UNIT 1 INTORDUCTON TO MARKETING

Introductions:

marketing in the process of identifying, Creating, promoting, delivering malus to the customer It
involves understanding Consumers needs & and then devising Strategies to meet those into
profitability.

Key Components of marketing.

Product: what been offer to the customers

Price: The value customers pay for the product or Service
Place: where and how the product is distributed or Sold.
Promotion: How customers are inform about and encourage purchase the product
Meaning of market

Market is generally understood as the place or geographical area where buyer and seller gather
and enter into transactions involving transfer of ownership of goods & services

Definition:

"According to philip Kotler says that market consist all ole potential customers sharing of
particular need and want who might be wiling & able to Engage in exchange of satisfied the
need and wants.

Q. WHAT IS MEANT BY MARKETING?

Marketing is what is a marketer does. The traditional objective of marketing had been to make
the goods available at places where they are needed. This idea was later on changed by shifting
the emphasis from exchange to satisfaction of human wants.

Q. DEFINE THE TERM MARKETING?

According to American Marketing Association, ―Marketing is the process of planning and
executing the conception, pricing, promotion, and distribution of ideas, goods and services to
create exchanges that satisfy individual and organizational goals.
Paul Mazur defines, ―Marketing as the creation and delivery of a standard of living to
society.
FEATURES

Q. EXPLAIN THE FEATURES / CHARACTERISTICS /NATURE OF MARKETING.

1. Marketing is both consumer-oriented and competitors-oriented.
2. Marketing is the most important function of management.
3. The long-term objective of marketing is profit maximization through customer satisfaction.
4. Marketing must deliver goods and services in exchange of money.
5. Lack of quality and innovation concept.
6. It starts with consumers and ends at consumers by satisfying their needs.
7. Marketing is an integrated process which is based on strategies and models.

CLASSIFICATION OF MARKET

Markets can be classified in many ways. Generally, the classification made on:
1. Geographic Area,
2. Economic,
3. Volume of Business,
4. Time,
5. Importance,
6. Nature of Goods,
7. Regulation,
8. Nature of Transactions.

1. Geographic Area

Local Market: When the market for a product is restricted to particular town or state, such a
market is called a local market. Ex: Kali mark, Bovonto.

National Market: When the market for a product extends to the whole country, such as
market is called a national market. Ex: Hidustan lever.

International Market: We are living in an era of liberalization and globalization. We have

access to most international brands of goods. A product, which is marketed through the world,
is said to be having an international market. Ex: Coco-cola, Fanta and Pepsi.

2. Economic

Perfect Market
The homogeneous nature of goods and uniform price through the market are the key. The
market for agricultural commodities is an example of a perfect market.

Monopolistic Market
The market for those products which are not identical and whose prices are different is
known as monopolistic market. The market for soaps, face powder, toothpaste, etc., is a
monopolistic market. Product differentiation is the key feature of such a market.

Monopoly Market
It is a market having just one seller. In India, for example, the Railway are being managed
by the Government. There is no perfect or close substitute available to the product or service of a
monopolist.
 Oligopoly Market
It is a market in which there are a few sellers who work according to a common
understanding. Their price strategy is the same. The market for soft drinks can be cited as an
example.

3. Volume of Business

Whole sale Market: A Wholesaler is a person who sellers in large quantities to retailers.
Retail Market: A retailer is one who buys in bulk quantities from the whole seller and
generally sells in small quantities to the consumers.

4. Time

Very Short Period Market: It is a market that exists for just a day at a particular place. Such
one-day markets are quite common in our villages.
Short Period Market: When the market exists for a week or month, it can be called a short
period market.
Long Period Market: The market for most consumer goods and services is a long period
market.

5. Importance

Primary Market: It is the market for agricultural commodities.

Secondary Market: It is the market for semi-manufactured goods.
Terminal Market: It is the market in which the final products are sold to the ultimate
consumers.

6. Nature of goods

Commodity Market
Agricultural Goods Market: It is a market for agricultural goods.
Consumer Good Market: It is a market in which goods desired by the common man are made
available.
Industrial Goods Market: It is a market in which goods used by the manufactures as inputs in
production are sold.
Bullion Market: It is the market for gold and silver.

Capital Market
Money Market: It is the market in which money is borrowed and lent. The commercial banks
are the participants of the money market.
Foreign Exchange Market: In this market the currencies of foreign countries are bought and
sold.
Stock market: The shares of companies and other securities are trade in stock markets.
 7. Regulation

Regulated Markets: These markets are governed by rule and regulations. The stock market,
the commodity market and the foreign exchange market are example.
Unregulated Market: These markets operate according to demand and supply forces and are
not governed by rigid rule and regulations.

8. Nature of Transactions

Sport Market:
In this kind of a market delivery of goods takes place immediately.
Forward Market
Hence, only a contract to deliver is entered into now. Actual delivery of goods takes place
only at a later date.

FUNCTION OF MARKETING

Victorious marketing management calls for integration of market related elements. The task of
marketing management is to combine these elements into an effective operating system and to
arrange the system in its interaction with a dynamic environment.
These functions are:
1. Assessing the marketing opportunities.
2. Planning marketing activities.
3. Providing effective marketing organisation.
4. Actuating by leadership.
5. Motivating the human-side and
6. Evaluating and adjusting marketing efforts.

1. Assessing the Marketing Opportunities:

It involves the identification of the company goals and the analysis of established and new
profit opportunities open to the firm. The significance of this function is that the market
opportunities are changing and the marketing management must develop creative strategies to
cultivate these opportunities. That is, a planned programme of innovations is essential for the
marketing effectiveness. That is to say, the firm must respond to the market and adopt a broad
and dynamic view of the marketing opportunity. New opportunities are beset with challenges.
Thus, the firm should be ready and willing to accept and shoulder the risks of the possible
venture.

2. Planning the Marketing Activities:

Planning is an integral part of marketing management and is the vital element of the system's
orientation. This function is based on the marketing opportunity which is key to the successful
marketing management and performance. Marketing planning is used to develop and define
objectives and then derive strategies and design programmes that enable the firm to achieve
 these set aims. The systems approach warrants a concise statement of these goals and
encourages systematic analysis of the impact of the programmes devised. Planning provides the
basis for integrated marketing strategy to make planning central to the marketing concept, both
in the short and long-run. Thus, planning is the prelude to other functions of marketing
managment.

3. Providing Effective Marketing Organisation:

The innovative and dynamic nature of marketing activity places heavy demands on the
marketing organisation. As marketing is an accepted system, the role of organisation is felt
more. The interaction process between the organisation and the environment is a focal concern
of developing marketing discipline. Application of the newer organisation theories may have
impact on the marketing operations. New product developments and the growing importance
of international marketing are some of the marketing changes that have raised organisational
problems for the unit. Thus, the organisation provided is to be accommodative in the light of
changing concept of marketing.

4. Actuating by Leadership:
Diverse changes are influencing the patterns and styles of theleadership required for effective
performance of marketing functions. Development of newer patterns of leadership are testing
the traditional views of management methods and policies. For instance, one organisational
problem is raised by the tendency towards centralisation of responsibility for integration of
total marketing tasks. Balanced against this centralisation tendency is the need for greater
participation in management and decision- making by people at subordinate levels. The
solution needs analysis of management's philosophy, communication pattern, scope of
authority and responsibility, leadership activities and staffing policies and practices and the
placement of an individual in the organisation, in a given position.

5. Motivating the Human-side:

Marketing involves the functions that are finally identified with the people. Free flow of goods
will be there only when the people involved in the process are motivated. Employee motivation
is a must in these days of keen competition. The question of today's management is not to
create a suitable man for the management, but to keep him longer as a loyal and humble
employee so that the benefits of stay are fully enjoyed by the unit. That is why, new ways of
encouragement or stimulation are to be introduced where the individual unfolds his talents and
initiative to contribute the very best of his.

6. Evaluating and Adjusting marketing Efforts:

In order to take advantage of profitable marketing opportunities, the marketing manager must
continually evaluate and adjust the market efforts. The firm is to adjust to its ever changing
environment. To make an effective judgement, the marketing manager must have the
knowledge of the entire marketing system so that the components of the system can be
evaluated, controlled and adjusted to bring the system in line with the marketing activities on
 one hand, and the opportunities on the other. Essentially, the major challenge confronting
marketing management is that of creative adaptation to change. To meet this challenge, the firm
should have a complete appraisal of its marketing operations through marketing audit, research
and other control devices.

EVOLUTION OF MARKETING.

The marketing concept is not the result of a sudden change in the process of thinking of the
business managers. It is the result of the changing situation, which compelled the business
people to give and important place to the change in the live of thinking took place after passing
several stages.
1. Barter system: The goods are exchange against goods, without any other medium of exchange,
like money.
2. Production orientation: This was a stage where producers, instead of being concerned with
the consumer preference, concentrated on the purpose of profit.
3. Sales orientation: The selling activity becomes the dominant factor, without any effort for the
satisfaction of the consumer needs.
4. Marketing orientation: Customers importance was realized but only as means of disposing of
goods produced. Competition becomes stiffer.
5. Consumer orientation: Under this stage only such products are brought forward to the market
which is capable of satisfying the testes, preferences and expectations of the consumers
satisfaction.
6. Management orientation: The marketing function assumes a managerial role to co-ordinate all
interacting business activities with the objectives of planning, promoting and distributing
want-satisfying products and potential customer.

MODERN MARKETING

Q. WHAT IS MODERN MARKETING?

The modern concept of marketing is not the result of a sudden change in the process of
thinking of the business managers. It is the result of changing situation, which compelled the
business people to give an important place to the consumer and his wants. The change in the
line of thinking took place after passing several stages.

Q. DEFINE MODERN MARKETING.

1. The marketing concept is a consumer orientation backed by integrated marketing aimed at
the generating consumer satisfaction as the key to satisfying organizational goals. - Philip
Kotler.
2. “Marketing concept is a corporate stage of mind that insists on the integration and
coordination of all marketing function which in turn welded with all other corporate function
for the basis objectives of producing maximum long range corporate profits‖. P.Felton
 MODERN MARKETING CONCEPT

1. The Production Concept

The production concept suggests that people prefer products and services that are easily
available and affordable, which is essentially the idea of mass production.
Focusing your marketing efforts on this concept means you’re looking to achieve a highly
efficient production process, keep costs low, and aim to scale production.

Think Walmart, McDonald’s (or any of the big, fast food franchises), Forever 21, Starbucks, and
countless other big brands you’ll find across the U.S. in every mall, town, and city. They all use
this approach.
Brands that focus on mass production keep costs low and sell to a large customer base. Each
item sold attracts a low-profit margin, but selling at a very high volume ensures that profit
remains high.

2. The Product Concept

The product concept emphasizes that buyers prioritize a product’s quality, features, and
benefits. Product-focused buyers seek innovation and uniqueness rather than solely seeking the
lowest price.
A prime example that exemplifies this type of marketing is Apple. Apple products are renowned
for their exceptional user experience.
They are designed to be user-friendly, intuitive, and easy to set up and update. Every aspect,
from their sleek packaging to their minimalist design and intuitive controls, exudes elegance.
Apple sets a premium price for their products, but their dedicated fan base is willing to pay for
the superior quality and user experience they offer.
When customers purchase an Apple product, they have a clear understanding of what they’re
getting. Apple also prioritizes accessibility, which sets their products apart in the market.

3. The Selling Concept

The selling concept is founded on the belief that customers will not purchase an adequate
quantity of a product or service unless they are actively persuaded to do so.
This concept assumes that customers tend to be resistant and need to be convinced to make a
purchase. Marketing strategies rooted in the selling concept involve pervasive and continuous
advertising efforts.
Companies that embrace this concept often employ various techniques to sway hesitant buyers
into making a purchase. This approach is commonly utilized by companies that have excess
inventory and need to sell it in order to create space for new products.

4. The Marketing Concept

You read it right, one of the 5 marketing concepts is “the marketing concept”. While the selling
concept is all about what the company wants or needs, the marketing concept focuses on the
customer.
If you’ve hung out in marketing groups or social media pages online, you’ll have heard
discussions about concentrating on solving a customer’s problem to build a sustainable
business.
Brands that utilize the marketing concept spend time getting to know their customer’s likes and
dislikes. They understand what problems keep their customers awake at night and develop
products and services to solve those issues.
This is the approach you’ll see small businesses take. While they can’t compete on scale or price
with more prominent brands, they can, through a deep understanding of their customer, fill the
gaps in the market and meet a niche demand.

5. The Societal Marketing

The societal marketing concept takes the marketing concept further and is increasingly
becoming the concept of choice when devising a marketing strategy.
This concept emphasizes focusing on meeting customers’ needs to solve their problems while
ensuring no harm comes to them.
You should also provide this solution as ethically as you can.
Examples of brands and products that focus on this marketing concept include:
Herbivore and other beauty brands use organic ingredients and claim that their products are
ethically produced and do not harm the environment Reformation is a clothing brand that
focuses on ethically made clothing produced without harm to nature.

Innovation in modern marketing

Innovation in modern marketing is the process of creating and promoting new products,
services, or processes to engage customers and stand out from competitors. It involves
understanding customer needs and behaviors, and using data to create targeted marketing
campaigns. Some examples of innovative marketing include:
Personalization to scale
Personalization can help you gain more loyal followers who follow you for life — or at least
longer than they would have without personalization. Research shows that quickly growing
companies generate 40% more revenue from personalization than their slower-growing
counterparts.
Virtual and augmented reality
These technologies can create immersive experiences that allow customers to interact with
products or services before purchasing.
Influencer Marketing:
While not new, influencer marketing continues to evolve with micro-influencers leading the
trend. These individuals have a niche, highly engaged audience. Partnering with the right
influencers can create authentic brand endorsements and drive conversions.
Big data platforms
These platforms can help businesses understand customer behavior and preferences by
analyzing large amounts of data.
Programmatic ads
These ads automate the process of buying media by targeting specific audiences.
Chatbots
These AI-powered tools can handle customer service queries, improving customer satisfaction.
Relationship marketing /RTM
Building long-term relationships with customers can lead to increased loyalty, referrals, and
sales. Real-time marketing (RTM) is a marketing strategy that involves creating and distributing
content based on current events, trends, or customer needs
Digital marketing
Using online channels like social media, email marketing, and search engine optimization to
reach target audiences.
Gamification

Gamification is a marketing strategy that uses game-like elements to improve consumer

engagement and interaction. It can be used to create a more fun and interactive experience for
customers by incorporating game design elements like points, badges, challenges, and rewards.

Sustainability messaging

Sustainability messaging in marketing is a way to communicate a company's sustainability

practices and goals to its customers, investors, and employees. It's a strategic approach that
prioritizes environmental, social, and economic sustainability.

IMPORTANCE OF MARKETING

Delivers the Standard of Living:

Marketing helps to achieve, maintain and raise standards of living of the community now-a-
days production is carried on mass scale. Mass production needs mass scale marketing. Both
production and sales on mass scale bring down the cost of production and increase the amount
of profit. Besides, the consumers are also benefited by getting a variety of goods at a lower
price.

Connects the Producers and Consumers:

The very object of production is consumption. The producer produces goods and services for
the purpose of selling. Therefore they should get in touch with the consumers who require such
goods and services.

Increase the National Income:

This national income of a country is really composed of the purchasing power i.e., what money
can buy in terms of goods and services. Effective marketing reduces the distribution costs and
there by lowers of prices. Lower prices to consumers mean more purchasing power.

Provides Employment Opportunities:

Marketing furnishes employment both in production work and in marketing activities. Effective
marketing results in large scale production which in turn creates more jobs, marketing
activities require a large number of employees.
 Help to Maintain Economic Stability:
As observed by a classical economist, ―nothing happens in our economy until somebody sells
something‖, therefore, marketing is the main spring of all economic activities. Besides the
economic activities must be stable and free from fluctuation, especially in price. Effective
marketing system enables to maintain the price level stable by equating demand and supply.

ROLES AND RESPONSIBILITY OF MARKETING

Market Research:
Collecting data on consumers, competitors and market place and consolidating information into
actionable items, reports and presentations Understanding business objectives and designing
surveys to discover prospective customers’ preferences Compiling and analyzing statistical data
using modern and traditional methods to collect it.
Strategy development:
A market development strategy is a growth strategy that aims to introduce existing (or new)
products or services to new markets. It involves identifying and targeting untapped
geographical areas, new customer segments, or different distribution channels to expand the
market base.
Brand management:
Brand management, also known as Marketing, is responsible for the overall management of a
brand. This includes everything from product development and marketing to advertising and
public relations. All of these aspects work together to create a particular image or reputation for
a brand.
Campaign management:
Use analytics to measure campaign success. Identify the metrics you will use to determine if
your campaign was successful. But this is only a framework.
In marketing, campaign management might be launching a new product, generating sales-
accepted leads, reducing churn by a certain percentage, or repositioning the company to grow
revenue in a new marketing segment by a specific dollar amount. The outcome is strategic and
objectively measurable.
Customer engagement
Customer engagement in marketing is the process of creating a meaningful connection with
customers to build brand loyalty and increase customer satisfaction. It's important for
businesses to engage with customers at every stage of the customer journey, from awareness to
loyalty.
Public relation:
Public relations (PR) is a marketing area that focuses on building a positive image for a brand or
organization and maintaining relationships with target audiences. PR can help influence
consumer perceptions and purchase decisions. Here are some ways PR is used in marketing:
digital marketing:
The role of digital marketing is simple: help your business spend your marketing budget more
effectively, obtain more valuable leads, and gain a higher return on investment (ROI) for your
business.
NICHE MARKETING
Niche marketing:
Niche marketing is a focus approach to target a specific Segment of the Market that as unique
needs , preference or characteristic instead of applying broad audience niche marketing
indentific Small group of highly specific customers & creates products, services or contents
tailor to the requirements.
Characteristics of Niche market:
Unique set of needs: Niche market is represented by specialist needs among the audience,
served by a few competitors.
Ample size: The size of the niche market should be large enough to earn profits.
Sufficient purchasing ability: While selecting a particular niche, the firm must lay emphasis on
the purchasing ability of the target customers.
No real competitors: Markets that are not recognized by other firms or the competitors have
negligible interest in it.
Resources, competencies and skills: Firm possesses the needed resources, competencies and
skills, to exploit the niche.
Need for special treatment: Niches are typified by the customer group whose needs are often
ignored by the existing players in the market
Growth prospects: The firm seeking to enter a niche market, should focus on the growth
prospects, i.e. the opportunities to grow and expand.
Customers Goodwill: In order to excel in a market niche, first of all the firm should understand
clearly and thoroughly, ‘what their customers need’. Further, niche customers are so loyal, that
they can pay a higher price to get the product.
Firm achieve economies through specialization: The primary advantage of pursuing a niche
strategy is that the firm seeks dominance in the market and achieve economies through
specialization.
Provides barriers to entry for competitors: Niche market should be such that which presents
barriers to entry for competitors because it is not likely to attract competitors easily.
Greater profit margins: A niche marketer knows the customer’s group and their needs so well
that it serves them in the best manner. This leads to greater margins due to the premium price
for the value addition, and strong brand loyalty. Further, the customers are ready to pay a
premium price for the product which exactly satisfies their needs.
IMPORTANCE

Better Customer Engagement

When you focus on niche marketing, you can connect more deeply with your audience.
Tailoring your messages to a specific group creates a sense of belonging and loyalty. This
understanding and feeling of value lead to higher engagement and brand loyalty

Less Competition

Focusing on a specialized market means dealing with less competition than in larger markets.
This helps your brand to be noticeable and to become a top player in that particular field. With
fewer competitors, you can attract more customers and create a loyal customer base

Improved relations with customers

By focusing on a specific group of people to sell your products or services, you can build
stronger connections with your customers. They feel appreciated and special when you give
them items that are tailored to their individual needs. Customers are happier and more likely to
remain loyal to your brand over time when you provide them with individualized experiences.

More Successful Marketing

With niche marketing, it is possible to create highly targeted and relevant marketing campaigns.
Your audience’s unique needs, preferences, and pain points can all be addressed, making your
marketing campaigns more successful and memorable. Better ROI and higher conversion rates
can result from this focused strategy.

Building Expertise And Authority

By concentrating on a specific niche, your brand can establish itself as an authority in that field.
You can position your brand as an authority by continuously offering helpful content and
solutions. This credibility can attract more customers and create trust in your brand.

Cost-Effective Marketing

Compared to general marketing strategies, niche marketing may be more affordable. You can
spend your money more wisely and reach the right audience without wasting it on indifferent
customers if you take a targeted approach. Your marketing investment may yield higher returns
as a result of this.
STEPS TO EFFECTIVE NICHE MARKETING

Identify Your Niche: It's crucial that you find a niche that aligns with your interest, relates to
your product or service, and has a potential customer base willing to pay for what you have to
offer.

Research Your Audience: Gain a deep understanding of who your potential customers are, their
needs, interests, and behavior. This will help you design effective marketing strategies.

Develop a Unique Offering: Craft a product or service that meets the specific needs of your
target audience. It should be unique and compelling enough to attract your niche market.

Build a Strong Brand: Create a strong brand identity with an attractive logo, motto and visual
style. Position your brand as the go-to solution for your niche market.

Promote Your Offering: Use a variety of marketing channels, including social media, SEO,
content marketing, and event marketing. The goal is to raise awareness and generate interest.

Monitor and Adjust: Track your success, tweak your approach as needed, and always be
prepared to adjust your strategies based on feedback and results.
 UNIT 2: MARKET SEGMENTATION
What is market segmentation?
Market segmentation is the practice of dividing your target market into approachable groups. Market
segmentation creates subsets of a market based on demographics, needs, priorities, common interests,
and other psychographic or behavioural criteria used to better understand the target audience.

By understanding your market segments, you can leverage this targeting in product, sales, and
marketing strategies. Market segments can power your product development cycles by informing how
you create product offerings for different segments like men vs. women or high income vs. low income

Definition of market segmentation

Market segmentation is a process companies use to break up their potential customers into different
groups or segments. This allows a company to allocate the appropriate resources to each individual
segment, resulting in more accurate targeting across a variety of marketing campaigns.

Segmentation means to divide the marketplace into parts, or segments, which are definable, accessible,
actionable, and profitable and have a growth potential. In other words, a company would find it
impossible to target the entire market, because of time, cost and effort restrictions. It needs to have a
'definable' segment - a mass of people who can be identified and targeted with reasonable effort, cost
and time.

Once such a mass is identified, it has to be checked that this mass can actually be targeted with the
resources at hand, or the segment should be accessible to the company. Beyond this, will the segment
respond to marketing actions by the company (ads, prices, schemes, promos) or, is it actionable by the
company? After this check, even though the product and the target are clear, is it profitable to sell to
them? Is the number and value of the segment going to grow, such that the product also grows in sales
and profits?

Segmentation takes on great significance in today's cluttered marketplace, with thousands of products,
media proliferation, ad-fatigue and general economic problems around the world markets. Rightly
segmenting the market place can make the difference between successes and shut down for a company.

Segmentation allows a seller to closely tailor his product to the needs, desires, uses and paying ability of
customers. It allows sellers to concentrate on their resources, money, time and effort on a profitable
market, which will grow in numbers, usage and value.

Benefits of Market Segmentation

Marketing segmentation takes effort and resources to implement. However, successful marketing
segmentation campaigns can increase the long-term profitability and health of a company. Several
benefits of market segmentation include:

Increased resource efficiency:

 Marketing segmentation allows management to focus on certain demographics or customers. Instead of
trying to promote products to the entire market, marketing segmentation allows a focused, precise
approach that often costs less compared to a broad reach approach.

Stronger brand image:

Market segmentation forces management to consider how it wants to be perceived by a specific group
of people. Once the market segment is identified, management must then consider what message to
craft. Because this message is directed at a target audience, the company's branding and messaging are
more likely to be very intentional. This may also have an indirect effect of causing better customer
experiences with the company.

Greater potential for brand loyalty:

Marketing segmentation increases the opportunity for consumers to build long-term relationships with
a company. More direct, personal marketing approaches may resonate with customers and foster a
sense of inclusion, community, and a sense of belonging. In addition, market segmentation increases the
probability that the company lands the right client, who fits its product line and demographic.

Stronger market differentiation:

Market segmentation gives companies the opportunity to pinpoint the exact message they want to
convey to the market and competitors. This can also help create product differentiation by
communicating specifically how a company is different from its competitors. Instead of a broad
approach to marketing, management crafts a specific image that is more likely to be memorable and
specific.

Better targeted digital advertising:

Marketing segmentation enables a company to perform better targeted advertising strategies. This
includes marketing plans that direct effort toward specific ages, locations, or habits via social media.

Stronger marketing messages:

You no longer have to be generic and vague – you can speak directly to a specific group of people in
ways they can relate to, because you understand their characteristics, wants, and needs.

Targeted digital advertising:

Market segmentation helps you understand and define your audience’s characteristics, so you can direct
your online marketing efforts to specific ages, locations, buying habits, interests etc.

Developing effective marketing strategies:

Knowing your target audience gives you a head start about what methods, tactics and solutions they will
be most responsive to.

Better response rates and lower acquisition costs:

will result from creating your marketing communications both in ad messaging and advanced targeting
on digital platforms like Facebook and Google using your segmentation.

Attracting the right customers:

targeted, clear, and direct messaging attracts the people you want to buy from you.

Increasing brand loyalty:

when customers feel understood, uniquely well served, and trusting, they are more likely to stick with
your brand.

Differentiating your brand from the competition :

More specific, personal messaging makes your brand stand out.

Identifying niche markets:

segmentation can uncover not only underserved markets, but also new ways of serving existing markets
– opportunities which can be used to grow your brand.

Staying on message:

As segmentation is so linear, it’s easy to stay on track with your marketing strategies, and not get
distracted into less effective areas.

Driving growth:

You can encourage customers to buy from you again, or trade up from a lower-priced product or
service.

Enhanced profits:

Different customers have different disposable incomes; prices can be set according to how much they
are willing to spend. Knowing this can ensure you don’t oversell (or undersell) yourself.

Product development:

You’ll be able to design new products and services with the needs of your customers top of mind, and
develop different products that cater to your different customer base areas

Companies like American Express, Mercedes Benz, and Best Buy have all used segmentation strategies to
increase sales, build better products, and engage better with their prospects and customers.

How to get started with segmentation

There are five primary steps to all marketing segmentation strategies:

Define your target market:

 Is there a need for your products and services? Is the market large or small? Where does your brand sit
in the current marketplace compared to your competitors?

Segment your market:

Decide which of the five criteria you want to use to

segment your market: demographic, firmographic, psychographic, geographic, or behavioural. You don’t
need to stick to just one – in fact, most brands use a combination – so experiment with each one to figure
out which combination works best for your needs.

Understand your market:

You do this by conducting preliminary research surveys, focus groups, polls, etc. Ask questions that
relate to the segments you have chosen, and use a combination of quantitative (tickable/selectable
boxes) and qualitative (open-ended for open text responses) questions.

Create your customer segments:

Analyse the responses from your research to highlight which customer segments are most relevant to
your brand.

Test your marketing strategy:

Once you have interpreted your responses, test your findings by creating targeted marketing,
advertising campaigns and more for your target market, using conversion tracking to see how effective it
is. And keep testing. If uptake is disappointing, relook at your segments or your research methods and
make appropriate changes.

Criteria of market segmentation

Market segmentation is a marketing technique that almost all companies practice. The process provides
marketing strategists with data for a better understanding of their market, allowing them to create more
personalized and profitable strategies. This practice is important for companies because it minimizes the
amount of time, money, and effort marketing strategists put in certain campaigns.

So, what are the Criteria/requirements for effective market segmentation? Effective segmentation
should be measurable, accessible, substantial, differentiable, and actionable. When a company has
segmented their market accordingly, there is a higher chance that it will become more profitable and
successful in the long run.

5 criteria/Requirements Effective Segmentation

Identifying the requirements for effective market segmentation allows companies to create marketing
campaigns that are essential for their growth and development. Here are the five criteria for effective
market segmentation:

1. Measurable
The size and purchasing power profiles of your market should be measurable, meaning there is
quantifiable data available about it. A consumer’s profiles and data provide marketing strategists with
the necessary information on how to carry out their campaigns.

It would be difficult to create advertisements for markets that have little to no data or for audiences that
can’t be measured. Always ask whether there is a market for the kind of product or service that your
business wants to produce then define how many possible customers and consumers are in that market.

2. Accessible

Accessibility means that customers and consumers are easily reached at an affordable cost. This helps
determine how certain ads can reach different target markets and how to make ads more profitable.

A good question to ask is whether it’s more practical to place ads online, on print, or out of house. For
example, gather data on the websites a specific target market usually visits so you can place more
advertisements on those websites instead.

3. Substantial

The market a brand should want to penetrate should be a substantial number. You should clearly define
a consumer’s profiles by gathering data on their age, gender, job, socio-economic status, and purchasing
power.

It doesn’t make sense to try and reach an unjustifiable number of people — you’re just wasting
resources. However, you also don’t want to market the brand to a group too small that the business
doesn’t become profitable.

4. Differentiable

When segmenting the market, you should make sure that different target markets respond differently to
different marketing strategies. If a business is only targeting one segment, then this might not be as
much of an issue.

But for example, if your target market is college students, then it’s essential to create a marketing
strategy that both freshman students and senior students react to in the same positive way. This process
ensures that you are creating strategies that are more efficient and cost-effective.

5. Actionable

Lastly, your market segments need to be actionable, meaning that they have practical value. A market
segment should be able to respond to a certain marketing strategy or program and have outcomes that
are easily quantifiable.

As a business owner, it’s important to identify what kind of marketing strategies work for a certain
segment. Once those strategies have been identified, ask yourself if the business is capable of carrying
out that strategy
 TYPES OF SEGMENTATION

Geographic Demographic
segmentation segmentation

Psychographic Behavioral
segmentation segmentation

Geographic segmentation

Grouping buyers by physical location is often easy to accomplish due to the generally static information.
Geographics can influence buying habits, such as having parallel needs due to climate or resource access.
A company may also use this method to target prospects and customers within a certain distance of their
business.

Examples of geographic segmentation include:

City, state, and country

Zip code
Region
Seasonal climate
Population density

HYPERLOCAL SOCIAL MARKETION:

The surge in digital and mobile technology has given a boost to hyperlocal marketing – location based
targeting to consumers in local communities or neighborhoods using social media.

For example, to energize its mobile app presence, Burger King devised an innovative hyperlocal social
marketing promotion called Whopper Detour. The mobile promotion offered discounted Whoppers to
people close to competing McDonald's outlets. Burger King "geofenced" (drew a virtual perimeter
around) some 14,000 McDonald's locations across the U.S. Then all users had to do was to drive within
600 feet of a McDonald's, open the BK app, and receive a coupon for a 1-cent Whopper. The bold
campaign resulted in 1.5 million app downloads.
Demographic segmentation

Market segmentation often brings to mind demographic factors like age, gender, and occupation.
Demographic factors are the most popular bases for segmenting customer groups. One reason is that
consumer needs, wants, and usage rates often vary strongly with demographic variables. Another is that
demographic variables are easier to measure than other useful segmentation variables. Demographic
segmentation is a powerful method B2C companies use to create market segments, and here are a few of
the typical ways they group consumers:

Age
Gender
Religion
Occupation/income
Education
Marital status

Examples: One of the key target demographics for Colgate Palmolive is families with young children. The
company's range of oral care products specifically designed for children, such as flavored toothpaste and
fun toothbrush designs, appeals to parents looking to instill good oral hygiene habits in their kids from a
young age.

Psychographic segmentation

Psychographic segmentation groups ideal and existing customers by personality characteristics, making
it a method exclusive to B2C organizations. Psychographic segmentation examples include:

Values
Goals
Lifestyles
Hobbies
Attitudes
Beliefs

Examples: The Coca-Cola target audience primarily includes men and women, from teenagers to middle-
aged adults, who resonate with Coca-Cola’s core brand attributes of youthfulness, energy, and
authenticity.

For younger consumers, Coca-Cola’s branding taps into themes of adventure, joy, and
spontaneity, often seen in campaigns promoting Coca-Cola as the ultimate refreshment for social
gatherings and shared experiences. Meanwhile, Coca-Cola also addresses the needs of health-conscious
consumers with products like Diet Coke, which provides a sugar-free option, catering to individuals
seeking lower-calorie beverages.

Coca-Cola’s adaptability to diverse consumer preferences is evident in its versatile product offerings and
packaging options. The brand provides a range of sizes to meet various consumption needs, from small
cans for on-the-go moments to larger bottles ideal for family events. This thoughtful targeting strategy
 demonstrates Coca-Cola’s understanding of its varied consumer base, ensuring it remains relevant and
desirable to a broad audience.

Behavioral segmentation

Behavioral segmentation helps companies determine buyers’ purchasing habits and behaviors. By
looking at a website visitor’s digital footprint, organizations can group customers by:
Occasions
Benefits sought
Brand loyalty
Intent to buy
Potential needs
Taste & preference

Example:

1. Netflix is one of the best examples of behavioral segmentation based on its users’ app usage. The video
streaming platform tracks its users’ usage patterns, for example, frequency of use, time spent on the app,
types of movies or TV shows viewed, and more.
As a result, Netflix offers tailored viewing experiences to its millions of users by
recommending shows and movies. Also, Netflix sends personalized promotional emails to segmented
users, persuading them to log in to the app. This is a great attempt to improve customer retention with a
touch of personalization.

2. . B-Wear: Customer appreciation email

Behavioral segmentation type: Customer loyalty
B-Wear’s marketing team looked to analyze data points to know which customers they’ve
successfully retained versus who they’ve lost. They experimented with segmented lists based on
purchase histories, customer engagement levels, customers needing offers to continue shopping, and so
on.
Analyzing past purchases and engagement let B-Wear segment its most loyal customers. The brand sent
them exclusive incentives as part of their ‘customer appreciation’ email sequences, thus boosting repeat
purchases.
Here’s an email example that appeals to people shopping for both Valentine’s Day and for pets.

Market segmentation steps

STEP1: Identify the potential buyers: -Through proper market research and market segmentation (It
is the process of pulling apart the entire market as a whole and separating it into manageable disparate
unit a has on various demographie, political, economic and social factors, it can also he customer/
product/vampetition related segmentation).

STEP 2: Select the target audiences:-The factors that influence Targeting are the Internal and External
Environment. Internal environment includes the missim, vision, values and objectives of the firm,
whorous; External factors are the social, cultural, economie, global, demographie, natural, task,
technological, political and legal environment.
 Through appropriately compiling the customers profile to decide the 4 P Produet, Priov, Place and
Promotion and obtain the demographie, pwychological, geographic and behavioral information of the
buyer. Targeting is deciding the potential buyers, products to be offered and appropriately positioning
each product to the segment.

STEP 3: Proper positioning of the Product: After developing an appropriate segmentation and target
strategy, positioning strategy can be worked out effectively. Pusitioning unables the firm to create a
positive image, gain competitive advantage and place the itand in the customers mind to enhance their
goodwill and become the most preferred brand.

Positioning can be in the form of product, price, promotion, service, distribution channel, image, people,
advertising, publicity, public relation or selling differentiation.

MARKET TARGETING
Once marketers have created different segments, they then assess which segment aligns best with their
products, values, and offerings. Next, need to decide which Segments to target by identifying the group
that will offer the largest return and to consider here: d will be the most profitable. There are several
factors

 The profitability of each segment.

 The size and potential growth of each customer group.

How well your organization can service this market. For example, are there any
legal, technological or social barriers that could have an impact?

Example:

The Adventure Travel Company analyzes the profits, revenue based on their segments

Segment A has profits of 68,220,000

Segment B has profits of $4,360,000,
Segment Chas profits of $3,430,000.

For Eg , it decides to focus on Segment A, after confirming that the segment size is big enough (it's
estimated to be worth $220,000,000/year

MARKET TARGET STRATEGIES:

There are three targeting strategies an organization can adopt:-

1. Undifferentiated Marketing: It is a standardization strategy option, where the firm offers the same
product, uses the same advertising, promotional, distribution, publicity, public relations and pricing
strategies to different market segment. Eg. Pepsi and Coca-Cola.
Using an undifferentiated marketing (or mass marketing) strategy, a firm might decide to ignore market
segment differences and target the whole market with one offer. Such a strategy focuses on what is
common in the needs of consumers rather than on what is different. The company designs

2. Differentiated Marketing Strategy: It contradicts the Undifferentiated Marketing Strategy where the
firm develops different products services to suit the need of varying groups which increases their
marketing and operational expenditures. Eg:- Airline Industry.
Using a differentiated marketing (or segmented marketing) strategy, a firm targets several market
segments and designs separate offer for each. For example, the InterContinental Hotels Group (IHG)
operates more than 6,000 hotels worldwide under 16 brands grouped into four collections-luxury and
lifestyle, premium, essentials, and suite- each targeting different segments.
By offering product and marketing variations to segments, companies hope for higher sales and
a stronger position within each market segment. Developing a stronger position within several segments
creates more total sales than undifferentiated marketing across all segments.
But differentiated marketing also increases the costs of doing business. A firm usually finds it
more expensive to develop and produce say, 10 units of 10 different products than 100 units of a single
product. Developing separate marketing plans for separate segments requires extra marketing research,
forecasting, sales analysis, promotion planning, and channel management. Trying to reach different
market segments with different advertising campaigns increases promotion costs. And having too many
overlapping brands can confuse customers, and different brands might cannibalize each other's
customers. For ex ample, does IHG really need 16 different brands, many of which compete with each
other in a given segment? Thus, a company must weigh the advantages against the disadvantages when
deciding on how many brands it will offer and how differentiated they will be.

3. Concentrated Marketing: This is a focused approach of the firm to target only one particular
segment and create a niche market of that particular segment. In other words instead of targeting a
small share of a large group, the company aims at a large share of a small group.

4. Micro marketing : Differentiated and concentrated marketers tailor their offers and marketing
programs to meet the needs of various market segments and niches. At the same time, however, they do
not customize their offers to each individual customer. Micromarketing is the practice of tailoring
products and marketing programs to suit the tastes of specific individuals and local customer segments.
Rather than seeing a customer in every individual, micro marketers see the individual in every customer.
Micromarketing includes local marketing and individual marketing.

POSITIONING

The prices where marketers try to create a product image or identity in the minds of their target market
relative to competitive products, it is all about placing a product brand in the minds of the customer to
ocespy a stable, distinct and permanent place in their rational and conscious mind set.
Beyond deciding which segments of the market it will target, the company must decide on a value
proposition-how it will create differentiated value for targeted segments and what
Positions it wants to occupy in those segments. Product positioning is the way a product is defined by
consumers on important attributes-the image the product occupies in consumers' minds relative to
competing products. Products are made in factories, but brands hap- pen in the minds of consumers.
 Consumers are overloaded with information about products and services. They cannot reevaluate
products every time they make a buying decision. To simplify the buying process, consumers organize
products, brands, and companies into categories and "position" them in their minds. A product's position
is the complex set of perceptions, impressions, and feelings that consumers have for the product
compared with competing products.
Consumers position products with or without the help of marketers. But marketers do not want to
leave their products' positions to chance. They must plan positions that will give their products the
greatest advantage in selected target markets, and they must design marketing mixes to create and
support these planned positions.

Positioning example : Spotify does more than just stream music. pres you "Music for every mood."

Positioning is creating an identity to your product. This identity is a cumulative of the following
four positioning identities.

1. Who am I?
It refers to the corporate credentials like the origin, family tree and the 'stable from which it comes from.
For instance, think of the mental associations when a buyer buys a Japanese car and it is a Honda!

2. What am I?
It refers to the functional capabilities. The perceived brand differentiation is formed using the brand's
capabilities and benefits. For instance, the Japanese cars are known for their fuel-efficiency, reasonable-
price and utility-value.

3. For whom am I?
It refers to the target segment for the brand. It identifies the that market segment for which his brand
seems to be just right and has competitive advantage. For instance, the Japanese car makers have
traditionally focused on the quality-conscious, value-seeking and rather-serious car buyer

4. Why me?
It highlights the differential advantage of the brand when compared to the competing brands. It gives
reasons as to why the customer should select this brand in preference to any other brand. For instance,
Japanese car makers have tried to score a competitive advantage on the lines of quality and technology

Key Factors of Positioning Strategy

Positioning is critical for any brand, product or service to ensure an impression is created on the mind of
the consumer. The main factors considered by a marketer for creating a strategy for a brand or product
areas:

1. Product Features
Positioning can around it, he done on how the product looks, feels, appears etc. The main features of the
products can be used to highlight the value and create the positioning

2. Utility & Benefits

It takes into account the value which a product gives and which needs are solved. It should show the
clear benefit in terms of dollar value or number.
Eg 50% savings in electricity expenses can be a clear benefit to a customer.

3. Use Categories
This defines how the product can be used. All the different use cases and scenarios can be used to create
a compelling positioning.

4. Occasion
The time, event or the occasion when the product can be used. Association with an event like New Year
can lead to strong positioning in the minds of customer.

5. Competitive Comparison
Positioning can be done when compared to a competitive offering. This is done by a lot of companies to
points of parity or points of differentiation to create a better positioning. existing competitive
positioning and make it better using

Points of Parity (POPs)

The positioning is done on the basis of mostly similar elements compared to a competitor.

Points of Difference (PODs)

In this case, there is a clear difference in the product offerings vis-à-vis the competitor.

REPOSITIONING
What Is Repositioning in Marketing?

In a world where your marketing strategy should always be customer-centric, repositioning in

marketing gives you a unique opportunity to update perceptions of your product or service. By changing
how your product or service is seen, your brand may be able to compete more effectively in the market
or enter new market segments so that you can create targeting for new audiences.

What is repositioning in marketing usually caused by?

Some reasons you may want to start repositioning your product or service may include:

Changes in your competition: A competitor’s innovation may have made your product less appealing,
or their pricing may have caused a dip in your sales.

Changes in the market: There may have been a recession, or people may have more disposable income.
There may also have been social forces at work dictating purchasing decisions, such as sustainability.

Changes in consumer habits: These may include evolving preferences such as using the internet as a
resource to decide or find information on your product or service.
Changes in your internal business environment: This may include a change in management or
strategy, new technology being introduced, or the acquisition of something that enables you to better
differentiate from your competitors.

What does repositioning in marketing look like?

The first part of repositioning is usually to develop a marketing plan as to how exactly you will appeal to
new segments of the market. This may include amending elements of your product or service, including:

Price: Here, you may offer more tiers of pricing, decide to produce a premium offering, or ensure you
have low-cost options for customers.
Marketing strategy: You may change the channels through which you try to reach customers by
offering more of a digital presence, for example, or creating more experiential, event-based marketing.
Target audience: Here, you may switch the size of companies you aim to reach if you are a B2B
business, for example, or try to reach a different age or location cohort.
Customer engagement: You may look at growing brand loyalty through things like exclusive discounts,
newsletters, or events.
Color scheme: If you are aiming to reach a new age group or international market, you may use color
schemes to differentiate from competitors, for example.
Logo design: Here, you may get your design team to create a new logo to spark renewed and first-time
interest in your brand.
Tagline: If you are using outdoor marketing or digital marketing, you may also want to use your tagline
to reshape customers’ perceptions of your product or service.
Whatever direction your organization chooses, repositioning in marketing provides a new and unique
opportunity to reach new customers at scale with a message that resonates.

Introduction to consumer behaviour

MEANING
Consumers make many buying decisions every day, and the buying decision process is the focal
point of the marketer's effort. Most large companies research consumer buying decisions in
great detail to answer questions about what consumers buy, where they buy, how and how
much they buy, when they buy, and why they buy. Marketers mine mountains of big data on
consumers to learn about their paths to purchase. But learning about the whys behind con
summer buy it .

Characteristics Affecting Consumer Behavior

OBJECTIVE 5-2 Explore the four major factors that influence consumer buyer behavior.
Corsumer purchases are influenced strongly by cultural, social, personal, and psycho- logical
characteristics, as shown in Figure 5.2. For the most part, marketers cannot control such
factors, but they must take them into account,

Cultural Factors
Cultural factors evert a broad and deep influence on consumer behavior. Marketers need to
understand the role played by the buyer's culture and subculture.

Culture

Culture has a strong effect on a person's wants and behavior. Human behavior is largely leamed.
Growing up in a society, children learn basic values, perceptions, wants, and behaviors from
their families and other important institutions

SUBCULTURE

. Sub Culture contains smaller subcultures, or groups of people with shared value lens based on
common life experiences and situations. Subcultures include nationalities Religions, racial
groups, age cohorts, and geographic regions. Most brands and marketing religiongns today are
multicultural in nature, inclusive of the diverse mix of subcultures that make up the American
consumer marketplace.

Social Factors

A consumer's behavior also is influenced by social factors, such as the consumer's groups and
social networks, family, and social roles and status.
Lovely brand to Glow & Lovely.
Reference group

A group that serves as a point of comparison or reference in shaping a person's attitudes or

behavior.

Opinion leader

A within a reference group who, because of special skills, knowledge, personality, or

othercharacteristics, can socialy influence others.

Word-of-mouth influence

The impact of the personal recommendations of trusted friends. family, associates, and other
consumers on buying behaviour.
Influencer

Enluting established influencers or creating new influencers to spread information about a

company's brands.

Family

The family is the most important membership group and consumer buying unit in society
Marketers are interested in how various

Roles and Status

A person belongs to many groups-family, clubs, organizations, online communities. The
person's position in each group can be defined in terms of both role and status. A role con sists
of the activities people are expected to perform according to the people

Personal Factors

A buyer's decisions also are influenced by personal characteristics such as the buyer's
occupation, age and stage, economic situation, lifestyle, and personality and self-concept.

Occupation
A person's occupation affects the goods and services they buy. Segmenting and targeting
consumer by occupation can several some interesting oppourtunities .

Age and Life Stage

People change the goods and services they buy over their lifetimes, Tastes in food People,
churniture, and recreation are often age related. Buying is pass shaped by the stage of the
family life cycle-the phases through which families pass as they mature over time. Life-stagechanges
usually result from demographics and life-changing events marriage, having children,
purchasing a home, divorce, children going to col lege, changes in personal income, moving out
of the house, and retirement. Marketers often define their target markets in terms of life-cycle
stage and customize their offer. ings and marketing for each stage.

Economic Situation

People's economic situations affect the wheres and whats of their shopping. Marketers watch
trends spending, personal income, savings, andhave enhanced customer value by redesigning,
reposition ing, and repricing their offering.

ENVIRONMENTAL SITUTATION

Environmental circumstances can affect consumer attitudes and buying behaviors. People's
physical, technological, and health circumstances will impact what products they buy, where
and how they shop, and much more.

Lifestyle

People coming from the same subculture, economic group, and occupation may have quite
different lifestyles. Lifestyle is a person's pattern of living as expressed in his or her psy
chographics. It involves measuring consumers' major AIO dimensions-activities (work, hobbies,
shopping, sports, social events), interests (food, fashion, family, recreation), and opinions (about
themselves, social issues, business, products). Lifestyle captures something more than the
person's social class or personality. It profiles a person's whole pattern of acting and interacting
in the world .

Five Steps in Buying Decision Process

There are five steps in the buying decision process. It starts with the pre-purchase stage and ends at the
post-purchase stage. The buyer decision process consists of the following steps:

Need recognition

Information search

Evaluation of alternatives

Purchase decision

Post-purchase behavior
The marketing department must take action to ensure they influence their customers and make a
memorable impression.

Need Recognition Stage

Need recognition is the first step in the buyer decision process. In this step, the buyer recognizes a need
or realizes that a product or service they require is missing. They may recognize this need either through
external or internal stimuli.
Internal stimuli include hunger and thirst, for instance. Marketers do not have much control here, as
they cannot induce internal stimuli. The product's marketing must focus on generating an external
stimulus through a successful campaign.

Marketers must create brand awareness through campaigns and ensure that customers recall the brand
during a time of need. The brand must be memorable and trustworthy among the target segment.

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Buyer Decision Process
Information Search Stage
Once an internal or external stimulus prompts consumers, they start collecting information about
possible solutions from various sources. Consumers also rely on past experiences with brands while
making a decision. A brand must successfully provide its customers with all the information they want.
Customers should be able to interact with a brand - e.g. leave reviews and comments for future
customers.

Evaluation of Alternatives Stage

In this step, customers evaluate their options - different companies provide means to meet their needs.
Marketers must convince the consumer that their product is superior to competitors'. Consumers
compare the available solutions and opt for the best one that fits their situation. This decision may be
based on price, additional features, or other product or service factors.

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Buyer Decision Process
Purchase Decision Stage
Once the customer has all the information, they will finally decide to purchase one of the alternatives.
Two main factors influence this decision: attitudes and unexpected situational factors.

Attitudes refer to how consumers are influenced by other consumers' opinions (e.g., through word-of-
mouth). If someone whose opinion we value were to speak in favor of a brand, our likeliness of
purchasing from that brand will be high.

Unexpected situational factors refer to unforeseen changes in any factors that may affect consumers'
purchase decisions. These may include an unexpected price rise, better product benefits, etc.

By this stage, marketers must have convinced customers that their product is the best in the market.

Post-purchase Behavior Stage

It is wrong to assume that a marketer's job is done once the customer makes a purchase. Knowing if the
customer was satisfied or dissatisfied with the purchase is also crucial. The product or service will fail to
meet the customer's expectations if the brand promises more than what it can deliver.

It is vital to ensure that the customer is satisfied with the product's performance, as this is the key to
building trust and a loyal customer base for the brand.
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Buyer Decision Process
What can impact the (before purchasing) decision-making of a customer?
There are several factors that can impact a customer's decision-making process before making a
purchase, including:

Personal factors: age, gender, income level, lifestyle, and personality.

Psychological factors: motivations, perceptions, beliefs, and attitudes.

Social factors: family, friends, and social networks.

Cultural factors: culture, values, and beliefs.

Marketing factors: price, promotion, and availability, as well as the brand's reputation and image.

Buyer Decision Process Example

An example of the buyer decision process will help you understand the concept in more detail. Let us
look into the journey of a customer - Samuel - who is planning to buy a laptop.

Problem recognition: Samuel realizes the need for a new laptop when he notices that his current laptop's
battery is weak and causing him inconvenience.
Information search: Samuel collects information about various laptop brands by reading specs, reviews,
and talking to friends and colleagues.
Evaluation of alternatives: Samuel shortlists a few alternatives and evaluates their pros and cons to
make the best logical decision considering other benefits and his budget.

Purchase decision: Samuel may be influenced by people's attitudes and unexpected situational factors
while making the final purchase decision.
Post-purchase evaluation: Samuel engages with the brand based on his experience with the product. If
the product meets his needs or exceeds expectations, he will be satisfied, but if it falls short, he will be
disappointed.

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Buyer Decision Process
Types of Buyer Decision Process
The four main types of buyer decision processes are:

1. Complex buying behavior

2. Variety-seeking buying behavior

3. Dissonance-reducing behavior
4. Habitual buying behavior

We can understand the types of buyer decision processes with the help of the matrix shown below:

Buyer decision process Types StudySmarter

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Figure 2. Types of Buying Behaviour, StudySmarter Originals

Complex Buying Behavior

A type of buying behavior where the buyer is highly involved in the process, and the differences between
brands are significant. This buying behavior is usually seen when the buyer makes a risky purchase, a
purchase that involves a lot of money, or one that will impact their life significantly. In such cases, the
buyer will have to research and gather significant information about the brands and products not to
make a mistake in the purchase decision stage. Such purchases may be hard to reverse and involves
higher than usual risks. Examples include buying a car or a house.

FREUDIAN MOIVATION THEORY

What Is Freudian Motivation Theory?

Freudian motivation theory posits that unconscious psychological forces, such as hidden desires and
motives, shape an individual's behavior, like their purchasing patterns. This theory was developed by
Sigmund Freud who, in addition to being a medical doctor, is synonymous with the field of
psychoanalysis.

Freudian Motivation Theory Put to Use

When companies want to gauge the probability of success for a new product, they will enlist market
researchers to uncover the hidden motivations of a selected group of consumers to determine what
might trigger their buying habits. They may utilize a number of techniques to discover such deeper
meanings, such as role-playing, picture interpretation, sentence completion, or word association, among
others. Such exercises can help researchers learn about how consumers react to products and how to
best market them as a result. For example, buying a particular brand of computer can make a person feel
smart, successful, productive, and prestigious. Marketers can use this information to cultivate brand
identity.

Consider the example of a man who buys a new car given the fact that his old car is in good working
condition. It is possible that the man's decision to purchase a car was motivated by his urge to create a
status symbol for himself in society. This decision may not be as conscious as the buyer would think it to
be.

What are the three concepts of Freud's theory?

Freudian theory postulates that adult personality is made up of three aspects: (1) the id, operating on
the pleasure principle generally within the unconscious; (2) the ego, operating on the reality principle
within the conscious realm; and (3) the superego, operating on the morality principle at all levels of ...
 UNIT -3 PRODUCT AND PRICE

WHAT IS MEANT BY MARKETING MIX?

A mixture of several ideas and plans followed by a marketing representative to promote a particular
product or brand is called marketing mix. Several concepts and ideas combined together to formulate final
strategies helpful in making a brand popular amongst the masses form marketing mix.

DEFINITION

DEFINE THE TERM MARKETING MIX.

According to Stanton, ―Marketing mix is the term used to describe the combination of the four inputs
which constitute the core of a company‘s marketing system the product, the price structure, the
promotional activities and the distribution system.

What are the 7 Ps of Marketing?

The 4 Ps marketing mix concept (later known as the 7 Ps of marketing) was introduced by Jerome
McCarthy in his book: "Basic Marketing: A Managerial Approach". It refers to the thoughtfully designed
blend of strategies and practices a company uses to drive business and successful product promotion.

Initially 4, these elements were Product, Price, Place and Promotion, which were later expanded by
including People, Packaging and Process. These are now considered to be the “7 Ps” mix elements.

It can be difficult for a small business owner or marketing manager to know how to establish a unique
selling proposition or to reach the right customers, especially on new platforms like the internet, with
digital marketing. The 7 Ps of marketing give a framework to use in marketing planning and essential
strategy to effectively promote to your target market.

It can also into consideration elements of the mix in your day to day marketing decision making process
with the goal to attract the right audience to successfully market to through your marketing campaigns.

1. Product (or Service)

Your customer only cares about one thing: what your product or service can do for them. Because of this,
prioritize making your product the best it can be and optimize your product lines accordingly. This
approach is called “product-led marketing.” In a marketing mix, product considerations involve every
aspect of what you're trying to sell. This includes:

 Design
 Quality
 Features
 Options
 Packaging
  Market positioning

2. Price

Many factors go into a pricing model. Brands may:

 Price a product higher than competitors to create the impression of a higher-quality offering.
 Price a product similar to competitors, then draw attention to features or benefits other brands
lack.
 Price a product lower than competitors to break into a crowded market or attract value-conscious
consumers.
 Plan to raise the price after the brand is established or lower it to highlight the value of an updated
model.
 Set the base price higher to make bundling or promotions more appealing.

Consider what you're trying to achieve with your pricing strategy and how price will work with the rest of
your marketing strategy.

3. Promotion

Promotion is the part of the marketing mix that the public notices most. It includes television and print
advertising, content marketing, coupons or scheduled discounts, social media strategies, email marketing,
display ads, digital strategies, marketing communication, search engine marketing, public relations and
more.

All these promotional channels tie the whole marketing mix together into an omnichannel strategy that
creates a unified experience for the customer base. For example:

 A customer sees an in-store promotion and uses their phone to check prices and read reviews.
 They view the brand's website, which focuses on a unique feature of the product.
 The brand has solicited reviews addressing that feature. Those reviews appear on high-ranking
review sites.
 The customer buys the product and you’ve sent a thank you email using marketing automation.

Here are the ways can use these channels together:

Make all the channels available and make the most of them to reach target audience.

Embrace the move toward personalized marketing.

Segment promotional efforts based on customers' behavior.

Test responses to different promotions and adjust marketing spend accordingly.

Remember that promotion isn't a one-way street. Customers expect to pay attention to their interests and
offer them solutions when they need them.
4. Place

Where will you sell your product? The same market research that informed your product and price
decisions will inform your placement as well, which goes beyond physical locations. Here are some
considerations when it comes to place:

Where will people be looking for your product?

Will they need to hold it in their hands?
Will you get more sales by marketing directly to customers from your own e-commerce website, or will
buyers be looking for you on third-party marketplaces?
Do you want to converse directly with your customers as they purchase, or do you want a third party to
solve customer service issues?

5. People

People refers to anyone who comes in contact with your customer, even indirectly, so make sure you're
recruiting the best talent at all levels—not just in customer service and sales force.

Here’s what can do to ensure people are making the right impact on customers:

 Develop marketers’ skills so they can carry out your marketing mix strategy
 Think about company culture and brand personality.
 Hire professionals to design and develop products or services.
 Focus on customer relationship management, or CRM, which creates genuine connections and
inspires loyalty on a personal level.

6. Process

Prioritize processes that overlap with the customer experience. The more specific and seamless your
processes are, the more smoothly your staff can carry them out. If your staff isn't focused on navigating

7.Physical Evidence
Lastly, the Physical Evidence element of the 7Ps refers to the tangible aspects of a product,
including packaging, branding, and more. Ensuring the tangible aspect of a product aligns with the
customer’s perception of the brand is essential in setting the business apart from competitors.
As per National Retail Federation data, 72% of consumers are more likely to shop at a store that has a
positive physical environment. An Epsilon research indicates 80% of consumers are more likely to make
a purchase if brands offer them personalized experiences.

 Environment: The physical setting where the service is delivered.

 Tangible Cues: Physical items that support the service (e.g., brochures, uniforms).
 Online Presence: Website and digital footprint.
 Branding Materials: Logos, signage, and other visual elements.
procedures, they have more attention available for customers—translating directly to personal and
exceptional customer experiences.

Some processes to consider:

 Are the logistics in your main distribution channel cost-efficient?

 How are your scheduling and delivery logistics?
 Will your third-party retailers run out of product at critical times?
 Do you have enough staff to cover busy times?
 Do items ship reliably from your website?

If you get more than one customer complaint about any process, pinpoint what's going wrong and figure
out how to fix it.

PRODUCT
WHAT IS A PRODUCT?

The term product in the modern marketing includes more than physical goods. The product may be
intangible- services or an idea or an amalgamation or all the three.

A product is anything than can be offered to a market for attention, acquisition, use or consumption that
might satisfy a want of need.

PRODUCT MIX

The product mix is one of the elements in the product policy. This is more important now a day since
most of the manufacturers are diversifying their products. The product policy decisions are made of three

Different levels: Product mix, product item and product line. These ‗three in one‘ elements make the
product planning effectively.

Product mix is the list of all products offers for sale by a company. It is defined as the composite of
products offered for sale by a firm or business unit. The various definitions put forth by scholars are given
below:

Philip Kotler:

―Product Mix (also called as product assortment) is the set of all product line and items that a particular
seller offers for sale to buyers.

Definition of William Stanton:

―The product mix is the full list of all products offered for sale by a company‖.
 PRODUCT LINE AND PRODUCT MIX

Most companies generally market several products rather than just one or two. It is necessary for them to
understand the relationship among all their products to coordinate their marketing of total group of
products. Product item, product line and product mix concepts help us to understand the relationship
among a company‘s different products.

A product item refers to a particular version of a product that is distinct, such as surf excel is a (premium)
product item offered by the Hindustan lever limited. A product line is a closely related group of products
for essentially similar use, and technical and marketing consideration. colgate product line includes
Colgate dental cream, colgate gel, colgate total ,colgate herbal,etc. product mix is the total number of
products that a company markets. Product mix consistency means how closely related different product
lines are in end use, production requirements, distribution Etc. A Company may have many product lines
in its product mix. The product mix width refers to the number of product lines a company has. Product
line length means the number of product variants available in a company‘s product line.

THE GOALS OF PRODUCT MIX

The efficient fulfillment of the marketer‘s goal to supply goods and services to consumer for satisfaction
of their needs can be possible if due attention is given three issues which govern the product mix – Sales
Growth, Sales Stability and Profits.

 Sales growth can be achieved either by increasing its share in existing markets or by finding new markets.
Four ways can be adopted by which product mix can be adjusted to achieve a goal that is organizational
goals.

☻ Market Penetration under which market share is increased by expanding sales of present products in
existing uses;
☻ Market development under which markets are expanded by creating new uses of present products;
☻ Product development where market share is increased by developing new products to satisfy existing
needs.
☻ Diversification where market is expanded by developing new products to satisfy new consumer needs.

 Sales stability: stable sales allow for more efficient planning in all phases of production and distribution.
It is also desirable to maintain a proper balance in total sales and product mix so that a market share
losing product can be counteracted by another picking up market share. Sales stability is also possible by
making an entry into a new market.
 Profits are determined by the components of the product mix. Some items are usually more profitable
than others. Low profit items may be performing a valuable part in helping to sell company‘s more
profitable products; and they may also prove as insurance against an unforeseen failure in profitable
products.
 FACTOR INFLUENCING CHANGE IN PRODUCT MIX
 Market demand: The change in the demand of a product affects the decision of product mix if the
demand of a new product is increasing in the market and the production of that new product is
beneficial to the company considering its cost of production, utilization of its plant and machinery and
labour force and it is thinks that it can compete with its competitors it can start production of the new
product. Likewise if the demand of a product is declining fast it can decide to drop its production.
 Competitor’s actions and reactions: The decision of adding or eliminating the product may be the
reaction of competitor‘s action. If company thinks that it can meet the competition well by adding
new product it can decide to produce the product.
 Quantity of production: If the production of the new product is considered to be at a large scale and
the company can add more items to its product line just to get the economics of large-scale
production.
 Use of residuals: If residuals can be used gainfully the company can develop it‘s by product into the
main product. For example, a sugar mill can develop the production of paper, etc,
 Goodwill of the company: If the company is of repute, it can market any new product in the market
without much difficulty.
 Change in purchasing power: If the number of customers increases in their purchasing power or with
the change in their behaviour, fashion, etc. the company may think to add one more product keeping
mass production or increase in profitability in mind.
 Full utilization of marketing capacity: If the marketing personnel are not being utilized to their
capacity, the company may start the production of another production in order to utilize their
marketing capacity fully. In this way, company may be able to reduce its marketing cost.
 Change in company desire: Keeping in mind the objectives of the firm i.e. maintaining or increasing
the profitability of the concern, the firm may eliminate some of its unprofitable process or may start
the process of producing a new product. In this way, the firm tries to make its product mix an ideal
one.

PRODUCT LIFE CYCLE

WHAT DO YOU MEAN BY PRODUCT LIFE CYCLE?

Like a human being, all products have certain length of life during which they pass through certain
identifiable stages. Through the conception of the product, during its development and upto the market
introduction, product remains in pre-natal stage. It life begins with its market introduction, then goes
through a period during which its market grows, rapidly, eventually, it reaches at maturity and then stands
saturated. Afterwards its market declines and finally its life comes to an end.

The importance stages from the viewpoint of marketing can be grouped into six: (i) Innovation or
introduction, (ii) Growth, (iii) Maturity, (iv) Saturation, (v) Decline, and (vi) Obsolescence. This is
termed as a product life cycle.
DEFINE PRODUCT LIFE CYCLE.

William J. Stanton has explained the concept of life cycle of a product, as ―From its birth to death, a
product exists in different stages and in different competitive environments. Its adjustment to these
environments determines to a great degree just successful its life will be‖.

DIFFERENT STAGES OF PRODUCT LIFE CYCLE

The life cycle of a product consists of the following stages:

1. Introduction stage:

The introduction stage starts when a new product is first launched. Introduction takes time, and sales
growth is apt to be slow Well-known products such as fronen foods, HDTVs, and all-electric vehicles
lingered for many years before they entered a stage of more rapid growth.

In this stage, as compared to other stages, profits are negative or low because of the low sales and high
distribution and promotion expenses. Much money is needed to attract distributors and build their
inventories. Promotion spending is relatively high to inform consumers of the new product and get them
to try it. Because the market is not generally ready for product refinements at this stage, the company and
its few competitors produce basic versions of the product. These firms focus their selling on those buyers
who are most ready to buy.

A company, especially the market pioneer, must choose a launch strategy that is consistent with the
intended product positioning. It should realize that the initial strategy is just the first step in a grander
marketing plan for the product's entire life cycle. If the pioneer chooses its launch strategy to make a
"quick killing," it may be sacrificing long-run revenue for the sake of short-run gain. The pioneer has a
good chance of building and retaining market leader-ship if it plays its cards correctly from the start,
always with an eye on the long run.
When a product is just introduced into the market, it will take some time for the buyers to come to know
of it. Sales will gradually start. Profits will be low. Selling costs will be very high at his phase. Steps must
be taken by the marketer to popularize the brand name.

2. Growth stage:

If the new product satisfies the market, it will enter a growth stage in which sales will start climbing
quickly. The early adopters will continue to buy, and later buyers will start following their lead, especially
if they hear favorable word of mouth. Attracted by the opportunities for profit, new competitors will enter
the market. They will introduce new product features, and the market will expand. The increase in
competitors leads to an increase in the number of distribution outlets, and sales jump just to build reseller
inventories. Prices remain where they are or decrease only slightly. Companies keep their promotion
spending at the same or a slightly higher level. Educating the market remains a goal, but now the
company must also meet the competition.

Profits increase during the growth stage as promotion costs are spread over a large volume and as unit
manufacturing costs decrease. The firm uses several strategies to sustain rapid market growth for as long
as possible. It improves product quality and adds new product features and models. It enters new market
segments and new distribution channels. It shifts some advertising from building product awareness to
building product conviction and purchase, and it lowers prices at the right time to attract more buyers.

In the growth stage, the firm faces a trade-off between high market share and high current profit. By
spending a lot of money on product improvement, promotion, and distribution, the company can capture a
dominant position. In doing so, however, it gives up maximum current profit, which it hopes to make up
in the next stage.

3. Maturity stage:

At some point, a product's sales growth will slow down, and it will enter the maturity stage. This maturity
stage normally lasts longer than the previous stages, and it poses strong challenges to marketing
management. Most products are in the maturity stage of the life cycle, and therefore most of marketing
management deals with the mature product.

The slowdown in sales growth results in many producers with many products to sell. In turn, this
overcapacity leads to greater competition. Competitors begin marking down prices, increasing their
advertising and sales promotions, and upping their product development budgets to find better versions of
the product. These steps lead to a drop in profit. Some of the weaker competitors start dropping out, and
the industry eventually contains only well-established competitors.

Both sales and profits will reach the maximum level at this stage. Towards the end of this stage, the
marketer may also witness the supply exceeding the demand ‘situation. He may adopt certain promotional
measures like free gift on purchase’, exchange offer and so on. Such measures may help to extend the
span of this stage and may not offer a permanent solution.
 4. Decline stage:

The sales of most product forms and brands eventually dip. The decline may be slow, as in the cases of
postage stamps and mainframe computers, or rapid, as in the case of VHS tapes and CDs. Sales may
plunge to zero, or they may drop to a low level where they continue for many years. This is the decline
stage. Sales may decline for many reasons, including technological advances, shifts in consumer tastes,
and increased competition. As sales and profits decline, some firms withdraw from the market. Those
remaining may prune their product offerings. addition, they may drop smaller market segments and
marginal trade channels, or they may cut the promotion budget and reduce their prices further.

Carrying a weak product can be very costly to a firm, and not just in profit terms. There are many hidden
costs. A weak product may take up too much of management's time. It often requires frequent price and
inventory adjustments. It requires advertising and sales-force attention that might be better used to make
"healthy" products more profitable. A product's failing reputation can cause customer concerns about the
company and its other products. The biggest cost may well lie in the future. Keeping weak products
delays the search for replacements, creates a lopsided product mix, hurts current profits, and weakens the
company's foothold on the future

In At this level, profits touch the lowest point. Competition becomes intense and the customers show
preference for better products. Product alteration or modification may provide solution in some cases. If
that is not possible, the marketer may have to abandon the product.

The concept of product life cycle guides the marketers in selecting the appropriate strategy
for every stage. However, it is not necessary that every product should pass through all the different
stages. Some products may die in the introduction stage itself. The time span in every stage will also vary
from product to product.

Product life cycle characteristics and strategies

CHARACTERISTICS INTRODUCTION GROWTH MATURITY DECLINE

sales Low sales Rapidly rising sales Peak sales Declining sales

costs High cost per Average cost per Low cost per Low cost per
consumer consumer consumer consumer

profits negative Rising profits High profits Declining profits

customers innovators Early adopters Mainstream Lagging adopters

adopters

competitors Few Growing number Stable number Declining number

Beginning to
decline
STRATEGIES INTRODUCTION GROWTH MATURUTY DECLINE

product Offer a basic Offer product Diversify brand and Phase out weak
product extensions, service, models items
and warranty

Price Price based on value Price high enough to Price to match or Cut price
delivered drive profits but Beat competitors;
enough to penetrate Increase price based
market On innovation
distribution Build selective Build intensive Build more intensive Go selective: phase
distribution distribution distribution of unprofitable
outlets
Advertising Build product Build interest in the Stress brand Reduce to level
awareness among mass market: focus differences and needed to retain
early adopters and on communicating benefits hard-core loyals
dealers delivered value
Sales promotion Use heavy sales Reduce to take Increase to encourage Reduce to minimal
Promotion to entice Advantage of heavy Brand switching level
trial Consumer demand

ADVANTAGES OF PRODUCT LIFE CYCLE CONCEPTS

The product life cycle concept is useful to chart individual item, brands, product forms and product
classes.

This concept can also be used to chart styles, fashions and fads.
The management can understand what typically happens at different stages in a product life.
Therefore, it can improve its forward planning.
It also enables the management to try new products in order to equalize the profit or return.
Different suitable price policies can be formulated for different products passing through different
stages.
WHAT IS NEW PRODUCT DEVELOPMENT?

The development and distribution of new products are of great current interest among businessmen.
Business firms are placing increasing reliance on new products for the achievement of their profit
objective. But most of new products are marketing failures. Even among a group of well-managed
companies in America, the success rate for products, which reached the market, was still only two out of
three. Hence a good programme for planning and developing new products is essential for the success of
new products.
REASONS FOR THE NEW PRODUCT FAILURE

Inadequate market analysis:

Where the product is introduced in the market without proper market analysis or with biased and
incomplete data, the product fails in achieving its objectives. It is because the enterprise fails in (i)
Understanding the consumers needs and wants properly, (ii) making correct estimates of sales, and (iii)
meeting the standards of utility etc.

Product Defect:
This arises out of technical flaws in the process of production. This is a fundamental reason for product
failure. Low quality of products, poor design or packing may lead to product failure. This can be done
away through the proper product testing.
Higher costs:
Higher final costs than anticipated at the time of product planning are another reason for product failure.
It might be partly due to wrong pricing policies adopted by the firm. The cost estimates also often go
wrong when the products are finally introduced into the market.
Poor Timing:
The fundamental principle to be followed in product planning is to find out the exact time at which the
product is to be introduced in the market. Usually when and how are the two questions a manufacturer is
often finding difficult to answer. A close analysis of the market conditions and consumer behaviour and
attitudes is essential to find an answer to the two problems.

Distribution problems:

This includes channels of distribution; failure to train marketing personnel for new products and new
markers; failure to co-operate with middlemen; poor physical distribution of goods.
Promotion problems:
Inadequate advertisement, use of wrong appeals failure to cooperate with distribution system, sales force
inadequacies in training motivation or supervision.
Pricing problems:
This includes higher costs than anticipated. This led to higher prices, which in turn led to lower sales
volume than anticipated.

PRICE
Price mix is the value of the product determined by the producers. price mix includes the decisions as to:
price level to be adopted; discount to be offered; and, terms of credit to be allowed to customers.

DEFINE PRICING:

―Price is the exchange value of goods and service in terms of money‖. Setting the right price is an
important part of effective marketing. It is the only part of the marketing mix that generate revenue
(product, promotion, and place are all about marketing costs).Price is also the marketing variable that can
be changed most quickly, perhaps in response to a competitor price change.

Put simply, Price is the amount of money or goods for which a thing is bought or sold. The price of
a product may be seen at a financial expression of the value of that product.

For a consumer, price is the monetary expression of the value to be enjoyed/ benefits of purchasing
product, as compared with other available items.

IMPORTANCE OF PRICING

Without price there is no marketing, in the society, It money is not there, exchange of goods can be
undertaken, but without price. That is there is no exchange value of a product or service agreed upon in a
market transaction is the key factors which affect the sales operations.

 Price is important economic regulator.

 Can decide the success or failure of a firm.
 The marketing demand for a product or service to a large extent depends upon the price of the
product.
 Price will affect the competitive position and share of the market.
 Price is always an important consideration both to the buyer and seller.

OBJECTIVES OF PRICING

Some specific objectives of company‘s pricing may be noted below:

 To maximize the profits: The primary objective of the pricing decision is to maximize profits for the
concern and therefore pricing policy should determine in such a way so that the company can earn the
maximum profits.
 Price Stability: As far as possible, the prices should not fluctuate too often. A stable price policy
above can win the confidence of the consumers. It will also add to the goodwill of the firm. For this
purpose, the concern should consider long run and short-run elements.
 Competitive situation: One of the objectives of the price decision is to face the competitive situation
in the market. Prices of the commodities should be fixed keeping in the mind the competitive
situation.
 Achieving a Target-return: This is a common objective of well-established and reputed firm in the
market (either for the company‘s name, or its brand or the quality of the product) to fix a certain rate
of return on investment.
 Ability to pay: Price decisions are sometimes taken according to the ability of customers to pay, i.e.,
more prices can be charged from persons having a capacity to pay.
 Long-run Welfare of the firm: The main aim of some concerns is to fix the price of the product, which
is in the best interest of the firm in the long run keeping the market conditions and economic
situations in mind.
 PRICING POLICIES:

It provides the framework and consistency needed by the firm to make reasonable, practicable and
effective pricing decisions. The correctness of any pricing depends on such variable as managerial
philosophy. Competitive conditions and the firm‘s marketing and pricing objective. The following are
however, the policies recognize for pricing.

Cost Oriented Pricing Policy: It is also referred to as cost-plus pricing. Such a policy considers only
the cost of production and distribution. The production and distribution costs of product are added and
then divided by the number of units produced. The resultant figure is the cost per unit. To this, the
percentage of profits desired by the marketer is added to arrive at the selling price. This policy ignores
altogether the influence of demand, competition and all other external forces.

Demand –Based Pricing Policy: In this case, the price of the product will be determined in
accordance with the demand position in the market. If the demand is more, the price will be hiked and
if it is less the price will be reduced.

Competition-Based Pricing Policy: Here, the price of the competing products is taken as the basis.
The price of the product may be more or less than the price of the competitors‘ products. It may even
be equal to the price of the competitors‘ products. The drawback of this approach is that it ignores cost
and demand. The price might have been hiked although there would not have been any increase in the
cost.

PRICING STRATEGIES (OR) PROCEDURE FOR PRICE DETERMINATION

New products howsoever distinctive have limited period free of competition. The period depends on
innovation, potentiability, and the rate at which it gains market acceptance and potential competitors‘
product development capability. In the market pioneering stage, marketer has three price strategies:

 Procedure for price determination: There is no specific procedure applicable to all firms for price
determination however following steps may be followed to determine.
 Determining demand for the product: The marketer has to make out estimation for his product. Each
price that the company might charge will lead to a different level of demand. There is a relation
between the price charged and the resulting demand. In the normal case, demand and price are
inversely related. i.e. higher the price, lower the demand.
 Anticipate and analyses the competitive reaction: The competitors can influence the price.
Competition may arise from
 Similar products
 Close substitute
Unrelated products seeking the same consumer‘s disposable income when the marketing field is easy
to enter, then the number of competitors is greater, and there is a room for more revenue. To
anticipate the reactions of the competitors, it is necessary to collect information about their product,
cost structure, market share etc.
 Establish expected share of market: A marketer must decide the share of the market at the expected
price. Low priced products may capture larger share of the market, and a high priced product may
 captured by advertisements and non-priced competition. Share of the market is also decided by the
factors, such as present production capacity, cost of plant extension etc.
 Selected pricing strategy: A good and proper pricing policy may be employed to achieve a
predetermined share of the market.
 Skimming price: This price strategy is characterized by high initial price of the product, at the time of
introduction of the product in the market. Manufacturers aim at profit maximization at the shortest
period, where market conditions are also favorable. The price is brought down when competitors
enter into the market field. Under this, the price is fixed high because the product is characteristic for
its distinctiveness and exclusiveness etc. Skimming is suitable for new products because
 At the initial stage, competition is at minimum, and the distinctiveness of the products leads the
market.
 If the market is unfavorable the price can be brought down easily, and at the same time, if the
price is too low, it is very difficult to raise the price.
 High price creates a vision of superior product.
 Penetrating price: Price skimming strategy adopts a high introductory price to skim the milk of the
market. Whereas penetration pricing strategy adept‘s a low introductory price to speed up or capture
the widespread market acceptance. Penetrating pricing strategy is characterized by low initial price of
the product, when introduced in the market. The aim is to catch the major portion of the market. The
policy is satisfactory, when
 The cost of production comes down because of large-scale operations.
 There is fear of stiff competition.
 The public accepts the new products as a part of its daily life.
 The public accepts the new products as a part of its daily life.
 Consider company’s marketing policies: The price of product is influenced by the nature of product‘s
have to be disposed of within a limited time. E.g. fruits, milk, vegetables etc. Durable products e.g.
car, radio, cloth, scooter etc.., are concerned. But when the fashion changes, the marketer may
compel the stockiest to sell out the stocks before they become obsolescent.
 Channels of distribution select the types of middlemen and the gross marginal requirements of these
middlemen will influence a manufacturer‘s price. Wholesalers as well as retailers may purchase from
a producer, who often sets a factory price for each of the above two, larger the promotional methods
used, larger will be the expenses and this will reflect in the manufacturer‘s price, as the set price has
to cover the expenses.

FACTORS INFLUENCING IN PRICING

I) Internal Factors: Those factors, which are well within the control of the business, are called internal
factors. These include:
Costs: A conventional approach to the determination of price for a product is based on its cost of
production and distribution. All that is done here is to add up all the costs incurred (material cost, labour
cost, administration overhead and selling and distribution overheads) and divide the same by the number
of units produced. This will give us the cost per unit of output. To this figure, if a certain percentage of
profit, as desired by the business, is added we can arrive at the selling price per unit. The drawback of
this approach is that it ignores several external factors like demand, extent of competition and so on.
Irrespective of the cost of production and distribution, the buyer may be willing to buy a particular
product at a certain price.

Business objectives: Apart from the basic preference for profits, every business has certain other
objectives. These objectives can also influence pricing decisions. These are given below:
Return on investment: Every business expects a certain rate return on the investment made every
year. The rate of return is expressed in percentage terms.

Market share: If a business is aiming only for a small share of the market, i.e., catering to the needs
of a certain category of buyers only, the price of its product has to be naturally high. On the other hand,
if the business is aiming for a large share of the market, i.e., catering to different classes of buyers, the
price of its product can be fixed low.

Preventing competition: If the goal of a business is to prevent its competitors from gaining upper
hand, it will probably keep the price of its product low. Such a strategy will certainly work if the market
consists mainly of middle and lower income buyers and the business is able to offer the product at a
price lower than that of the competitors. To prevent competition, a business may also keep its price high
if it is able to convince the buyers that the quality of its product is much more superior to that of the
competitors.

Meeting competition: If the aim of the marketer is just to meet competition, his price will fall in line
with that of the competitors. The very nature of the soft drinks market is such that whoever enters the
industry will keep the price on par with their rivals.

Stability in price: A marketer, who is aiming for a stable price for his product, will keep it
unchanged over a fairly longer period of time. He ignores all other factors like demand, competition,
etc., and is determined to deep his price stable. Those buyers, who are specific about stability in price,
may wholeheartedly offer their support to such a product.

Maximizing profits: The objective of profit maximizations‘ can be achieved by adopting any of the
following measures:
• Large-scale production.
• Curtailing the cost of production and distribution.
• Maximizing sales.
• Increasing the market share and so on.

II) External Factors: Those factors, which are behind the control of the marketer, are called external
factors. Although they are beyond the marketer‘s control, they cannot be ignored. They play a crucial
role in pricing decisions and are as important as the internal factors. These include the following:
 Demand: The demand for a product is nothing but a buyers desire to have a product backed by his
ability and willingness to pay for it. The law of demand says that the quantity demanded of a commodity
will be less when its price increases and it will be more when the price decreases, other things (tastes and
preferences of the consumers, competitive pressures etc.) remaining the same. Marketers do alter the
price according to the demand position in the market. For this, they closely monitor the market
conditions.

Competition: Only a monopolist is free from competitive pressures. If the competing products are
all identical, price variation cannot be adjusted. If they are dissimilar, i.e., each has certain unique
features, price differences may be accepted.

Middlemen: The goods produced by a manufacturer are not directly marketed by him. Normally,
there are wholesalers and retailers in the market. In addition to wholesalers and retailers, there are also
other intermediaries in the market like brokers, commission agents and so on. All these intermediaries
have to be paid for their services. All these charges come to be included in the price and it is only the
ultimate consumer who finally bears the burden. Longer the chain of intermediaries, greater will be price
payable by the consumer.

Government regulations: The Government does regulate business activities. If the excise and
customs duties payable by the producers to the Government are hiked by the latter, the producers usually
shift their burden on the consumers by increasing the price. Similarly, if the sales tax is increased by the
Government the burden will again fall only on the consumer. All such increases will be reflected in the
price.

Political conditions: The political conditions, prevailing both at the national and international level,
influence pricing. The share market‘ is particularly vulnerable to political changes. A change in the
portfolios of ministers may influence share prices. The recent war between U.S.A and Iraq has brought
about a hike in the price of gold and petroleum products.

KINDS OF PRICING
1. Odd pricing:

When the price of a product is an odd number, such pricing method is knows as odd pricing. Example:
Conventionally, Bata shoe company has been fixing the price of shoes and chapples by the method of
odd pricing, e.g. `399.95

2. Psychological pricing:

When the price of a product is a round number, such a method of pricing is known as psychological
pricing. For example, a product may be priced `10 or `15. Such a method preferred by those marketers
who do not believe in the techniques of off pricing.
3. Price based on the prevailing or ruling price:

Such a method is followed by those marketers who want to fall in line with their competitors. They
keep the same priced as decided already by their rivals. Example: Manufacturers of cement follow a
uniform price policy

4. Prestige pricing:

This method is followed by those who deal in luxury goods. Such marketers, generally, keep the price
of goods high for they think that customers will judge quality by the price. Example: Those who sell
cosmetic items, leather goods, electronic items, etc., follow prestige pricing.

5. Customary prices:

By custom or convention, certain products are sold almost at the same price by different marketers.
Example: Milk, butter, coffee powder, soft drinks, etc.

6. FOB (Free on Board) Pricing:

Such a pricing has relevance when goods are to be transported to the buyer‘s place. In case of FOB
origin, the buyer will bear the transit charges himself and in the case if FOB destination, he need not
pay the transit charges.

7. CIF (Cost, Insurance and Freight) price:

In the case of CIF price quotation, the price paid by the buyer (may be an importer) is inclusive of
cost, insurance and freight charges.

8. Dual pricing:

It refers to the practice of some marketers who quote two different prices for the same product; one
may be for bulk buyers and one for small quantity buyers.

9. Administered pricing;

Here the pricing is divided only the administration (or) the owner (or) the seller. He is not interested
is reading the competitor, demand, supply or anything what the policy division of a company (or) a
owner, that is the factor declines the pricing of a product.

10. Monopoly Pricing:

Here the new products are fix the price based on this policy only. Here the substitutes are not
available, so the decision of one seller or person is the pricing of a product. Kingmaker pricing is
done.

11. Price lining:

In this case, the price, once determined remains unchanged for a fairly longer period of time.

12. Mark-up pricing:

It refers to the price arrived at by a retailer by adding a certain percentage (towards his margin of
profit) to the manufacturer‘s price. It is only at this price that he sells the goods to the consumers.

13. Penetration pricing:

Here consumers are the target peoples. Initially we fix very less price and after reaching the product
into consumer minds, we may increase the price.

14. Expected pricing:

The price, which is expected by the consumers, study the consumer minds and find out what price
they are expected and fix a price.

15. Sealed bit pricing (or) contract price:

This is for a particular work. The work value is calculated and fixes a price through the tender or
contract.

16. Negotiated pricing:

Manufacturer of industrial goods, who need components from suppliers, negotiate with the latter
before finalizing the price. This becomes necessary in view of the high cost of the components.

17. Skimming pricing:

It refers to the practice of setting a very high price for a product, when it is introduced into the market
for the first time and to reduce the same gradually as competitors enter the market.

18. Cost-based pricing:

A traditional method that sets prices based on the cost of production and marketing. Also known as
markup pricing, this method involves adding a fixed markup to the cost of goods sold.

19. Value-based pricing:

A method that sets prices based on what customers are willing to pay for the product.This method can
help build customer loyalty and drive innovation.

20. Competition-based pricing:

A method that sets prices based on what the co Product Bundle Pricing

21. Bundle Pricing:

selling multiple products together at a lower total, price than buying the separately

EXAMPLE: Combo
22. Dynamic pricing:

Dynamic pricing is a strategy that adjusts prices based on market demand and time. It's also known as
surge or demand pricing.
 Unit – 4 Promotion and distribution
What is promotion?
Promotion marketing is the process of sharing information about a brand, product, or service to
increase awareness, interest, and sales. It's a key part of marketing, along with product, price, and
place.

 Inform : Use advertising, personal selling, and public relations to share information about a
product's benefits and applications
 Persuade: Highlight how a product or service can solve a consumer's needs better than other
options
 Create interest : Generate interest from consumers and encourage them to purchase the
products or service

Key Elements of Promotion advertising

Advertising:
This includes buying slots to make commercials on TV, radio, newspapers, magazines, or on
the Internet to promote your product or service. The purpose is to extend the coverage, ensure
as many people as possible know what is being advertised or sold, and increase the profile.

Public Relations (PR):

PR is about managing how stakeholders develop an understanding of your company. This

includes communicating with the media, writing press releases, managing events, and dealing
with all the associated problems. Public relations plays an important role in erecting and
enhancing image as well as credibility within the populace.

Sales Promotions:

These are short-term promotions, for example, a discount price, promotional coupons, or a
product sale that are meant to make someone buy the product. Sales promotions can make
customers rush to purchase products, which is good for sales within a certain period.

Direct Marketing:

Direct marketing refers to strategically marketing directly to a specific audience with messages
delivered through e-mail, mail, or phone. The goal is to secure an immediate reaction of
curiosity or interest from a target audience, such as buying a product or asking for additional
information.

Digital Marketing:

This employs such aspects as websites, search engine results, and social media platforms to
market to specific audiences. Digital marketing is advantageous because it offers insight into
the success of the promotion in marketing completed.

Personal Selling:

Personal selling is a form of selling that involves the salesperson contacting the buyer in an
attempt to make the sale. This is particularly useful for more complex or expensive products
since it enables the sales reps to give advice, answer questions, or satisfy individual needs.

Example of a Famous Brand and Their Promotion in Marketing Mix

Brand: Coca-Cola
Advertising:
Coca-Cola employs international and domestic TV ads, online/offline banners, and billboards
to advertise its beverages. For instance, their “Share a Coke” series of campaigns promote and
popular frame slogans and personalization, which help generate vast population appeal in
general while enhancing brand visibility.

Public Relations:

Coca-Cola practices PR by endorsing large events such as the Olympics and the World Cup
and conducting numerous community-oriented schemes. These efforts sometimes comprise
linkages to the environment and social organizations to enhance their image.

Sales Promotions:

Coca-Cola employs “free giveaway” crusades, which offer free bottles for every purchase,
coupons, and games. These promotions are typically employed and positioned in stores as well
as on products to generate a direct call to purchase.

Direct Marketing:

It employs email marketing to notify customers of new products as well as seasonal

promotions. They also employ text messaging using SMS.
Digital Marketing:

Coca-Cola uses Instagram, Facebook, and Twitter to interact with the social media audience
through sharing, stop motion video ads, influencer marketing, and bad snap hack campaigns,
‘Share a Coke.’ They regularly post humorous things and engage in hashtag trends to gain
increased exposure.

Personal Selling:

Coca-Cola employs salespeople in its retail and food service segments to deal directly with
store owners and managers for placement and advertisement. They offer assistance on display,
advertising tools, and product familiarization to boost sales and awareness.

OBJECTIVES OF ADVERTISING

There are 3 main objectives of advertising – to inform about the brand or offering, to persuade
to buy or perform a task and to remind and reinforce the brand message.

 To Inform
Advertisements are used to increase brand awareness and brand exposure in the target market.
Informing potential customers about the brand and its products is the first step toward attaining
business goals.

 To Persuade
Persuading customers to perform a particular task is a prominent objective of advertising. The
tasks may involve buying or trying the products and services offered, forming a brand image,
developing a favourable attitude towards the brand etc.

 To Remind
Another objective of advertising is to reinforce the brand message and to reassure the existing
and potential customers about the brand vision. Advertising helps the brand to maintain top-of-
mind awareness and to avoid competitors stealing the customers. This also helps in the word of
mouth marketing.
Other objectives of advertising are subsets of these three objectives.
These subsets are:
• Brand building
• Increasing sales
• Creating demand
• Engagement
• Expanding customer base
• Changing customers attitudes, etc.
 IMPORTANCE OF ADVERTISING
 To The Customers

Convenience: Targeted informative advertisements make the customer‘s decision-making

process easier as they get to know what suits their requirements and budget.

Awareness: Advertising educates the customers about different products available in the
market and their features. This knowledge helps customers compare different products and
choose the best product for them.

Better Quality: Only brands advertise themselves and their products. There are no
advertisements for unbranded products. This ensures better customer quality and a good
business model as no brand wants to waste money on false advertising.

 To The Business

Awareness: Advertising increases brand and product awareness among the people belonging
to the target market.

Brand Image: Clever advertising helps the business to form the desired brand image and
brand personality in the minds of the customers.

Product Differentiation: Advertising helps the business differentiate its product from
competitors ‘and communicate its features and advantages to the target audience.

Increases Goodwill: Advertising reiterates brand vision and increases the brand‘s goodwill
among its customers.

Value For Money: Advertising delivers the message to a wide audience and tends to be value
for money when compared to other elements of the promotion mix.

ADVANTAGES OF ADVERTISING

 Reduces Per-Unit Cost: The wide appeal of advertisements increases the demand for
the product which benefits the organisation as it capitalises on the economies of scale.
 Helps In Brand Building: Advertisements work effectively in brand building. Brands
that advertise are preferred over those which doesn‘t.
 Helps In Launching New Product: Launching a new product is easy when it is backed
by an advertisement.
 Boosts Up Existing Customers ‘Confidence In The Brand: Advertisements boost
existing customers ‘confidence in the brand as they feel pride when they see an
advertisement of the product or the brand they use.
 TYPES OF ADVERTISING

Print

1704
GURRILLA Radio
(1984)
1992

Social
Paid
media Types of
search
(2000) advertising
1998

OUT NATIVE
DOOR (1900)-
(1830)
(2011)
DISPLAY
(1994)

Print advertising:

Print advertising refers to printed advertisements, often seen in newspapers and magazines.
However, this category also includes other printed materials, such as brochures, directories and
flyers. Companies can place advertisements in local newspapers–whether throughout the paper
or within the classifieds section to target consumers within a geographic location.

For a more targeted audience, companies may seek advertising opportunities in magazines.
Specialty magazines can help a company reach a specific group or type of people. For example,
a company that sells golf equipment would place ads in magazines for golf enthusiasts because
they know that audience is more likely to appreciate their product. Magazine advertising can
also offer a better visual experience for consumers, as the full-page opportunities allow for
more colour and high- production images than newspaper advertisements.
Radio advertising:

Radio is another form of broadcast advertising that plays ads during programming breaks.
Customers can listen to radio advertisements while conducting other activities, such as driving
or doing household chores. Like television, radio enables the repetition of advertisements,
which can give companies more recognition with consumers.

Companies can research what radio stations are popular with their target customers. They can
also learn what times of day these customers listen to the radio most. For example, they may try
to advertise during a morning time slot when they know many of their customers will be driving
to work.

Paid advertising:

Paid search is a type of online advertising, sometimes referred to as pay-per-click (PPC)

advertising. Companies that use PPC advertising only pay a fee when users click on their ad.
They bid on specific keywords, usually related to their business, along with the placement of
their ad on the search engine. For example, a company that sells folding bicycles includes the
keyword "foldable bikes" in its bid. When users search that phrase, the company's products
appear as an ad within the search results—typically at the top of the page.

Native advertising:

Native advertising is a type of digital advertising in which ads look similar to the rest of the
page content. Pay-per-click advertisements can serve as a form of native advertising because
the advertised product often blends in with the other results. Businesses enjoy using this format
because it does not interrupt the user experience, unlike display advertising.

For example, a website that publishes articles about professional development may also include
sponsored articles. These look the same as the articles published by the site's writers and editors
but came from a business looking to promote its products or services. A reader may find an
article about time management tips and realize later that it is a sponsored post from a company
that sells time- tracking software. In this scenario, the company also would likely mention or
advertise its software within the article's content.

Display advertising:

Display advertising is a type of digital advertising that uses identifiable ads. These may include
banner ads at the tops or sides of web pages and pop-up ads. Another example would be the
video ads that appear before or during streaming video content. Display advertising encourages
users to click on them to move to the company's website, often to make a purchase. These
advertisements are very prevalent online, though sometimes that can make them easy for
consumers to ignore.

One method used in display advertising is remarketing or retargeting. When users visit a brand's
website, they often accept browser cookies that allow the site to track their journey. If the user
decides not to purchase anything on the site, the brand may target that customer and place ads
for their products on other websites to remind them to return and buy the item.
Outdoor advertising:

Outdoor advertising refers to advertisements that consumers see outside their homes. As a result,
this type of advertising is sometimes called out-of-home advertising. Examples include
billboards and advertisements seen in public places or transit vehicles, such as on the sides of
buses or inside subway cars.

Outdoor advertising aims to catch the attention of a large population. Usually, these ads help
businesses build their brand awareness within a geographic location. The space allotted to
outdoor advertisements may be limited, as can the amount of time a consumer takes to view the
advertisements. Typically, these ads use bold images and fewer words so that the content is
easily understood

Social advertising:

Companies use social media advertising to promote their products or services on various
platforms. Social media advertising, like other digital advertising, enables companies to target
specific audiences. They may focus on reaching customers based on their geographic location,
age group or buying habits. They can either pay for the platforms to promote their
advertisements, or they can use more organic methods.

For example, a small business can use organic social media advertising by asking its followers
to like and re-share one of their posts. They then may pick a participant at random to receive a
discount or gift. Today's businesses also utilize online influencers, bloggers or celebrities to
create posts promoting their brands or products. Rather than full advertising campaigns, these
methods may serve as more cost-effective techniques that enable the business to spread
awareness of their brand.

Guerrilla advertising

Guerrilla advertising refers to less conventional methods that are generally low-cost and employ
creative techniques to draw attention. A common strategy in this category is ambient
advertising, in which a company places ads in public places but uses an unconventional manner.
For example, rather than advertising on a bus stop, a company may paint a mural on the
sidewalk advertising their services.

Guerrilla marketing sometimes invites public interaction or participation. For example, the
advertisement may encourage individuals to take a photo with the ad and post it on social media
using a hashtag. That is why companies using guerilla advertising aim for eye-catching ads —
to entice consumers to interact with their content. Advertising via word-of-mouth can serve as
an effective and less costly way for companies to build brand awareness.
 Traditional vs digital advertising

basis Traditional Marketing Digital Marketing

Meaning Traditional Marketing is a form of Digital Marketing is a form of

marketing that uses conventional marketing that uses online platforms
methods/offline media to reach the and digital technologies to reach the
target audience. target audience.

Reach & It frequently uses a wide range of Precise targeting according

Targeting media, including print, radio, and to geography, interests, habits,
television, to reach a large and demographics is made
audience. possible by digital marketing.
Cost It may be costly, particularly Digital Marketing provides different
for print advertising or television low-cost solutions, ranging from
commercials. Expenses are pay- per-click advertising to free
frequently set and might not offer advertising (organic social media).
comprehensive ROI information. Digital campaigns often have lower
costs.

Interactivity Traditional Marketing involves a Digital Marketing enables interaction

& one-way communication strategy through likes, shares, comments,
Engagement with little room for involvement reviews, and other forms of two-way
or interaction. communication.

Flexibility & In traditional marketing, once a Real-time adjustments based on

Agility campaign begins, it usually performance indicators, trends, and
becomes harder to modify and feedback are possible with digital
frequently requires a large lead marketing. Campaigns may be easily
time. adjusted or changed as needed.
 Measurability Brand awareness, recall and reach Digital marketing offers a variety of
And analytics are among the metrics utilized in analytics tools for monitoring user
traditional marketing but extra activity, campaign performance, and
measurement is not always easy return on investment. Data driven
to achieve. insights make optimization and
continuous enhancement possible.

Tangibility In traditional marketing print Digital marketing is the practice of

and brand advertisements, billbords , and promoting brands virtually using
presence brochures are examples of online platforms including social
tangible items that can make an media, email, and webpages.
impression.

Global vs Traditional marketing is Global reach is made possible by

local impact appropriate for companies that digital marketing, which is perfect for
target particular geographic areas companies looking to grow aboard or
since it can have a big local connect with different target markets.
impact.

Sales promotion
WHAT IS SALES PROMOTION?

Sales promotion is another important component of the promotion mix. It is essentially a

direct and immediate inducement. It adds extra value to the product and hence prompts the
dealer/consumer to buy the product.
Thus, sales promotion methods aim to capture the market and increase the sales volume.
It is an important instrument in marketing to lubricate the marketing efforts. Now-a-days sales
promotion is a necessary tool to boost sales.

PURPOSE OF SALES PROMOTION

Customers are more selective in; their buying choices and a good promotional programme
is needed to reach them. The main purpose of sales promotion is to boost sales of a product by
creating demand, that is, both consumer demand as well as trade demand. It improves the
performance of middlemen and acts as a supplement to advertising and personal selling. It helps in
achieving the following purposes:

 The basic purpose of promotion is to disseminate information to the potential customers.

 Sellers use incentive-type promotions to attract new customers, to reward loyal customers
and to increase the repurchase rates of occasional users.
IMPORTANCE OF SALES PROMOTION
The business world today is a world of competition. A business cannot survive if its products do
not sell in the market. Thus, all marketing activities are undertaken to increase sales. Producers may
spend a lot on advertising and personal selling. Still the product may not sell. So incentives need to be
offered to attract customers to buy the product. Thus, sales promotion is important to increase the sale
of any product. Let us discuss the importance of sales promotion from the point of view of
manufacturers and consumers.

Importance of Sales Promotion to Manufacturers:

Sales promotion is important for manufacturers because

 It helps to increase sales in a competitive market and thus, increases profits;

 It helps to introduce new products in the market by drawing the attention of potential customers;
 When a new product is introduced or there is a change of fashion or taste of consumers,
existing stocks can be quickly disposed off;
 It stabilizes sales volume by keeping its customers with them. In the age of competition it is
quite much possible that a customer may change his/her mind and try other brands. Various
incentives under sales promotion schemes help to retain the customers.

Importance of sales promotion to consumers:

Sales promotion is important for consumers because

 The consumer gets the product at a cheaper rate;

 It gives financial benefit to the customers by way of providing prizes and sending them to
visit different places;
 The consumer gets all information about the quality, features and uses of different products;
 Certain schemes like money back offer creates confidence in the mind of customers about
the quality of goods;
 It helps to raise the standard of living of people. By exchanging their old items they can use
latest items available in the market. Use of such goods improves their image in society.

Importance of sales promotion to Intermediaries:

Intermediaries/middlemen also get benefits from sales promotion. It becomes easy for
wholesalers, retailers, agents and dealers to sell goods, because it is not needed to inform consumers
about the features, utility, price, using information, etc of the products. This saves labor and time. As
the businessmen get trade discount, gift, bonus, etc from producers. It results sales volume resulting
in more profit. Demand and supply of products continues by which capital invested in
stock of goods can be effectively mobilized.
 KINDS
KINDS OF SALES PROMOTION

Some of the major kinds of sales promotion are as follows:

 Consumer sales promotion;

 Dealer sales promotion;
 Sales force promotion

Consumer Sales Promotion:

Activities aimed at reaching the consumer at his home or in his office may be called consumer
sales promotion. It is aimed to inform or educate the consumers and to stimulate the consumers.
Success in sales depends on consumers‘ co-operation. Consumer sales promotion increases the use of
product by the consumers, attracts new customers and stands straight among the competitors, to
introduce new products and to promote established products.

The following are the various sales promotion schemes used at the consumers‘ level:
Sampling: Free samples are given to consumers to increase their interest in the product. They are also
given to introduce a new product and expand the market. It increases the sales volume when the
product is a new one to the customers. It is an effective device when the product is purchased often,
e.g., soaps, detergents, tea or coffee etc.

Coupons: Coupons are supplied along with a product. It is a certificate that reduces prices. Coupons
can be mailed, enclosed in the packets or printed in the advertisements. The purpose is to attract the
customers and bring them to a particular shop to increase the sales of a particular brand.

Demonstration: It is the instructions to educate the consumers in the manner of using the product. It is
a promotional tool to attract the attention of the consumers. When products are complex and of a
technical nature, demonstration is necessary, e.g., computers, field machinery, electrical pumping set
etc. Demonstration is done in front of consumers for mix, wet grinder in retail shops etc.

Further examples:

 Demonstration at retail shops: Sometimes, the demonstrations are organized at the retail stores by
company salesmen for the benefit of retailers as well as consumers.
 School Demonstrations: When the products happen to be a costly one and a hi-tech one, companies
arrange demonstrations in schools or hotels. Here the consumers are invited to a particular place and
demonstrations are arranged.
 Door-to-door Demonstrations: Consumer products companies quite often resort to house- to-house
demonstrations. It is considered a highly specialized field of sales promotion. Eureka Forbes, the
consumer appliances firm etc. popularized their products through door-to-door
demonstrations.
 Demonstrations to key people: Sometimes, demonstrations are organized for the benefit of key people
and influential persons. It is a good selling technique.

Contests: These are conducted to attract new customers or to introduce new products. The consumers
are asked to state in a few words why they prefer a particular product. To enter into the contest, the
consumers must purchase a product and submit the evidence (a label or package or a card attached to
the product) with the entry form for contest.
To take part in the contest the consumers must be interested in the product. Consumers‘ skill
and their ideas are tested and the prize is given to the best entry. It stimulates sales at the retail level.
Entry forms correctly filled are submitted to the panel of judges. They will select the best and prizes
will be given to the successful consumers. Like contest, sweepstakes and games are also employed in
sales promotions, and prizes are offered to the winners.

Money Refund Offers: If the purchaser is not satisfied with the product, a part or all of the purchaser‘s
money will be refunded. It is stated on the package. It will create new users and strengthen the brand
loyalty. Sometimes, the money will be refunded if 10 top covers or 10 empty bottles or 10 packages
are sent back to the manufacturers.

Premium Offers: It is a temporary price reduction which increases the instinct of the buyers. Products
are offered free or at a reduced cost as an inducement for purchasing. It is offered to consumers for
consumer goods like soap, brush, paste, washing powder, glucose etc. For instance, when the
customer buys two soaps, a soap box is given free along with the soaps. The soap box is a premium.
In certain cases, the price is reduced. The reduced amount is a premium. There are many types of
premium offers:
 Direct Premium: A with-pack premium accompanies the product inside (in pack) or outside (on-
pack) the package e.g., one plastic spoon in Taj tea or one steel spoon inside glucose-D or Cadbury
sweets inside the bourn-vita refill pack etc.
 Free in Mail Premium: Premium items are sent by the company by mail to consumers who are
requested to send the proof of their purchase. For instance cigarette companies offer a packet of 10
cigarettes against 10 empty covers.
 A Self-liquidating Premium: It is an item sold below its normal retail price to consumers. The cost
of the additional product is collected from the buyer at a concessional rate. For instance, a steel
tumbler is given free of cost if you buy a packet of 200 gms of sunrise instant coffee; or a soap
powder manufacturer offers two kilograms of soap powder along with a plastic bucket at 50% off
price. This method increases sales and brings benefits.
 Trading Stamps: It is given for purchasing the product in a particular shop. It is a premium given to
the consumers by the seller in the form of stamps. These stamps are redeemable at the stamp
redemption centres. To attract customers the retail shops use trading stamps.
 Price off Offer: It stimulates sales during a slump season. It gives a temporary discount to the
consumers, i.e., goods are offered at a rate less than the labelled rate. Fans are sold at a reduction rate
in rainy season.
 Buy-back Allowance: Allowance is given following a previous trade deal. That is, trade deal offers a
certain amount of money for new purchases based on the purchased quantity. It prevents decline in
post- trade deal. Buyers‘ motivation is increased because of their co-operation on the first trade deal,
e.g., when cinthol and marvel soaps are concerned, the salesmen give one mug and two coupons free.
If we purchase the two soaps by giving the coupons to the shop, the seller will reduce Rs. 2/- from the
original price.
 Free Trials: It consists of inviting prospective purchasers to try the product without cost, in the hope
that they will buy the product. Thus, buyers are encouraged by free trial to stimulate purchase interest.
 Dealer Sales Promotion:
The other name for dealer promotion is trade promotion. Manufacturers use a number of
techniques to secure the co-operation of wholesalers, retailers or the middlemen. These activities,
which increase the interest and enthusiasm of dealers and distributors, are called dealer or distributor
sales promotion. It is the middlemen who are important persons for the fast movements of products.
Hence this must be offered with some incentive. Following are the dealer sales promotion devices:
Buying Allowance: It is an offer of money off or temporary reduction to dealers for purchasing in
stipulated period of time. It is a very effective method to introduce new products in the market. It
encourages the dealers to buy a quantity that they will not buy in ordinary time. This buying allowance
gives the dealers immediate profit, and price redemption. A wet grinder producer will give one grinder
free if one purchases five wet grinders at a time.
Merchandise Allowance: An advertising allowance is given to the dealers for advertising the features of
the manufacturer‘s product. A display allowance is given to them for arranging special displays of the
product. After verifying the promotional work of the dealer, the manufacturers will give a certain
amount of money for promotional activities.
They hope that additional efforts will be taken to increase the sales at retail level. Some
manufacturers, as an encouragement, offer additional quantities of merchandise. This technique is
known as merchandise deal E.g., Godrej company offers the dealers one extra soap cake, free of cost,
when one purchases a dozen soap cakes.
Price Deals: Apart from the regular discount, special discounts are also allowed to the dealers for a
specified quantity of purchase. This special discount is over and above the regular discount. For
instance, a regular discount of Rs. 10 per case is allowed; and if the dealer purchases 100 cases at a
time, he will be given a discount of Rs. 12 per case, i.e., Rs. 200 extra for the purchase of 100 cases.
Push Money or Premium: Manufacturers may offer push money. It is a payment in cash or gifts given
to dealers or to their sales force to push the manufacturer‘s product. To push his brand, the
manufacturer will offer free specialty items that carry company‘s name, such as pens, pencils,
calendars, match boxes, memo pads and yard sticks etc. This is a device for aggressive selling.
Co-operative Advertising: Dealers spend money in advertising manufacturer‘s product with the consent
of the manufacturers. The dealer can claim an allowance by giving the proof of the advertisement. This
is an indirect advertising for the manufacturer. It will increase the sales of the manufacturer‘s product.
But it is a burden on the manufacturer‘s budget.
Dealer Sales Contests: This is an indirect way of boosting the sales. This type of contest is conducted at
the level of retailers and wholesalers. This is in the form of window display, store display, sales
(volume) etc. Prize is awarded to the outstanding achievements. This method is aimed at stimulating
and motivating distributors, dealers, sales-staff etc.
Dealer’s Listed Promotion: Listing dealer is an advertisement. It gives a list of dealers or retailers who
stock the product or who are engaged in its promotion. For example, the advertisement of Bombay
Dyeing in newspapers carries the names of the stockiest of their products. The consumer can buy the
product from anyone of the listed dealers. This method induces the dealers to stock the products; and
the consumers are encouraged to buy the products from the listed dealers.
Dealer’s Gift: Manufacturers give attractive and useful articles to dealers against their order. The articles
are transistor, radio, television set, clock, watch etc. Some manufacturers offer free holidays family
tours to dealers who place more orders. Ralli Fan Co., arranges for free holidays tours to those who sell
the maximum fans in a year.
Point-of-purchase: This plays the role of silent salesman. Point-of-purchase is also known as dealer-aids,
dealer displays, and dealer hopes etc. The competition among the retailers or traders has encouraged
point- of-purchase advertising, which is a significant method for sales promotion. It means advertising
at the point of purchase by the consumers.
 It is generally at the level of retailer‘s shop. For instance floor displays, stands, overhead signs,
wall signs, posters etc., are examples of point-of-purchase materials. Again, it may be exterior or
interior items. Exterior items like banners, displays are utilized by firms like service station.

Sales Force Promotion:

As dealer and consumer promotion, the sales force promotion also is a necessary
one. The activities of sales force must be induced. In the channel of distribution the role
of salesman is very important. The idea of sales force promotion is to make the
salesman‘s effort more effective.
The tools for sales force promotions are:
Bonus to Sales Force: The manufacturer sets a target of sales for a year. If the sales forces
sell the products above the targeted sales, bonus is offered to them. This is an
encouragement incentive given to the sales people to sell more products—to cross the quota
or targeted sales. Sales Force Contests: To increase the interest and efforts of sales by sales
force over a specified time, these contests are announced. The prizes are given to the
salesman who secures the
maximum sales in sales contests. Thus it stimulates the salesmen to sell more products.
Salesmen Meetings and Conferences: The idea behind these is to educate, inspire and
reward salesmen. Encouragement is given to them during the discussion. New selling
techniques are described to them and discussed in the conference. Tools of Sales
Promotion.

PERSONAL SELLING

WHAT IS PERSONAL SELLING?

Personal selling is a promotional activity by which the consumers are personally induced
and persuaded to buy the goods and services of a manufacturer. Personal selling is thus a broader
concept and salesmanship is just a part of it.

DEFINE PERSONAL SELLING.

According to American Marketing Association, ―the personal process of assisting or

persuading a prospective customer to buy a commodity or service and to act favourably upon an
idea that has commercial significance to the seller‘

Qualities needed for personnel seller:

Prospect education

A key selling skill needed by salespeople is the ability to successfully educate people about what a
product or service can offer them. This often involves introducing new perspectives and ideas to
potential customers to change how the prospect thinks about a good or service. Being able to
educate customers can offer them value they can't find elsewhere and build trust and rapport.

Return-on-investment demonstration

Another selling skill is the ability to show the buyers the return on investment they might
experience if they purchase a service or product. This is especially true when the product or
service is expensive and takes time to yield results. A great way to support the demonstration of
return on investment is to connect prospects with current customers who have already achieved
the desired results.

You can give examples and details about past customers to illustrate exactly how an investment
can help customers save over time. For example, a salesperson could highlight how a more
efficient heater and air conditioner can reduce gas and electricity bills, paying for itself over
time through energy savings. With some services and products, salespeople can remind
prospects about potential tax savings as well.

Listening skills

Strong listening skills are imperative for a successful selling approach. Personal seller often aim
to listen to their prospects and work to understand the prospect's requirements and problems.
This can work by asking relevant questions and responding in a way that shows you understand
what the prospect is saying.

Problem-solving skills

A primary reason customers purchase a good or service is to solve a problem or meet a need.
For example, a person shopping for a new car is likely interested in investing in a vehicle that
can get them from place to place in a reliable and stress-free manner. They may also be looking
to purchase a car to replace a current vehicle that's faulty or unreliable. Being able to show your
customers how your product or service can solve their problems can help you become a more
effective personal seller.

Understanding the purchasing process

Sales associates must fully understand the purchasing process to explain this process to
prospects accurately. Prospects who are knowledgeable about the purchasing process are more
likely to feel confident when deciding whether to make a purchase. Additionally, understanding
the purchase process allows sales representatives and other sales employees to be aware of what
buying stage a prospect is in and take the appropriate measures to help that prospect move to the
next stage successfully.

Interpersonal skills

Customers are much more likely to buy products and services from companies they like. And,
because the component of a company a customer is most likely to come into contact with is a
sales individual, these employees need strong interpersonal skills to build and maintain
relationships with customers. Personal seller can dedicate time to building rapport with prospects
and work to gain their trust and respect. Some ways you can build rapport include:
Greet customers warmly.

by greeting customers with a smile and making them feel welcome.

Listen actively.

Listen to their needs and concerns, and show that you understand them.

Use their name; Using a customer's name makes them feel valued and important.

Show empathy; Show empathy by attempting to understand their point of view.

Be knowledgeable; Have a good knowledge of your product or service and be able to answer their
questions.

Be responsive; Respond promptly to their inquiries or concerns.

Use positive language; Use positive language to create a friendly and welcoming atmosphere.

Personalize the experience; Tailor the experience to the customer's needs and preferences.

Follow up; Follow up with the customer to ensure their satisfaction and address any issues that
may have arisen.

Be genuine; Be authentic and sincere in your interactions with customers to build trust and long-
lasting relationships.

Persuasion skills

Persuasion is an essential skill that nearly every sales individual needs to be successful in their
position. Good persuasion skills allow sales employees to convince customers why the product
or service they're selling is worth a financial investment. Components of persuasion skills
include assessing the needs of the customer, being as helpful as possible, personalized
messaging and focusing on the end goal of solving the customer's problem. To be persuasive,
personal seller also can learn all the features and benefits of their products and services. That
way, they can provide reasons why their product is better than competitors.

Questioning skills

Effective questioning skills allow selling associates to assess a customer's needs accurately.
Rather than simply giving the prospect a bunch of information that may or may not be useful to
them, taking time to ask questions ensures you provide customers with information that is
relevant to their issue or need. The best types of questions to ask during the purchasing process
are qualifying questions, which allow salespeople to identify what a customer is looking for and
customize their approach based on that information.

Time management skills

Personal seller spend much of their time making calls and meeting or speaking with clients.
Time management skills are essential to ensure productivity and increase overall sales.
Examples of time
management skills that sales representatives benefit from include scheduling, goal setting,
decision- making, prioritization and strategic thinking.

Prospecting skills

Prospecting skills are skills that allow sales associates to better identify qualified prospects.
These skills help prevent wasted time on potential buyers who truly aren't interested in the
product or service they're offering and allow for more time spent on prospects who are likely to
convert to customers. Good prospecting skills for sales employees include consistency, strong
copy and scripts, relationship nurturing and listening skills.

Social selling

Social media is a major way in which many consumers find and purchase products and services.
Being educated on how to use various strategies for social media can give sales individuals an
advantage regarding prospecting and conversion. Social selling is an essential tool for modern
sales people , as it allows them to build meaningful relationships with prospects and customers,
establish their brand and reputation and ultimately drive more sales.

Organization

Possessing strong organizational skills can help you sort, track and manage your correspondence
with clients. This can help you consider each customer's unique preferences and requirements,
even if you're conducting multiple deals simultaneously, and keep all of their payment and
shipping information secure. If you sell a variety of products, organizational skills can also
allow you to maintain an inventory that's easy to use and accessible. Effective organizational
skills let you respond to customer requests or questions quickly. They can also help you avoid
being late to meetings with customers or delivering products late.

Attention to detail

Customer preferences, budgets and requirements may vary, and possessing keen attention to
detail can help you notice and remember this information about each of your clients. This can
help you ensure you suggest the product or service that's right for them and their lifestyle. For
example, if you sell cars, remember details such as the customer's model and colour preferences,
family size and price range. Paying attention to small details like the name of customers' pets or
their favorite vacation spots is an excellent way to demonstrate that you care and form a lasting
bond with customers.

Channel of distribution
What is a distribution channel in business?

In business, a distribution channel refers to means or route through which products or services are
transferred from the producer or manufacturer to the end consumer. It encompasses a series of
 intermediaries, such as wholesalers, retailers, and distributors, who facilitate the movement and
exchange of goods in the marketplace.

It plays a crucial role in ensuring that products reach the right place at the right time, connecting
producers with consumers and maximizing the availability and accessibility of goods in the market.

What are the different types of distribution channels?

There are three major distribution channels and they are:

 Direct distribution channels

 Indirect distribution channels
 Hybrid distribution channels
1. Direct distribution channels:
Direct distribution channels refer to the method of selling products directly from the
producer or manufacturer to the end consumer without the involvement of intermediaries. In
this channel, the producer takes on the responsibility of marketing, sales, and distribution.

Types
 Company-owned online stores
 Direct sales representatives:
 Company-owned physical outlets

Characteristics
Direct distribution channels are characterized by a direct relationship between the producer and the
end consumer. The producer retains control over the entire sales process, from marketing to
distribution. It often involves a shorter supply chain, resulting in faster decision-making, reduced
costs, and increased control over brand image and customer experience.

Advantage
 Greater control: The producer has direct control over branding, pricing, and
customer interactions, allowing for better brand management.
 Higher profit margins: Eliminating intermediaries can lead to higher profit
margins as there are no middlemen to share the revenue.
 Direct customer feedback: Direct channels enable direct communication and
feedback from customers, facilitating product improvement and personalized
customer service.
 Disadvantages
 Increased responsibilities: The producer must handle all aspects of marketing, sales,
and distribution, which can be resource-intensive and time-consuming.
 Limited market reach: Direct channels may have limitations in reaching a
broader customer base, especially in geographically dispersed markets.
 Higher upfront costs: Setting up and managing direct channels may require
significant investments in infrastructure, technology, and marketing.

2. Indirect distribution channels

Indirect distribution channels refer to the method of selling products where intermediaries,
such as wholesalers, retailers, distributors, agents, or brokers, are involved in the
distribution process
 between the producer and the consumer. These intermediaries handle tasks like warehousing,
transportation, marketing, and selling the products to the end customers.

Types
 Wholesalers
 Retailers
 Distributors
 Agents and brokers

Characteristics
Indirect distribution channels involve multiple stages in the distribution process, with each
intermediary playing a specific role. The producer transfers the products to the
intermediaries, who then take responsibility for storing, marketing, and selling the products to
reach the end consumer. It allows for wider market coverage, as intermediaries often have
established networks and expertise in specific markets or industries.

Advantage
 Market expertise: Intermediaries possess in-depth knowledge of the market,
consumer preferences, and distribution networks, enabling producers to leverage
their expertise for effective product placement and promotion
 Expanded market reach: By partnering with intermediaries, producers can
access a broader customer base, especially in markets where intermediaries have
an established presence
 Cost efficiency: Intermediaries can consolidate orders, handle logistics, and
provide marketing support, resulting in cost savings for producers
Disadvantages
 Reduced control: Producers have less control over product positioning, pricing,
and customer interactions as intermediaries are involved in the distribution
process
 Profit sharing: Producers may need to share profits with intermediaries,
reducing overall profit margins
 Communication challenges: Managing communication and maintaining
consistent branding and messaging across multiple intermediaries can be
complex.

3. Hybrid distribution channels

Hybrid distribution channels combine elements of both direct and indirect channels. It involves a
combination of selling products directly to consumers while also utilizing intermediaries to
distribute and sell products on behalf of the producer.

Types
 Manufacturer-owned retail stores
 Online marketplaces
 Dual distribution

Characteristics
Hybrid distribution channels offer flexibility and diversity in reaching customers. They allow
producers to maintain control over certain aspects of the sales process while also leveraging the
market
 reach and expertise of intermediaries. In this channel there is often a combination of company-
owned retail outlets, online sales, and partnerships with distributors or retailers.

Advantages
 Increased market coverage: Hybrid channels provide access to a wider
customer base by combining direct and indirect distribution methods.
 Control over branding and customer experience: Direct channels allow
producers to maintain control over branding, pricing, and customer interactions.
 Leveraging intermediaries’ expertise: Indirect channels enable the use
of intermediaries’ knowledge and resources to expand market reach and
improve distribution efficiency.
 Disadvantages
 Increased complexity: Managing multiple distribution channels and
coordinating activities between direct and indirect channels can be complex
and challenging.
 Potential channel conflicts: Conflict may arise between company-owned
channels and intermediaries, particularly in terms of pricing, competition, and
customer relationships.
 Higher costs: Maintaining and managing a hybrid distribution strategy may
involve higher costs compared to relying solely on direct or indirect channels.

Different levels of distribution channels

Distribution channels can operate at different levels, each representing a stage in the process of
getting products from the producer to the end consumer.

Here are the common levels of distribution channels:

Zero-level channel or direct marketing

In this there are no intermediaries involved between the producer and the end consumer. The
producer directly sells products to customers through methods such as company-owned online
stores, direct sales representatives, or physical outlets. This level of distribution provides the
producer with maximum control over the marketing and distribution process.

One-level channel or retail

In this channel there is one intermediary between the producer and the consumer. Typically, this
intermediary is a retailer who purchases products from the producer and sells them directly to
customers. Retailers can operate through physical stores, e-commerce platforms, or a combination
of both.

Two-level channel or wholesale and retail

In the two-level channel there are two intermediaries between the producer and the consumer. The
first intermediary is a wholesaler who purchases products in bulk from the producer and sells
them in smaller quantities to retailers. The second intermediary is the retailer who then sells the
products to the end consumer. Wholesalers help in distribution, storage, and breaking down larger
product quantities, while retailers focus on selling to individual customers.
Three-level channel or agent, wholesaler, and retailer
In a three-level channel, there are three intermediaries involved in the distribution process. The
first intermediary is an agent or broker who acts on behalf of the producer, connecting them with
wholesalers. The wholesalers purchase products from the producer and sell them to retailers.
Finally, the retailers sell the products to consumers. This channel structure is common in
industries where specialized agents or brokers assist in connecting producers with wholesalers.

Functions of a distribution channel

Transportation: Managing the transportation of goods from manufacturers to

consumers Warehousing: Managing the storage of goods

Inventory: Managing the inventory of goods

Buying: Buying products from manufacturers or suppliers

Selling: Selling products to retailers or end customers

Risk bearing: Taking on risk associated with product distribution

Assembling: Assembling products

Grading: Grading products

Post-purchase service: Providing customer service after purchase

Maintenance: Providing maintenance for products

Financing: Financing the distribution of products

Market information: Collecting market information

Types of channel members

Here are some different types of channel members:

Distributors: Distributors are businesses that work closely with industrial suppliers, buy their
products and typically resell them to wholesalers or other businesses
.
Wholesalers: Wholesalers buy large quantities of product, or product in bulk, at a significant
discount from producers or distributors in order to sell smaller amounts to retailers. By buying so
much product, wholesalers take a risk that it doesn't sell but can also make large profits.

Retailers: Retailers buy products in bulk from wholesalers or distributors to sell to customers in
small quantities in person or online. Retailers provide more customized information about the
product for the customer.

Agents and brokers: Agents and brokers help a business sell their products by promoting it, finding a
buyer and facilitating a deal.
 Unit 5 Competitive analysis and strategies
GLOBAL MARKET ENVIRONMENT

What is Global Marketing?

Global marketing refers to the strategic practice of promoting and selling products or services
globally. It involves extending a company’s marketing activities beyond its domestic market to reach
customers in different countries and regions worldwide. Global marketing recognizes the increasing
interconnectivity and interdependence of economies and societies and aims to capitalize on the
opportunities presented by a global marketplace.

The concept of global marketing acknowledges the diverse preferences, behaviours, and needs of
consumers worldwide. It recognizes that a one-size-fits-all approach is no longer effective in today’s
highly competitive marketplace. Instead, global marketing focuses on developing customized
marketing strategies that resonate with target audiences in different countries, considering cultural
differences, language barriers, legal regulations, and economic factors.

Example of Global Marketing

Coca-Cola’s global marketing strategies, characterized by universal messaging harmonized with

localized campaigns, have propelled it to a dominant market position worldwide, including in India.
For instance, the “Share A Coke” campaign was adeptly localized to resonate with Indian consumers,
showcasing the brand’s adeptness in navigating cultural nuances while maintaining a consistent brand
image. Through global marketing, Coca-Cola amplifies its brand presence. It significantly enhances
its revenue streams, embodying the profound impact and necessity of global marketing for brands
aspiring for international acclaim and profitability.

Key elements of the global market environment:

Cultural factors:
Cultural differences significantly affect global marketing strategies. Understanding local customs,
traditions, and consumer behavior is crucial. For example, color symbolism varies greatly between
cultures and can influence product packaging and advertising. Language barriers and religious beliefs
also play a significant role in shaping marketing messages. The opportunity lies in leveraging cultural
insights to create marketing campaigns that resonate deeply with local audiences, thereby enhancing
brand loyalty and recognition.
Economic factors:
Economic factors such as the country’s economic stability, currency exchange rates, and consumer
purchasing power are vital considerations. Markets with strong economic growth offer significant
opportunities for expansion, but they may also be highly competitive. Conversely, entering emerging
markets can be risky due to economic volatility but potentially rewarding due to lower competition
and first-mover advantages.

Political factors:
Political stability, government policies, and trade agreements influence global marketing decisions.
Stable political environments are generally more conducive to business, while political instability can
pose risks such as sudden policy changes or trade restrictions. Understanding and adapting to these
political dynamics can help businesses mitigate risks and capitalize on favorable trade agreements or
government incentives.

Government regulations, trade policies, political stability, and potential risks associated with
operating in a particular country.

Legal factors:
Legal and regulatory frameworks vary widely across countries. Compliance with local laws regarding
product standards, advertising regulations, and intellectual property rights is crucial. Navigating these
legal complexities can be challenging but adhering to them is essential to avoid penalties and
safeguard the company’s reputation.

Laws regarding intellectual property, advertising, product safety, and import/export regulations that
can vary significantly between nations

Technological factors:
Level of technological adoption, infrastructure, and access to technology in different markets,
influencing product development and marketing strategies

Commercial Environment:
This includes the business infrastructure, level of technological advancement, and distribution
channels in a market. Advanced infrastructures and technology can facilitate easier market entry and
efficient operations. However, in countries with less developed commercial environments, businesses
might face logistical challenges but have the opportunity to establish themselves as market leaders by
introducing new technologies or practices.

Important considerations for global marketing:

Market research:

Thoroughly understanding the cultural nuances and consumer behaviors in target markets before
launching products.
Product adaptation:

Modifying product features, design, or packaging to suit local preferences and regulations.

Pricing strategy:

Adjusting prices based on local costs, currency fluctuations, and consumer price sensitivity

Distribution channels:

Identifying appropriate distribution networks and logistics to reach consumers in different markets

Principles of ethical marketing

Ethical marketing guidelines can vary based on a company's purpose, mission and preferences. Here
are some common principles of ethical marketing:

Honesty
One of the most important components of ethical marketing is the idea of full honesty in marketing
communications. It's critical for business leaders and marketers to convey the truth about a company's
products and services in order to protect the health, well-being and rights of consumers. For example,
the Food and Drug Administration requires companies to include a "Nutrition Facts" label on
products that provides a detailed list of a food's ingredients and nutrient content. This ensures that
consumers have full knowledge of what they may eat or drink.

Transparency
A concept very similar to honesty, transparency in marketing ethics is the idea of disclosing the
details behind company processes and behavior. It also refers to the process of having open and
honest discussions about ethics. Being upfront and straightforward about company history, current
practices and future goals can help to keep an organization accountable to its customers and
stakeholders. While there is sometimes proprietary or private information to keep confidential, there
can be many factors of a business to share with audiences. For example, a business may publish
content about product development processes.

It's critical for businesses to be transparent about the following elements of their products and
services:

 Suppliers: Being transparent about who and what the company pays and supports can help
consumers gain a full understanding of the organization's partners and networks.
 Pricing: In order to gain customers and build trust, it's usually necessary for businesses to be
transparent about pricing, pricing strategies and any extra fees that may exist in a transaction.
 Quality: Expressing the level of quality of a good to audiences can help consumers to have
realistic expectations of the value of their purchases.
 Features: A component of transparency is being truthful and detailed about the various
features and elements of a company's products or services.
  Customer satisfaction: Companies may use real reviews or other evidence from actual
customers to build credibility and practice transparency regarding customer satisfaction.

Health and safety

The physical safety of customers is one of the top priorities for ethical businesses and marketing
teams. Marketers can uphold this principle by educating, protecting the privacy of and respecting the
civil and human rights of consumers. It's also beneficial when they focus on supporting the physical
safety and mental health of employees. They may do this by offering health and wellness benefits and
programs.

Legality
Part of ethical marketing is complying with all governmental and environmental regulations and
industry standards. This proves to consumers that a business is serious about developing excellent
quality and services. It also protects the liability and interests of a business, enabling it to remain in
operation.

Conscious practices
Companies may decide to engage in conscious practices to protect communities and the environment.
Popular conscious practices include fair trade and wages and environmentally sustainable processes.
Another example is promoting socially-conscious images in marketing materials

Personal behavior
Part of marketing ethics is ensuring that all marketing team members abide by high standards of
personal ethics. While these standards are subjective, companies often set strict requirements for their
employees about respecting the rights of others. Ethical team members can practice empathy and
honesty in relationships with customers.

Understanding business ethics and social responsibility

Business ethics are the set of values and principles that guide how a company conducts its operations.
These values include honesty, integrity, respect, and fairness. They also include principles such as
transparency, accountability, and social responsibility. Business ethics are often codified into a
company’s code of conduct, which outlines the company’s expectations for employee behavior and
decision-making.

Social responsibility is a company’s commitment to doing what is right for the community,
environment, and stakeholders. This includes activities such as reducing waste, using renewable
energy sources, and engaging in philanthropy. Companies have a responsibility to ensure that their
operations have a positive impact on the environment and society.
 Why business ethics and social responsibility are important?

Business ethics and social responsibility are two concepts that are closely intertwined. Let’s
understand why it’s important for any business to adhere to them.

Create a better working environment

Business ethics promote fairness, trust, and transparency among all members of the organization.
Adhering to business ethics protects the interests of everyone involved, and ensures that the
organization is operating in an ethical manner. Businesses that respect the right of the employees and
treat them fairly can create a better working environment with a strong and unified team of
employees.

Better sales and profitability

In this age of social media, where customers are becoming more vocal about their experiences, it is
important for businesses to maintain a positive reputation. Customers are more likely to purchase
from a company that they know is honest and trustworthy. Business ethics provide a framework for
organizations to adhere to and helps to build customer trust and loyalty, which leads to increased sales
and profitability.

Minimize legal risks

Businesses that practice ethical principles ensure that their business practices and behaviours are
within the boundaries of the law. Such companies are less likely to be accused of unethical practices,
which minimizes their legal risks.

Maintain a positive reputation

Social responsibility encompasses the idea of corporate social responsibility, which involves
organizations taking responsibility for the impact of their actions on society and the environment. By
taking responsibility for their actions, organizations can help to combat climate change and improve
public health. Companies that are socially responsible often have a better reputation and attract more
customers, as well as employees who are committed to the company’s mission.

RECENT TREND IN MARKETING

 AI-Enhanced Marketing:

AI has become indispensable in marketing, transforming content creation and data analytics. HubSpot
says over 60% of marketers leverage AI to boost efficiency, and by 2026, 80% of advanced creative
roles will likely utilize generative AI for content enhancement.

AI streamlines repetitive tasks, offers deeper customer insights, and helps marketers refine targeting
and customer journeys, making marketing campaigns more effective. With 81% of marketers noting
AI’s positive influence, AI's role in marketing is poised for significant growth.
 User-Generated Content (UGC):

UGC continues to grow as a low-cost, high-impact way to foster brand trust and authenticity. Brands
such as Nike and Glossier actively promote user-generated content on platforms like Instagram and
TikTok. About 93% of marketers agree that UGC enhances brand credibility.

UGC shows real-life customer experiences through customer stories, reviews, and images. This
resonates more deeply with audiences than traditional advertising, driving engagement, loyalty, and
stronger customer relationships.

 Community-Building and Authentic Branding:

Building engaged communities is increasingly important as consumers gravitate toward brands with
genuine connections and values. Companies like Lululemon and Peloton successfully nurture
communities focused on wellness and shared experiences.

Marketing platform TINT reports that 82% of consumers favor brands with active online
communities. Community-building supports brand loyalty and long-term growth, allowing companies
to form strong, value-based customer connections.

 High-Quality Editorial Content:

High-quality editorial content stands out in today’s information-saturated landscape, helping brands
position themselves as thought leaders. In 2024, 92% of marketers plan to invest in blogs and 82% in
podcasts, appealing to audiences seeking valuable, informative content.

This trend fosters customer trust and builds long-term relationships, with brands using blogs,
newsletters, and podcasts to connect meaningfully and enhance their credibility.

 Case Studies for Trust and Lead Generation:

Case studies remain crucial for B2B marketers, illustrating product effectiveness and boosting lead
generation. HubSpot reports that 87% of marketers plan to maintain or increase case study
investments in 2024, as they provide real-world examples that validate a brand’s impact.

Case studies showcase real-world success, validating the brand’s effectiveness. It reduces perceived
risk by showcasing proven outcomes, guiding potential customers toward purchase decisions,
especially in industries with significant investments.

 SEO Evolution and Adaptation:

SEO is adapting to changing algorithms, focusing on content quality and relevance to remain
competitive. As voice search and multimedia become more prominent, SEO strategies are shifting
toward more conversational and mobile-responsive content.

Despite predictions of a potential 50% decline in organic traffic by 2028, SEO investment is essential,
with brands prioritizing video, image optimization, and AI-powered advancements for improved
discoverability.
 Advanced Chatbots:

AI-powered chatbots are evolving to handle complex customer inquiries, offering 24/7 support with
minimal human input. Platforms like WhatsApp and Messenger allow brands to utilize chatbots for
customer service, cross-selling, and personalized promotions.

Beyond customer support, chatbots are valuable for product recommendations, lead qualification, and
appointment scheduling, creating more engagement opportunities while saving resources.

 Personalized Customer Experience:

Personalization, powered by AI, enables brands to tailor experiences to individual preferences,

driving higher conversion rates and customer satisfaction. With 70% of companies reporting a 200%
ROI from personalized campaigns, it’s clear that personalization yields results.

Consumers are also more open to data sharing for tailored experiences, as demonstrated by successful
AI-driven personalization from brands like Netflix and Crate and Barrel. Personalization signals that
a brand truly understands and values its customers.

 Interactive Content:

Interactive content offers an immersive way for consumers to engage with brands, making content
like 360-degree videos, quizzes, and AR ads increasingly popular. Interactive content doubles
conversion rates compared to static content.

Trends like polls, quizzes, and infographics encourage user engagement and brand loyalty. This form
of content enhances brand connection by allowing consumers to actively participate and spend more
time on pages.

 Mobile-First Marketing:

With increasing mobile usage, mobile-first strategies have become essential for optimizing user
experience. Designing campaigns with mobile responsiveness improves SEO and enhances
conversions, aligning with Google’s mobile-first indexing.

A mobile-first approach also enhances ad placement, loading times, and ultimately user satisfaction,
positioning brands better in search rankings and capturing attention where consumers are most active.

 Social Messaging Integration:

Social messaging is growing as a direct channel for brand-customer interactions. Platforms like
WhatsApp and Messenger allow personalized, real-time communication, which 70% of consumers
now expect from brands.

Social messaging provides a convenient way for customers to ask questions, receive updates, and
engage with brands one-on-one, offering an alternative to traditional customer service. This builds
loyalty and enables brands to maintain close, ongoing engagement with audiences.
 Audio and Podcast Content:

Audio content is gaining traction, with podcasts and chatrooms, allowing brands to engage audiences
during commuting or daily routines. Podcasts build trust through in-depth discussions, offering a
sense of intimacy with listeners.

Many brands are leveraging this trend through their own shows or ads in popular podcasts, offering
an alternative to visual-heavy content. It helps tap into a growing audience and establish stronger
brand connections.

A BASIS UNDERSTANDING OF E-MARKETING

E-Marketing Meaning

E-marketing refers to those strategies and methods that utilize online ways to reach the target and
potential customers. Millions of Internet users access various websites using different tools like
computers, laptops, tablets, and smart or Android phone devices. The number of internet users is
increasing day by day. So every business appears to be hopping on the internet marketing. The
Internet is the most effective tool for any business with market leaders.

Features Of E-marketing
Many small or big businesses are using e-marketing because of its different features and numerous
benefits. Some of the essential features are as follows:

E-marketing Is Cheap Than Traditional Marketing

Comparing its cost with traditional marketing media such as newspaper ads and billboards is much
more reasonable and efficient. You can reach a wide range of audiences with minimal resources.

Tangible ROI

Small business owners can now check the turnover rate with the help of Keap. It explores numerous
things like views of videos, the number of emails opened, and per click on the link. Most importantly,
it notifies us of how much sales the business has made due to e-marketing.

24/7 Approach

It works 24 hours a day, seven days a week, and 365 days a year. Whether you’re homesick, sleeping,
or attending casual meetings, it doesn’t matter, but e-marketing is always hard at work.

Eliminate Follow-up Failure

Elimination of follow-up failure is the main secret behind the success of the small business. It is done
by entering your business figures into the Keap. Then its automatic marketing system will provide
custom-tailored details about your business, which areas to enhance, and what product to quit.
 Advantages Of E-marketing
 Fast Response

The response rate of Internet marketing is fast; for example, you upload something, and it goes
viral. Then it would reach millions of people overnight.

 Cost-Efficient

Compared to the other media of advertising, it is more reasonable. If you’re using unpaid methods,
then there is almost zero cost.

 Interactive

One of the essential elements of digital marketing is that it’s very interactive. People can leave their
comments, and you’ll get feedback from your target market.

 Way To Personalized Marketing

Online marketing opens the door to personalized marketing. With the proper planning and
marketing strategy, customers feel that this ad is directly speaking to them.

 Accessibility

The beauty of the online world and e-marketing is that it’s available from everywhere all over the
world.

Disadvantages Of E-marketing
 Technology Dependent

E-Marketing is entirely dependent on technology and the internet; a slight disconnection can risk
your whole business.

 Privacy & Security Issues

Privacy and security issues are very high because your information is open to everyone; therefore,
one has to be very careful about what goes online.

 Higher Transparency & Price Competition

When privacy and security issues are high, you must spend a lot to be transparent. Price
competition also increases with higher transparency.

 Maintenance Cost

With the fast-changing technological environment, you have to grow consistently with the speed of
technology, and the maintenance cost is very high
 M-MARKETING
What is Mobile Marketing?

Mobile Marketing is a dynamic marketing strategy that capitalizes on mobile channels, including
SMS, MMS messaging, smartphones, tablets, and mobile apps, to effectively promote products or
services to a targeted consumer audience. This approach's primary objective is to consistently engage
with consumers on their handheld devices, offering a personalized and precisely targeted marketing
experience. Key components integral to the success of mobile marketing initiatives encompass
diverse elements such as mobile ads, SMS and MMS messaging, mobile apps, and location-based
marketing.

Advantages of Mobile Marketing

1. Expanding Audience Reach: Mobile Marketing serves as a dynamic channel for businesses to
establish connections with a broader audience, leveraging the widespread use of mobile devices in
people's daily lives. This expansive reach ensures that businesses can engage with a diverse consumer
base, fostering increased visibility and brand presence.

2. Lead Generation and Customer Expansion: Strategically employing mobile marketing opens
avenues for businesses to generate a higher volume of leads, facilitating the expansion of their
customer base. Through targeted mobile campaigns, firms can attract potential customers, nurturing
them into valuable leads for sustained growth.

3. Sales Amplification: Effective mobile marketing campaigns contribute to heightened sales by

providing customers with a seamless, personalized shopping experience. This convenience, coupled
with strategic marketing efforts, translates into increased sales figures, making mobile marketing a
pivotal driver of business revenue.

4. Cost-Effective Campaigns: Compared to traditional marketing methods, mobile marketing offers a

cost-effective approach for businesses to reach a larger and more targeted audience. This efficiency
enables businesses to optimize their marketing budget, allocating resources strategically for
maximum impact.

5. Personalization for Enhanced Engagement: Mobile Marketing empowers businesses to infuse

personalization into their campaigns, tailoring content based on user preferences, behaviors, and
locations. This personalized approach enhances user engagement, making interactions more
meaningful and relevant to individual consumers.

Disadvantages of Mobile Marketing

1. Privacy and User Data Handling: The utilization of user data in mobile marketing initiatives often
sparks privacy concerns, prompting a need for transparent practices and robust data protection
measures. Businesses must navigate this landscape carefully, ensuring responsible data usage, to build
and maintain consumer trust.
2. Addressing Spam Challenges: The prevalence of spam messages and notifications in mobile
marketing necessitates a delicate balance to avoid being perceived as intrusive. Mitigating spam-
related issues is crucial for maintaining positive user experiences and fostering a receptive audience
for mobile campaigns.

3. Navigating Creative Constraints: Crafting compelling and visually appealing content for mobile
devices presents a unique set of challenges due to constraints like screen size and design limitations.
Successfully navigating these restrictions requires innovative approaches to captivate users
effectively within the mobile interface.

4. Budgeting for App Development: For businesses, especially smaller ones with limited budgets, the
high cost associated with designing and maintaining mobile applications can pose financial
challenges. Strategic budgeting and consideration of cost-effective alternatives become essential to
overcome this obstacle.

Examples of Mobile Marketing

1. IKEA's Interactive Mobile Initiatives: IKEA has successfully utilized mobile marketing to pioneer
interactive experiences for customers. Introducing augmented reality apps, IKEA enables users to
visualize furniture in their homes before making a purchase. This innovative approach enhances the
customer journey and exemplifies how mobile marketing can redefine and elevate the retail
experience.

2. Burger King's Mobile Outreach: Burger King employs mobile marketing strategies to effectively
reach consumers on their mobile devices, driving both awareness and sales for their diverse range of
products. Through innovative approaches, Burger King leverages the ubiquity of mobile devices to
engage with their audience, ensuring their presence in the dynamic digital landscape.

3. Swiggy's Mobile Engagement: Swiggy, a prominent food delivery platform, has adeptly executed
impactful mobile marketing campaigns aimed at engaging customers and amplifying awareness of
their services. Leveraging mobile channels, Swiggy strategically connects with users, employing
tailored strategies to promote their platform and foster customer loyalty.

Types of Mobile Marketing

Mobile marketing works by connecting with customers through their mobile devices encouraging
them to interact with your brand. Here are some types of mobile marketing:

In-App Marketing

In-app marketing is marketing through mobile apps. In-app marketing can be either for your own
brand or for other brands. For your own brand, In-App marketing refers to the use of banners,
overlays, and inbox messaging to market your products to your app users. You can engage customers
who are active users of your brand’s app and guide their user experience in your app. For other
brands, ads can be included on popular apps or your brand’s app. The ads can be banners, a full page,
or videos. In-app marketing also allows you to increase your customer base through advertisements
on popular apps.
Mobile Push Marketing

Mobile push marketing sends marketing messages on mobile devices using push technology. It allows
you to deliver relevant information to users even if they are not on your website or app. Mobile push
notifications allow you to communicate with existing and potential customers in a simple and
effective way.

SMS Marketing

SMS marketing is a marketing campaign via text message. You can send promotions, alerts, offers,
and more to current and potential customers’ phones. Text marketing campaigns can be successful
because most people have their phones with them, and it is difficult to ignore push notifications.

Social media platforms typically have billions of users, making social media a great place to advertise
and promote your business. Social media marketing allows you to make a more personal connection
with consumers through Facebook ads, promoted tweets, or shoppable pins on Pinterest.

Location-based marketing allows you to target a customer on their mobile device based on their
location. You can create specific marketing campaigns based on your customers’ location, making the
marketing campaign more relevant.

QR Code Marketing

QR code marketing allows you to create a link to your website, download your app, review your
business, or signup for your newsletter. Customers can scan the QR code with the camera on their
smartphones and it is simple to use. QR code marketing allows you to engage more customers and
can be used for almost any marketing purpose.

E- TAILING
What Is Electronic Retailing (E-tailing)?

Electronic retailing (E-tailing) is the sale of goods and services through the internet. E-tailing can
include business-to-business (B2B) and business-to-consumer (B2C) sales of products and services.

E-tailing requires companies to tailor their business models to capture internet sales, which can
include building out distribution channels such as warehouses, internet webpages, and product
shipping centers.

Types of Electronic Retailing (E-tailing)

Business-to-Consumer (B2C) E-Tailing

Business-to-consumer retailing is the most common of all e-commerce companies and the most
familiar to most Internet users. This group of retailers includes companies selling finished goods or
products to consumers online directly through their websites. The products could be shipped and
 delivered from the company's warehouse or directly from the manufacturer. One of the primary
requirements of a successful B2C retailer is maintaining good customer relations.

Business-to-Business (B2B) E-tailing

Business-to-business retailing involves companies that sell to other companies. Such retailers include
consultants, software developers, freelancers, and wholesalers. Wholesalers sell their products in bulk
from their manufacturing plants to businesses. These businesses, in turn, sell those products to
consumers. In other words, a B2B company, such as a wholesaler might sell products to a B2C
company.

"E-tailing," short for "electronic retailing," refers to the practice of selling goods and services online
through digital platforms like websites and mobile apps, essentially creating a virtual storefront where
customers can browse, learn about products, and make purchases 24/7 from anywhere with an
internet connection; it allows businesses to reach a global audience without needing physical stores.

Features of E-tailing:
 Digital Sales Channel: Unlike traditional retail, E-tailing happens entirely online through digital
channels.
 Accessibility: Customers can access E-tail stores anytime, anywhere with an internet connection.
 Product Information: Detailed product descriptions, images, and reviews are readily available online.
 Global Reach: Businesses can sell to customers worldwide through E-tailing.

Examples of E-tailers:

Amazon: One of the largest online retailers, selling a wide range of products

eBay: An online marketplace where sellers can list items for purchase

Shopify: A platform that allows businesses to create their own online store.

Customer relationship management

CRM (customer relationship management) is the combination of practices, strategies and

technologies that companies use to manage and analyze customer interactions and data throughout
the customer lifecycle. The goal is to improve customer service relationships, assist with customer
retention and drive sales growth.

CRM systems compile customer data across different channels and points of contact between the
customer and the company. These include the company's website, telephone, live chat, direct mail,
marketing materials and social networks. CRM systems can also give customer-facing staff detailed
data on customers' personal information, purchase history, buying preferences and concerns.
 CRM benefits businesses
The benefits of CRM systems apply to all types of organizations, ranging from small businesses to
large corporations. They include the following:

 Enhanced customer service. Having customer information, such as past purchases and interaction
history, easily accessible helps customer support representatives provide better and faster customer
service.

 Trend spotting. Collecting and accessing customer data allows businesses to identify trends and
insights about their customers through reporting and visualization features.

 Automation. CRM systems can automate menial but necessary sales pipeline and customer support
tasks.

TYPES OF CRM
1. Operational CRM systems
Operational CRM are designed to help execute sales, marketing, and customer service functions.
They help streamline and manage all the ways your company interacts with customers.

The main goal of this type of operational CRM is improving customer acquisition and retention: they
help generate new leads, nurture them, convert them into customers, and retain them through
ongoing marketing communications and high-quality customer service.

Businesses of all sizes use operational CRM systems and frequently enable time-saving CRM
automations, including:

Marketing automations: Marketing automation can target specific customer segments with emails,
texts, and digital ads. These can be initiated by triggers, like a purchase or landing page visit. For
longer sales cycles, operational CRM can track touchpoints, automate follow-ups, and indicate when
a lead should progress to a sales lead.

Sales automation: Like marketing automation, sales automation uses behavioral triggers to help
your sales team automatically provide customers with strategic communications at specific points in
the sales process. They also help you score and manage leads and can automatically generate sales
forecasting reports.

Customer service automation: CRM customer service automations include self-service features,
live chat and AI-powered chatbots, and automated email responses, which can help you efficiently
handle customer requests.
2. Analytical CRM systems
Whereas an operational CRM system helps get leads into your sales funnel, an analytical CRM
system enables you to understand how your prospects are moving through your sales funnel.

Analytical CRM systems capture, store, and analyze customer data to provide insights into how
customers interact with your business, allowing you to assess the effectiveness of marketing, sales,
and customer service efforts and adjust your strategy accordingly. You might run a report on six
recent marketing campaigns, analyze the data to gauge their efficacy, and model future campaigns on
the winning example’s tactics.

Analytical CRM can also run performance reports, such as sales history and customer service
satisfaction scores, allowing you to leverage the strengths of high-performing team members and
identify areas for employee development.

Analytical CRM are used by businesses of all sizes and are particularly valuable for those focused on
improving their customer relationship management practices.

3. Collaborative CRM systems

In a large business, sales, marketing, and customer support teams frequently collaborate on client
accounts. The main goal of a collaborative CRM is to improve customer experience and streamline
business processes by facilitating communication between departments.

Collaborative CRM are particularly popular with large businesses—companies with large customer
bases in which multiple people service individual client accounts. Here’s an example of how
communication between departments might play out over a customer life cycle:

A sales team member gathers information on a new lead at an event and uploads it to the CRM
database.

A marketing team member inputs the new lead into an automated marketing campaign.

When your sales team member reaches out with a follow-up call, they can see the customer’s entire
history with your company, from the initial conversation at the event to their engagement with
marketing materials.

Your new customer makes a purchase, automatically prompting a customer service call to thank
them for their business.

The customer submits a customer request, which notifies a customer service representative via the
CRM. Because the customer service agent has access to the customer’s entire marketing, sales, and
customer service history, they can resolve the issue quickly.
4. Strategic CRM systems
Strategic CRM are sometimes lumped in with collaborative CRM and provide many of the same
features. The difference is that while collaborative CRM focuses on immediate improvements,
strategic CRM concentrates on long-term customer engagement. Their main goal is to support
customer retention and increase customer loyalty.

Strategic CRM collects information about customer needs and priorities to provide value to your
client base. For example, they might tell you which communications channels specific customers
prefer to use. They’re handy for businesses requiring long-term customer relationship management,
such as an IT company that provides clients with ongoing data management services.

MARKET RESEACH
What Is Market Research?
Market research examines consumer behavior and trends in the economy to help a business develop
and fine-tune its business idea and strategy. It helps a business understand its target market by
gathering and analyzing data.

Market research is the process of evaluating the viability of a new service or product through
research conducted directly with potential customers. It allows a company to define its target
market and get opinions and other feedback from consumers about their interest in a product or
service.

Research may be conducted in-house or by a third party that specializes in market research. It can be
done through surveys and focus groups, among other ways. Test subjects are usually compensated
with product samples or a small stipend for their time.

Types of Market Research

Face-to-Face Interviews
From their earliest days, market research companies would interview people on the street about the
newspapers and magazines that they read regularly and ask whether they recalled any of the ads or
brands that were published in them. Data collected from these interviews were compared to the
circulation of the publication to determine the effectiveness of those ads.

Phone Research
The man-on-the-street interview technique soon gave way to the telephone interview. A telephone
interviewer could collect information in a more efficient and cost-effective fashion.

Telephone research was a preferred tactic of market researchers for many years. It has become much
more difficult in recent years as landline phone service dwindles and is replaced by less accessible
mobile phones.

Survey Research
As an alternative to focus groups, surveys represent a cost-effective way to determine consumer
attitudes without having to interview anyone in person. Consumers are sent surveys in the mail,
usually with a coupon or voucher to incentivize participation. These surveys help determine how
consumers feel about the product, brand, and price point.
Online Market Research
With people spending more time online, market research activities have shifted online as well. Data
collection still uses a survey-style form. But instead of companies actively seeking participants by
finding them on the street or cold calling them on the phone, people can choose to sign up, take
surveys, and offer opinions when they have time.

This makes the process far less intrusive and less rushed, since people can participate on their own
time and of their own volition.

Primary Research
It involves collecting original data directly from sources or through first-hand experiences. It is
tailored to answer specific research questions.The following are the methods to do primary market
research:

 Interviews: One-on-one discussions providing in-depth insights.

 Surveys: Broad data collection through questionnaires
 Focus Groups: Group discussions to gauge consumer opinions.
 Observations: Behavioral assessments in natural settings
 Experiments: Controlled studies to establish cause and effect
 Each method offers unique benefits, such as detailed personal insights from interviews
or large-scale survey data.

Secondary Research
It utilises existing data compiled by others, often for different purposes.The following are the
methods to do secondary market research:

 Literature Reviews: Analysis of academic and industry publications.

 Statistical Analysis: Examination of existing datasets.
 Meta-analysis: Combining results from multiple studies.
 These methods help identify trends and benchmarks without the time and cost of
primary data collection.

Qualitative Research
This approach seeks to understand underlying reasons and motivations through non-numerical data.
The following are the methods to do qualitative market research:

 Interviews: Deep dives into personal experiences.

 Focus Groups: Collective views on a topic.
 Ethnographic Studies: Cultural immersion for context understanding.
 Qualitative methods provide rich, narrative data that reveal the ‘why’ behind
behaviours.

Quantitative Research
This research quantifies data to analyse variables and patterns statistically. The following are the
methods to do quantitative market research:
  Surveys: Structured questionnaires for numerical data.
 Experiments: Testing hypotheses in controlled settings.
 Observational Studies: Systematic tracking and recording of behaviours.
 Quantitative methods are ideal for confirming hypotheses and generalising findings to
larger populations.

Branding Research
This approach assesses how a brand is perceived and positioned in the market.The following are the
methods to do branding market research:

 Brand Audits: Evaluating brand elements and performance.

 Customer Surveys: Gathering perceptions and experiences.
 Competitive Analysis: Comparing brand positioning against competitors.
 Branding research informs strategic decisions to enhance brand equity and market
presence.

Customer Research
Customer research explores customer needs, behaviours, and satisfaction levels.The following are the
methods to do customer market research:

 Surveys: Direct feedback on customer experience.

 Interviews: In-depth discussions on customer journeys.
 Segmentation Analysis: Grouping customers based on characteristics.
 Customer research guides product development and marketing strategies to meet
customer expectations better.

Competitor Research
This approach analyses rivals to understand their strategies and market standing.The following are the
methods to do competitor market research:

 SWOT Analysis: Identifying competitors’ strengths, weaknesses, opportunities, and

threats.
 Market Positioning: Assessing competitors’ market share and brand perception.
 Product Comparisons: Evaluating competing products or services.
 Competitor research helps businesses identify market gaps and opportunities for
differentiation.

Product Research
This research informs the development and improvement of products.The following are the methods
to do product market research:

 User Testing: Real-world product usage to gather feedback.

 Market Analysis: Studying market demand and trends.
 Concept Testing: Evaluating product ideas before full development.
 Product research ensures that new products meet market needs and have a competitive
edge.
 5 Steps to Conduct Market Research Process
.
1. Define your target audience
Before you start understanding how your customers operate, you need to quickly understand
who your customers are. Create a buyer persona and keep it handy.

2. Understand their behaviour

After knowing well who your target audience is, find out what are the best ways to get in
touch with them to get true answers. Evaluate their active hours, tonality, preferences, and so
on.

3. Choose a method to get insights

Now is the time to take one of the most important decisions: to choose how to conduct the
research. After following step 2, this should get easy. For example, if you find that your
target audience opens their emails regularly and responds to them, you can choose to run a
survey. However, if you find that the internet penetration to your target audience is very low
and they understand their local dialect, then choosing ethnographic research comes in handy.

4. Collate the responses

This is where all your efforts come down to. It can be an Excel sheet, a Google document, or
a particular software, documenting every fact is a must. Make sure to protect your data and
share it only with the relevant people.

5. Form hypothesis & take actions

After you have a heap of information, it’s time to study the data and build a hypothesis. There
might be instances where you will realise that you need to change the entire sign-up flow or
change the language or take a different approach.

MARKETING INFORMATION SYSTEM (MIS)

What is a Marketing Information System (MIS)?

A Marketing Information System (MIS) is a helpful tool for businesses. It's a way to collect,
organize, and use marketing information. Think of it as a system that gathers data about sales,
customers, and the market. This tool is important because it helps businesses make smart decisions. It
allows them to understand what's happening in the market, what customers are doing, and what
competitors are up to. By having this information, businesses can plan better, use their resources
wisely, and stay ahead of the competition. In simpler terms, it's a way for companies to know what's
going on in the business world and use that knowledge to make better choices.

Importance of a Marketing Information System

A Marketing Information System (MIS) plays a crucial role in the success of businesses by providing
valuable insights and support across various aspects of marketing. Its importance is evident in several
key areas.
1. Decision Making: One of the key advantages of having an MIS in place is that it aids decision-
making. By offering comprehensive data and insightful analysis, it helps decision-makers within a
company make well-informed choices. This means they can look at the available options and pick the
most suitable ones for the company's benefit.

2. Market Understanding: Understanding the market is pivotal for successful marketing, and an MIS
proves to be quite handy in this regard. It gives a peek into the market dynamics, customer
behaviours, and what the competitors are up to. This understanding is crucial for businesses to tweak
their strategies in line with what's happening in the market, ensuring they stay on track and meet
customer demands effectively.

3. Competitive Edge: Timely and accurate information is like gold in the business world, and an MIS
ensures companies have access to just that. It lets them respond quickly to changes in the market. By
staying abreast of industry trends, customer preferences, and what the competition is doing,
businesses can position themselves well, making them more resilient and responsive to market needs.

4. Resource Optimization: Efficient use of resources is a make-or-break aspect for any business, and
an MIS helps in optimizing marketing resources. By providing insights into the performance of
different marketing channels, it assists in using budgets more effectively. This ensures that resources
are channelled toward strategies and campaigns that bring in the best returns, ultimately boosting
overall efficiency.

5. Performance Measurement: Measuring how well marketing strategies are working is an ongoing
process, and an MIS aids in this by providing tools for assessment and analysis. Companies can
gauge the effectiveness of their marketing campaigns, pinpoint areas that need improvement, and
make necessary adjustments. This continuous feedback loop contributes to refining marketing
strategies, leading to better overall performance.

Marketing Information System Components

A Marketing Information System (MIS) comprises various components that work together to
facilitate the collection, processing, storage, and dissemination of information for effective marketing
decision-making. These components are integral to the overall functionality of the system:

1. Internal Records: Internal records are the foundation of an MIS. These include data generated and
maintained within the organization. Examples include sales records, customer databases, inventory
levels, and financial information. Internal records provide insights into the organization's
performance and customer interactions.

2. Marketing Intelligence: Marketing intelligence involves gathering external information related to

the market environment. This includes monitoring competitor activities, analyzing industry trends,
and staying abreast of changes in the economic and regulatory landscape. Marketing intelligence
helps in understanding the external factors that can impact marketing strategies.

3. Marketing Research: Marketing research is a systematic process of collecting, analyzing, and

interpreting data to understand market opportunities and challenges. It involves both primary
research (direct data collection) and secondary research (using existing data). Marketing research
helps in gaining insights into consumer behaviour, preferences, and market dynamics.

4. Data Warehousing: Data warehousing involves the centralized storage of large volumes of data
from various sources. It provides a platform for organizing, managing, and retrieving information
efficiently. A well-designed data warehouse facilitates analysis and reporting, supporting decision-
makers in accessing relevant data when needed.

5. Information Output: The final component involves presenting information to decision-makers in a

meaningful format. This can include reports, dashboards, visualizations, and presentations. The goal
is to provide actionable insights derived from the processed data. Effective information output
ensures that decision-makers can easily comprehend and utilize the information for strategic
planning.

MARKET REGULATION
Marketing regulation" refers to a set of rules and laws enforced by government agencies to control
and oversee how businesses market their products and services, aiming to protect consumers from
misleading or unfair practices, ensure fair competition within the market, and maintain overall market
stability; essentially, it dictates what companies can and cannot say or do when promoting their
products to the public.

Key aspects of marketing regulation:

Consumer protection:

Regulations often focus on preventing deceptive advertising, false claims about product benefits, and
misleading pricing practices to safeguard consumer interests.

Data privacy:

Laws like GDPR (General Data Protection Regulation) govern how companies collect, store, and use
consumer data, requiring transparency and user consent.

Advertising standards:

Regulations can specify what types of content are allowed in advertising, including restrictions on
explicit language, harmful stereotypes, and claims related to health or safety.
Price controls:

In certain situations, regulations may set limits on how much a company can charge for a product to
prevent price gouging.

Industry-specific regulations:

Different sectors like pharmaceuticals, food, and finance often have their own specific marketing
regulations due to the nature of their products.

Truth in advertising laws:

Requiring companies to substantiate claims made in their marketing materials.

Anti-spam laws:

Regulating unsolicited commercial emails to protect consumers from excessive marketing messages.

Children's advertising guidelines:

Setting restrictions on marketing practices targeting children.

Environmental labeling regulations:

Defining standards for companies making eco-friendly claims about their products