WHAT IS MARKETING?

 "Marketing consists of all the activities of individuals and organizations designed to

identify, anticipate, and mutually satisfy the needs of all parties involved in the
exchange."
 One party must exchange a product or service with another party for some form of
payment. This is the central focus for all marketing activities.

MARKETING MIX aka Services Marketing Mix

Set of actions, or tactics, that a company uses to promote its brand or product in the
market.
Price: refers to the value that is put for a product. It depends on costs of production,
segment targeted, ability of the market to pay, supply - demand and a host of other
direct and indirect factors. There can be several types of pricing strategies, each tied in
with an overall business plan. Pricing can also be used a demarcation, to differentiate
and enhance the image of a product.
Product: refers to the item actually being sold. The product must deliver a minimum
level of performance; otherwise even the best work on the other elements of the
marketing mix won't do any good. Planning & Strategy -> conceiving -> Developing &
Shaping -> Testing
Place: refers to the point of sale. In every industry, catching the eye of the consumer
and making it easy for her to buy it is the main aim of a good distribution or 'place'
strategy. Retailers pay a premium for the right location. In fact, the mantra of a
successful retail business is 'location, location, location'.
Manufacturing --> C & F -->Distributor-->Whole Seller-->Retailer--> Consumers

Promotion: this refers to all the activities undertaken to make the product or service
known to the user and trade. This can include advertising, word of mouth, press reports,
incentives, commissions and awards to the trade. It can also include consumer
schemes, direct marketing, contests and prizes.
People – All companies are reliant on the people who run them from front line Sales
staff to the Managing Director. Having the right people is essential because they are as
much a part of your business offering as the products/services you are offering.
Processes –The delivery of your service is usually done with the customer present so
how the service is delivered is once again part of what the consumer is paying for.
Physical Environment – Almost all services include some physical elements even if
the bulk of what the consumer is paying for is intangible. For example a hair salon
would provide their client with a completed hairdo and an insurance company would
give their customers some form of printed material. Even if the material is not physically
printed (in the case of PDFs) they are still receiving a “physical product” by this
definition.

PRODUCT MIX
Also known as product assortment, is the total number of product lines that a company
offers to its customers. The product lines may range from one to many and the
company may have many products under the same product line as well. All of these
product lines when grouped together form the product mix of the company. The product
mix is a subset of the marketing mix and is an important part of the business model of a
company. The product mix has the following dimensions:

Width: The width of the mix refers to the number of product lines the company has to
offer. For e.g., If a company produce only soft drinks and juices, this means its mix is
two products wide. Coca-Cola deals in juices, soft drinks, and mineral water and hence
the product mix of Coca-Cola is three products wide.
 Length: Length of the product mix refers to the total number of products in the mix. That
is if a company has 5 product lines and 10 products each under those product lines, the
length of the mix will be 50 [5 x 10].
Depth: The depth of the product mix refers to the total number of products within a
product line. There can be variations in the products of the same product line. For
example – Colgate has different variants under the same product line like Colgate
advanced, Colgate active salt, etc.
Consistency: Product mix consistency refers to how closely products are linked to each
other. Less the variation among products more is the consistency. For example, a
company dealing in just dairy products has more consistency than a company dealing in
all types of electronics.

Product Mix depends on many factors like

 Company Age
 Financial Standing
 Area of Operation
 Brand identity, etc.

Example: Coca-Cola has product brands like Minute Maid, Sprite, Fanta, Thumbs up,
etc. under its name. These constitute the width of the product mix. There are a total of
3500 products handled by the Coca-Cola brand. These constitute the length. Minute
Maid juice has different variants like apple juice, mixed fruit, etc. They constitute
the depth of the product line ‘Minute Maid’. Coca-Cola deals majorly with drinking
beverage products and hence has more product mix consistency.

MARKETING MANAGEMENT CONCEPTS : There are four marketing management

concepts that companies will utilize in their marketing objectives. All of these aim to
achieve profits and objectives, but the focus and means by which they do so will differ.
They will typically follow one of these four major concepts:
 Product Concept - This management orientation says that if you build a quality product
and set a reasonable price, very little marketing effort is needed to sell it. The product
generates the demand "build it, and they will come"
 Selling Concept - This management orientation says that consumers will not normally
buy enough of a product unless it is aggressively promoted to them.
 Marketing Concept - This management orientation says the major purpose of an
organization is to identify consumer needs and then adapt the organization in a way that
will satisfy the customers needs more effectively and efficiently than competition. (i.e.
Chain restaurants may alter their menu in different countries)
 Societal Concept - This management orientation focuses on satisfying consumers
needs and demonstrating long run concern for societal welfare in order to achieve
company objectives and attend to its responsibilities for society. The idea is to find a
balance between social welfare, consumer needs, and company profits.

TRADITIONAL VS. INTEGRATED MARKETING

 If a company opts to use a traditional approach, all of these departments work as
separate entities. For example, development will draw up a product and then pass it
along to engineering to create it. Engineering will then pass it along to production mass
produce it. They will afterwards pass it to marketing, who will eventually move the
product to distribution for a product launch.
Conclusion
 Integrated marketing is the better approach.
 While it may take longer to launch a product, the likelihood of success is greater.
 The traditional approach leaves much room for interdepartmental conflicting interest and
is therefore regarded as an outdated approach in marketing.
 It all too often ignores the consumers needs.
 Hence, the integrated marketing approach helps a business work collectively as one
unit.

NATURE - MARKETING
 Marketing is an Economic Function
Marketing embraces all the business activities involved in getting goods and services,
from the hands of producers into the hands of final consumers. The business steps
through which goods progress on their way to final consumers is the concern of
marketing.
 Marketing is a Legal Process by which Ownership Transfers
In the process of marketing the ownership of goods transfers from seller to the
purchaser or from producer to the end user.
 Marketing is a System of Interacting Business Activities
Marketing is that process through which a business enterprise, institution, or
organization interacts with the customers and stakeholders with the objective to earn
profit, satisfy customers, and manage relationship. It is the performance of business
activities that direct the flow of goods and services from producer to consumer or user.
• Marketing is a Managerial function
• "Marketing is the combination of activities designed to produce profit through
ascertaining, creating, stimulating, and satisfying the needs and/or wants of a selected
segment of the market." According to this managerial/systems approach the emphasis
is on how the individual organization processes marketing and develops the strategic
dimensions of marketing activities.
 Marketing is a social process
Marketing is the delivery of a standard of living to society. According to Cunningham
and Cunningham (1981) societal marketing performs three essential functions: -
• Knowing and understanding the consumer's changing needs and wants;
• Efficiently and effectively managing the supply and demand of products and services;
and
• Efficient provision of distribution and payment processing systems.
 Marketing had dual objectives - profit making and consumer satisfaction

SCOPE - MARKETING
 Study of Consumer Wants and Needs
Goods are produced to satisfy consumer wants. Therefore, study is done to identify
consumer needs and wants. These needs and wants motivates consumer to purchase.
 Study of Consumer behavior
Marketers performs study of consumer behavior. Analysis of buyer behavior helps
marketer in market segmentation and targeting.
 Production planning and development
Product planning and development starts with the generation of product idea and ends
with the product development and commercialization. Product planning includes
everything from branding and packaging to product line expansion and contraction.
 Pricing Policies
 Marketer has to determine pricing policies for their products. Pricing policies differs form
product to product. It depends on the level of competition, product life cycle, marketing
goals and objectives, etc.
 Distribution
Study of distribution channel is important in marketing. For maximum sales and profit
goods are required to be distributed to the maximum consumers at minimum cost.
 Promotion
Promotion includes personal selling, sales promotion, and advertising. Right promotion
mix is crucial in accomplishment of marketing goals.
 Consumer Satisfaction
The product or service offered must satisfy consumer. Consumer satisfaction is the
major objective of marketing.
 Marketing Control
Marketing audit is done to control the marketing activities.

IMPORTANCE OF MARKETING
 Study of consumer behavior
 Helps in framing promotion
 Building strategy
 Market related information
 Pricing policy
 Market segmentation
 Market research – data.
 Helps company to evaluate its marketing performance.

MASLOW’S HIERARCHY OF NEEDS THEORY

1. Physiological needs- These are the basic needs of air, water, food, clothing and
shelter. In other words, physiological needs are the needs for basic amenities of life.
2. Safety needs- Safety needs include physical, environmental and emotional safety and
protection. For instance- Job security, financial security, protection from animals, family
security, health security, etc.
3. Social needs- Social needs include the need for love, affection, care, belongingness,
and friendship.
4. Esteem needs- Esteem needs are of two types: internal esteem needs (self- respect,
confidence, competence, achievement and freedom) and external esteem needs
(recognition, power, status, attention and admiration).
5. Self-actualization need- This include the urge to become what you are capable of
becoming / what you have the potential to become. It includes the need for growth and
self-contentment. It also includes desire for gaining more knowledge, social- service,
creativity and being aesthetic. The self- actualization needs are never fully satiable. As
an individual grows psychologically, opportunities keep cropping up to continue growing.
According to Maslow, individuals are motivated by unsatisfied needs. As each of these
needs is significantly satisfied, it drives and forces the next need to emerge. Maslow
grouped the five needs into two categories - Higher-order needs and Lower-order
needs. The physiological and the safety needs constituted the lower-order needs.
These lower-order needs are mainly satisfied externally. The social, esteem, and self-
actualization needs constituted the higher-order needs. These higher-order needs are
generally satisfied internally, i.e., within an individual. Thus, we can conclude that during
boom period, the employees lower-order needs are significantly met.

THE MARKETING ENVIRONMENT IS MADE UP OF:

1. Micro-environment (Internal Factors): The micro-environment of the company

consists of various forces in its immediate environment that affect its ability to operate
effectively in its chosen markets. This includes the following:
a) The Company:
• In designing marketing plans, marketing management takes other company groups into
account – Finance, Research and Development, Purchasing, Manufacturing,
Accounting, Top Management etc. Marketing manager must also work closely with
 other company departments. Finance in concerned with funds and using funds to carry
out the marketing plans.
• The R&D Department focuses on designing safe and attractive product. Purchasing
Department is concerned with supplies of materials whereas manufacturing is
responsible for producing the desired quality and quantity of products. Accounts
department has to measure revenues and costs to help marketing know-how. Together,
all of these departments have impact on the marketing plans and action.
b) Company’s Suppliers:
• Suppliers provide the resources needed by the company to product its goods and
services. They are important links in the company’s overall customer “value delivery
system”. Supplier developments can seriously affect marketing. Marketing managers
must watch supply availability – supply shortages or delays, labor strikes and other
events can cost sales in the short run and damage customer satisfaction in the long run.
Marketing Managers also monitor the price trends of their key inputs. Rising supply
costs may force price increases that can harm the company’s sales volume.
c) Marketing Intermediaries:
• Intermediaries or distribution channel members often provide a valuable link between
an organization and its customers. Large-scale manufacturing firms usually find it
difficult to deal with each one of their final customers individually in the target markets.
So, they chose intermediaries to sell their products.
• Marketing intermediaries include resellers, physical distribution firms, marketing service
agencies, and financial intermediaries. They help the company to promote, sell, and
distribute its goods to final buyers. Resellers are distribution channel firms that help the
company to find customers for goods. These include whole-sellers and retailers who
buy and resell merchandise. Selecting and working with resellers is not easy. These
organizations frequently have enough power to dictate terms or even shut the
manufacturer out of large markets.
d) Physical distribution:
• Firms help the company to stock and move goods from their points of origin to their
destinations. Working with warehouse and transportation firms, a company must
determine the best ways to store and ship goods, and safety marketing services
agencies are the marketing research firms, advertising agencies, media firms, and
marketing consulting firms that help the company target and promote its products to the
right markets.
• When the company decides to use one of these agencies, it must choose carefully
because those firms vary in creativity, quality, service and price. Financial
intermediaries include banks, credit companies, insurance companies, and other
businesses that help finance transactions or insure against the risks associated with the
 buying and selling of goods. Most firms and customers depend on financial
intermediaries to finance their transactions.
• e) Customers:
• Consumer markets consists of individuals and households that they buy goods and
services for personal consumption. Business markets buy goods and services for
further processing or for use in their production process, whereas reseller markets buy
goods and services to resell at a profit.
• Government markets are made up of government agencies that buy goods and services
to produce public services or transfer the goods and services to others who need them.
Finally, international markets consist of the buyers in other countries, including
consumers, producers, resellers and governments. Each market type has special
characteristics that call for careful study by the seller.
• f) Competitors:
• No single competitive marketing strategy is best for all companies. The company’s
marketing system is surrounded and affected by a host of competitors. Each firm should
consider its own size and industry position compared to those of its competitors. These
competitors have to be identified, monitored and outmanouvered to gain and maintain
customer loyalty.
• Industry and competition constitute a major component of the micro-environment.
Development of marketing plans and strategy is based on knowledge about
competitors’ activities. Competitive advantage also depends on understanding the
status, strength and weakness of competitors in the market.
• Large firms with dominant positions in an industry can use certain strategies that
smaller firms cannot afford. But being large is not enough. There are winning strategies
for large firms, but there are also losing ones. And small firms can develop strategies
that give them better rate of return than large firms enjoy.

Every company is surrounded by seven types of public, as shown below:

• 1. Financial—banks, stock-brokers, financial institutions.
• 2. Media—Newspaper, magazines, TV.
• 3. Government—Government departments.
• 4. Citizen—Consumer Organisations; environment groups.
• 5. Local—neighbourhood residents, community groups.
• 6. General—General Public, public opinions.
• 7. Internal—Workers, officers, Board of Directors.
 Macro Environment (External factors): consists of broader forces that not only affect
the company and the industry, but also other factors in the micro-environment.
A. Demographic Environment:
• Demography is the study of population characteristics that are used to describe
consumers. Demographics tell marketers who are the current and potential customers,
where are they, how many are likely to buy and what the market is selling. Demography
is the study of human populations in terms of size, density, location, age, sex, race,
occupation and other statistics.
• Marketers are keenly interested in studying the demography ethnic mix, educational
level and standard of living of different cities, regions and nations because changes in
demographic characteristics have a bearing on the way people live, spend their money
and consume.
Income: Income determines purchasing power and status. Higher the income, higher is
the purchasing power. Though education and occupation shapes one’s tastes and
preferences, income provides the means to acquire that.
Life-style: It is the pattern of living expressed through their activities, interests and
opinion. Life-style is affected by other factors of demography as well. Life-style affects a
lot on the purchase decision and brand preferences.
Sex: Gender has always remained a very important factor for distinction. There are
many companies which produce products and services separately for male and female.
Education: Education implies the status. Education also determines the income and
occupation. With increase in education, the information is wider with the customers and
hence their purchase decision process is also different. So the marketers group people
on the basis of education.
Social Class: It is defined as the hierarchical division of the society into relatively
distinct and homogeneous groups whose members have similar attitudes, values and
lifestyle.
Occupation: This is very strongly associated with income and education. The type of
work one does and the tastes of individuals influence one’s values, life-style etc. Media
preferences, hobbies and shopping patterns are also influenced by occupational class.
Age: Demographic variables help in distinguishing buyers, that is, people having
homogenous needs according to their specific wants, preferences and usages. For
instance, teenagers usually have similar needs. Therefore, marketers develop products
to target specific age groups. The age groups that attract the attention of marketers
can be classified as:
• (i) Infants: The population of India is growing at an alarming rate. The rate of infant
deaths has declined considerably due to the advancement in medicine. Although infants
are consumers of products, their parents are the decision makers. The size of a family
is decreasing and the average income of family is increasing.
• (ii) School going teens: In this segment, there is a great demand for school uniforms,
bags, shoes, books, stationary, confectioneries, food, albums, bicycles and other similar
products.
• (iii) Young Adults:
• Marketers target the young adults in the age group 18-30 years with products like
motorbikes, music systems, clothes, sports cars etc. Two-wheeler manufacturers in
India target this segment of people. In the last five years, various companies like, Bajaj,
Hero-Honda, Kinetic, TVS etc. have introduced a large number of models to attract
young adults.
• (iv) Adults (35-45):
• Consumers, in this age group, are more health conscious and look for stability and
financial independence. The industries that are benefited by them are: Pharmaceuticals,
personal products, fitness products, gym equipment’s, cars, home appliances,
consumer durables, banks, insurance companies, etc. Marketers push products
specifically designed for this age group.
• (v) Senior Citizens:
• This consumer group boosts the demand for health care services, select skin care
products, financial planning etc.
• For example, one of the demographic characteristic is the size of family. With the
number of small families increasing in India, the demand for smaller houses and
household items has increased significantly. Similarly, the number of children in a family
has reduced significantly over the years. So, per child spending in a family has
increased significantly.
• According to the World Health Organisation, young people in the age group of 10-24
years comprise 33% of the population and 42% of our population consists of age group,
0-24 years. Teen-agers in the age group below 19 years comprise 23%. The senior
citizen age group above 65 years comprise only 8% of total population. About 58% of
the working population is engaged in agricultural activities, with highest, that is 78% in
Bihar and Chattisgarh and lowest 22% in Kerala.
• Since human population consists of different kinds of people with different tastes and
preferences, they cannot be satisfied with any one of the products. Moreover they need
to be divided in homogeneous groups with similar wants and demands. For this we
need to understand the demographic variables which are traditionally used by
marketers, to segment the markets.
• (vi) Women:
• Women constitute nearly 50% of India’s population. They are actively taking up
professions. This shift in their role has generated a greater demand for childcare and
convenience products that save time in cooking, cleaning and shopping.
• Marketers are trying to come up with products that are easier to handle, less heavy,
convenient to use etc. The change in the role of women is paving the way for a change
in the role of men. Advertisements portray men cleaning, cooking and caring for their
children, which was

B. Economic Environment: Economic environment is the most significant component

of the marketing environment. It affects the success of a business organisation as well
as its survival. The economic policy of the Government, needless to say, has a very
great impact on business. Some categories of business are favourably affected by the
Government policy, some adversely affected while some others remain unaffected. The
economic system is a very important determinant of the scope of private business and
is therefore a very important external constraint on business.
(i) General Economic Conditions:
• General Economic Conditions in a country are influenced by various factors.
They are:
• 1. Agricultural trends
• 2. Industrial output trends
• 3. Per capita income trends
• 4. Pattern of income distribution
• 5. Pattern of savings and expenditures
• 6. Price levels
• 7. Employment trends
• 8. Impact of Government policy
• 9. Economic systems.
(ii) Industrial Conditions:
• Economic environment of a country is influenced by the prevalent industrial conditions
as well as industrial policies of a country.
• A marketer needs to pay attention to the following aspects:
• 1. Market growth
• 2. Demand patterns of the industry
• 3. Its stage in product life cycle.
(iii) Supply sources for production:
• Supply sources required for production determines inputs which are available required
for production.
• They are:
• 1. Land
• 2. Labour
• 3. Capital
• 4. Machinery and equipment etc.

C. Physical Environment:
• The physical environment or natural environment involves the natural resources that are
needed as inputs by marketers or those that are affected by marketing activities.
Environmental concerns have grown steadily in recent years. Marketers should be
aware of trends like shortages of raw materials, increased pollution, and increased
governmental intervention in natural resources management. Companies will have to
understand their environmental responsibility and commit themselves to the ‘green
movement’.
• Potential shortages of certain raw materials, for examples, oil, coal, minerals, unstable
cost of energy, increased levels of pollution; changing role of Government in
environment protection are a few of the dangers the world is facing on physical
environment forces. Other aspects of the natural environment which may increasingly
affect marketing include the availability and cost of raw materials, energy and other
resources, particularly if those resources and energy come from non-renewable
sources.

D. Technological Environment:
• One of the most dramatic forces shaping people’s lives in technology. Technology has
released such wonders as penicillin, open-heart surgery and birth control pill. It has
released such horrors as the hydrogen bomb, nerve gas, and the sub-machine gun.
Every new technology is a force for “creative destruction”. Transistors hurt the vacuum
tube industry, xerography hurt the carbon paper business, autos hurt the railroads, and
television hurt the newspapers.
• Technology essentially refers to our level of knowledge about ‘how things are done’.
That is understanding this aspect of the marketing environment is much more than
simply being familiar with the latest hi-tech innovations. Technology affects not only the
type of products available but also the ways in which people organize their lives and the
ways in which goods and services can be marketed.
• Computer-aided design (CAD) and computer-aided manufacturer (CAM) have
shortened the time required for new products to reach the market and increased the
variety of products that can be produced cost effectively. The benefits of CAD/CAM are
clearly evident in the car industry. Mass production is in standardized models. Computer
 systems have also contributed substantially to the growth of various forms of direct
marketing such as direct mail, direct response marketing etc.

E. Political Environment:
• The political environment consists of factors related to the management of public affairs
and their impact on the business of an organisation. Political environment has a close
relationship with the economic system and the economic policy. Some Governments
specify certain standards for the products including packaging.
• Some other Governments prohibit the marketing of certain products. In most nations,
promotional activities are subject to various types of controls. India is a democratic
country having a stable political system where the Government plays an active role as a
planner, promoter and regulator of economic activity.
• Businessmen, therefore, are conscious of the political environment that their
organisation face. Most Governmental decisions related to business are based on
political considerations in line with the political philosophy following by the ruling party at
the Centre and the State level

F. Legal Environment: Marketing decisions are strongly affected by laws pertaining to

competition, price-setting, distribution arrangement, advertising etc. It is necessary for a
marketer to understand the legal environment of the country and the jurisdiction of its
courts.
• Consumer Protection Act 1986
• Securities and Exchange Board of India Act 1992
• Different Taxation Laws.

G. Social and Cultural Environment:

• Socio-cultural forces refer to the attitudes, beliefs, norms, values, lifestyles of individuals
in a society. These forces can change the market dynamics and marketers can face
both opportunities and threats from them. Some of the important factors and influences
operating in the social environment are the buying and consumption habits of people,
their languages, beliefs and values, customs and traditions, tastes and preferences,
education and all factors that affect the business.
• As health problems in people have increased because of significant changes in their
lifestyle, they have become concerned about their food. They prefer to eat low fat, low
or no cholesterol
• In India, social environment is continuously changing. One of the most profound social
changes in recent years is the large number of women entering the job market. They
have also created or greatly expended the demand for a wide range of products and
services necessitated by their absence from the home. There is a lot of change in
quality-of-lifestyles and people are willing to have many durable consumer goods like
TV., fridge, washing machines etc. even when they cannot afford them because of their
availability on hire-purchase or instalment basis.

FACTORS INFLUENCING CONSUMER BUYING BEHAVIOUR

PERSONAL FACTORS
Occupation: The occupation of an individual plays a significant role in influencing
his/her buying decision. An individual’s nature of job has a direct influence on the
products and brands he picks for himself/herself.
Tim was working with an organization as Chief Executive Officer while Jack, Tim’s
friend now a retired professor went to a nearby school as a part time faculty. Tim always
looked for premium brands which would go with his designation whereas Jack preferred
brands which were not very expensive. Tim was really conscious about the clothes he
wore, the perfume he used, the watch he wore whereas Jack never really bothered
about all this.
Age :Age and human lifecycle also influence the buying behaviour of consumers.
Teenagers would be more interested in buying bright and loud colors as compared to a
middle aged or elderly individual who would prefer decent and subtle designs.
A bachelor would prefer spending lavishly on items like beer, bikes, music, clothes,
parties, clubs and so on. A young single would hardly be interested in buying a house,
property, insurance policies, gold etc.An individual who has a family, on the other hand
would be more interested in buying something which would benefit his family and make
their future secure.
Economic Condition : The buying tendency of an individual is directly
proportional to his income/earnings per month. How much an individual brings
home decides how much he spends and on which products?
Individuals with high income would buy expensive and premium products as compared
to individuals from middle and lower income group who would spend mostly on
necessary items. You would hardly find an individual from a low income group spending
money on designer clothes and watches. He would be more interested in buying
grocery items or products necessary for his survival.
Lifestyle: Lifestyle, a term proposed by Austrian psychologist Alfred Adler in 1929,
refers to the way an individual stays in the society. It is really important for some people
to wear branded clothes whereas some individuals are really not brand conscious. An
individual staying in a posh locality needs to maintain his status and image. An
 individual’s lifestyle is something to do with his style, attitude, perception, his social
relations and immediate surroundings.
Personality: An individual’s personality also affects his buying behavior. Every
individual has his/her own characteristic personality traits which reflect in his/her buying
behavioral fitness freak would always look for fitness equipment's whereas a music
lover would happily spend on musical instruments, CDs, concerts, musical shows etc.

CULTURAL FACTORS
Factors that an individual learns at a very early stage of life due to socialization within
the family and other key institutions, such as the set of values, preferences, behavior
patterns, and perceptions are learned as the individual grows.
Culture: The culture refers to the beliefs, customs, rituals and practice that a particular
group of people follows. As a child grows, he inculcates the buying and decision-making
patterns through his family and the key institutions. The culture varies from region to
region and even from country to country. Such as the sale of “sarees” and “Lungis” is
more in South than the North India. Therefore, the marketer should carefully study all
the different cultures and frame the marketing strategies accordingly.
Subculture: The culture can be further divided into subculture wherein the people are
classified more specifically on the basis of their shared customs and beliefs, including
religions, geographic regions, nationalities, etc. The different sub-cultures forms several
market segments whose needs can be carefully studied by the marketer, and the
strategic marketing decisions can be taken accordingly. Such as the needs of the
people living in metro cities and the ones living in B-grade cities must be identified
before the launch of the marketing campaign.
Social Class: The social class to which an individual belongs influences the buying
decision. Generally, the people belonging to the same class are said to be sharing the
similar interest, value and the behavior. Our society is classified into three social
classes upper class, middle class, and the lower class. The consumers belonging to
these classes possess different buying behaviors. Such as an individual belonging to
the upper class buy those products or services that advocate his status while the lower
class people buy those products which satisfy their basic needs.

SOCIAL FACTORS
Family: A child develops his buying behavior and preferences by watching his parents
and tend to buy the same products or services even when he grows old. The family can
influence the buying behavior of an individual in either of the two ways:
• Influences the personality, attitude, beliefs, characteristics of the individual.
• Influences the decision making of an individual with respect to the purchase of certain
goods and services.
It is believed that an individual passes through two families: Family of Orientation and
Family of Procreation. In the former type, it is the family wherein an individual has
taken the birth, and the parents have a strong influence on his behavior. While in the
family of procreation, it is the family created by an individual with his spouse and
children and as such the preferences tend to change with the influence of the spouse.
Reference Group: A reference group is a group with which an individual likes to get
associated, i.e. want to be called as a member of that group. It is observed, that all the
members of the reference group share common buying behavior and have a strong
influence over each other.
• The marketers should try to identify the roles within the reference group that influences
the behavior of others. Such as Initiator (who initiates the buying
decision), Influencer (whose opinion influences the buying decision), Decision-
Maker (who has the authority to take the purchase decision) and Buyer (who ultimately
buys the product).
Roles and Status: An individual’s position and role in the society also influences his
buying behavior. Such as, a person holding a supreme position in the organization is
expected to purchase those items that advocate his status. The marketers should try to
understand the individual’s position and the role very much before the endorsement of
the products.

STAGES OF CONSUMER BUYING DECISION PROCESS

The marketer is responsible for selling the goods in the market so he must have the
knowledge how the consumers actually make their buying decisions. For this he must
study the consumer buying decision process or model. It involves five stages.
 1. Need recognition:- consumer buying decision process starts with need
recognition. The marketer must recognize the needs of the consumer as well as how
these needs can be satisfied. For example if a person is hungry then food is desired or
if it is a matter of thirst than water is desirable.
 2. Information search:– in consumer buying decision process information search
comes at second number. In this stage consumer searches the information about the
product either from family, friends, neighborhood, advertisements, whole seller,
retailers, dealers, or by examining or using the product.
 3. Evaluation of alternatives:– after getting the required knowledge about the product
the consumer evaluate the various alternatives on the basis of it’s want satisfying
power, quality and it’s features.
 4. Purchase decision: – after evaluating the alternatives the buyer buys the suitable
product. But there are also the chances to postpone the purchase decision due to some
reasons. In that case the marketer must try to find out the reasons and try to remove
them either by providing sufficient information to the consumers or by giving them
guarantee regarding the product to the consumer.
 5. Post purchase behavior:– after buying the product consumer will either be satisfied
or dissatisfied. If the consumer is not satisfied in that case, he will be disappointed
otherwise If he is satisfied than he will be delighted. It is usually said that a satisfy
consumer tell about the product to 3 people and a dissatisfy consumer tell about the
product to 11 people. Therefore, it is the duty of the marketer to satisfy the consumer.

METHODS OF PROFILING CUSTOMER BUYING DECISION

PROCESS
Understanding the consumer’s behavior in connection with the product is called
mapping the customer’s consumption system.
1. Introspective Method: Marketers can do the simulation practice or act for the real life
case Studies of their product.
2. Retrospective Method: The Marketer can interview a small number of recent
purchasers, asking them to recall the events leading to their purchase.
3. Prospective Method: Marketers can locate consumers who plan to buy the product
and ask them to think out loud about going through the buying process.
4. Perspective Method: Marketers can also ask consumers to describe the ideal way to
buy the product.

BUSINESS ORGANIZATION PURCHASING PROCESS

1. A Problem Is Identified The purchasing process does not begin until someone
identifies a problem within the organization, which can be solved by purchasing a good
or service. Anyone within the organization can initiate this – from a customer service rep
out of printer paper – to the CEO who decides that it's time to expand to a larger facility.
In some instances, a sales person may help someone in the organization to identify a
need that no one had previously recognized.
2. General Need Description After a problem is identified, the organization
determines which product or service is required. When an office is out of printer paper,
the office manager may decide that more paper is needed. However, a software
engineer in the same company might suggest that the organization become paperless
by providing all employees in the office with tablet computers.
3. Product or Service Specification Once the general need is agreed upon by those
who have purchasing authority in that organization, they will then narrow down the
options by specifying what the product or service must offer. If they have decided on
tablets, they would then specify the size they want, how much memory the tablets offer,
and so on. If they decide on paper, then they would determine the quantity and quality
of paper required.
4. Potential Supplier Search The fourth step of the buying process involves looking
for potential suppliers. If the company doesn't already have an established relationship
with a vendor that offers the product, then often the company must look online, attend
trade shows or contact suppliers by telephone. Purchasers determine if the suppliers
are reputable, financially stable and if they'll be around for future requirements.
5. Request for Proposals For large purchases, organizations usually write out a formal
RFP, a Request for Proposal, and then send it to their preferred suppliers. Alternatively,
they may make the process public so that anyone can send in a proposal. For smaller
purchases, this could be as simple as looking at the price on a website.
6. Supplier Evaluation and Selection In this part of the process, supplier proposals
and prices are evaluated to determine who is offering the best price and the best
quality. Often, price alone is enough to win an organization's business, as many
businesses will weigh the price against financing options, supplier reputation and
whether or not a supplier can provide the organization with future goods and services.
7. Establishing Credit and Order Specification Once the winning supplier has
been selected, the organization places the order. This may involve establishing credit
with the supplier, agreeing on terms, as well as reviewing shipment times and any other
deliverables that may come with the sale, such as installation or product training.
8. Supplier Performance Review After the product has been delivered or the
service has been performed, the organization will review the purchase to see if it meets
acceptable standards. For larger purchases, this could be a formal review involving key
decision makers in the organization and the supplier's sales staff. For smaller
purchases, it is often informal. For example, if the company ordered a box of paper that
arrived late or was damaged, the company may decide not to buy from that supplier
again, without ever informing the supplier of a problem.

B2B CRM
B2B is simply shorthand for “Business to Business”, and it generally refers to who you
sell your product to. If your company sells a product or service to other businesses,
you're a B2B company. The inverse of B2B is “B2C” – This means Business
to Consumer. Through effective CRMs, businesses enjoy more benefits to their overall
sales and customer retention programs. These benefits include helping companies in
determining their most profitable consumers while establishing long
term relationships with customers.
 The benefits of doing so include:
• Better client relationships. ...
• Improved efficiency in serving clients. ...
• Greater staff satisfaction. ...
• Increased revenue and profitability. ...
• Cost savings. ...
• Less client attrition.

1. Show you care: In any kind of relationship, caring is an excellent way to let someone
know they are important. But in building a brand, you need to be authentic in showing
how much you care for your customers. Be genuine in offering help. Once people see
that you are dependable and original, they will trust your brand.
2. Communicate regularly: Whenever you see a comment on your blog post, be sure to
reply politely. Visitors love it when the site owners reply to their comments. That is
something that fuels them to keep updated with your posts. Also, make your customers
feel important by listening to them and providing solutions. Sending a thank you note or
phone call can change someone’s mood.
3. Build and nurture your online community. : With the wide accessibility of the internet
today, it’s easier for brands to reach their target market online. By building an online
community where your customers and prospects are connected to, you can simply
promote your brand and let them know why they need to buy it. One best platform to
connect with your audience is through social media.
4. Organize events: If you want a more personal way of engaging your audience and
customers, hosting events can be an effective way. Whether online or offline, spending
time to interact with your customers is important in building a strong brand.
5. Reward customers: Current, regular, and loyal customers are worth rewarding. You
can develop your own loyalty program to show them your appreciation and respect for
being loyal to your brand. When they feel appreciated and rewarded, you can make
them trust your brand even more.
6. Stay consistent no matter what. One of the most important factors in maintaining
customer relationships is consistency. Be consistent in the marketing methods you use
and regularly update your site. Provide customers with up-to-date information they need
when buying products online. Just be consistent in your effort to retain customers in the
best possible way.
 HIGH-INVOLVEMENT AND LOW-INVOLVEMENT PRODUCTS
1. High-involvement products are those that represents the consumer’s personality, status
and justifying lifestyle; for example, buying a home theatre.
2. By contrast, low- involvement products are those that reflect routine purchase decisions;
for example, buying a candy or an ice cream.

Features/Characteristics of High-involvement Products:

1. High price
Where the products are highly priced consumers display high
involvement; for example, buying a designer product. When buying a Mercedes car,
a consumer displays high involvement, but not when buying a second-hand car.
2. Technical features:
When a consumer is buying products having complex features then they spends time in
getting themselves familiarized with the product, which shows high involvement. Such
products include computers, refrigerators, washing machines, TVs, music system, cars,
DVDs, and so on. Manufacturers provide product manuals to facilitate easy
understanding of the product.
3. Major differences between alternatives:
High involvement is caused when the consumer notice major differences between
alternatives; for example, Swiss and Chinese wrist watches. Consumers spend more
time to evaluate the difference to arrive at the right decision.
4.Projection of self:
Some consumers are very specific about what they buy; for example, if a consumer
claims that he uses only branded products, it means the consumer is ready to pay more
for the brand and convince himself that he is not a run-of-the-mill type buyer.The same
behavior is seen while choosing jeweler, cosmetics, perfumes, cars, clothes,
restaurants, and so on. As self-image is more dominating than the price of the product,
the consumer intentionally pays more because he is ruled by variety and money power.
5. Evaluation of risks:
Presence of high risks leads to high involvement. A consumer is interested to evaluate
risks to know how to minimize them and if possible to avoid them; for example, hair
dyes contain chemicals. A consumer evaluates if its use can result in health problem,
and if so, how to avoid such risks.

Risks of Low Involvement:

• Brand hopping: Some consumers do not display brand loyalty. They switch from one
brand to another. Whenever a new consumer product appears in the market, they buy it
on trial basis. Brand hopping is common where differences between the brands are
minimum.
• Availability of alternative brands: When a consumer finds similar alternatives within
the same product class, they settles for any one brand. In this case, buying process is
not time consuming.
• Effect on consumer’s self-image: This situation generally arises when the consumer
is buying daily-consumption items; for example, if they want to buy Marie biscuits, they
may pick up Marie by Parle or by Britannia. This is because it neither reflects the status
nor damages the consumer’s image.

Peter Drucker (1963) recommended classifying products in one of following six

ways:
• i. Tomorrow’s breadwinners
• ii. Today’s breadwinners
• iii. Yesterday’s breadwinners
• iv. The also-rans
• v. The failures
• vi. Products that are capable of making a contribution assuming that drastic action is
taken
This approach of classification provides the basis for posing following 3
questions:
• i. Should we continue to market the product?
• ii. If so, should the strategy and level of resource allocation be changed in a minor way?
• iii. Should there be a major rethink of the product’s strategy (e.g. a relaunch, a
repositioning or a major styling change)?

PRODUCT ADVERTISING
Pioneering or informative advertising:
The major objective of this type of advertisement is to create the general awareness of
the product. Activities are aimed at stimulating the primary demand of the product
category rather than a specific brand. For example, the advertisement Malaysia
Tourism, with their picturesque TV commercial and the slogan ‘Malaysia – Truly Asia’
made an indelible mark where pioneering advertisement was concerned.
• Here the product category is introduced first, educative in intent and it appeals to the
consumer’s rational as well as to his emotional being. This type of advertising is
beneficial at the introductory stage of the PLC. Thus, generating awareness and
creating primary demand for the product are the main functions of advertising here.

Competitive or Persuasive advertising: This advertisement becomes useful at a

slightly later stage in PLC after introduction. Once the importance of the product has
been established then selective demand of a specific product brand is stimulated. By
now the product is established in the market and has reached the growth in the market
and has reached the growth or maturity stage of the PLC. Competitive advertising is
again of two types:
 Direct type, where it seeks to stimulate immediate buying action.
 Indirect type, anticipating that the consumer’s final action will be buying, the benefit of
the product is emphasized in this type.

Retentive or Reminder oriented:

• The product might have established and consolidated itself firmly in the market place.
However, its sales may start to decline at a later point. The market by now might be full
of competitors offering various brands of the product, which are more or less same in
core benefits.
• The buyer must be reminded about the brand to sustain his loyalty. It is a soft sell
approach where the buyer is judged to continue the usage of the product. The essence
here is to keep the brand name in front of the eye of the viewer. This kind of advertising
is used at both the maturity as well as the declining stage.

MARKET SEGMENTATION
Market Segmentation is a process of dividing the market of potential customers into
different groups and segments on the basis of certain characteristics. The member of
these groups share similar characteristics and usually have one or more than one
aspect common among them. Market Segmentation is a convenient method marketer
use to cut costs and boost their conversions. It allows them to be specific in their
planning and thus provide better results. It ultimately helps them to target the niche user
base by making smaller segments. One of the major reasons marketers segment
market is because they can create a custom marketing mix for each segment and cater
them accordingly.

Bases of Market Segmentation

 1. Geographic Segmentation
• This type of market segmentation is important for marketers as people belonging to
different regions may have different requirements for the same product/service. Eg.
water might be scarce in some regions which inflates the demand for bottled water but,
at the same time, it might be in abundance in other regions where the demand for the
same is very less.

2. Demographic Segmentation: Demographic segmentation divides the market on the

basis of demographic variables like age, gender, marital status, family size, income,
religion, race, occupation, nationality, etc. This is one of the most common
segmentation practice among marketers in almost every industry.
• Gender: Gender is one of the most simple yet important bases of market segmentation.
The interests, needs and wants of males and females differ at many levels. Thus,
marketers focus on different marketing and communication strategies for both. This type
of segmentation is usually seen in the case of cosmetics, clothing, and jewellery
industry, etc.
• Age group: Segmenting market according to the age group of the audience is a great
strategy for personalized marketing. Most of the products in the market are not universal
to be used by all the age groups. Hence, by segmenting the market according to the
target age group, marketers create better marketing and communication strategies and
get better conversion rates.
• Income : Income decides the purchasing power of the target audience. It is also one of
the key factors to decide whether to market the product as a need, want or a luxury.
Marketers usually segment the market into three different groups considering their
income. These are High Income Group , Mid Income Group , Low Income Group
• Occupation : Just like income, influences the purchase decision of the audience. A
need for an entrepreneur might be a luxury for a government sector employee. There
are even many products which cater to an audience engaged in a specific occupation.
• Usage Product usage also acts as a segmenting basis. A user can be labelled as
heavy, medium or light user of a product. The audience can also be segmented on the
basis of their awareness of the product.
• Lifestyle Other than physical factors, marketers also segment the market on the basis
of lifestyle. Lifestyle includes subsets like marital status, interests, hobbies, religion,
values, and other psychographic factors which affect the decision making of an
individual.

3. Behavioral Segmentation: The market is also segmented based on audience’s

behavior, usage, preference, choices and decision making. The segments are usually
divided based on their knowledge of the product and usage of the product. It is believed
 that the knowledge of the product and its use affect the buying decision of an individual.
The audience can be segmented into –
• Those who know about the product,
• Those who don’t know about the product,
• Ex-users,
• Potential users,
• Current Users,
• First time users, etc.

4.Psychographic Segmentation
• Psychographic Segmentation divides the audience on the basis of their personality,
lifestyle and attitude. This segmentation process works on a premise that consumer
buying behavior can be influenced by his personality and lifestyle. Personality is the
combination of characteristics that form an individual’s distinctive character and includes
habits, traits, attitude, temperament, etc. Lifestyle is how a person lives his life.
• Personality and lifestyle influence the buying decision and habits of a person to a great
extent. A person having a lavish lifestyle may consider having an air conditioner in every
room as a need, whereas a person living in the same city but having a conservative
lifestyle may consider it as a luxury.

Nature of a market segment

A market segment needs to be homogeneous. There should be something common
among the individuals in the segment that the marketer can capitalize on. Marketers
also need to check that different segments have different distinguishing features which
make them unique. The segment must have a similar type of reaction to the marketing
activities being pitched.
• A good market segment is always externally heterogeneous and internally
homogenous

Examples of market segmentation

• Beauty products.
• A company that sells nutritious food might market the product to the older people while
fast-food chains target the working demographic or teens.
• Sports brands often segment the market based on the sports they play which help them
market the sports specific products to the right audience.
Essentials For Effective Market Segmentation
I. Measurable and Obtainable: The size, profile and other relevant characteristics of
the segment must be measurable and obtainable in terms of data.
For an organisation with direct sales (without intermediaries), the own customer
database could deliver valuable information on buying behaviour (frequency, volume,
product groups, mode of payment etc.).
ii. Relevant: The size and profit potential of a market segment have to be large enough
to economically justify separate marketing activities for this segment. If a segment is
small in size then the cost of marketing activities cannot be justified.
iii. Accessible: The segment has to be accessible and servable for the organisation.
That means, the customer segments may be decided considering that they can be
accessed through various target-group specific advertising media such as magazines or
websites the target audience likes to use.
iv. Substantial: The segments should be substantial to generate required returns.
Activities with small segments will give a biased result or negative results.
v. Valid: This means the extent to which the base is directly associated with the
differences in needs and wants between the different segments.
vi. Unique or Distinguishable or Differentiable: The market segments have to be that
diverse that they show different reactions to different marketing mixes. If not, then there
would have been no use to break them up in segments.
vii. Appropriate: The segments must be appropriate to the organization’s objectives
and resources.
viii. Stable: The segments must be stable so that its behaviour in the future can be
predicted with a sufficient degree of confidence.
ix. Congruous: The needs and characteristics of each segment must be similar
otherwise the main objective of segmentation will not be served. If within a segment the
behaviour of consumers are different and that they react differently, then a unique
marketing strategy cannot be implemented for everyone. This will call for a further
segmentation.
x. Actionable or Feasible: It has to be possible to approach each segment with a
particular marketing programme and to draw advantages from that. The segments that
a company wishes to pursue must be actionable in the sense that there should be
sufficient finance, personnel and capability to take them all. Hence, depending upon the
reach of the company, the segments must be selected.
xi. Some general considerations: Apart from the above-mentioned essentials, the
segment must have some other features:
• i. Growth potential
• ii. Profitable
• iii. Less risk prone
• iv. Less competition intensive

Levels of Market Segmentation

 1. General Marketing
 2. Individual Marketing
 3. Niche Marketing
 4. Local – Global Marketing

DIFFERENCE BETWEEN UNDIFFERENTIATED,

CONCENTRATIONS AND DIFFERENTIATED MARKETING

The planning a target market strategy consists of choosing the proper approach and
selecting the target market. A firm may select undifferentiated marketing, concentrated
marketing or differentiated marketing.

i. Undifferentiated Marketing (Mass Marketing):

• The firm tries to reach a wide range of consumers with one basic marketing plan. These
consumers are assumed to have a desire for similar good and service attributes.
• Henry Ford, sold one standard car at a reasonable price to many customers. The
Original Model T had no options and came only in black. Undifferentiated marketing
maximizes sales.
ii. Concentrated Marketing:
• The firm concentrates on one group of consumers with a distinct set of needs and uses
a tailor-made marketing plan to attract this single group. Concentrated marketing can let
a firm maximise per unit profits, but not total profits, since only one segment is sought.
• A firm with low resources may vie effectively for specialised markets. Shree Leathers,
Shoe maker in Kolkata targets middle class customers segment for all of its shoes.
iii. Differentiated Marketing (Multiple Segmentation):
• Differentiated Marketing enables a firm to appeal to two or more distinct market
segments, with a different marketing plan for each. It combines the best aspects of
undifferentiated marketing and concentrated marketing.
• Firms may use both mass marketing and concentrated marketing in their multiple
segmentation strategies. Microsoft has complete lines of software targeted separately at
final consumers (for home use) and organisational consumers (for business use).
• P&G, a leader in laundry detergents has various brands such as Tide, Bold, Drift,
Cheer, Gain, Ivory Snow & Ariel. Multiple segmentation lets a firm diversify and
minimise risks because all emphasis is not placed on one segment. Indian auto makers
like Maruti-Suzuki and others are also pursuing multi-brand strategy.

PRODUCT LIFE CYCLE

Entry or Introduction Stage:
• Launch new product.
• Develop the market for the product.
• Build brand awareness. Advertise.
• Trademark or patent the new product if necessary.
• Consider your pricing strategy: should it be a low price to quickly gain market share; or
a high price if limited competition and high cost to bring to market:
• Target Marketing distribution, place or location based on your market research: target
the easiest market to enter first; you want to have early and fast wins.
• Promotional materials are developed to inform and gain awareness, understanding and
acceptance of the product. Focus on an audience that likes to be an early adopter
 Growth Stage:
• Focus on growing market share.
• Increase brand preference: focus on product features, advantages and benefits.
• Product quality must be good. Awareness of quality focus must be a communication
message.
• As product demand grows, stabilize pricing and ensure that the cost/price relationship is
valid AND also supported by the market. At this stage (for new products specifically)
you will have an advantage over your competition and price will not be as sensitive as in
later stages.
• Enter additional markets. Your product, and its brand, will be gaining recognition and
will receive easier acceptance. Demand will increase.
• Promotional materials are focused on the broader, more expanded market (and
audience).
Mature Stage:
• Small business sales growth starts to slow down. Focus on holding on to market share
and making as much profit as possible.
• Competitors have caught up to you and your product.
• Define and refine what is unique about your product: unique value proposition and
strong product differentiation and product positioning (or re-positioning). If possible,
and/or necessary, add new, different and unique features and benefits to your product.
• Pricing may be impacted by competitive activity. Develop alternative competitive
strategy to cutting price for as long as possible.
• Distance to market may begin to cost in time and money. Look for alternatives: open a
branch closer to the big markets, or the smaller less competitive markets; can the
product be sold online? Expand your market reach.
• Promotional materials are focused on the unique value proposition, new features and
benefits and other product differentiation.
Declining Stage:
• Your product has become a commodity. Typically, at this stage, competition is fierce
and you can only continue to win if you are the lowest cost provider.
• Consider carefully if you wish to continue with this product if cannot compete effectively.
• Look at ways to reduce product costs.
• Look at ways to improve or change the product.
• Understand your customers and your competition very well during this stage: Develop
your marketing research plan. Is market demand dying? Do your competitive
 intelligence and analyze your competition in business. Can your competitors be more
efficient at producing the product than you? Don't hang on to the product for emotional
reasons but also don't let go of the product too soon.

MARKET RESEARCH
Marketing research refers to systematic gathering and analysis of information about the
moving (sale and distribution) of goods or services from producer to consumer.
Marketing research covers three wide areas: market analysis, which yields information
about the marketplace; product research, which yields information about the
characteristics and desires for the product; and consumer research, which yields
information about the needs and motivations of the consumer.

Scope of Market Research

• Analysis of the market size according to age, sex, income, and standard of living of the
customers
• To know about prospective customers.
• Estimating the territorial demand of different markets.
• Studying the market changes and market conditions affecting the market changes.
• Knowing about the profitability of different markets and the market segments.
• Analyzing the working of various channels of distribution.
• To know all about competitors their market share and their products.

TECHNIQUES OF MARKET RESEARCH

• 1. Surveys. With concise and straightforward questionnaires, you can analyze a sample
group that represents your target market. The larger the sample, the more reliable your
results will be.
 In-person surveys are one-on-one interviews typically conducted in high-traffic locations
such as shopping malls. They allow you to present people with samples of products,
packaging, or advertising and gather immediate feedback. In-person surveys can
generate response rates of more than 90 percent, but they are costly. With the time and
labor involved, the tab for an in-person survey can run as high as $100 per interview.
 Telephone surveys are less expensive than in-person surveys, but costlier than mail.
However, due to consumer resistance to relentless telemarketing, convincing people to
participate in phone surveys has grown increasingly difficult. Telephone surveys
generally yield response rates of 50 to 60 percent.
 Mail surveys are a relatively inexpensive way to reach a broad audience. They’re much
cheaper than in-person and phone surveys, but they only generate response rates of 3
percent to 15 percent. Despite the low return, mail surveys remain a cost-effective
choice for small businesses.
 Online surveys usually generate unpredictable response rates and unreliable data,
because you have no control over the pool of respondents. But an online survey is a
simple, inexpensive way to collect anecdotal evidence and gather customer opinions
and preferences.

2. Focus groups. In focus groups, a moderator uses a scripted series of questions or

topics to lead a discussion among a group of people. These sessions take place at
neutral locations, usually at facilities with videotaping equipment and an observation
room with one-way mirrors. A focus group usually lasts one to two hours, and it takes at
least three groups to get balanced results.

3. Personal interviews. Like focus groups, personal interviews include unstructured,

open-ended questions. They usually last for about an hour and are typically recorded.
• Focus groups and personal interviews provide more subjective data than surveys. The
results are not statistically reliable, which means that they usually don’t represent a
large enough segment of the population. Nevertheless, focus groups and interviews
yield valuable insights into customer attitudes and are excellent ways to uncover issues
related to new products or service development.

4. Observation. Individual responses to surveys and focus groups are sometimes at

odds with people’s actual behavior. When you observe consumers in action by
videotaping them in stores, at work, or at home, you can observe how they buy or use a
 product. This gives you a more accurate picture of customers’ usage habits and
shopping patterns.

5. Field trials. Placing a new product in selected stores to test customer response
under real-life selling conditions can help you make product modifications, adjust prices,
or improve packaging. Small business owners should try to establish rapport with local
store owners and Web sites that can help them test their products.

Steps Involved in Marketing Research Process

1. Identification and Defining the Problem:
• Clear definition of the problem helps the researcher in all subsequent research efforts
including setting of proper research objectives, the determination of the techniques to
be used, and the extent of information to be collected. Survey of secondary data,
experience survey, or pilot studies, i.e., studies of a small initial sample. is ‘preliminary
investigation’.
2. Statement of Research Objectives:
• After identifying and defining the problem with or without explanatory research, the
researcher must take a formal statement of research objectives. Such objectives may
be stated in qualitative or quantitative terms and expressed as research questions,
statement or hypothesis. For example, the research objective, “To find out the extent to
which sales promotion schemes affected the sales volume” is a research objective
expressed as a statement.
• On the other hand, a hypothesis is a statement that can be refuted or supported by
empirical finding. The same research objective could be stated as, “To test the
proposition that sales are positively affected by the sales promotion schemes
undertaken this winter.” Example of another hypothesis may be: “The new packaging
pattern has resulted in increase in sales and profits.” Once the objectives or the
hypotheses are developed, the researcher is ready to choose the research design.

3. Planning the Research Design or Designing the Research Study:

• After defining the research problem and deciding the objectives, the research design
must be developed. A research design is a master plan specifying the procedure for
collecting and analysing the needed information. It represents a framework for the
research plan of action.
• The objectives of the study are included in the research design to ensure that data
collected are relevant to the objectives. At this stage, the researcher should also
determine the type of sources of information needed, the data collection method (e.g.,
 survey or interview), the sampling, methodology, and the timing and possible costs of
research.

4. Planning the Sample:

• Sampling involves procedures that use a small number of items or parts of the
‘population’ (total items) to make conclusion regarding the ‘population’. Important
questions in this regard are— who is to be sampled as a rightly representative lot?
Which is the target ‘population’? What should be the sample size—how large or how
small? How to select the various units to make up the sample?

5. Data Collection:
• The collection of data relates to the gathering of facts to be used in solving the problem.
Hence, methods of market research are essentially methods of data collection. Data
can be secondary, i.e., collected from concerned reports, magazines and other
periodicals, especially written articles, government publications, company publications,
books, etc. Data can be primary, i.e., collected from the original base through empirical
research by means of various tools.
There can be broadly two types of sources
(i) Internal sources—existing within the firm itself, such as accounting data, salesmen’s
reports, etc.
(ii) External sources—outside the firm.

6.Data Processing and Analysis:

• Once data have been collected, these have to be converted into a format that will
suggest answers to the initially identified and defined problem. Data processing begins
with the editing of data and its coding. Editing involves inspecting the data-collection
forms for omission, legibility, and consistency in classification. Before tabulation,
responses need to be classified into meaningful categories.
• The rules for categorizing, recording and transferring the data to ‘data storage media’
are called codes. This coding process facilitates the manual or computer tabulation.
• Analysis of data represents the application of logic to the understanding of data
collected about the subject. In its simplest form analysis may involve determination of
consistent patterns and summarising of appropriate details.
• The appropriate analytical techniques chosen would depend upon informational
requirements of the problem, characteristics of the research designs and the nature of
the data gathered.
 7. Formulating Conclusion, Preparing and Presenting the Report:
• The final stage in the marketing research process is that of interpreting the information
and drawing conclusion for use in managerial decision. The research report should
clearly and effectively communicate the research findings and need not include
complicated statement about the technical aspect of the study and research methods.
• Often the management is not interested in details of research design and statistical
analysis, but instead, in the concrete findings of the research. If need be, the researcher
may bring out his appropriate recommendations or suggestions in the matter.
Researchers must make the presentation technically accurate, understandable and
useful.

NEW PRODUCT DEVELOPMENT (NPD)

Product development typically refers to all of the stages involved in bringing a product
from concept or idea, through market release and beyond.

1a. Idea generation – The New Product Development Process

• Idea generation refers to the systematic search for new-product ideas
• Internal idea sources: the company finds new ideas internally. That means R&D, but
also contributions from employees.
• External idea sources: the company finds new ideas externally. This refers to all kinds
of external sources, e.g. distributors and suppliers, but also competitors. The most
important external source are customers, because the new product development
process should focus on creating customer value.
1b. Idea screening – The New Product Development Process
All ideas generated are screened to filter out good ones. While the purpose of idea
generation was to create a large number of ideas, the purpose of the succeeding stages
is to reduce that number. The reason is that product development costs rise greatly in
later stages. Therefore, the company would like to go ahead only with those product
ideas that will turn into profitable products.

2. development and Testing – The New Product Development Process

• To go on in the new product development process, attractive ideas must be developed
into a product concept. A product concept is a detailed version of the new-product idea
stated in meaningful consumer terms. You should distinguish
• A product idea à an idea for a possible product
• A product concept à a detailed version of the idea stated in meaningful consumer terms
• A product image à the way consumers perceive an actual or potential product.

3a. Concept development

• Imagine a car manufacturer that has developed an all-electric car. The idea has passed
the idea screening and must now be developed into a concept. The marketer’s task is to
develop this new product into alternative product concepts. Then, the company can find
out how attractive each concept is to customers and choose the best one. Possible
product concepts for this electric car could be:
• Concept 1: an affordably priced mid-size car designed as a second family car to be
used around town for visiting friends and doing shopping.
• Concept 2: a mid-priced sporty compact car appealing to young singles and couples.
• Concept 3: a high-end midsize utility vehicle appealing to those who like the space
SUVs provide but also want an economical car.
• As you can see, these concepts need to be quite precise in order to be meaningful. In
the next sub-stage, each concept is tested.

3b. Concept testing (Minimum Viable Product – MVP used)

• New product concepts, such as those given above, need to be tested with groups of
target consumers. The concepts can be presented to consumers either symbolically or
physically. The question is always: does the particular concept have strong consumer
appeal? For some concept tests, a word or picture description might be sufficient.
However, to increase the reliability of the test, a more concrete and physical
presentation of the product concept may be needed.

4.Marketing strategy development – The New Product Development Process

• A description of the target market, the planned value proposition, and the sales, market
share and profit goals for the first few years
• An outline of the product’s planned price, distribution and marketing budget for the first
year
• The planned long-term sales, profit goals and the marketing mix strategy.

5.Business analysis – The New Product Development Process

• The fifth step in the new product development process involves a review of the sales,
costs and profit projections for the new product to find out whether these factors satisfy
the company’s objectives.
• In order to estimate sales, the company could look at the sales history of similar
products and conduct market surveys. Then, it should be able to estimate minimum and
maximum sales to assess the range of risk. When the sales forecast is prepared, the
firm can estimate the expected costs and profits for a product, including marketing,
R&D, operations etc. All the sales and costs figure together can eventually be used to
analyse the new product’s financial attractiveness.

6. Product development – The New Product Development Process

• The new product development process goes on with the actual product development.
Up to this point, for many new product concepts, there may exist only a word
description, a drawing or perhaps a rough prototype. But if the product concept passes
the business test, it must be developed into a physical product to ensure that the
product idea can be turned into a workable market offering.
• The R&D department will develop and test one or more physical versions of the product
concept. Developing a successful prototype, however, can take days, weeks, months or
even years, depending on the product and prototype methods and be very expensive.
• Also, products often undergo tests to make sure they perform safely and effectively.
This can be done by the firm itself or outsourced. In many cases, marketers involve
actual customers in product testing. Consumers can evaluate prototypes and work with
pre-release products. Their experiences may be very useful in the product development
stage.

7. Test marketing – The New Product Development Process

• The product and its proposed marketing programme are tested in realistic market
settings. It allows the company to test the product and its entire marketing programme,
including targeting and positioning strategy, advertising, distributions, packaging etc.
before the full investment is made.
• The amount of test marketing necessary varies with each new product. Especially when
introducing a new product requiring a large investment, when the risks are high, or
when the firm is not sure of the product or its marketing programme, a lot of test
marketing may be carried out.

8. Commercialization
• The product is ready, so should be the marketing strategies. The marketing mix is now
put to use. The final decisions are to be made. Markets are decided for the product to
 launch in. This stage involves briefing different departments about the duties and
targets. Every minor and major decision is made before the final introduction stage of
the new product development.

How the Roadmap Fits into Product Development

To have a system in place for prioritizing, summarizing, and capturing your product’s
key objectives and major themes
Why is it important to build your roadmap visually? Here are the two primary benefits:
1. You and your team can more easily refer back to the product strategy you agreed on,
and quickly reacquaint yourself with those high-level objectives to make sure you’re still
on track.
2. A visually appealing roadmap can also help a product manager present the product’s
strategic goals and plans in a more compelling way to the company’s executives and
other key stakeholders.
Earning this buy-in is often a necessary step in securing organizational approval to
move ahead with new product development, so it makes sense to give your product
roadmap every advantage you can before presenting it to your stakeholders.

What is Agile Product Development?

• Product development concept + principles of agile software development like rapid
iteration based on user feedback.
• The benefit of the agile framework is that it allows an organization to shorten the cycle
from brainstorming through actually launching a product—because the product team
intentionally pushes out versions of the product (starting with its early-stage MVP) much
more quickly, and with much fewer updates and improvements in each release. This
allows for the team to enlist the feedback of actual users to incrementally make the
product better.

PRODUCT DIFFUSSION
Acceptance of product/service by a target market. Process of communication where
consumers first hear about a product, try it and share their impressions with others.
The Diffusion of Innovation – Strategies for Adoption of Products
Process by which new products are adopted (or not) by their intended audiences. It
allows designers and marketers to examine why it is that some inferior products are
successful when some superior products are not.
 Diffusion and Adoption
• It is worth noting that adoption is the process by which a user begins and continues to
use a product; diffusion is a measure of the rate of adoption. It considers the
relationship not just between any given user and a product but the relationship between
all users, each other and the product.
Diffusion studies offered some interesting advice for driving the rate of diffusion
including:
• Examining social networks (it’s worth noting that Rogers wasn’t talking about Facebook
or LinkedIn here though the idea applies in a similar way in digital networks but rather
“real life” social networks) and finding highly respected individuals and working with
them to create desire for an innovation
• Determining a representative group of desired users and “injecting” the innovation into
that group to gain positive feedback, case studies, etc. to help make the decision
making process easier for other would-be early adopters
• Diffusion recognizes that adoption is not an isolated process but rather one which is
influenced heavily by other members of the adoption cycle.

1. Knowledge
• The would be adopters do not have enough information to make a decision to purchase
on and have not yet been sufficiently inspired to find out more. Marketers look to
increase awareness of the product and provide enough education that the prospective
adopter moves to the 2nd stage.

2. Persuasion
• Persuasion is the point at which the prospective adopter is open to the idea of
purchase. They are actively seeking information which will inform their eventual
decision.
• This is the point at which marketers will be seeking to convey the benefits of the product
in detail. There will be a conscious effort to sell the product to someone at this stage of
the diffusion of innovation.

3. Decision
• Eventually the would-be adopter must make a decision. They will weigh up the pros and
cons of adoption and either accept the innovation or reject it.
• It is worth noting that this is the opaquest part of the process. This is, at least in part,
due to the fact that people do not make rational decisions in many instances. They
make a decision based on their underlying perceptions and feelings and following the
 decision they attempt to rationalize that decision. Thus, obtaining an understanding of
the decision-making process is challenging – the reasons given following a decision are
not likely to be representative of the actual reasons that a decision was made.

4. Implementation
• Once a decision to adopt a product has been made the product will, in most cases, be
used by the purchaser. This stage is when the adopter makes a decision as to whether
or not the product is actually useful to them. They may also seek out further information
to either support the use of the product or to better understand the product in context.
• This phase is interesting because it suggests that designers and marketers alike need
to consider the ownership process in detail. How can a user obtain useful information in
the post-sale environment? The quality of the implementation experience is going to be
determined, to a lesser or greater extent, by the ease of access to information and the
quality of that information.

5. Confirmation
• This is the point at which the user evaluates their decision and decides whether they will
keep using the product or abandon use of the product. This phase can only be ended by
abandonment of a product otherwise it is continual. (For example, you may buy a new
car today – you are highly likely to keep using the car for a number of years –
eventually, however, you will probably sell the car and buy a new one).
• This phase will normally involve a personal examination of the product and also a social
one (the user will seek confirmation from their peers, colleagues, friends, etc.)

PRODUCT INNOVATION
The development of new products, changes in design of established products, or use of
new materials or components in the manufacture of established products. Numerous
examples of product innovation include introducing new products, enhanced quality and
improving its overall performance.

IMPORTANCE:
1. Solve Problems Easily
• You need to come up with creative answers to solve certain problems in your business.
Many times you’ll face problems that don’t seem to go away. You need to think outside
 the box to find an answer you’ve never come up with. This way you can make your
product, store your inventory and find a creative solution to make your business better.
2. Increase Your Productivity
If you ever feel that you are bogged down with work and struggle to get everything
done, it’s time that you should become more productive. To do this, start finding a new
process.In businesses, it is always preferred to test new ideas. You will be surprised by
the combination of ideas that work together to make productivity plans that work for your
company.
3. Market Your Business
• You can use various creative ideas and innovation to make your business stand out
from the crowd. Here, small business marketing comes in. In order to make people
remember your business, you need innovative ideas. You can create a new brand,
develop a quirky business or can work with any non- profit organization.
• Once you develop a unique character in your business, you should market it. Just
innovate a marketing plan that suits your business’ personality. Stand out from all other
businesses and this will help you make a unique identity among customers.
4. Obtain sustainability in the market for the new product.
• Need to come out with the new product innovation for continuity of the business in the
market, especially when the existing product decline.

OBJECTIVES OF PRODUCT INNOVATION

• To help facilitate a strong leadership conversation about innovation objectives and
innovation goals, here are some examples of why you might choose to enable
an innovation engine for your organization:
• To differentiate your organization in the marketplace
• To build customer loyalty
• To identify savings potential
• To achieve revenue potential
• To accelerate exploitation of new business ideas worthy of pursuing
• To a build climate and culture of innovation as per the organization's innovation mission
• To become a leading innovation brand for products and services in the markets served
and new markets you may serve
• To improve and expand current products and services
• To access new technologies
• To access new markets
• To identify market trends
• To improve product quality and associated core processes
• To improve employee attraction, engagement, and retention
• To develop new competencies

Criteria that make product innovation successful

1. Relevant customer benefit
• Is the innovation relevant for the customer?
• In order to be successful, an innovation must satisfy a customer need. Innovations often
don't bring the desired success because they don't bring real benefits to the customer or
are aimed at the wrong target group.
2. Acceptance and explainability of the product innovation
• Can you simply explain the product benefits and its uniqueness to customers?
• Sometimes a product innovation puts conventional customer ideas into question to such
an extent that they do not recognize their benefits. When the first supermarket opened
in Germany in the 1930s, it soon had to close its doors again. One of the most important
reasons: The self-service principle was simply not accepted by customers.
• Another two decades were to pass before supermarkets were able to establish
themselves in Germany. The same happened with the first ATM, which was also
installed in a New York bank branch in the 1930s. It was also dismantled after a few
months due to a lack of customer acceptance and it still took decades until ATMs were
established.
• If new developments from customers require a major rethink, it can be useful to prepare
the target group for the market launch with an information campaign.
3. Easy to test
• Is it easy for the customer to try the product and experience the benefits?
• The Segway, for example, was originally designed for the masses and sold by the
makers as the "future" of one-man passenger transport. But due to its complicated
operation and need for explanation, the vehicle is neither easy to test nor suitable for
the masses.
4. Easy to change
• Is it easy for the customer to switch to your product without risk and effort?
• To stick to the example of the Segway: Until today there is no suitable infrastructure.
There is no suitable power supply and the Segway is not in good hands both on
 sidewalks and on roads. In addition, there are target groups, such as pensioners, for
whom the Segway is unsuitable because driving the Segway is too risky. Segway
ultimately flopped because the company hadn't thought about an appropriate
distribution strategy or infrastructure.
5. Legal framework
• Do you get into legal conflicts (laws, norms, patents) or ethnic conflicts (values) with
product innovation?
• In 2006, an American beverage company came into conflict with the law that introduced
the energy drink "Cocaine" with three times the caffeine content of Red Bull. Shortly
after the launch, the product was taken off the shelves by the FDA due to the
glorification of an illegal drug and the high caffeine content. Meanwhile, the drink is
available again in an adapted form.
• 6. Earnings prospects of product innovation
• Does product innovation have the necessary potential for sales and profit?
• Many successful new developments often take years after market launch to mature and
offer attractive value for money. New technologies should also be taken into account
when assessing revenue prospects to prevent a newly introduced product from being
displaced by a new technology.
• The APS cameras are a classic example of this. Launched in the mid-1990s by leading
camera and film manufacturers, they were significantly better than traditional 35 mm
cameras. But just a few years later, APS technology was largely replaced by digital
photography.
• In some cases, however, improved versions can be worthwhile. The company Freeplay
Energy, for example, produces a world receiver with crank dynamo even in the age of
Internet and satellite communication. The spectrum of customers in this niche market
ranges from survival enthusiasts to development aid organizations.
• The APS cameras are a classic example of this. Launched in the mid-1990s by leading
camera and film manufacturers, they were significantly better than traditional 35 mm
cameras. But just a few years later, APS technology was largely replaced by digital
photography.
• In some cases, however, improved versions can be worthwhile. The company Freeplay
Energy, for example, produces a world receiver with crank dynamo even in the age of
Internet and satellite communication. The spectrum of customers in this niche market
ranges from survival enthusiasts to development aid organizations.
• 7. Integration into existing product portfolio
• Can the product be launched without directly competing with your existing product
portfolio?
• In this context, the saying of Steve Jobs, who said during the i-Phone introduction: "If
you don't cannibalize yourself, then someone else will do it", is well known. At the time,
the iPod was growing steadily, generating 50 percent of Apple's revenue. Jobs brought
the iPhone to market, although he knew that it would massively cannibalize the iPod
business and eventually displace it completely.
• The introduction of innovative products to the market increases the risk that they will be
at the expense of existing products. Brand cannibalization can cost margins and reduce
the value of the company. Cannibalization should therefore normally be avoided.
However, there are also advocates of "preventive cannibalization". The decisive factor
here is how cannibalization affects total revenues.
• 8. Brand fit
• Does the product innovation fit your brand positioning and values?
• Harley Davidson landed a huge flop when it launched aftershaves and perfumes in
1994. The company's brand is built on values such as masculinity, machismo and
rebellion. As a result, many fans have found that Harley Davidson's perfumes have
clearly spanned the globe.
• 9. Practicability
Do you have the necessary resources to technically implement and market the product
innovation?
You may need to bring on board partners for technical development (technologies,
competencies, means of production) or you may need sales partners to successfully
position a product innovation on the market (suitable sales channels, no barriers to
market entry).
• Numerous innovations fail due to a lack of cooperation between important business
partners, on whom the success of an innovation depends. When Robert Chesbrough
invented Vaseline in the second half of the 19th century, he tried unsuccessfully to win
pharmacies as distribution partners. Only when Chesbrough decided to distribute his
invention to the public did he achieve his breakthrough.
• In another example, the run-flat tyres were not able to assert themselves on the market
a few years ago, although they offered more safety. An important reason for this was
that the garages lacked the necessary equipment to mount the tyres correctly.

PRODUCT STRATEGY
Vision of the product. If a company launches a product, then it has a vision of where the
product will reach. The product strategy is the bare bone planning of the steps to ensure
the product reaches the desired space. Product roadmap which is the sequential step of
events which need to take place to ensure maximum penetration of the product and
maximum product adoption in the market.
 Importance of Product Strategy
• It helps decide the exact steps to be taken in any event to make the product a success.
• It prepares the company for response by competitors or towards changing market
conditions.
• It helps the company decide the target market and in market penetration.
• A product vision is formed thereby setting the product on an independent path with a
time to time intervention allowing the company to focus on multiple products in a short
time.
• Product strategy helps the formation of the product roadmap.
7 Steps to Develop a product strategy :

1. Marketing mix
Example – While deciding on an electronics product strategy, you need to decide the
various product line and length that a single model will have. You also need to decide
the packaging and labelling to use besides considering the effect of all these expenses
on the marketing mix.

2) Product Mix
Sometimes a single product might not make the cut but its product variant might be an
instant hit. Take shampoos for example. Most in demand shampoo are the Anti-dandruff
shampoo. However, besides this, most of the top shampoo brands have a variety of
products on offer with minor differences in ingredients. These are nothing but a
combination of the product mix.

3) Levels of a product
• A product has various levels. The three levels of a product which includes the core
product, the actual product, and the augmented product.
• A marketer needs to assume the various levels of a product while deciding the product
strategy. Example – An automobile manufacturer or an equipment manufacturer needs
to give service along with the product to the end customer.
• If the manufacturer does not give service, then the product will not sell. Hence at such a
time, the manufacturer has to understand the important role of the augmented product
in the product strategy.

4) Type of products
• Durable products / Nondurable products
• Shopping goods / Specialty goods / Convenience goods
• Industrial goods/consumer goods
• Service products
• Deciding on the type of product can help you in determining how to penetrate your
target market. Market-product segmentation is an important step in strategy but this
step will clear your mind on which segment you are going to target because the product
is restricted to that segment only.

5) Differentiation
• Product Form and Product features
• Product performance levels
• Reliability / Repairability / Durability
• Style and Design
• Ordering ease / Ease of installation
• Customer service / Warranties and Guarantee
• As can be seen above, these are critical decision-making elements for any consumer
and by creating differentiation at the product level, the product strategy becomes a
sound strategy to compete on even grounds with the competitor
• Example – American Tourister is known for its durable luggage. The same goes
for Woodland shoes. These are brands which have targeted product reliability and
durability as a differentiating factor right from the product strategy stage. As a result,
their complete marketing strategy is focused towards one direction – Promoting their
products as far superior then competition due to the differentiating factors.

6) Brand elements
• Brand identity and Brand image are important considerations for the success of any
company. Naturally, when deciding on the product strategy, you need to decide the
brand elements for the product. There can be numerous branding elements involved
thereby giving more recognition for the product and accumulating more respect in the
market.

7) Product Design
• Quite simply, a computer is a generic product name whereas desktops & laptops are all
variants of a computer. The only difference between laptops and desktops is the
 product design. Both of them have CPU and both have monitors. Thus, product design
plays a crucial role in the success of a product and should be given due consideration
while designing the product strategy.
• The technology market is built on product design. This is why smartphones have
become a major crowd puller because of their differing aesthetics. If we want to talk
about product design, we just cannot ignore the fashion industry which is completely
dependent on the design of the product to built its brand identity. Fashion labels
like Gucci, Armani and others spend a fortune getting the design right.

PRICING
 Pricing policy of a company sets out the prices of their products or services.
Pricing policy may vary depending on region, sales volume (wholesale vs. retail) and
the like.
• Price is only one of the factors based on which customers make their purchasing
decisions. Therefore, the pricing policy should always be considered and determined in
the context of supply, situation on the market and other factors of the marketing mix.

Reasons for determining pricing policy?

• Market entry - if a business wants to enter the market, it must be able to determine the
right price that future customers will accept. Most often the price is determined either
based on what the competitors are charging or based on the costs and margins.
• Achieve the highest possible market share - the goal is to attract as many customers as
possible at the expense of competing businesses
• Suppressing or destroying competition - the goal is to sell at prices that competitors will
not be able to compete with
• Maximization of profit - the goal is to achieve maximum profit, ie. to sell with a high
margin to a large number of customers; can only be applied in case of high demand
• Avoiding losing market share - the goal is to keep prices similar to the competitors
• Keeping prices lower than competitors - one of the offensive tactics, especially in hyper-
competitive markets, such as e-shops (selling commodities); the goal is to increase the
sales volumes and to raise market share
• Survival - the goal is to reduce or stop the decline in sales, usually achieved by means
of setting lower prices than competitor.
 TYPES OF PRICING POLICIES

• Premium pricing
Premium pricing, also called image pricing or prestige pricing, is a pricing strategy of
marking the price of the product higher than the industry standards/competitors’
products. The idea is to encourage a perception among the buyers that the product has
a more utility or a higher value when compared to competitors’ products just because it
is sold at a premium price. Eg. Branded unleaded petrol is sold at a higher price than
regular unleaded petrol. The consumer never gets to test if the branded is better, yet he
buys the branded offering thinking if it’s expensive, it must be better.

• Penetration Pricing
Penetration pricing is a pricing strategy where the price of the product is initially kept
lower than the competitors’ products to gain most of the market share and to trigger
word of mouth marketing. Eg. Oneplus launched its flagship product Oneplus 1, which
had all the features of an iPhone, at a highly affordable price of $299. Once the
company acquired a good market share, it started launching its products at a premium.
The recent phones from Oneplus are priced in the range of $500-$700.
• Economy Pricing
Economy pricing is a no-frills pricing strategy followed by generic food suppliers and
discount retailers where they keep the prices of the product minimal by reducing the
expenditure on marketing and promotion. This strategy is used essentially to attract
most price-conscious consumers. Eg. Aldi & Walmart uses no-frills economy pricing
strategy where it operates small stores, only sells products which have a good demand,
keep products in their original shipping containers, and even charges the customers if
they ask for carry-bags.
• Price Skimming
Price Skimming is a strategy of setting a relatively high introductory price of the product
when the product is new and unique and the market has fewer competitors. The idea is
to maximise the profits on early adopters before competitors enter the market and make
the product more price sensitive. The strategy got its name from successive skimming
of layers of cream or the customer segments as the prices are lowered over time. The
initial high price not only helps the business to recover its development costs but also
gives the product a perception of being an exclusive and premium product. Eg.
Smartphones (both iPhones and Android) are introduced in the market at a higher price,
but the price is reduced as the time passes.
• Psychological Pricing
 Psychological pricing refers to the psychological pricing strategies marketers use to
make customers buy the products, triggered by emotions rather than logic. Such
strategies come in the form of:
• Charm Pricing: This involves reducing the price by a minimal amount (say 1 cent)
which makes the customer perceive the price to be less. For example – the price of a $3
product is set as $2.99 in supermarkets as customers’ brains process $2.99 to be
nearer to $2 and not $3.
• Prestige Pricing: This involves rounding off and setting a higher price for premium and
exclusive products as rounded figures are easily processed and are preferred in such
cases.
• Bundle Pricing: Bundle pricing involves selling packages or set of goods or services at
lower prices than they would have actually cost if sold separately. This is an effective
strategy to bundle unsold products or products with less demand with the high selling
products to clear up the shelf space and to increase the profits. Eg. Mcdonald’s happy
meal is a perfect example of bundle pricing.
• BOGOF: Buy one, get one free offers trigger the greed among the customers as they
get two products for the price of one. This strategy is often used to clear up the stock or
increase the volume of sales.
• Price Anchoring: Anchor is the first (higher or lower) price communicated to the
customer to make their mind revolve around that price and buy the product the
• Freemium : Freemium is an Internet-based pricing strategy where basic services are
provided free of charge but charges are levied on additional premium features. The
freemium strategy is different from premium with free samples strategy as you don’t pay
anything to utilize the free services provided under the freemium business model. EG.
Candy Crush Saga is a great example of freemium pricing strategy where the game is
provided for free but a price is levied if you want more lives to play
• Pay What You Want
Pay what you want is a pricing strategy where the power of deciding the price of a
product is given to the buyers, who pay their desired amounts for a product, which could
even be zero. Unlike how it seems, this pricing strategy often leads to more profits and
increased market share as most of the customers pay amounts which are more than the
cost price of the product. Although many businesses set a minimum price and use a
partial version of this pricing strategy, many refrain themselves from setting a floor price.
EG. Panera Bread Co. restaurant in the St. Louis is a famous example of a business
operating successfully using the pay-what-you-want pricing strategy.
• Predatory Pricing
Predatory pricing, or below the cost pricing, is an aggressive pricing strategy of setting
the prices low to a point where the offering is not even profitable, just in an attempt to
eliminate the competition and get the most market share. An onoing price war among
 the competitors may lead to one adopting a predatory pricing strategy to make the
competitor exit the arena. Predatory pricing is illegal in many countries under the
antitrust laws and competition acts as it acts as a barrier to healthy competition and
leads to businesses enjoying a monopoly. Eg. A perfect example of a company
adopting a predatory pricing strategy is Amazon which, in 2013, offered books at a price
less than the cost price and even shipped it for free just to win over the traditional brick-
and-mortar competitors.
• Dynamic Pricing
Dynamic pricing, also called demand pricing, is a comparatively new pricing strategy
which charges different prices of the same item from different users depending upon
their perceived ability to pay. This pricing strategy is dependent on the internet and is
usually used by the eCommerce websites. It uses cookies and internet browsing
history of the users to understand their requirements and the urgency to buy and price
the products accordingly to increase the sales. Eg. Ecommerce websites like Amazon,
Flipkart, etc. use this strategy to remarket their products to the window shoppers.

FACTORS AFFECTING PRICING PLOLICY

I) Internal factors
• i) Marketing objectives: the marketing objective of the product must be kept in mind
before setting the price of the product, the product is for high class, middle class or
lower class.
• ii) Marketing mix: one of the key elements of marketing mix is price. Other elements of
marketing mix also affect the pricing decision.
• iii) Cost: A company must keep in mind both fixed as well as variable cost while setting
the price.
• iv) Organizational set up: price of the product is decided by organizational set up. In
large scale organizations the price is decided by the product manager while in the small
organization the price is decided by the top management
(II)External factors
• i) Market and demand: cost of the product is the lower limit of the price. While the
market and demand set the upper limit of the product.
• ii) Competition: competition affects the pricing decision of the product. The marketer
must have knowledge about the activities of the competitor. For this sometime the
companies go for price leadership, while other goes for low pricing decision to wipe off
the competition from the market.
• iii) Other environmental factors: the other environmental factors also affect the pricing
decisions like:
• Economic conditions of the country like inflation, deflation, boom, recession etc. affect
the pricing policy.
• Consumer thinking about the product.
• Distribution channel also affects the pricing policy.
• Government policies also have an effect on the price of the product.

DISTRIBUTION MANAGEMENT
Physical Distribution: “Physical distribution involves planning, implementing and
controlling the physical flow of materials and final goods from the point of origin of use
to meet consumer needs at a profit.” – Philip Kotler
• It includes all those activities which help in efficient movement of goods from producer
to consumer, such as transportation, warehousing, material handling, inventory control,
order processing, market forecasting, packaging, plant and warehouse location and
customer service.

Objectives of Physical Distribution:

• Consumer satisfaction
• Profit maximization
other objectives
i. To make available the right goods in right quantity at right time and right place at least
cost.
ii. To achieve minimum inventory level and speedier transportation.
iii. To establish price of products by effective management of physical distribution
activities.
iv. To gain competitive advantage over rivals by performing customer service more
effectively.

Importance of Physical Distribution System:

• 1. Creating Time and Place Utility: This is done through transportation and
warehousing. Transportation system creates place utility as it makes available the
goods at the right place where they are required. Warehousing creates time utility by
storing the goods and releasing them when they are required.
• 2. Helps in Reducing Distribution Cost: Physical distribution cost account for a major
part of the price of the product. If these costs are handled systematically, decrease in
costs of product can be there.
• 3. Helps in Stabilization of Price: Physical distribution helps in maintaining stable
prices. Even customers expect price stability over a period of time. Proper use of
transportation and warehousing facilities.
• 4. Improved Consumer Services: Making products in right quantity available at right
time and right place i.e. place where customer needs.

Components of Physical Distribution:

(1) Order Processing: Starting point of any distribution activity. Order processing
includes activities like receiving the order, handling the order, granting credit, invoicing,
dispatching, collecting bills, etc. Each customer expects that the order placed by him is
implemented without delay, and as per the specifications of the order.
• Marketer should lay down standard procedures to maintain the order cycle time i.e. the
time period between the time of placement of an order by the customer to the time of
arrival of goods at his destination.

(2) Storage and Warehousing: Storage means making proper arrangements for
retaining the goods in proper condition till they are demanded by customers. There are
many products which are seasonally produced but are used throughout the year, they
can be stored and later released.
 Storage warehouse helps in storing the good for long and medium period of time to
ensure matching of supply and demand. Distribution warehouses facilitate assembling
the product and redistributing it within a short period of time. They can also be
centralized (when located near factory) or decentralised (when located near market).
 Warehousing provides the storage function. Places where the goods are stored are
known as warehouse. Goods are stored in warehouses to be released in time of
demand. Apart from storing function, warehouses also perform other functions like,
marketing and assembling the goods. Storage reduces the need for instant
transportation which is difficult and costly.

(3) Inventory Control: Inventory control refers to efficient control of goods stored in
warehouses. They are the reservoir of the goods held in anticipation of sales.
 Neither to small nor too large inventory should be maintained. Former would result in
stock out, resulting in lost sales and latter involves heavy investments. Thus, a balance
has to be maintained. As Prof. W. J. Stanton states, “the goal of inventory control is to
minimise both the investment and the fluctuation in inventories, while at the same time
filling customer order properly and accurately.”
 (4) Material Handling: Material handling includes all those activities which are
associated in moving products when it leaves the manufacturing plant but before it is
loaded on the transport.
• It involves moving the goods from plant to warehouses and from warehouses to place of
loading in transport modes. Proper management of material handling helps in avoiding
unnecessary movement of goods, avoiding damage to the goods, facilitate order
processing and efficient movement of goods.

(5) Transportation: Transportation as a component of physical distribution is

concerned with the movement of goods from the warehouse to customer destination. It
includes loading and unloading of goods and their movement from one place to another.
In doing so it provides time and place utility. Transport accounts for a major portion of
the distribution cost and of the total price of the product therefore needs to be adequate,
regular and dependable.
Choice of a particular mode of transportation depends upon various factors like cost of
the transport, availability of the mode of transport, speed, reliability, frequency, safety
and suitability of the mode to move the product.
• i. Road Transport: Road transport may be through different means like transport by
animals (like bullock, camel), transport by human beings (like coolies or porters),
transport by automobiles (like scooters, auto rickshaws, cars, truck buses etc.). Road
transport is flexible and economical. However, it is unsuitable for long distances.
• ii. Railways: It is suitable for transporting bulk goods over long distances. It is an
economical mode because large volume of traffic is handled over large network of
railways. However, it is inflexible as it is unfit to transport goods to rural areas. Further, it
involves huge maintenance expenditure.
• iii. Water Transport: Water way is an important mode of transport for heavy and bulky
goods in large quantities. It consists of inland water transport and ocean transport.
Inland water transport is used for transporting goods within county and ocean transport
is used to transport goods to other countries. Water transport is a cheapest form of
transport, having great carrying capacity and is highly suitable for heavy and bulky
goods, but it has low speed and higher degree of risk due to seasonal difficulties.
• iv. Air Transport: Although it accounts for a small percentage of transportation, it is
useful for perishable items, overnight packages, emergency supplies etc. The main
disadvantage of air transport is that it has high freight charges, low carrying capacity
and too much dependence on climatic conditions.
• v. Pipelines: These are specialized carriers design to transport the crude and refined
petroleum and natural gas from wells to refineries and further to distribution center. It is
an economical mode as it involves less handling and labor cost, but it is the slowest
mode of transportation and very limited in number.
 MARKETING CHANNEL
A marketing channel (also called trade channels or distribution channels) system is the
particular set of interdependent organizations involved in the process of making a
product or service available for use or consumption.

Functions
• Specialization and Division of Labor
o Provides efficiency and cost savings.
o Attains economies of scale.
o Aids producers who lack resources to market directly.
o Builds good relationships with customers.
• Overcoming Discrepancies
o Discrepancy of Quantity: The difference between the amount of product produced and
the amount an end user wants to buy.
o Discrepancy of Assortment: The lack of all the items a customer needs to receive full
satisfaction from a product(s).
o Temporal Discrepancy: A situation that occurs when a product is produced but a
customer isn’t ready to buy it.
o Spatial Discrepancy: The difference between the location of a producer and the
location of widely scattered markets.
• Providing Contact
• Efficiency
• Gather information.
• Develop and disseminate persuasive communications.
• Reach agreements on price and terms.
• Acquire funds to finance inventories.
• Assume risks.
• Provide for storage.
• Provide for buyers’ payment of their bills.
• Oversee actual transfer of ownership.
 Channels and marketing decisions
A push strategy uses the manufacturer’s sales force, trade promotion money, and other
means to induce intermediaries to carry, promote, and sell the product to end users.
A pull strategy uses advertising, promotion, and other forms of communication to
persuade consumers to demand the product from intermediaries.
Top companies skillfully employ both push and pull strategies. A push strategy is more
effective when accompanied by a well-designed and well executed pull strategy that
activates demand. On the other hand, without at least some consumer interest, it can be
very difficult to gain much channel acceptance and support, and vice versa for that
matter.

Marketing Channel Flows

A marketing channel performs the work of moving goods from producers to consumers.
It overcome the time, place and possession gaps that separate goods and services from
those who need or want them. Members of marketing channel perform a number of key
functions. Some of these functions constitute a forward flow of activity from the
company to the customer; others constitutes backward flow from customers to the
company. Still others occur in both directions.

Designing a Marketing Channel System

1. Analyze customer needs
2. Establish channel objectives
3. Identify major channel alternatives
4. Evaluate major channel alternatives

Identifying Channel Alternatives

1. Number of intermediaries
2. Terms and responsibilities
3. Types of intermediaries

Number of Intermediaries
1. Exclusive
2. Selective
3. Intensive

Terms and Responsibilities of Channel Members

1. Price policy
2. Condition of sale
3. Distributors’ territorial rights
4. Mutual services and responsibilities

Channel Intermediaries
Retailer - A channel intermediary that sells mainly to customers. Take Title to Goods
Merchant Wholesaler - An institution that buys goods from manufacturers, takes title to
goods, stores them and resells and ships them. Take Title to Goods
Agents and Brokers- Wholesaling intermediaries who facilitate the sale of a product by
representing channel member. Do NOT Take Title to Goods
 RETAILING AND WHOLESALING
Retailing includes all the activities involved in selling goods or services directly to final
consumers for personal, nonbusiness use.
Levels of Retail Service
1. Self-service
2. Self-selection
3. Limited service
4. Full service

Functions of Retailers
1. provide convenience;
2. provide guarantee and service;
3. provide financing of transactions;
4. perform promotional activities;
5. perform storage function
6. perform intelligence service for the manufacturer
7. serves as buying agent of the consumers.

Major Types of Corporate Retail Organizations

1. Corporate chain store
2. Voluntary chain
3. Retailer cooperative
4. Consumer cooperative
5. Franchise organization
6. Merchandising conglomerate

Nonstore Retailing
1. Direct selling
2. Direct marketing
3. Automatic vending
4. Buying service

Major STORE Retailer Types

1. Specialty store
2. Department store
3. Supermarket and Superstore
4. Convenience store
5. Discount store
6. Off-price retailer
7. Catalog showroom

Changes in the Retail Environment

1. New retail forms and combinations
2. Growth of intertype competition
3. Competition between store-based and non-store-based retailing
4. Growth of giant retailers
5. Decline of middle market retailers
6. Growing investment in technology
7. Global profile of major retailers
 Wholesaling refers to all activities involved in selling goods and services to those who
intend to resell or use the same for producing goods or services.
Wholesaling Functions
1. Selling and promoting
2. Buying and assortment building
3. Bulk breaking
4. Warehousing
5. Transportation
6. Financing
7. Risk bearing
8. Market information
9. Management services and counseling

Major Wholesaler Types

1. Merchant
2. Full-service
3. Limited-service
4. Manufacturers
5. Specialized

MARKET LOGISTICS
Market logistic includes planning the infrastructure to meet demand then implementing
and controlling the physical flows of material and final goods from points of origin to
points of use to meet customer requirement at a profit.

Steps for planning market logistics:

1. Deciding on the company’s value proposition to its customers.
2. Selecting the best channel design and network strategy for reaching the customers.
3. Developing operational excellence in sales forecasting, warehouse management,
transportation management and material management.
4. Implementing the solution with the best information systems, equipment, policies and
procedures.
 Market logistics decisions
1. How should we handle orders (order processing)?
2. Where should we locate our stock(warehousing)?
3. How much stock should we hold(inventory)?
4. How should we ship goods(transportation)?

The Nature and Importance of Warehousing

Warehousing provides time and place utility (primarily time) for raw materials, industrial
goods, and finished products, allowing firms to use customer service as a dynamic
value-adding competitive tool.

Functions of warehousing include:

1. Transportation consolidation
2. Product mixing
3. Cross-docking Service
4. Protection against contingencies
5. Smoothening
6. Receive goods into warehouse
7. Identify, sort, and label goods
8. Dispatch the goods to temporary storage
9. Recall, select, or pick the goods for shipment

Basic Warehouse Decisions: A Cost Trade-off Framework

• Ownership
Public versus contract versus private
• Centralized or Decentralized Warehousing
How many
Location
Size
What products where
 The Ownership Decision : Factors to consider
1. Throughput volume : (because of fixed costs)
2. Stability of demand
3. Density of market area to be served
4. Security and control needs
5. Customer service needs
6. Multiple use needs of the firm

Warehouse Layout and Design

1. Develop a demand forecast.
2. Determine each item’s order quantity.
3. Convert units into cubic footage requirements.
4. Allow for growth.
5. Allow for adequate aisle space for materials handling equipment.
6. Provide for the transportation interface.
7. Provide for order-picking space.
8. Provide storage space.
9. Provide recouping, office, and miscellaneous spaces.

Transportation Consolidation
Supply and Product Mixing

SUPPLY CHAIN MANAGEMENT

A management system that coordinates and integrates all of the activities performed by
supply chain members into a seamless process, from the source to the point of
consumption.
 Benefits of Supply Chain Management:
1. Reduced Costs
2. Greater Supply Chain Flexibility
3. Improved Customer Service
4. Higher Revenues
5. Role of Supply Chain Management:
6. Communicator of customer demand from point of sale to supplier
7. Physical flow process that engineers the movement of goods

Supply Chain Integration : A key principle of supply chain management is that multiple
firms work together to perform tasks as a unified system rather than as several
individual companies acting in isolation.
Types of Integration:
1. Relationship Integration
2. Measurement Integration
3. Technology and Planning Integration
4. Material & Service supplier Integration
5. Internal Operations Integration
6. Customer Integration

The key processes of Supply Chain Management

1. Customer Relationship Management
2. Customer service Management
3. Demand Management
4. Order fulfillment
5. Manufacturing flow Management
6. Supplier relationship Management
7. Product development and commercialization
8. Return Management

Trends in Supply Chain Management:

1. Advanced Computer Technology
2. Outsourcing of Logistics Functions
3. Electronic Distribution
 INTEGRATED MARKETING COMMUNICATION
Integrating all the methods of brand promotion to promote a particular product or service
among target customers using tools like advertising, online marketing, public relation,
direct marketing, and sales promotion. In integrated marketing communication, all
aspects of marketing communication work together for increased sales and maximum
cost effectiveness.
• Advertising
Advertising is the non-personal and paid form of communication. It is one of the most
effective forms of communication where it reaches a mass audience at once within a
short period of time. It not only increases sales but also creates awareness among
consumers. Marketers need to ensure that the right message should be delivered in the
right manner to the consumers. The various media used are print media, radio,
billboards, television etc.
• Personal selling
Personal selling includes face to face interaction with the end users with the motive of
promoting the product and convincing the buyer to purchase the product. It is the most
effective tools in IMC as salesperson directly communicates with the buyer, resolves
their issues on spot, Improvise his pitch as per the need of the buyer and focus on
building a long-term relationship with end users.
• Sales Promotion
Sales promotion are the short-term incentives given to consumers to accelerate the
sale. It gives them a reason to buy the product by providing attractive offers like
discount coupons, contests, premiums, samples, sweepstakes, price packs, low-cost
financing deals, and rebates.
• Direct Marketing
It is the oldest form of communication where organizations directly communicate with
end users through emails, telephone, fax, text messages, catalogue, brochure, and
promotional letter. Nowadays people buy more online, so marketers help consumers in
the buying process by sending those catalogs and other marketing material which
makes the process easier for consumers.
• Mobile Marketing
Mobile marketing involves communicating with customers through mobile by sending
them a text message. It is the cheapest traditional means of promotion.
• Social Media Marketing
 Is one of the most powerful media where the promotion of the brand or business can be
done through the social media channel. It is one of the low-cost promotional methods
where a large number of users are targeted at once.
• Public Relations
It is the practice of managing the relationship between an organization and the public. It
is a two-way communication where the public shares their feedback to the organization.
PR is done to create the goodwill in the market and present the product of the company
in the positive light. Promotion can be done through press releases, public
appearances, event sponsorships, news, etc.
• Sponsorships
It is a mixture of sales promotion and public relations. Sponsorships create brand loyalty
and help in differentiating the product with competitors. Trade Fairs & Exhibitions

Components of IMC
• The Foundation - As the name suggests, foundation stage involves detailed analysis of
both the product as well as target market. It is essential for marketers to understand the
brand, its offerings and end-users. You need to know the needs, attitudes and
expectations of the target customers. Keep a close watch on competitor’s activities.
• The Corporate Culture - The features of products and services ought to be in line with
the work culture of the organization. Every organization has a vision and it’s important
for the marketers to keep in mind the same before designing products and services.
Example: Organization A‘s vision is to promote green and clean world. Naturally its
products need to be eco-friendly and biodegradable, in lines with the vision of the
organization.
• Brand Focus - Represents the corporate identity of the brand.
• Consumer Experience - Marketers need to focus on consumer experience which
refers to what the customers feel about the product. A consumer is likely to pick up a
product which has good packaging and looks attractive. Products need to meet and
exceed customer expectations.
• Communication Tools - Communication tools include various modes of promoting a
particular brand such as advertising, direct selling, promoting through social media.
• Promotional Tools - Brands are promoted through various promotional tools such as
trade promotions, personal selling and so on. Organizations need to strengthen their
relationship with customers and external clients.
• Integration Tools - Organizations need to keep a regular track on customer feedbacks
and reviews. You need to have specific software like customer relationship
management (CRM) which helps in measuring the effectiveness of various integrated
marketing communications tools.
• Integrated marketing communication enables all aspects of marketing mix to work
together in harmony to promote a particular product or service effectively among end-
users.

IMC vs Traditional Advertising

 IMC is recognized as a business process that helps companies identify the most
appropriate and effective methods for communicating and building relationship with
customers and other stakeholders.

 However, the advertising relies primarily on using the mass media to communicate with
the target audience on a mass scale.

Examples
This first video highlights Crocker Bank from 1970. It is taken from a documentary on
the advertising industry entitled Art & Copy.
This second video highlights a major campaign undertaken by the National Australia
Bank (NAB). As you will see, this is probably one of the best executed campaigns that
you will see, given that it uses so many different communication tools and its core
message was effectively communicated in a very short period time.
https://youtu.be/BDbvAEcP_2k
FIVE M’S OF ADVERTISING
The five M’s of advertising are described by Philip Kotler in his book Marketing
Management, Eleventh Edition (Prentice Hall). Advertising is any paid form of non-
personal presentation and promotion of ideas, goods or services by an identified
sponsor. In developing an advertising program, always start with identifying the target
market and the buyer’s motives. After that, make the five major decisions in developing
the advertising program known as the Five M’s of Marketing. They are: mission, money,
message, media and measurement.

Mission
The mission has two parts: specific sales volume goals for a period of time and the
advertising objective. Advertising objectives are specific communication tasks to be
accomplished with a specific audience in a specific period of time. In other words, who
and how many will believe what when? For a new retail clothing store, the mission may
be to increasing awareness of the store’s existence by people living in the surrounding
area who have household incomes in a certain range. A more specific statement than
this would be even better. If you knew by what percentage your increase of awareness
would be and by when, it would make your communications more effective. The above
statement should also be more descriptive of the target market. What about your
competition? Advertising can attempt to stimulate primary demand for the product
category itself or the specific brand you are selling. If your ad mentions your brand
name, should it also mention the competitor’s brand name specifically, or should it just
reference those “other brands” or should it not hint at the competition at all? New brands
entering a competitive market often choose to just talk about their own brand and its
benefits.

Money
It is difficult to know exactly how much you should spend on advertising. Any amounts
of money spent are written in the accounting books as an expense in the period that the
expenditure was made. Advertising expenses are not capitalized. To capitalize means
to record as an asset and then depreciate that asset over time. Money spent on
advertising builds the intangible asset called brand equity which exists in the minds of
the people in the market. There are five factors to consider when setting the advertising
budget as described by Philip Kotler in his book Marketing Management, Eleventh
Edition, as he references Strategic Advertising Campaigns by Donald E. Schultz,
Dennis Martin and William P. Brown. They are: the stage in the product life cycle,
market share and consumer base, competition and clutter, advertising frequency and
product suitability.

Message
Before discussing the process of generating a message, it should be noted that there
are two main types of advertising: product advertising and institutional advertising.
Product advertising attempts to sell a product or service that is aimed at either final
users or distribution channel members. Institutional advertising attempts to sell an
organization’s image, reputation or ideas. The objective is to promote organization’s
goodwill.
The process of developing the advertising message involves message generation,
message evaluation, message selection, message execution. The objective here is to
create an effective message. With the target audience in mind, the message should be
something that they can relate to and believe. For example, some ads show people
solving problems with the product. Some ads simply show people having a good time
using the product. It helps if the message is memorable and unique. The message
should be easily understood and be more than just the facts. In the fashion industry,
many advertisements for high-end designer fashions include social and status benefits
of wearing a particular brand of clothing. A product is portrayed as being exclusive. For
lower-end clothing, an ad might focus on the product’s comfort while wearing it or it’s
low price. How the message is delivered is also important. Ads are often designed to
appeal to the emotions with a positive tone, appealing music, attractive colors,
appealing images, humor or a testimonial. Caution must be observed that the ad does
not cross social or legal norms. The ad should not be offensive to anyone including
ethnic, racial and minority groups. The ad should not be false or deceptive. If you are
advertising a product for a certain price, you must be willing to sell it for that price. Also,
if an item is ticketed at a certain price, you must be willing to sell it at that price.

Media
The method of message delivery is made after you have decided on the message.
Choose media that will reach your target audience. That media must also be able to
reach and create an impact on the consumer. An ad for lady’s designer purses will likely
have a greater impact in a fashion magazine than in a home gardening magazine. Also,
to create an impact, the message must be well-designed and it may have to be
repeated several times. It may be in more than one media form. The media mix is the
use of two or more different media forms in one advertising plan that are usually
scheduled either simultaneously or close to each other. It must also be within your
budget. One of the other decisions you have to make is who will actually do the work.
For example, if you are confident with your computer and design skills, you can create
your own ad on a computer and send it to the print media company for publishing. To
“farm out” is to give work out to people other than yourself or your own employees. This
is also called outsourcing.
There are several terms that an advertising agency will use that are useful to know. An
advertising agency is an organization that typically creates advertising messages on
behalf of its advertiser clients and then places those messages on various media forms.
A full-service advertising agency will do the above functions and more. They will be able
to conduct marketing research, develop marketing and media strategies, develop the
message content itself by either doing it themselves or outsourcing the work and
supervising the process and report back to the client the progress and success of the
advertising campaign.

Measurement
To better plan for future advertisements, many companies have set up formal
measurement systems that attempt to evaluate an ads effectiveness. Larger companies
will develop an ad campaign and test it in a certain geographic region before launching
it nationally. To do this research, marketers ask two different questions. First, they ask if
the message was effectively communicated to the target audience. Secondly, they ask if
the ad generated additional sales volumes. Effective communication could be measured
by conducting primary market research to ask if the audience remembers, understands
and believes the advertising message. They could also be asked how they feel about
the ad and if it might influence their purchasing decisions in the future. Measuring
changes in sales volumes can be more difficult because there are many factors that
influence a person’s decision to buy a product. A competitor may have also just
launched an aggressive ad campaign. Simply looking at your sales figures for the period
of time in question does not tell the whole story.

Advertising Honesty
In the United States, the Federal Trade Commission (FTC) is tasked with monitoring
advertising and taking legal action against organizations that break the law. The FTC is
commissioned with protecting the interests of all consumers and to fight against
deceptive and unfair practices. As an advertiser you do not want to mislead consumers.
Relevant information that is left out of the ad could be considered misleading. All
performance claims must be substantiated. Claims about consumer product and service
preferences must also be substantiated.

Advertising Objectives
There are four possible objectives of an advertisement: to inform, to persuade, to
remind and to reinforce. Normally an advertisement only uses one of these objectives at
a time. What you are advertising is your store. Focus on that. The brands in your store
are important too, so mention those as you see fit. Since your store is new, your main
objective will be to inform and to some extent persuade.
Inform: Advertisements of this type are often used for new stores, to create awareness
among consumers. This type of ad provides the consumer with information about a
store, its image, its type of customer and the location and contact information. To some
extent all advertising must inform the consumer. New brands entering the market will
either focus on informing or persuading customers. Later on, they may switch to
reminding and reinforcing.
Persuade: This advertising attempts to create appeal, liking and preference. Some
advertisements do this by aiming to convince the target market through comparison to
others. What makes your store different? What makes it better. If price is the primary
feature, be sure to also include something else about the store that is attractive. Price
alone may not be enough. How you have positioned your store in the marketplace will
drive the content of this type of ad.
Remind: Once a store is established, the public has already been informed and some
have been persuaded. Some customers may be loyal customers. Now you just want to
keep the store brand visible and remind the public of the benefits of shopping there.
People do forget.
Reinforce: This advertising aims to convince purchasers that they made the right
choice. Advertisements may show satisfied customers using the product.
CLASSICAL VS OPERANT CONDITIONING
Classical conditioning based on the Behaviorist theory of psychology, which has the
theoretical goal of being able to predict and control behavior. Classical conditioning
heavily based on work by Pavlov and his research on dogs.
Links a stimulus and a response.
Natural reaction (an unconditioned response - UR) to a particular stimulus
(unconditioned stimulus - US). E.g. food (US) results in salivation (UR)
A bell will have no independent ability to result in salivation, it is currently a Neutral
Stimulus.
If a bell is rung alongside food repeatedly (called ‘trials) the dog is conditioned to
associate a bell with food Now, when the bell is rung it is no longer a neutral stimulus
it is a conditioned stimulus (CS), the dog will respond (salivate) this is a conditioned
response (CR)
Implications for marketing
The goal of marketing is to influence consumer decision making therefore this technique
is incredibly useful to marketeers.
Marketeers want to associate their product (a neutral stimulus) with a particular
unconditioned response (e.g. positive emotion). Therefore, they will associate their
product with an unconditioned stimulus which currently creates an unconditioned
response.
E.g. Celebrity => positive emotion, perfume = no/little response, celebrity + perfume
(repeated trials – multiple exposure) = positive emotion, perfume = positive emotion.

Operant Conditioning
Classical conditioning suggests that organisms are passive, B.F. Skinner argues that
organisms actively engage with environment so a different model was required.
Skinners insight was that past consequences of an action shape and influence future
activity. So, to understand behavior it is important to look at the causes of an action and
its consequences. Skinner proposed three types of response that can follow behavior:
Neutral, Reinforcer, Punishment
Implications for marketing
When buying a new product (behavior), according to operant conditioning theory the
likelihood of you purchasing the product again (repeating the behavior) is influence by
whether you perceive the product/ experience as positive or negative (e.g. it tastes
good).
If positive, the behavior (buying the product) is an example positively reinforcement,
leading to increased sales. Therefore the challenge in marketing is stimulate the initial
behavior and to reinforce the learning (multiple trials). This could be achieved by first
and multiple purchase incentives (such as BOGOF – buy one, get one free).
 Additionally, it is possible to use punishment to reduce the likelihood of customers
leaving your brand. For example, negative punishment is the removal of a pleasant
stimulus following undesired behavior. An example of this would be the removal of a
loyalty bonus if shopping at a competitor.
To retain existing customers, rewards such as money back and loyalty points help
reinforce usage and provide a positive stimulus following behavior (positive stimulus).
Operant conditioning is most effective for low-involvement products.

RECENT MARKETING TRENDS

1. Customer Experience

2020 will be the year of the customer. We’re seeing a massive shift in beliefs about
what marketing actually is. It’s no longer about trying to convince people to buy from or
work with your company. Instead, the priority has moved towards providing
fantastic customer experiences that will keep people coming back for more. In a sense,
when you focus on building a positive business culture and providing great service, the
marketing almost takes care of itself.

Customer experience or CX is already the hottest buzzword in marketing circles, but it’s
more than just a passing trend. 73% of people say that customer experience is an
important factor in their buying decisions, but currently only 49% of US consumers say
that today’s companies provide a good experience.

What exactly makes a great CX? Efficiency, convenience, knowledgeable and friendly
service, and easy payment options are what people value most in their customer
experience. But aspects more traditionally considered as marketing’s domain are cited
too: up-to-date technology, personalization, an easy mobile experience, brand image,
and design all add up to the overall customer experience.

2. Employee Engagement

If efficient and friendly service is the cornerstone of great customer experience, how do
you ensure you’re providing this? The answer, of course, is in your employees. The
previously mentioned research also found that 46% of consumers will abandon a brand
if its employees are not knowledgeable, and bad employee attitude is the number one
factor that stops individuals from doing business with a company.
Source: https://www.pwc.com/us/en/advisory-services/publications/consumer-
intelligence-series/pwc-consumer-intelligence-series-customer-experience.pdf
When you’re turning the responsibility of creating a great customer service over to your
employees, you need to make sure that they want your business to succeed as much
as you do. The key to this is building a solid foundation of employee engagement and
taking steps to ensure every employee understands and is aligned with your brand
mission and values.

3. Visualization

Research has shown that people prefer visual content to plain text. You just have to
look at the growth of image-focused platforms Pinterest and Instagram to see the proof
of this. Google, Pinterest, and several other companies are also investing in visual
search technology. Images are already returned for 19% of searches on Google,
and 62% of millennials say they are more interest in visual search than any other new
technology.

Visuals are also easier to remember than written content. Adding data visualizations,
infographics, images, and videos to your text not only makes it more interesting and
attractive, but it can help your message to be absorbed better too.
4. Personalization

80% of consumers said that they’d be more likely to do business with a brand that
provides a personalized experience, as per a survey by Epsilon. Marketing
personalization is no longer limited to automatically changing the name of the person
you’re addressing in your email newsletters. Improvements in technology such as AI
combined with increased data collection and insights from social media and other
sources have made it possible and easy to hyper-personalize everything from content to
design to product recommendations and everything in-between.

5. Strategic Marketing Transformation

Used to describe the process when a business operating without a strategic marketing
plan evolves by changing its fundamental business processes and procedures.
Undergoing a marketing transformation can help companies to improve customer
service and experience, boost brand awareness and reputation, and ultimately increase
revenue and profits.

Your strategic marketing plan defines goals and determines which marketing tactics you
will employ to reach your customers including content marketing, SEO, email marketing,
social media, advertising, and offline marketing. It then lays out a plan for how every
part of the organization will be involved in these tactics. To put it simply, the marketing
strategy is no longer only the responsibility of the chief marketer or CMO. Strategic
marketing transformation recognizes this and ensures that the brand, company
reputation, customer relationships, and the customer experience as a whole are
considered in every business activity.

6. SERP Position Zero & Featured Snippets

Featured snippets and other “on SERP” information means that you don’t need to click
through to a website to get the information you’re looking for anymore – it’s right there
on the Google search results page.

This on-SERP information may appear in various places, but the most sought after
position is right at the top of the page, before the organic listings. This position has been
dubbed “position zero”. As it’s often the only information that a searcher will view, it’s
highly coveted. Over 60% of search results returned by Google are now position zero
search results.

7. Voice Search

We’re not quite at the commonly cited prediction that 50% of searches will be driven by
voice in 2020 (we’re currently sitting at about 20% according to Google), but this
statistic is probably not that far in the future. The smart speaker business is booming,
with around a quarter of US households now owning a Google Home, Amazon Echo, or
another smart speaker. Consumers are also expecting to use voice search more in the
near future – 61% of those aged 25–64 who already use a voice device intend to use it
more in the future according to research by PwC. Eg. Tequila brand Patròn is an
example of a company that’s seen huge success from using branded skills. Smart
speaker users can ask their digital assistant to “ask Patròn for a cocktail recipe.” This
not only helps to increase brand awareness and visibility, but it also enables users to
buy the product directly from the recipe results.

8. AI-Based Automation and Chatbots

AI is one of the major technologies behind voice search and smart assistants. It’s also
made chatbots possible, which are now popping up on more websites than ever before.

Big data, supported by AI and predictive analytics, is also helping brands to learn more
about their audience and customers. It’s enabling hyper-personalization of customer
experiences and marketing messages at scale.

9. Live Video

The live video industry is expected to be worth over $70 billion by 2021. Live video is
incredibly popular with consumers, and people spend three times longer watching live
video than they do watching pre-recorded video. Video is also the most popular way for
consumers to learn about new products.
When the live element is added, this makes video more engaging as the audience feels
they’re a part of it and can influence the content, rather than just passively watching.

Live video is great for grabbing the attention of your social audience on Facebook or
Instagram. These types of videos are so attractive to viewers because they tap into
“FOMO” or fear of missing out. When you’re not sure if a live video is going to contain a
tidbit of information that you can’t get anywhere else, or it will mean you’re the first to
find out about some new and exciting news, you’re going to want to watch it.

10. Lifecycle marketing

The role of digital in creating a unified customer experience is also high in the response,
but it’s shocking that digital marketing isn’t seen as a driver of boosting revenue from
existing customers. It’s an artefact of the question since digital marketing is effective in
achieving all of these goals, including customer retention.

A more practical way to plan to integrate online marketing into marketing activities is to
consider communications from a customer point-of-view through the customer journey. I
call this always-on lifecycle marketing and recommend you review your use of online
AND offline media across the customer lifecycle.
SALES MANAGEMENT
To be successful in a changing market environment, it is important that sales
managers understand the importance of emerging trends in the following areas

1.Global prospective
Domestic companies who never thought about foreign competitors are suddenly finding
them in their backyard. This is a challenge which sales managers and salesperson
must take on, they have to improve their personal selling efforts not only in their
countries but also in foreign countries. Selling goods and services in global markets
presents a challenge due to differences in culture, language, needs and requirements.

2. Technological revolution
Digital revolution and management information system have greatly increased the
capabilities of consumers and marketing organizations. Consumer today can get
information about products, compare it with other brand,place an order instantly over
the internet. This has led to a different kind of sales force who collects information
about internet users, markets and prospects of internet buyers.To compete effectively,
sales person and managers will have to adopt the latest technology.

3.Customer relationship management

Combining information technology with relationship marketing has resulted in customer
relationship management. The concept of relationship marketing came about earlier by
bringing quality, customer service and marketing together.
Relationship marketing aims in building long term satisfying relations with key
customers distributors and suppliers in order to earn and retain their long term
preference and business.

4.Sales force diversity

The demographic characteristics of sales force is changing and becoming more varied.
For example, more and more women are taking up careers in sales management and
selling. Also the education level of sales people is going up most of them holding a
college degree or a post graduate degree. Sales managers now have to handle a sales
force of these varied demographic, expectations of each and every individual is
different and sales manager needs to use different motivational tools against each one
of them.
5. Team selling approach
The practice of team selling is more widely followed by most companies in recent
years. Team selling approach is used when company wants to build a long term
mutually beneficial relationship with major customers, who have high sales and
profitable potential. It is used for selling a technically complex product or a service to a
potential customer. The composition of team may vary depending upon the customer
from top management, technical specialist, customer service, etc…

6.Managing Multi-Channels
Multi-channel marketing system occurs when organization uses two or more marketing
channels to target one or more customer segments. Multi-channel may also lead to
conflicts and control problems, as two or more channels may compete for same
customer. A successful sales manager will have to effectively manage conflict between
the channels.
Major benefits of multi-channel marketing system are:
1.Lower channel cost 2.Increased market coverage 3.Customized selling

7.Ethical and social issues

Sales managers have ethical and social responsibilities. Sales people face ethical
issues such as bribery, deception (or misleading) and high pressure sales tactics.
Today’s sales managers have no choice but to ensure ethical standards from sales
force otherwise they may be out of business or even land up in legal problems.
 RECRUITING SALESFORCE
What is recruitment?
 The process of finding and hiring the best- qualified candidate (from within or outside
of an organization) for a job opening, in a timely and cost effective manner.
 The recruitment process includes analyzing the requirements of a job, attracting
employees to that
job, screening and selecting applicants, hiring, and integrating the new employee to
the organization.
The Requirement Process
 Different types of sales positions call for performing different activities.
 To ensure that new recruiters have the aptitude necessary to be successful in a
particular type of sales job , it is best to follow systematic procedure.
 Newly established firms go through these steps
Sales force recruitment process.
• Conduct a job analysis
• Prepare a job description
• Identify sales job qualification
• Attract a pool of sales recruits
• Select best recruits

Job Analysis
 to improve the performance the firm should conduct job analysis to identify the duties,
requirement, responsibility, and condition of the job.
 It has three steps
1. Analyze the work environment
2. Determine the duties and responsibility expected from the sales person
3. Spend time making calls with several salespeople, observing and recording the job
tasks they are actually performed.

Preparing a Job description

 It explains the current sales personnel
 The duties and responsibilities of the sales position, the skills needed on that job
 On what basis the employee will be evaluated.
 Since it will be used in recruiting, selecting, training and evaluating the sales force, the
job description should be in written.
 The tasks must be stated in qualitative terms.
 Job descriptions should be accurate and specific.
 No ambiguity should be present
 A check list should be made

Identify Sales Job qualification

 It is very important to identify the qualification of the salesperson
 Job qualification should identify the characteristics and abilities a person must have to
meet the requirements of the sales positions.
 Since recruiters with all the most important qualification are seldom found, managers
must decide which are most important, trade-offs are considered.
 There is no specific method to determine the job qualification for the different firms
 If the job requires analytical or technical skills then specific educational background or
experience will be need.

Attracting the Pool of applicants

 Large companies should continuously attract the sales persons
 We should start with large pool of applicants for more options.
 Small number applicants may not end in good recruitments
Identify sources of sales applicants.
 Companies use several sources to find qualified applicants.
 The search can begin within the company by surveying the sales force for possible
recruits and then seeking individuals from other departments.
 Some of the external sources include competitive and noncompetitive firms,
educational institutions, advertisements, and employment agencies.
 A relatively new source of sales candidates is through online career centers.
 Recruiters must recognize that top rated candidates can come from any source.
 However, with the increasing costs of recruiting, sales managers must be careful to
devote their time to the most productive sources.
Sales force selection process.
Selecting good applicants is an extremely important and challenging task for the sales
manager.
The salesperson selection process involves choosing the candidates who best meet
the qualifications and have the greatest aptitude for the job.
General steps in the salesperson selection process include:
initial screening,
 reference checking
in-depth interviewing
employment testing
follow-up interviewing
making the selection.
In selecting salespeople, several tools are used to screen and eliminate undesirable
recruits.
Initial screening may start with an application form or resume, a screening interview, or
some type of brief test.
Application forms, as well as resumes, are the most widely used screening tools and
are an easy means of collecting the information necessary to determine applicants'
qualifications, such as educational background, work experience, and personal
references
An important function of application forms is to help sales managers prepare for
personal interviews with candidates for sales positions.
Almost all companies make use of initial screening interviews or tests.
Apply the criteria used to make the final selection decision.
When all other steps have been completed in the selection process, the sales
manager must decide whether or not to hire each applicant.
The company reviews everything known about a particular applicant, gathered from
screening, reference checks, interviews, and tests.
The applicant's goals and ambitions are matched against present and future
opportunities, challenges, and other types of rewards offered by the job and the
company.
While selection tools and techniques can eliminate the obviously unqualified
candidates and generally spot the more competent individuals, some amount of
judgment is typically used to make the final selection decision.
Implement the sales force socialization process.
Once the process of recruiting and selection is complete, the new salesperson must be
integrated into the sales force.
Socialization involves the formal introduction of the recruit to company practices,
procedures, and philosophy as well as the social aspects of the job.
Effective development of job skills, adoption of appropriate role behaviors and
organization values, and adaptation to the work group and its norms can influence a
recruit's motivation, job satisfaction, and performance.
There are two levels in the socialization process.
1. Initial socialization occurs during the recruiting, selection, and introductory training
processes.
2. Extended socialization is accomplished through long-term training, job rotation, and
corporate social activities.

SERVICE MARKETING
Service marketing is marketing based on relationship and value. It may be used to
market a service or a product.With the increasing prominence of services in the global
economy, service marketing has become a subject that needs to be studied separately.
Nature of Services
1) Intangibility: A physical product is visible and concrete. Services are intangible. The
service cannot be touched or viewed, so it is difficult for clients to tell in advance what
they will be getting. For example, banks promote the sale of credit cards by
emphasizing the conveniences and advantages derived from possessing a credit card.
2) Inseparability: Personal services cannot be separated from the individual. Services are
created and consumed simultaneously. The service is being produced at the same time
that the client is receiving it; for example, during an online search or a legal
consultation. Dentist, musicians, dancers, etc. create and offer services at the same
time.
3) Heterogeneity (or variability): Services involve people, and people are all different.
There is a strong possibility that the same enquiry would be answered slightly differently
by different people (or even by the same person at different times). The quality of
services offered by firms can never be standardized.
4) Perishability: Services have a high degree of perishability. Unused capacity cannot be
stored for future use. If services are not used today, it is lost forever. For example,
spare seats in an aeroplane cannot be transferred to the next flight. Similarly, empty
rooms in five-star hotels and credits not utilized are examples of services leading to
economic losses. As services are activities performed for simultaneous consumption,
they perish unless consumed.
5) Changing demand: The demand for services has wide fluctuations and may be
seasonal. Demand for tourism is seasonal, other services such as demand for public
transport, cricket field and golf courses have fluctuations in demand.
6) Pricing of services: Quality of services cannot be standardized. The pricing of services
are usually determined on the basis of demand and competition. For example, room
rents in tourist spots fluctuate as per demand and season and many of the service
providers give off-season discounts.
7) Direct channel: Usually, services are directly provided to the customer. The customer
goes directly to the service provider to get services such as bank, hotel, doctor, and so
on. A wider market is reached through franchising such as McDonald’s and Monginis.
 Scope of Services Marketing
a) Service as an organization: It is the entire business or not-for-profit structure that
resides within the service sector. For example, a restaurant, an insurance company a
charity.
b) Service as core product: The commercial outputs of a service organization such as a
bank account, an insurance policy or a holiday.
c) Service as product augmentation: any peripheral activity designed to enhance the
delivery of a core product. For example, provision of a courtesy car, complimentary
coffee at the hairdresser.
d) Service as product support: Any product or customer-oriented activity that takes place
after the point of delivery. For example, monitoring activities, a repair service, up-dating
facilities.
e) Service as an act that is service as a mode of behaviour such as helping out and giving
advice.
 Advertising Industry Health care

Cleaning industry Hospitality industry

Distribution (business) IT service management

E-commerce Practice of law

Entertainment Online services

Financial services - Public services / Public

Banking & Insurance Utility Services

Travel Charities

Why is Service Marketing Unique and Challenging

a) A service cannot be demonstrated.
b) Sale, production and consumption of services takes place simultaneously.
c) A service cannot be stored. It cannot be produced in anticipation of demand.
d) Services cannot be protected through patents.
e) Services cannot be separated from the service provider.
f) Services are not standardized and are inconsistent.
g) Service providers appointing franchisees may face problems of quality of services.
h) The customer perception of service quality is more directly linked to the morale,
motivation and skill of the frontline staff of any service organization.

Importance of Services Marketing

Given the intangibility of services, marketing them becomes a particularly challenging
and yet extremely important task.
a. A key differentiator: Due to the increasing homogeneity in product offerings, the
attendant services provided are emerging as a key differentiator in the mind of the
consumers. Eg: In case of two fast food chains serving a similar product (Pizza Hut and
Domino’s), more than the product it is the service quality that distinguishes the two
brands from each other. Hence, marketers can leverage on the service offering to
differentiate themselves from the competition and attract consumers.
b. Importance of relationships: Relationships are a key factor when it comes to the
marketing of services. Since the product is intangible, a large part of the customers’
buying decision will depend on the degree to which he trusts the seller. Hence, the need
to listen to the needs of the customer and fulfill them through the appropriate service
offering and build a long lasting relationship which would lead to repeat sales and
positive word of mouth. Ex: Car sales largely depend upon the additional services
offered as a part of dealer’s price and also selling skills of the car salesman.
c. Customer Retention: Given today’s highly competitive scenario where multiple providers
are vying for a limited pool of customers, retaining customers is even more important
than attracting new ones. Since services are usually generated and consumed at the
same time, they actually involve the customer in service delivery process by taking into
consideration his requirements and feedback. Thus they offer greater scope for
customization according to customer requirements thus offering increased satisfaction
leading to higher customer retention. Ex: Restaurants, Hotels offer customized food and
stay experiences making the guests loyal. This encourages repeat business and greater
customer retention.
d. Multiple Touchpoints: Service marketing involves many touchpoints for the consumer.
Interactions with multiple people and experiences that are less tangible than when
buying an actual product all impact the consumer's perspective of the purchase
process. These touchpoints work together to establish a perception in the consumer's
mind. Ex: A holiday package involves services of multiple entities. Customer satisfaction
largely depends of the perception created before consumption of the service.
e. Services Proliferate: Consumers have many service options to choose from, and
because the product is intangible, the challenge for the service marketer is to somehow
make her services stand out from the crowd. Because service marketing is so prolific,
marketers must think of ways to communicate the benefits of the service they offer in
language that reflects consumer need and value. Ex: Healthcare service are available in
plenty in Pune. However, customers choose hospitals that offer honest and efficient
services.
f. Feedback Improves Service: Unlike the marketing process for a tangible product,
service marketing actually involves the consumer in the marketing process. He is
engaged in the process and contributes to a positive outcome. For this reason, it is
important to seek consumer feedback and to use that feedback to improve service
marketing effectiveness. Ex: Educational institutions that seek feedback from students
to improve qualitative aspects
g. Technology Impacts: Technology is having a major impact on the service economy. You
can use technology to streamline service activities and provide do-it-yourself (DIY)
options for consumers. Internet-based services, for instance, allow consumers to
participate actively in the service marketing process, often never involving contact with
another human being. Having a website is important, because people like to get
information about service providers before deciding which one to use.
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