1. You see a gorgeous girl at a party.

You go up to her and say: “ I am

very rich marry me she gives you a nice hard slap on your face.-
“That’s customer Feedback.”

2. You see a Gorgeous girl at a party you go up to her and say “ I am

very rich marry me” and she introduces you to her husband.-
“That’s Demand and Supply Gap”

3. You see a Gorgeous girl at a party. You go up to her and get her
telephone number. The next day you call and say “ Hi, I am very rich
Marry me-
“That’s Telemarketing”

4. You are at a party and see gorgeous girl you get up and straighten your
Tie, you walk up to her and pour her a drink, you open the door(of the
car) for her, pick up her bag after she drops it, offer her ride and
then say” by the way I am rich will you marry me: –
“That’s public relation”
5. You see a gorgeous girl at a party. You go up to her and say: “ I am
very rich marry:- “That’s direct marketing”

6. You are at party with a bunch of Friends and see a Gorgeous girl one of
your friend goes up to her and pointing at you says “He is very rich
marry him” “That’s advertising”

7. You are at a party and see gorgeous girl. She walks up to you and says
“ You are very rich can you marry me.. “That’s brand recognition”

8. A gorgeous girl comes to you and says I have heard you are filthy rich.
Will you marry me? “This is word of mouth publicity.”

9. You see a gorgeous girl at party. You go up to her and before you say
anything another person come and tell her “I am rich will you marry me”
and she goes with him “That’s competition eating your market share”

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 10. You see a gorgeous girl at a party you go up to her and before
you say “I am rich marry me” your wife arrives “That’s restriction for
entering into new markets”

 The term ‘market’ refers to the place where buyers and sellers gather to
enter into transactions involving the exchange of goods and services.

 Marketing has been referred to as performance of business activities that

direct the flow of goods and services from producers to consumers.

 Designing or merchandising, packaging, warehousing, transportation,

branding, selling, advertising and pricing are required. (DPWTBSAP)

 It may be noted here that marketing is not merely a post-production

activity.

 It includes many activities that are performed even before goods are
actually produced and continue even after the goods have been sold.

Following important features of marketing:

1. Need and Want: The process of marketing helps individuals and groups in
obtaining what they need and want.

 Needs are basic to human beings and do not pertain to a particular product.

 Wants, on the other hand, are culturally defined objects that are potential
satisfiers of needs.

2. Creating a Market Offering: On the part of the marketers, the effort

involves creation of a ‘market offering.

 Market offering refers to a complete offer for a product or service, having

given features like size, quality, taste, etc; at a certain price; available at a
given outlet or location and so on.

3. Customer Value: The process of marketing facilitates exchange of products

and services between the buyers and the sellers. The buyers, however, make buying
decisions on their perceptions of the value of the product or service in satisfying
their need, in relation to its cost.

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4. Exchange Mechanism: The process of marketing works
through the exchange mechanism.

(i) Involvement of at least two party’s viz., the buyer and

the seller.

(ii) Each party should be capable of offering something of

value to the other. For example, the seller offers a
product and the buyer, money.

(iii) Each party should have the ability to communicate and deliver the product or
service.

(iv) Each party should have freedom to accept or reject other party’s offer.

(v) The parties should be willing to enter into transaction with each
other.

 A product is a ‘bundle of utilities’ or ‘source of satisfaction’, that

can be used to satisfy human needs and wants.

 Apart from the product, what can be marketed is a service

 Thus, anything that is of value to the other can be marketed.

 Who is a marketer? : Marketer refers to any person who takes

more active part in the process of exchange.

MARKETING MANAGEMENT

 Marketing management means management of the marketing function.

 In other words, marketing management refers to planning, organising,

directing and control of the activities which facilitate exchange of goods
and services between producers and consumers or users of products and
services.
MARKETING AND SELLING

 Many people confuse ‘selling’ for ‘marketing’. They consider these two terms
as one and the same.

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  Marketing refers to a large set of activities of which selling is just one part.

The major differences between selling and marketing are listed as below:

(i) Part of the Process vs Wider Term: Selling is only a part of the process of
marketing and is concerned with promoting and transferring possession and
ownership of goods from the seller to the buyer.

 Marketing is a much wider term consisting of number of activities

(ii) Transfer of Title vs Satisfying Customer Needs: The main focus of selling is
on affecting transfer of title and possession of goodsfrom sellers to consumers or
users.

 In contrast, marketing activities put greater thrust on achieving maximum

satisfaction of the customer’s needs and wants.

(iii) Profit through Maximising Sales vs Customer Satisfaction: All selling

activities are directed at maximizing sales and, thereby, the profits of the firm.
Marketing, is concerned with customer satisfaction and there by increasing profit
in the long run.

(iv) Start and End of the Activities: Selling activities start after the product
has been developed while marketing activities start much before the product is
produced and continue even after the product has been sold.

(v) Difference in the Emphasis: In selling, the emphasis is on bending the

customer according to the product while in marketing, the attempt is to develop
the product and other strategies as per the customer needs.

(vi) Difference in the Strategies: Selling involves efforts like promotion and
persuasion while marketing uses integrated marketing efforts involving strategies
in respect of product, promotion, pricing and physical distribution.

MARKETING MANAGEMENT PHILOSOPHIES

In order to achieve desired exchange outcomes with target markets, it is

important to decide what philosophy or thinking should guide the marketing efforts
of an organisation.

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Production Concept

 It was believed that profits could be maximised by producing at large scale,

thereby reducing the average cost of production.

 Availability and affordability of the

product were considered to be the key
to the success of a firm.

 Greater emphasis was placed on

improving the production and distribution efficiency of the firms.

Product Concept

 Mere availability and low price of the product could not ensure increased
sale and as such the survival and growth
of the firm.

 The emphasis of the firms shifted from

quantity of production to quality of
products.

 Product improvement became the key to

profit maximisation of a firm, under the

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 concept of product orientation.

Selling Concept

 The product quality and availability did not ensure the

survival and growth of firms because of the large
number of sellers selling quality products.

 Firms must undertake aggressive selling and promotional

efforts to make customers buy their products.

 The use of promotional techniques such as advertising, personal selling and

sales promotion were considered essential for selling of products.

 The focus of business firms shifted to pushing the sale of products through
aggressive selling techniques.

Marketing Concept

 Marketing orientation implies that focus on satisfaction of customer’s needs

is the key to the success of any organisation in the
market.

 All the decisions in a firm are taken from the point of

view of the customers.

 Customer’s satisfaction become the focal point of all

decision making in the organisation.

 The basic role of a firm then is to‘identify a need and fill it’.

The Societal Marketing Concept

 Any activity which satisfies human needs but is detrimental to the interests
of the society at large cannot be justified.

 The business orientation should, therefore, not be short-sighted to serve

only consumers’ needs. It should also consider large issues of long-term
social welfare.

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  The societal marketing concept holds that the task of any organisation is to
identify the needs and wants of the target market and deliver the desired
satisfaction in an effective and efficient
manner so that the long-term well-being of
the consumers and the society is taken
care of.

 The societal marketing concept is the

extension of the marketing concept as
supplemented by the concern for the long-
term welfare of the society.

FUNCTIONS OF MARKETING

1. Gathering and Analyzing Market Information: One of the important functions

of a marketer is to gather and analyse market information.

 This is necessary to identify the needs of the customers and take various
decisions for the successful marketing of the products and services.

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  This is important for making an analysis of the available opportunities and
threats as well as strengths and weaknesses of the organisation.

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

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

3. Product Designing and Development: The design of the

product contributes to making the product attractive to the
target customers. A good design can improve performance of
a product and also give it a competitive advantage in the
market.

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

predetermined specifications, which helps in achieving uniformity and consistency
in the output.

 Standardisation ensures the buyers that goods

conform to the predetermined standards of quality,
price and packaging and reducesthe need for
inspection, testing and evaluation of the products.

 Grading is the process of classification of products

into different groups, on the basis of some of its important characteristics
such as quality, size, etc.

 Grading is particularly necessary for

products which are not produced according
to predetermined specifications.

5. Packaging and Labelling: Packaging refers to

designing the package for the products.

 Labelling refers to designing the label to be put on

the package.

 Packaging is important not only for protection of

the products but also serves as a promotional tool.

 Sometimes, the quality of the product is assessed

by the buyers form packaging.

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6. Branding: A very important decision area for marketing of most consumer
products is whether to sell the product in its generic
name (name of the category of the product, say Fan, Pen,
etc.) or to sell them in a brand name.

 Brand name helps in creating product

differentiations, i.e., providing basis for
distinguishing the product of a firm with that of
the competitor.

 Helps in building customer’s loyalty and in promoting its sale.

7. Customer Support Services: A very important function of the

marketing management relates to developing customer support
services such as after sales services, handling customer complaints
and adjustments, procuring credit services, maintenance services,
technical services and consumer information.

All these services aim at providing maximum satisfaction to the

customers, which is the key to marketing success in modern days.

8. Pricing of Products: Price of product refers to the amount of

money customers have to pay to obtain a product.

The marketers have to properly analyse the factors determining the

price of a product and take several crucial decisions in this respect,
including setting the pricing objectives, determining the pricing
strategies, determining the price and changing the prices.

9. Promotion: Promotion of products and services involves informing

the customers about the firm’s product, its features, etc. and persuading them to
purchase these products.

The four important methods of promotion include advertising, Personal Selling,

Publicity and Sales Promotion.

10. Physical Distribution: Managing physical distribution is another very

important function in the marketing of goods and services.

The two major decision areas under this function include:-

STUDY ISLAND CLASSES BS BY AA Page 9

(a) Decision regarding channels of distribution or the
marketing intermediaries

(b) Physical movement of the product from where it is

produced to a place where it is required by the customers
for their consumption or use.

11. Transportation: Transportation involves physical

movement of goods from one place to the other.

A marketing firm has to analyse its transportation needs

after taking into consideration various factors such as
nature of the product, cost and location of target market and take decisions in
respect of mode of transportation to be chosen and other related aspects.

12. Storage or Warehousing: Usually there is a time gap between the production
or procurement of goods and their sale or use.

 It may be because of irregular demand for the

products there is a need for storage of
adequate stock of goods to protect against
unavoidable delays in delivery or to meet out
contingencies in the demand.

 Marketing mix is described as the set of

marketing tools that a firm uses to pursue its
marketing objectives in a target market.

ELEMENTS OF MARKETING MIX

These are: (i) Product, (ii) Price, (iii) Place, and (iv) Promotion,

1. Product: Product means goods or services or ‘anything of value’, which is

offered to the market for exchange.

2. Price: Price is the amount of money customers have to pay to obtain the
product.

3. Place: Place or Physical Distribution include activities that make firm’s

products available to the target customers.

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4. Promotion: Promotion of products and services include activities that
communicate availability, features, merits, etc. of the products to the target
customers and persuade them to buy it.

ROLE OF MARKETING

All marketing organisations operate either to earn profit or pursue some other
goals marketing plays an important role in achieving its objectives.

Role in a Firm

The modern concept of marketing plays a significant role in achieving the

objectives of a firm.

By adopting marketing orientation, an organization whether profit making or non-

profit making, can achieve its goals in the most effective manner.

It is a well known fact that a satisfied customer is the most valuable asset of any
firm. Thus, marketing plays a crucial role in the survival and growth of a firm.

Role in the Economy

Marketing plays a significant role in the development of an economy. It acts as a

catalyst in the economic development of a country and helps in raising the
standards of living of the people.

Development of a nation can be judged by the level of standard of living of its

people.

MARKETING MIX
 Marketing mix is described as the set of marketing tools that a firm uses to
pursue its marketing objectives in a target market.

 There are large number of factors affecting marketing decisions. These can
broadly be divided into two categories: (i) controllable factors, and (ii) non-
controllable factors.

 Controllable factors are those factors which can be influenced at the level
of the firm.

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  There are certain other factors which affect the decision but are not
controllable at the firm’s level.

 These are called environmental variables.

ELEMENTS OF MARKETING MIX
These are: (i) Product, (ii) Price, (iii) Place, and (iv) Promotion,

1. Product: Product means goods or services or ‘anything of value’, which is

offered to the market for exchange.

 The concept of product relates to not only the physical product but also the
benefits offered by it from customer’s view point (for example toothpaste is
bought for whitening teeth, strengthening gums, etc.).

 Also include after sales services, handling complaints, availability of spare

parts etc.

2. Price: Price is the amount of money customers have to pay to obtain the
product. In case of most of the products, level of price affects the level of their
demand.

 Decisions have also to be taken in respect of discounts to customers,

traders and credit terms, etc.

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3. Place: Place or Physical Distribution include activities that make firm’s products
available to the target customers. Important decision areas in this respect include
selection of dealers or intermediaries to reach the customers, providing support to
the intermediaries (by way of discounts, promotional campaigns, etc.).

4. Promotion: Promotion of products and services include activities that

communicate availability, features, merits, etc. of the products to the target
customers and persuade them to buy it.

BRANDING
 To decide whether the firm’s products will be marketed under a brand name
or a generic name.

 Generic name refers to the name of the whole class

of the product.

 If products were sold by generic names, it would be

very difficult for the marketers to distinguish
their products from that of their competitors.

The various terms relating to branding are as follows:

1. Brand: A brand is a name, term, sign, symbol, design or some

combination of them, used to identify the products—goods or services of one seller
or group of sellers and to differentiate them from those of the competitors.

2. Brand Name: That part of a brand, which can be spoken, is

called a brand name.

3. Brand Mark: That part of a brand which can be recognised

but which is not utter able is called brand mark. It appears in
the form of a symbol, design, distinct color scheme or lettering.

4. Trade Mark: A brand or part of a brand that is given legal protection is called
trademark.

Advantages to the Marketers

(i) Enables Marking Product Differentiation:

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(ii) Helps in Advertising and Display Programmes:

(iii) Differential Pricing:

(iv) Ease in Introduction of New Product:

Advantages to Customers
(i) Helps in Product Identification:

(ii) Ensures Quality:

(iii) Status Symbol:

Characteristics of Good Brand Name

(i) The brand name should be short, easy to pronounce, spell, recognise and
remember e.g., Ponds, VIP, Rin, Vim, etc.

(ii) A brand should suggest the product’s benefits and qualities. It should be
appropriate to the product’s function. e.g., Fair & Lovely.

(iii) A brand name should be distinctive e.g., Liril, Sprit, Safari, Zodiac.

(iv) The brand name should be adaptable to packing or labeling requirements, to

different advertising media and to different languages.

(v) The brand name should be sufficiently versatile to accommodate new products,
which are added to the product line e.g., Maggie, Colgate.

(vi) It should be capable of being registered and protected legally.

PACKAGING

Levels of Packaging

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

2. Secondary Packaging: It refers to additional layers of protection that are kept

till the product is ready for use,

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3. Transportation Packaging: It refers to further packaging components
necessary for storage, identification or transportation.

Importance of Packaging

(i) Rising Standards of Health and Sanitation: Because of the increasing

standards of living in the country, more and more people have started purchasing
packed goods as the chances of adulteration in such goods are minimised.

(ii) Self Service Outlets: The self-service retail outlets are becoming very
popular, particularly in major cities and towns.

 Because of this, some of the traditional role assigned to personal selling in

respect of promotion has gone to packaging.

(iii) Innovational Opportunity: Some of the recent developments in the area of

packaging have completely changed the marketing scene in the country. For
example, milk can now be stored for 4-5 days without refrigeration in the recently
developed packing materials.

(iv) Product Differentiation: Packaging is one of the very important means of

creating product differentiation.

 The colour, size, material etc., of package makes real difference in the
perception of customers about the quality of the product.

Functions of Packaging

(i) Product Identification: Packaging greatly helps in

identification of the products.

(ii) Product Protection: Packaging protects the contents

of a product from spoilage, breakage, leakage, pilferage,
damage, climatic effect, etc.

(iii) Facilitating Use of the Product: The size and shape of the package should be
such that it should be convenient to open, handle and use for the consumers.

(iv) Product Promotion: Packaging is also used for promotion purposes.

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Labelling

Labels are useful in providing detailed information about the product, its contents,
method of use, etc. The various functions performed by a label are as follows:

1. Describe the Product and Specify its Contents: one of the most important
functions of labels is to describe the product, its usage, cautions in use, etc. and
specify its contents.

2. Identification of the Product or Brand: Labels is to help in identifying the

product or brand.

3. Grading of Products: Another important function performed by labels is to

help grading the products into different categories.

4. Help in Promotion of Products: An important function of label is to aid in

promotion of the products. A carefully designed label can attract attention and
give reason to purchase.

5. Providing In formation Required by Law: Another important function of

labeling is to provide information required by law.

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PRICING

Pricing occupies an important place in the marketing of goods and services by a

firm. No product can be launched without a price tag or at least some guidelines
for pricing.

Factors Affecting Price Determination

1. Product Cost: One of the most important factor affecting price of a product or
service is its cost. This includes the cost of producing, distributing and selling the
product.

 The cost sets the minimum level or the floor price at which the product may
be sold. Generally all marketing firms strive to cover all their costs, at least
in the long run.

2. The Utility and Demand: The buyer may be ready to pay up to the point where
the utility from the product is at least equal to the sacrifice made in terms of the
price paid. The seller would, however, try to at least cover the costs.

3. Extent of Competition in the Market: This is affected by the nature and the
degree of competition.

 The price will tend to reach the upper limit in case there is lesser degree of
competition while under conditions of free competition, the price will tend to
be set at the lowest level.

4. Government and Legal Regulations: In order to protect the interest of public

against unfair practices in the field of price fixing, Government can intervene and
regulate the price of commodities.

 Government can declare a product as essential product and regulate its

price.

5. Pricing Objectives: Generally the objective is stated to be maximise the

profits.

 If the firm decides to maximise profits in the short run, it would tend to
charge maximum price for its products. But if it is to maximize its total
profit in the long run, it would opt for a lower per unit price so that it can

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 capture larger share of the market and earn greater profits through
increased sales.

Apart from profit maximisation, the pricing objectives of a firm may include:
(a) Obtaining Market Share Leadership

(b) Surviving in a Competitive Market

(c) Attaining Product Quality leadership.

6. Marketing Methods Used: Price fixation process is also affected by other

elements of marketing such as distribution system, quality of salesmen employed,
quality and amount of advertising, sales promotion efforts, the type of packaging,
product differentiation, credit facility and customer services provided.

PHYSICAL DISTRIBUTION

 It is concerned with making the goods

and services available at the right
place, so that people can purchase the
same.

 There are two important decisions

relating to this aspect—

1. Regarding physical movement of goods from producers to consumers or

users.
2. Two, regarding the channels.

Channels of Distribution

Channels of Distribution are set of firms and individuals that take title, or assist in
transferring title, to particular goods or services as it moves from the producers
to the consumers.

Functions of Distribution Channels

1. Sorting: Middlemen procure supplies of goods from a variety of sources, which

is often not of the same quality, nature, and size.

He/She then sorts the nuts into homogenous groups on the basis of the size or
quality.

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 2. Accumulation: This function involves accumulation of goods into
larger homogeneous stocks, which help in maintaining continuous
flow of supply.

3. Allocation: Allocation involves

breaking homogenous stock into
smaller, marketable lots.

4. Assorting: Middlemen build assortment of products for resale.

There is usually a difference between the product lines made by manufacturers
and the assortment or combinations desired by the users.

 Middlemen procure variety of goods from different sources

and deliver them in combinations desired by customers.

5. Product Promotion: Middlemen also participate in certain

activities such as demonstrations, special displays, contests, etc.,
to increase the sale of products.

6. Negotiation: Arriving at deals that satisfy both the parties is

another important function of the middlemen. They negotiate the
price, quality, guarantee and other related matters with customers so that
transfer of ownership is properly affected.

7. Risk Taking: In the process of distribution of goods the

merchant middlemen take title of the goods and thereby
assume risks on account of price and demand fluctuations,
spoilage, destruction, etc.

Types of Channels

Direct Channel (Zero Level)

 Goods are made directly available by the manufacturers to customers,

without involving any intermediary.

 This is also called zero level channel.

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Indirect Channels

When a manufacturer employs one or more intermediary to move goods from the
point of production to the point of consumption, the distribution network is called
indirect.

1. Manufacturer-Retailer Consumer (One Level Channel): In this form of

arrangement one intermediary i.e., retailers is used between the manufacturers
and the customers.

That is, goods pass from the manufacture to the retailers who, in turn, sell them to
the final users.

2. Manufacturer-Wholesaler-Retailer- Consumer (Two Level Channel): Here the

wholesaler and retailer function as connecting links between the manufacturer and
consumer. Use of two middlemen in the channel network enables the manufacturer
to cover a larger market area.

3. Manufacturer-Agent-Wholesaler- Retailer-Consumer (Three Level Channel):

In this case, manufactures use their own selling agents or brokers who connect
them with wholesalers and then the retailers.

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  It is done particularly when the manufacturer carries a limited product line
and has to cover a wide market.

Factors Determining Choice of Channels

1. Product Related Factors: Industrial products are usually technical, made to

order and expensive products purchased by few buyers. These products require
short channels i.e., direct channel or involving few middlemen.

 Consumer products, on the other hand, are usually standardised, less

expensive, less bulky, non-technical and frequently bought products.These
can be better distributed by long network of channels, involving many
middlemen.

 Perishable products = short channels.

 Non-perishable products = longer channels

 Unit value of a product is low = long channels

 High value products = shorter channels

 Complex products requiring technical details = short channels

 Non-complex = Long channels.

2. Company Characteristics: Direct selling involves lot of funds to be invested in

fixed assets say for starting own retail outlets or engaging large number of sales
force. Indirect selling through intermediary does not involve deployment of huge
funds on these aspects.

 Firm has plenty of funds = Direct distribution.

 If spare funds are not available = Indirect channels.

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  Greater control on the channel members = short channels.

 Do not want more control over the middlemen = longer channel.

3. Competitive Factors: If the competitor’s have selected a particular channel say

Chemist shops for the sale of toiletry products like hair oil, the other firm may
also like to select the similar channel. In some cases producers may want to avoid
the channels used by competitors.

4. Market Factors: Number of buyers is small, like for most industrial products,
short channels are used. But if the number of buyers is large, as in case of most
convenience products like soft drink, toothpaste etc., longer channels involving
large number of intermediaries are used.

 If the buyers are concentrated in a small place, short channels may be used
but if the buyers are widely dispersed over a large geographical area,
longer channels may be used.

 Similarly if the size of order is small, as in case of most consumer

products, large number of intermediaries may be used. But if the size of
order is large, direct channels may be used.

5. Environmental Factors: In a depressed economy marketers use shorter

channels to distribute their goods in an economical way.

PHYSICAL DISTRIBUTION

Physical distribution covers all the activities required to

physically move goods from manufacturers to the
customers. Important activities involved in the physical
distribution include transportation, warehousing, material
handling, and inventory control.

Components of Physical Distribution

1. Order Processing: Products flow from manufacturers to customers via channel

members while orders flow in the reverse direction, from customers to the
manufacturers.

2. Transportation: Transportation is the means of carrying goods and raw

materials from the point of production to the point of sale.

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3. Warehousing: Warehousing refers to the act of storing and assorting products
in order to create time utility in them. The basic purpose of warehousing activities
is to arrange placement of goods and provide facilities to store them. The need for
warehousing arises because there may be difference between the time a product is
produced and the time it is required for consumption.

4. Inventory Control: A very important decision in respect of inventory is deciding

about the level of inventory. Higher the level of inventory, higher will be the level
of service to customers but the cost of carrying the inventory will also be high
because lot of capital would be tied up in the stock. Thus, a balance is to be
maintained in respect of the cost and customer satisfaction.
The major factors determining inventory levels include:
(a) Firm’s policy regarding the level of customer service to be offered.
(b) Degree of accuracy of the sales forecasts.
(c) Responsiveness of the distribution system i.e., ability of the system to transmit
inventory needs back to the factory and get products in the market.
(d) Cost of inventory, which includes holding cost

PROMOTION

 Promotion refers to the use of communication with the twin

objective of informing potential customers about a product
and persuading them to buy it.

PROMOTION MIX

 Promotion mix refers to combination of promotional tools used by an

organisation to achieve its communication objectives.

 These include: (i) Advertising, (ii) Personal Selling, (iii) Sales Promotion, and
(iv) Publicity.

ADVERTISING

 Advertising is perhaps the most commonly used

tool of promotion.

 It is an impersonal form of communication, which is paid for by the

marketers (sponsors) to promote some goods or service. The most common
modes of advertising are ‘newspapers’, ‘magazines’, ‘television’, and ‘radio’.

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The important distinguishing features of advertising are as follows:
(i) Paid Form.

(ii) Impersonality.

(iii) Identified Sponsor.

Merits of Advertising

(i) Mass Reach: Advertising is a medium through which a large number of people
can be reached over a vast geographical area.

(ii) Enhancing Customer Satisfaction and Confidence: Advertising creates

confidence amongst prospective buyers as they feel more comfortable and assured
about the product quality and hence feel more satisfied.

(iii) Expressiveness: With the developments in art, computer designs, and graphics,
advertising has developed into one of the most forceful medium of communication.

(iv) Economy: Advertising is a very economical mode of communication if large

number of people are to be reached.

Limitations of Advertising

(i) Less Forceful: Advertising is an impersonal form of communication.

 It is less forceful than the personal selling as there is no compulsion on the

prospects to pay attention to the message.

(ii) Lack of Feedback: The evaluation of the effectiveness of advertising message

is very difficult as there is no immediate and accurate feedback mechanism of the
message that is delivered.

(iii) Inflexibility: Advertising is less flexible as the message is standardised and is

not tailor made to the requirements of the different customer groups.

(iv) Low Effectiveness: As the volume of advertising is getting more and more
expanded it is becoming difficult to make advertising messages heard by the
target prospects.

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OBJECTIONS TO ADVERTISING

1. Adds to Cost: Advertising unnecessarily adds to the cost of product, which is

ultimately passed on to the buyers

2. Undermines Social Values: Another important criticism of advertising is that it

undermines social values and promotes materialism.

3. Confuses the Buyers: Another criticism against advertisement is that so many

products are being advertised which makes similar claims that the buyer gets
confused as to which one is true and which one should be relied
upon.

4. Encourages Sale of Inferior Products: Advertising does not distinguish

between superior and inferior products and persuade people to purchase even the
inferior products.

5. Some Advertisements are in Bad Taste: Another criticism against advertising

is that some advertisements are in bad taste.

PERSONAL SELLING

Personal selling involves oral presentation of message in the

form of conversation with one or more prospective customers
for the purpose of making sales.

 It is a personal form of communication.

Features of Personal Selling

(i) Personal Form.

(ii) Development of Relationship.

Merits of Personal Selling

(i) Flexibility: The sales presentation can be adjusted to fit the specific needs of
the individual customers.

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(ii) Direct Feedback: As there is direct face-to-face communication in
personal selling, it is possible to take a direct feed back from the customer

(iii) Minimum Wastage: The wastage of efforts in personal selling can be

minimised as company can decide the target customers before making any contact
with them.

ROLE OF
PERSONAL
SELLING

Importance
to Importance
Businessmen to Customers

Effective Help in
Promotional Identifying
Tool Needs

Flexible Tool Latest Market

Information

Minimises
Wastage of
Efforts Expert Advice

Consumer
Attention Induces
Customers

Lasting
Relationship

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SALES PROMOTION

 Sales promotion refers to short-term incentives, which are designed to

encourage the buyers to make immediate
purchase of a product or service.

 These include all promotional efforts other

than advertising, personal selling and
publicity, used by a company to boost its
sales. Sales promotion activities include
offering cash discounts, sales contests,
free gift offers, and free sample distribution.

 Sales promotion is usually undertaken to supplement other promotional

efforts such as advertising and personal selling.

Merits of Sales Promotion

(i) Attention Value: Sales promotion activities attract attention of the people
because of the use of incentives.

(ii) Useful in New Product Launch: Sales promotion tools can be very effective at
the time of introduction of a new product in the market.

(iii) Synergy in Total Promotional Efforts: Sales promotion activities are

designed to supplement the personal selling and advertising efforts used by a firm
and add to the over all effectiveness of the promotional efforts of a firm.

Limitation of Sales Promotion

(i) Reflects Crisis: If a firm frequently rely on sales promotion, it may give the
impression that it is unable to manage its sales or that there are no takers of its
product.

(ii) Spoils Product Image: Use of sales promotion tools may affect the image of a
product.

PUBLICITY

Publicity is similar to advertising, in the sense that it is a non-personal form of

communication. However, as against advertising it is a non-paid form of

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communication. Publicity generally takes place when favorable news is presented in
the mass media about a product or service.

Basis Selling Marketing

1. Scope It is only a part of It is a wide term consisting

process of marketing. of a number of activities
such as identification,
customers need etc.

2. Focus Transfer of the title Achieving maximum

from seller to satisfaction of customer’s
consumer. needs and wants.

3. Pre-dominance Product is given priority Customer is treated

as the king

4. Aim Profits through sales Profits through customer

volume satisfaction.

5. Emphasis Bending the customer To develop the productsas

according to the per the customers’ needs.
product.

6.Strategies Promotion and Integrated marketing

persuasion. efforts.

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