marketing management

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[email protected] Page 1 Meaning Marketing is defined as a process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return . Marketing is adopted by business firms as well as non – profit organizations. Marketing is the process of communicating the value of a product or service to customers. It is a critical business function for attracting customers. The management process through which goods and services move from concept to the customer. It includes the coordination of four elements called the 4 P's of marketing: (1) identification, selection and development of a product, (2) determination of its price, (3) selection of a distribution channel to reach the customer's place, and (4) development and implementation of a promotional strategy. For example, new Apple products are developed to include improved applications and systems, are set at different prices depending on how much capability the customer desires, and are sold in places where other Apple products are sold. In order to promote the device, the company featured its debut at tech events and is highly advertised on the web and on television. Marketing is based on thinking about the business in terms of customer needs and their satisfaction. Marketing differs from selling because (in the words of Harvard Business School's retired professor of marketing Theodore C. Levitt) "Selling concerns itself with the tricks and techniques of getting people to exchange their cash for your product. It is not concerned with the values that the exchange is all about. And it does not, as marketing invariable does, view the entire business process as consisting of a tightly integrated effort to discover, create, arouse and satisfy customer needs." In other words, marketing has less to do with getting customers to pay for your product as it does developing a demand for that product and fulfilling the customer's needs. Nature of marketing Consumer oriented , competitor oriented and market driven. It starts with customers and ends with customers by satisfying their needs. It is most important function of management Long term objective : Profit maximization through customer satisfaction It is an integrated process, based on strategies and models. It delivers goods and services in exchange of money

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Page 1: Marketing management

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Meaning

Marketing is defined as a process by which companies create value for customers and build strong customer relationships

in order to capture value from customers in return .

Marketing is adopted by business firms as well as non – profit organizations.

Marketing is the process of communicating the value of a product or service to customers. It is a critical business function

for attracting customers.

The management process through which goods and services move from concept to the customer. It includes the

coordination of four elements called the 4 P's of marketing:

(1) identification, selection and development of a product,

(2) determination of its price,

(3) selection of a distribution channel to reach the customer's place, and

(4) development and implementation of a promotional strategy.

For example, new Apple products are developed to include improved applications and systems, are set at different prices

depending on how much capability the customer desires, and are sold in places where other Apple products are sold. In

order to promote the device, the company featured its debut at tech events and is highly advertised on the web and on

television.

Marketing is based on thinking about the business in terms of customer needs and their satisfaction. Marketing differs

from selling because (in the words of Harvard Business School's retired professor of marketing Theodore C. Levitt) "Selling

concerns itself with the tricks and techniques of getting people to exchange their cash for your product. It is not

concerned with the values that the exchange is all about. And it does not, as marketing invariable does, view the entire

business process as consisting of a tightly integrated effort to discover, create, arouse and satisfy customer needs." In

other words, marketing has less to do with getting customers to pay for your product as it does developing a demand for

that product and fulfilling the customer's needs.

Nature of marketing

Consumer oriented , competitor oriented and market driven.

It starts with customers and ends with customers by satisfying their needs.

It is most important function of management

Long term objective : Profit maximization through customer satisfaction

It is an integrated process, based on strategies and models.

It delivers goods and services in exchange of money

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10 types of entities for marketing

Goods, Services, Experiences, Events, Persons, Places, Properties, Organisations, Information and Ideas

Scope of Marketing

1. Study of ConsumerWants 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.

2. Study of Consumer behaviour

Marketers performs study of consumer behaviour. Analysis of buyer behaviour helps marketer in market segmentation

and targeting

3. Production planning and development

It 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.

4. 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.

5.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.

6. Promotion

Promotion includes personal selling, sales promotion, and advertising. Right promotion mix is crucial in accomplishment

of marketing goals.

7. Consumer Satisfaction

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

8. Marketing Control

Marketing audit is done to control the marketing activities.

MARKETING PHILOSPHY

PHILOSOPHY to Guide Marketing/ Strategies/Marketing Management/ Orientations:

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(a) Production concept

(b) Selling concept

(c) Marketing Concept

(d) Societal Marketing Concept

Production Concept: holds that consumers will favour products that are available and highly affordable.

- Management should focus on production and distribution efficiency.

- This is an old concept

Example: LENOVO computers in chinese PC market due to low labour cost, high production efficiency and mass

distribution.

Product Concept – It holds that consumers will favour products that offer the most in quality, performance and

innovative features. Marketing strategy under this concept focuses on making continuous product improvements. Eg.

Desk top computers may be replaced by lap top computers or e-note books in long run.

Example: better mouse trap.

Selling Concept- holds that consumers will not buy enough of firm’s products unless it undertakes large scale selling and

promotion efforts.

- These industries must be good at tracking down prospects and selling them on product benefits.

- Aim is to sell whatever is made rather to make what market wants.

- No play firm relationship.

- Selling is insider-out prospective.

Marketing Concept: holds that achieving organisational goals depends on knowing the needs and wants of target market

and delivering the satisfaction better then competitors do.

- Concept is customer oriented i.e. ‘sense and respond’

- To finds right products for ‘customers perspective’

- Customers outside-in

- Integrated Marketing: When company’s all the departments work together to serve the customers’ interests, the

result is integrated Marketing.

- Societal Marketing Concept: It holds that organisations’ task is to determine the needs, wants and interests of

the target markets and to deliver the desired satisfaction more effectively and efficiently than the competitors in

a way that preserves or enhances the customer's or society’s well being.

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Marketing management

Marketing management is a business discipline which is focused on the practical application of marketing techniques and

the management of a firm's marketing resources and activities. Rapidly emerging forces of globalization have led firms to

market beyond the borders of their home countries, making international marketing highly significant and an integral part

of a firm's marketing strategy.[1] Marketing managers are often responsible for influencing the level, timing, and

composition of customer demand accepted definition of the term. In part, this is because the role of a marketing manager

can vary significantly based on a business's size, corporate culture, and industry context. For example, in a large consumer

products company, the marketing manager may act as the overall general manager of his or her assigned product.[2] To

create an effective, cost-efficient marketing management strategy, firms must possess a detailed, objective

understanding of their own business and the market in which they operate.[3] In analyzing these issues, the discipline of

marketing management often overlaps with the related discipline of strategic planning.

The Marketing Process

• Understand the marketplace and customer needs and wants.

• Design a customer-driven marketing strategy.

• Construct a marketing program that delivers superior value.

• Build profitable relationships and create customer delight.

• Capture value from customers to create profits and customer equity.

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MARKETING MIX

Marketing Mix - A mixture of several ideas and plans followed by a marketing representative to promote a

particular

product or brand is called marketing mix.

• Mc Carthy worked and popularized ‘4P’s as Marketing Mix :

• The Four Ps of the Marketing Mix

• (i)Product: A product is seen as an item that satisfies what a consumer needs or wants. It is a tangible good or an

intangible service. Intangible products are service based like the tourism industry, the hotel industry and the

financial industry. Tangible products are those that have an independent physical existence. Typical examples of

mass-produced, tangible objects are the motor car and the disposable razor. A less obvious but ubiquitous mass-

produced service is a computer operating system.Variety, Quality, Design, Features, Brand Name, Packaging,

Services , etc,.

• (ii) Price: List Price, Discounts, Allowances, Payment period, Credit terms.

• (iii) Promotion: advertising, Personal selling, Sales promotion, Public relations , Direct Selling

• (iv) Place: refers to providing the product at a place which is convenient for consumers to access.Channels,

Coverage, Assortments, Locations, Inventory, Transportation, Logistics, etc,.

In recent times, the concept of four Cs has been introduced as a more customer-driven replacement of four Ps.[1] And

there are two four Cs theories today. One is Lauterborn's four Cs (consumer, cost, communication, convenience), another

is Shimizu's four Cs (commodity, cost, communication, channel).

4Ps are decided on the basis of Marketing Research for Target Market involving ‘4 O’s

(i) Object: What does market buy?

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(ii) Objective: Why does market buy it?

(iii) Organization: Who participates in buying?

(iv) Operation: How does the market buy?

Extended Marketing Mix

• Extended Marketing Mix is applicable for services due to its peculiary characteristics explained above .

• In case of services apart from 4Ps i.e. Product , price , promotion and place , the folowing additional Ps are

applicable :

Physical evidence elements within the store -- the store front, the uniforms employees wear, signboards, etc.

People the employees of the organization with whom customers come into contact.

Process the processes and systems within the organization that affects its marketing process

Marketing Environment

The market environment is a marketing term and refers to factors and forces that affect a firm’s ability to build and

maintain successful relationships with customers.Three levels of the environmment are: Micro (internal) environment -

small forces within the company that affect its ability to serve its customers. Meso environment – the industry in which a

company operates and the industry’s market(s). Macro (national) environment - larger societal forces that affect the

microenvironment

Micro environment :

The micro environment refers to the forces that are close to the company and affect its ability to serve its customers. It

includes the company itself, its suppliers, marketing intermediaries, customer markets and publics. A firm's

microenvironment includes all of the following EXCEPT: Competitors

The company aspect of microenvironment refers to the internal environment of the company. This includes all

departments, such as management, finance, research and development, purchasing, operations and accounting. Each of

these departments has an impact on marketing decisions. For example, research and development have input as to the

features a product can perform and accounting approves the financial side of marketing plans and budgets.

The suppliers of a company are also an important aspect of the microenvironment because even the slightest delay in

receiving supplies can result in customer dissatisfaction. Marketing managers must watch supply availability and other

trends dealing with suppliers to ensure that product will be delivered to customers in the time frame required in order to

maintain a strong customer relationship.

Macro environment

The macroenvironment refers to all forces that are part of the larger society and affect the microenvironment. It includes

concepts such as demography, economy, natural forces, technology, politics, and culture.

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Meso-Environment

Marketing intermediaries help to sell, promote, and distribute goods. Intermediaries take many forms:

Resellers

Physical distribution firms

Marketing services agencies

Financial intermediaries

Customer markets must be studied.

Market types

Consumer

Business

Government

International

Customer markets must be studied:

Market types

Consumer

Business

Government

Reseller

International

Various publics must also be considered:

Government

Media

Financial

Local

General

Internal

Citizen Action Groups

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Marketing Environment : Forces that affect working of company or ability of company to serve the customer .

External Environment : Uncontrollable forces those affect ability of company to serve the customer .

External (Macro Environment) : Factors like demographic, economic , political ,social , etc , affect working or ability of

company and micro environmental forces like suppliers , intermediaries etc to serve their customers.

External Micro Environment : Suppliers , intermediaries, competitors , public affect the company`s ability to serve the

customer .

Objective of Environmental analysis : To carry out SWOT analysis i.e. strengths & weaknesses through internal

environment and opportunity and threats through external environment analysis

Internal Environment

Top Management : Sets company`s mission, vision , objectives, strategies, and policies

• Finance Department

• Research and Development Department

• Purchase Department

• Operations

• Marketing strategies and marketing Mix

Micro external environment :

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Suppliers : provide resources to company to produce goods and services.

- Suppliers to be considered as partners in company`s operation.

- Quality , payments to supplier and timely delivery to be monitored by company

- Strikes and workers` unrest to be resolved quickly to avoid delays.

Marketing Intermediaries : Whole Salers , distributors and retailers have power and influence to attract customers .

- Logistics firm affect level of customer service .

• Competitors : Companies are expected to monitor value being provided by competitors to customers and provide

better value .

• Public : 7 type of public can affect organisations in achieving goals , hence to be taken care by company:

- Financial public

- Media public

- Government public ( From legal view point )

- Consumer organisations

- Local public

- General public

- Internal public

Demographic :

• Population

• Population density

• Government policy regarding no. of children: China`s six pocket syndrome

• Population pattern : income wise , education wise

• Government policy to encourage education : Developed countries , now India ( Demographic dividends )

Economic Environment : pattern of demand and supply is affected by factors like :

• Income

• Inflation

• Recession

• Interest rate

• Exchange rate

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Marketer should understand effect of above factors on demand of products and company`s strategies and policies may

be decided accordingly.

Socio-cultural environment : Tastes , preferences and needs of different products depend on these factors .

- Market must study these factors to frame marketing strategies and policies.

Technological Environment : Market to take care of new technologies and update their products accordingly.

Natural environment : Natural resources , climate and topography of country play important role in the marketing of

products.

- Marketers are expected to take care these aspects.

Consumer and Organizational Buyer Behavior(incomplete)

Difference between Consumer and Organizational Buying

Fewer organizational buyers

Close, long-term relationship between organizational buyers and sellers

Organizational buyers are more rational

Organizational buying may be to specific requirements

Reciprocal buying may be important in organizational buying

Organizational selling/ buying may be more risky

Organizational buying is more complex

Negotiation is often more important in organizational buying

Consumer Buyer Behavior

An understanding of customers can only be obtained by answering the following questions

Who is important in the buying decision?

How do they buy?

What are their choice criteria?

Where do they buy?

When do they buy?

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Market segmentation

Market segmentation is a marketing strategy that involves dividing a broad target market into subsets of consumers who

have common needs, and then be designed and implemented to target these specific customer segments, addressing

needs or desires that are believed to be common in this segment, using media that is used by the market segment.

While there may be theoretically 'ideal' market segments, in reality every organization engaged in a market will develop

different ways of imagining market segments, and create product differentiation strategies to exploit these segments.

Successful market segmentation and corresponding product differentiation strategy can give a firm a commercial

advantage, due to the more effective match between target customer and product.

Criteria for segmenting

An ideal market segment meets all of the following criteria:

It is possible to measure.

It must be large enough to earn profit.

It must be stable enough that it does not vanish after some time.

It is possible to reach potential customers via the organization's promotion and distribution channel.

It is internally homogeneous (potential customers in the same segment prefer the same product qualities).

It is externally heterogeneous, that is, potential customers from different segments have different quality

preferences.

It responds consistently to a given market stimulus.

It can be reached by market intervention in a cost-effective manner.

It is useful in deciding on the marketing mix.

Basis for segmenting consumer markets

Geographic segmentation

The market is segmented according to geographic criteria—nations, states, regions, countries, cities, neighborhoods, or

zip codes

Psychographic segmentation:

consumers are divided according to their lifestyle, personality, values and social class

Behavioral segmentation

In behavioral segmentation, consumers are divided into groups according to their knowledge of, attitude towards, use of

or response to a product. It is actually based on the behavior of the consumer.called behavioral segmentation.

Positive market segmentation

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This part of the segmentation process consists of drawing up a perceptual map, which highlights rival goods within one's

industry according to perceived quality and price. After the perceptual map has been devised, a firm would consider the

marketing communications mix best suited to the product in question

Occasions

Segmentation according to occasions is based on the arising of special need and desires in consumers at various

occasions. For example, for products that will be used in relation with a certain holiday. Products such

as Christmas decorations or Diwali lamps are marketed almost exclusively in the time leading up to the related event, and

will not generally be available all year round.

Benefits

Segmentation takes place according to benefits sought by the consumer or which the product/service can provide.

Positioning (marketing)

In marketing, positioning is the process by which marketers try to create an image or identity in the minds of their target

market for its product, brand, or organization.

Re-positioning involves changing the identity of a product, relative to the identity of competing products.

De-positioning involves attempting to change the identity of competing products, relative to the identity of your own

product.

Targeting(from book also)

After the most attractive segments are selected, a company should not directly start targeting all these segments -- other

important factors come into play in defining a target market. Four sub activities form the basis for deciding on which

segments will actually be targeted.

The four sub activities within targeting are:

1. defining the abilities of the company and resources needed to enter a market

2. analyzing competitors on their resources and skills

3. considering the company’s abilities compared to the competitors' abilities

4. deciding on the actual target markets.

The first three sub activities are described as the topic competitor analysis. The last sub activity of deciding on the actual

target market is an analysis of the company's abilities to those of its competitors. The results of this analysis leads to a list

of segments which are most attractive to target and have a good chance of leading to a profitable market share.

Obviously, targeting can only be done when segments have been defined, as these segments allow firms to analyze the

competitors in this market. When the process of targeting is ended, the markets to target are selected, but the way to use

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marketing in these markets is not yet defined. To decide on the actual marketing strategy, knowledge of the differential

advantages of each segment is needed.

Positioning

When the list of target markets is made, a company might want to start on deciding on a good marketing mix directly. But

an important step before developing the marketing mix is deciding on how to create an identity or image of the product

in the mind of the customer. Every segment is different from the others, so different customers with different ideas of

what they expect from the product. In the process of positioning the company:

1. identifies the differential advantages in each segment

2. decides on a different positioning concept for each of these segments. This process is described at the

topic positioning, here different concepts of positioning are given.

The process-data model shows the concepts resulting from the different activities before and within positioning. The

model shows how the predefined concepts are the basis for the positioning statement. The analyses done of the market,

competitors and abilities of the company are necessary to create a good positioning statement.

When the positioning statement is created, one can start on creating the marketing mix.

Product Concepts

Product (business)

In marketing, a product is anything that can be offered to a market that might satisfy a want or need.[1] In retailing,

products are called merchandise. In manufacturing, products are bought as raw materials and sold as finished goods.

Commodities are usually raw materials such as metals and agricultural products, but a commodity can also be anything

widely available in the open market.

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Product levels/ layers :

Core benefits : Basic need to be satisfied e.g. for hotels rest and sleep.

Basic product : Basic product to meet the need . In case of hotel : Hotel room with bed , bath room , towels, desk,

dresser , closet.

Expected product : Additional features customers like to have . In case of hotel it include clean bed and linen ,

working lamp , TV etc

Augmented product : Product features for generating customer delight . In case of hotel it may be

complementary gift on arrival or on birth day.

Potential product : Features which are not provided by competitors : In case of hotel , heavy discount on marriage

anniversary party of important customer.

Product hierarchy :Each product is related to certain other products forming hierarchy . It has 6 levels :

Need family : Core need. e.g. Security for Life insurance

Product family : Product classes that satisfy a core need with reasonable effectiveness e.g. savings and income.

Product class : A group of products within a product family recognised as having a certain functional coherence

e.g. Financial instruments

Product line : A group of products within a product class that are closely related .

Product type : Group of closely related items within a product line e. g.Term life in insurance.

Items : Distiguishable within a product line.

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Product classification :

I. Based on durability and tangibility :

Non – durable : Soap, cold drinks etc

Durable : Washing machine, car , computers

Services : Repair, haircut , etc,.

II. Based on use :

a) Consumer goods :

Convenience goods : soap, newspaper etc

Shopping goods : Require shopping efforts to buy e.g. clothing, furniture etc

Specialty goods : Cars , cameras , Personal computers

Unsought goods : Insurance policy, encyclopedias , etc,.

b) Industrial goods :

Raw material : Iron ore , alumina etc

Plant and equipment : Machines to manufacture other products .

Spare parts

Operating supplies

Utilities

Product Levels

Customers will choose a product based on their perceived value of it. Satisfaction is the degree to which the actual use of

a product matches the perceived value at the time of the purchase. A customer is satisfied only if the actual value is the

same or exceeds the perceived value. Kotler defined five levels to a product:

1. Core Benefit

the fundamental need or want that consumers satisfy by consuming the product or service.

2. Generic Product

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a version of the product containing only those attributes or characteristics absolutely necessary for it to function.

3. Expected Product

the set of attributes or characteristics that buyers normally expect and agree to when they purchase a product.

4. Augmented Product

inclusion of additional features, benefits, attributes or related services that serve to differentiate the product from its

competitors.

5. Potential Product

all the augmentations and transformations a product might undergo in the future.

Kotler noted that much competition takes place at the Augmented Product level rather than at the Core Benefit level or,

as Levitt put it: 'New competition is not between what companies produce in their factories, but between what they add to

their factory output in the form of packaging, services, advertising, customer advice, financing, delivery arrangements,

warehousing, and other things that people value.'

Kotler's model provides a tool to assess how the organisation and their customers view their relationship and which

aspects create value.

Product and service decisions

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I . Individual product and service decisions

Product attributes

Branding

Packaging

Labeling

Product support services

II. Product Line decisions

III. Product Mix decisions

IV .Product planning and development / New product decisions

Product attributes :

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Product quality

Product features

Product style and design

Product quality : Relates to freedom from defects .

- Direct impact on product/ service performance, customer value and satisfaction.

- It is ability to satisfy stated and implied customer needs.

- TQM : tool for product / service quality improvement .

- Two dimensions of product quality : Levels and consistency

Features of products/services :

- Different features add value to customer.

- For cars , marketer offers basic model without extra features and other models with extra features charging

higher price than basic model.

Product style and design :

- Distinctive product style and design adds value.

- Style : Describes appearance of the product. It should be eye catching.

- Good design contributes to usefulness as well as looks of the product.

Branding :A brand is a name , term, sign, symbol, design or combination of these that identifies the marketer of the

product or service.

Branding adds value to customer.

Marketer is required to build and manage the brands.

Famous brands : Tata, Nike, Coca-cola, Pepsi, Nike, cadbury , Sony , Toyota.

Packaging : Involves designing and producing containers or wrappers for a product.

Primary function of package : to hold and protect the product.

Additional sales functions : attracting attention .

Labeling : It provides description and graphic on the package.

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Describes product details , brand name , manufacturer , contents , MRP, expiry date caution for use.

Product support services : After sales services through customer care centers . Ex :Marketers of HP computers provide

good after sales services .

Marketing mix decisions

Marketing mix : company’s tactical tool kit for establishing strong positioning in target markets.

An effective marketing program blends all marketing mix elements into an integrated marketing program

designed to achieve the company’s marketing objectives by delivering value to customers .

4Ps of marketing mix :

a) Product : as customer solution . Includes :

- Variety - Quality - Design - Features - Brand name - Packaging - Services

b) Price : Customer cost . Includes :

- List price - Discounts - Allowances - Payment terms - Credit terms

C ) Promotion : Customer communication . Includes :

- Advertising - Personal selling - Sales promotion - Public relations

d) Place : Customer convenience. Includes

- Channels - Coverage - Assortments - locations - Inventory - Transportation - Logistics

Product line decisions

Product line : Similar items of product mix are classified under one product line . Large companies deal with a number of

product lines.

Product width and depth : It is the number of product lines offered by a firm .

- It indicates diversification of firm.

Depth of product line : No. of products under one line .

- It reflects firm’s segmentation approach and marketing orientation.

Product consistency : It refers to how closely related products lines are in their end use , production requirement

and distribution channels.

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Brand Management

A brand is a name, term, sign,symbol, design or a combination of the above to identify the goods or service of a seller and

differentiate it from the rest of the competitors.When you cannot do this,the product is a commodity.

Brand management is a communication function that includes analysis and planning on how that brand is positioned in

the market, which target public the brand is targeted at, and maintaining a desired reputation of the brand. Developing a

good relationship with target publics is essential for brand management. Tangible elements of brand management

include the product itself; look, price, the packaging, etc. The intangible elements are the experience that the consumer

takes away from the brand, and also the relationship that they have with that brand. A brand manager would oversee all

of these things.

Brand management begins with having a thorough knowledge of the term “brand”. It includes developing a promise,

making that promise and maintaining it. It means defining the brand, positioning the brand, and delivering the brand.

Brand management is nothing but an art of creating and sustaining the brand. Branding makes customers committed to

your business. A strong brand differentiates your products from the competitors. It gives a quality image to your

business.

Brand management includes managing the tangible and intangible characteristics of brand. In case of product brands,

the tangibles include the product itself, price, packaging, etc. While in case of service brands, the tangibles include the

customers’ experience. The intangibles include emotional connections with the product / service.

Branding is assembling of various marketing mix medium into a whole so as to give you an identity. It is nothing but

capturing your customers mind with your brand name. It gives an image of an experienced, huge and reliable business.

It is all about capturing the niche market for your product / service and about creating a confidence in the current and

prospective customers’ minds that you are the unique solution to their problem.

The aim of branding is to convey brand message vividly, create customer loyalty, persuade the buyer for the product, and

establish an emotional connectivity with the customers. Branding forms customer perceptions about the product. It

should raise customer expectations about the product. The primary aim of branding is to create differentiation.

Strong brands reduce customers’ perceived monetary, social and safety risks in buying goods/services. The customers can

better imagine the intangible goods with the help of brand name. Strong brand organizations have a high market share.

The brand should be given good support so that it can sustain itself in long run. It is essential to manage all brands and

build brand equity over a period of time. Here comes importance and usefulness of brand management. Brand

management helps in building a corporate image. A brand manager has to oversee overall brand performance. A

successful brand can only be created if the brand management system is competent.

Following are the important concepts of brand management:

Definition of Brand

Brand Name

Brand Attributes

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Brand Positioning

Brand Identity

Sources of Brand Identity

Brand Image

Brand Identity vs Brand Image

Brand Personality

Brand Awareness

Brand Loyalty

Brand Association

Building a Brand

Brand Equity

Brand Equity & Customer Equity

Brand Extension

Co-branding

Parameters of brand popularity :

Age of brand

Reliability

Trust

Emotions that a brand evokes in customers

Value for money

Proprietary characteristics

Competitive position of brand

Indispensability of brand in consumer’s life

Brand Equity is the value and strength of the Brand that decides its worth. It can also be defined as the differential impact

of brand knowledge on consumers response to the Brand Marketing. Brand Equity exists as a function of consumer

choice in the market place. The concept of Brand Equity comes into existence when consumer makes a choice of a

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product or a service. It occurs when the consumer is familiar with the brand and holds some favourable positive strong

and distinctive brand associations in the memory

Advantages of branding :

Denotes uniform quality.

Leads to quality improvement due to brand competition.

Less time required in buying.

Psychological satisfaction to buyers.

Recall easier.

Advantages to manufacturer in terms of higher price.

Disadvantages : Price tends to go up.

Quality may be compromised by companies of popular brands.

Uncertainty of quality comparison.

Product Life Cycle

Concept : Each product passes through a Life Cycle i.e. stages

being : introduction, growth , maturity and decline

PLC reflects sales and profits of a product over a period of time .

It generally follows an established S shaped curve.

Introduction: The Introduction stage is probably the most important stage in the PLC. In fact, most products that fail do

so in the

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Introduction stage. This is the stage in which the product is initially promoted. Public awareness is very

important to the success of a product. If people don't know about the product they won't go out and buy it.

There are two different strategies you can use to introduce your product to consumers. You can use either a

penetration strategy or a skimming strategy. If a penetration strategy is used then prices are set very high initially and

then gradually lowered over time. This is a good stategy to use if there are few competitors for your product. Profits are

high with this

strategy but there is also a great deal of risk. If people don't want to pay high prices you may lose out. The

second

pricing strategy is a skimming strategy. In this case you set your prices very low at the beginning and then

gradually

increase them. This is a good strategy to use if there are alot of competitors who control a large portion of

the market.

Profits are not a concern under this strategy. The most important thing is to get you product known and

worry about

making money at a later time.

Growth: If you are lucky enough to get your product out of the Introduction stage you then enter this stage. The

Growth stage is

where your product starts to grow. In this stage a very large amount of money is spent on advertising. You

want to

concentrate of telling the consumer how much better your product is than your competitors' products.

There are several ways to advertise your product. You can use TV and radio commercials, magazine and

newspaper

ads, or you could get lucky and customers who have bought your product will give good word-of-mouth to

their

friends/family.

If you are successful with your advertising strategy then you will see an increase in sales. Once your sales

begin to

increase you share of the market will stabilize. Once you get to this point you will probably not be able to

take anymore

of the market from your competitors.

Sales start growing due to cumulative effect of promotion , distribution and word of mouth influence.

Cost decreases

High and sharply rising profits

Care for customer satisfaction is needed at this stage.

Marketing task is cultivating selective demand like niche marketing and focused marketing strategies.

Strategies include : Product modification, enlarging distribution & service network , maintaining competitive price level ,

different uses of products and packaging alternatives

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3. Maturity: The third stage in the Product Life Cycle is the maturity stage. If your product completes the Introduction

and Growth

stages then it will then spend a great deal of time in the Maturity stage. During this stage sales begin to

stabilize. The key to surviving this stage is differentiating your product from the similar

products offered by your competitors. Due to the fact that sales are beginning to stabilize you must make

your product

stand out among the rest.

Sales growth continues but at a slow rate , decrease in profit margin and cut throat competition.

Narrow down price and promotion war

Boom in market demand

Marketing task is to adopt segmental approach.

marketing strategies include service augmentation ,image marketing , strengthening brand through repositioning

, shortening of distribution channels

4. Decline: This is the stage in which sales of your product begin to fall. Either everyone that wants to has bought

your product or

new, more innovative products have been created that replace yours. Many companies decide to

withdrawal their

products from the market due to the downturn. The only way to increase sales during this period is to cut

your costs

reduce your spending.

Decline Phase :

Sales decline as customer preferences changed in favour of more efficient and better products.

No. of competing firms reduce

Marketing task is diverting and gradual withdrawal of the product

New product development

In business and engineering, new product development (NPD) is the complete process of bringing a new product to

market. A product is a set of benefits offered for exchange and can be tangible (that is, something physical you can touch)

or intangible (like a service, experience, or belief). There are two parallel paths involved in the NPD process: one involves

the idea generation, product design and detail engineering; the other involves market research and marketing analysis.

Companies typically see new product development as the first stage in generating and commercializing new product

within the overall strategic process of product life cycle management used to maintain or grow their market share.

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The eight stages

1. Idea Generation is often called the "NPD" of the NPD process[1].

Ideas for new products can be obtained from basic research using a SWOT analysis (Strengths,

Weaknesses, Opportunities & Threats). Market and consumer trends, company's R&Ddepartment,

competitors, focus groups, employees, salespeople, corporate spies, trade shows, or ethnographic

discovery methods (searching for user patterns and habits) may also be used to get an insight into new

product lines or product features.

Lots of ideas are generated about the new product. Out of these ideas many are implemented. The ideas

are generated in many forms. Many reasons are responsible for generation of an idea.

Idea Generation or Brainstorming of new product, service, or store concepts - idea generation techniques

can begin when you have done your OPPORTUNITY ANALYSIS to support your ideas in the Idea Screening

Phase (shown in the next development step).

2. Idea Screening

The object is to eliminate unsound concepts prior to devoting resources to them.

The screeners should ask several questions:

Will the customer in the target market benefit from the product?

What is the size and growth forecasts of the market segment / target market?

What is the current or expected competitive pressure for the product idea?

What are the industry sales and market trends the product idea is based on?

Is it technically feasible to manufacture the product?

Will the product be profitable when manufactured and delivered to the customer at the target

price?

3. Concept Development and Testing

Develop the marketing and engineering details

Investigate intellectual property issues and search patent databases

Who is the target market and who is the decision maker in the purchasing process?

What product features must the product incorporate?

What benefits will the product provide?

How will consumers react to the product?

How will the product be produced most cost effectively?

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Prove feasibility through virtual computer aided rendering and rapid prototyping

What will it cost to produce it?

Testing the Concept by asking a number of prospective customers what they think of the idea -

usually[citation needed] via Choice Modelling.

4. Business Analysis

Estimate likely selling price based upon competition and customer feedback

Estimate sales volume based upon size of market and such tools as the Fourt-Woodlock equation

Estimate profitability and break-even point

5. Beta Testing and Market Testing

Produce a physical prototype or mock-up

Test the product (and its packaging) in typical usage situations

Conduct focus group customer interviews or introduce at trade show

Make adjustments where necessary

Produce an initial run of the product and sell it in a test market area to determine customer acceptance

6. Technical Implementation

New program initiation

Finalize Quality management system

Resource estimation

Requirement publication

Publish technical communications such as data sheets

Engineering operations planning

Department scheduling

Supplier collaboration

Logistics plan

Resource plan publication

Program review and monitoring

Contingencies - what-if planning

7. Commercialization (often considered post-NPD)

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Launch the product

Produce and place advertisements and other promotions

Fill the distribution pipeline with product

Critical path analysis is most useful at this stage

8. New Product Pricing

Impact of new product on the entire product portfolio

Value Analysis (internal & external)

Competition and alternative competitive technologies

Differing value segments (price, value and need)

Product Costs (fixed & variable)

Forecast of unit volumes, revenue, and profit

These steps may be iterated as needed. Some steps may be eliminated. To reduce the time that the NPD process takes,

many companies are completing several steps at the same time (referred to as concurrent engineering or time to

market). Most industry leaders see new product development as a proactive process where resources are allocated to

identify market changes and seize upon new product opportunities before they occur (in contrast to a reactive strategy in

which nothing is done until problems occur or the competitor introduces an innovation). Many industry leaders see new

product development as an ongoing process (referred to as continuous development) in which the entire organization is

always looking for opportunities.

Pricing Concepts and decisions

Definition of Price : Price may be defined as the exchange of goods or services in terms of money. Price is the marketing

mix element that produces revenue while other elements of marketing mix produce costs. Price is also one of the most

flexible elements.

Factors affecting Pricing

I) Internal Factor

(a) Cost of the Product

(b) Objective of the firm ( maximize the current profit, Price stability, survival, maximize their Market share to fight

with competition ).

(c) Nature of Product

II) External Factor

(a) Demand

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(b) Competition

(c) Economic conditions

(d) Government regulations

Demand is the key determinant for market oriented company. Demand is the starting point for all activities.

Simply, the average customer will be demanding different product quantities, depending on price. Law of the

market says that demand and price are counter proportional ( price increase leads to demand decrease and vice

versa ).

Competition has a significant influence to price determination of market oriented companies. Prices need to be

adjusted in order to address the competition. Every company should research market and competition, prior to

launch of the new product. Survey should include direct competitors but also the substitutes. Based on market

survey and the strength of the company the prices can be the same, lower or higher.

Costs – While demand and competition are external factor, the costs are internal. The costs must be embedded in

every stage of price determination process. There are several methods of cost embedding into price:

1.) Costs Plus – company calculates the costs and increase price for the specific profit.

2.) Markup – price based on cost increased for amount of specific markup percentage.

3.) Target Return Method – calculated required markup, in order to achieve return on investment.

4.) Profit Maximizing is the price where the marginal profit equals marginal cost.

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5.) Breakeven Analysis – is the number of units sold that generates profit that can cover cost. This point does not

have profit nor lost.

Life Cycle pricing approach analysis the current phase of product life in market.

1.) Entering phase usually requires higher sales prices in order to payback initial development costs. Also

customers are willing to pay more for a new product.

2.) Growth phase is bringing the market stabilization. Prices are more or less stabile.

3.) Saturation phase leads to price decline, due to competition entrance and loss of consumer's interest

4.) Declining phase is the last part of product life cycle. Prices are still going down.

Sales Channels have the different shopping occasion. Consequently the pricing is adjusted to sales channel. For

example, the same products is cheaper in hypermarket than on petrol station.

vernment is usually do not interfere into price determination. Exceptionally it may limit maximal prices for a

certain products. Still, government is influencing pricing, since the taxes & custom duties are the part of the price.

Pricing process

Step 1: Examine Objectives

marketing decisions including price are driven by the objectives set by the management of the organization. These

objectives come at two levels. First, the overall objectives of the company guide all decisions for all functional areas (e.g.,

marketing, production, human resources, finance, etc.). Guided by these objectives the marketing department will set its

own objectives which may include return on investment, cash flow, market share and maximize profits to name a few.

1st Step : Selecting the Price Objectives :

We all know the price setting is the major part of marketing policy and one of P4 of marketing mix. So, it is the first in

which you have to select the price object for setting it. It may be

a) Survival the product in market :

Company thinks that his product is new and for creating its position in market, company should take minimum price from

its customers.

b) Maximum profit objective :

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If company wants to earn maximum profit, the company can set high price under price skimming. Company thinks that if

it will fix high price, no competitor faces it.

c) High market share objective :

Company's object is to increase sale. So, it will determine low price than competitors.

2nd Step : Determining the Demand :

Main aim of taking second step is to check whether our set price is best for increasing demand or not. In this step, we

takes following decisions

a) Create the demand curve and check the trend :

With past records of our company's product price and past sales company can create demand curve, it shows the effect of

changing price on demand of customer. The company can take the help of economist which they can explain its technical

explanation. But with this, company can know whether company's price are creating bad effect on demand or good effect

on demand.

b) Demand Elasticity

With this, company can estimate about how much demand is effected with increasing or decreasing the price.

3rd Step : Estimate the Costs :

Determine an Initial Price

Marketers have at their disposal several approaches for setting the initial price which include:

Cost Pricing

Market Pricing

Competitive Pricing

Bid Pricing

For determination the price of product company should estimate the cost of product.

I) Calculate variable and fixed cost :

Fixed cost = Electricity + salary bill etc

variable cost = raw material cost + labour cost + other expenses etc.

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II) Calculate differential cost in differential market :

Use activity base costing system if company sells product different time period.

III) Target Costing :

This is japan's technique

at what price consumer wants the product xxxx

Less margin = xxxx

-------------------------------------------------

Estimated price = xxxx

--------------------------------------------------

Cost must be less than estimated price

IV) Also estimate competitor's price:

4th Step : Selecting a Good Price Method :

a) Markup pricing :

Total cost price xxxx

Add % Margin on sale xxxx

----------------------------

Sale price xxxx

----------------------------

b) Perceived value price :

it is fixed on the basis of cost of market mix and margin

( product cost + advertising cost + placement cost ) + margin = fix price

c) Value Price :

Low price of quality product than competitors.

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6th Step : Select the Final Price

After analysis of above five steps, marketer selects the final price of a new product.

Pricing Policies & Strategies

Pricing Strategies

There are many ways to price a product. Let's have a look at some of them and try to understand the best

policy/strategy in various situations.

Premium Pricing.

Use a high price where there is a uniqueness about the product or service. This approach is used where a a

substantial competitive advantage exists. Such high prices are charge for luxuries such as Cunard Cruises, Savoy Hotel

rooms, and Concorde flights.

Penetration Pricing.

The price charged for products and services is set artificially low in order to gain market share. Once this is achieved,

the price is increased. This approach was used by France Telecom and Sky TV.

Economy Pricing.

This is a no frills low price. The cost of marketing and manufacture are kept at a minimum. Supermarkets often

have economy brands for soups, spaghetti, etc.

Price Skimming.

Charge a high price because you have a substantial competitive advantage. However, the advantage is not

sustainable. The high price tends to attract new competitors into the market, and the price inevitably falls due to

increased supply.Manufacturers of digital watches used a skimming approach in the 1970s. Once other manufacturers

were tempted into the market and the watches were produced at a lower unit cost, other marketing strategies and

pricing approaches are implemented.Premium pricing, penetration pricing, economy pricing, and price skimming are the

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four main pricing policies/strategies. They form the bases for the exercise. However there are other important

approaches to pricing.

Psychological Pricing.

This approach is used when the marketer wants the consumer to respond on an emotional, rather than rational basis. For

example 'price point perspective' 99 cents not one dollar.

Product Line Pricing.

Where there is a range of product or services the pricing reflect the benefits of parts of the range. For example

car washes. Basic wash could be $2, wash and wax $4, and the whole package $6.

Optional Product Pricing.

Companies will attempt to increase the amount customer spend once they start to buy. Optional 'extras' increase

the overall price of the product or service. For example airlines will charge for optional extras such as guaranteeing a

window seat or reserving a row of seats next to each other.

Captive Product Pricing

Where products have complements, companies will charge a premium price where the consumer is captured.

For example a razor manufacturer will charge a low price and recoup its margin (and more) from the sale of the only

design of blades which fit the razor.

Product Bundle Pricing.

Here sellers combine several products in the same package. This also serves to move old stock. Videos and CDs are often

sold using the bundle approach.

Promotional Pricing.

Pricing to promote a product is a very common application. There are many examples of promotional pricing

including approaches such as BOGOF (Buy One Get One Free).

Geographical Pricing.

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Geographical pricing is evident where there are variations in price in different parts of the world. For example rarity

value, or where shipping costs increase price.

Value Pricing.

This approach is used where external factors such as recession or increased competition force companies to

provide 'value' products and services to retain sales e.g. value meals at McDonalds.

Designing a Marketing Channel

Start at the End

Before you examine the cost of websites, email-blast campaigns or even fliers, start with your customer. Determine who

your customer is. Do this by identifying the needs your products or services fill. Once you know the needs they fill, you

can identify who has those needs. For example, if you know your discount grocery store appeals to nonworking mothers

with large families, start thinking about how to reach such a customer.

Work Backward

Once you have identified your customer, think about that customer's shopping habits. Ask yourself if your customer uses

the Internet, responds to email or prefers to shop sales discovered from posters and fliers. Knowing your customer's

habits can save you a lot of time and money in designing your marketing channel, because you won't waste effort

pursuing avenues that don't lead to your customer.

Distribution

Work your way back from customers through product outlets to distribution. Your distribution should be chosen based on

your customer's habits. Many businesses make the mistake of finding distribution first, then trying to get the customer to

where products are sitting. If you start with your customer and work back to distribution, you can find the best method

for getting your products to where your customers are.

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Investment vs. Expense

According to Partners in Excellence, a consulting company that helps businesses with marketing strategy, many

businesses fail to build effective marketing channels because they view the process as an expense rather than an

investment. If you invest in creating an effective marketing channel, you have a valuable conduit to customers. If you view

your marketing channel as an expense, a liability for your company, you will have a tendency to take shortcuts and

shortchange your business by under-marketing.

Product Promotion

Product Promotion Mix :

1. Advertising 2.Sales promotion

3 . Public Relations / publicity 4. Personal selling 5. Direct Marketing

Advertising : It is a paid form of non-personal presentation and promotion of ideas , goods and services by an identified

sponsor. Advertising

Advertising or advertizing[1][2][3] is a form of communication for marketing and used to encourage, persuade, or

manipulate an audience (viewers, readers or listeners; sometimes a specific group) to continue or take some new action.

Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering, although political

and ideological advertising is also common. In Latin, ad vertere means "to turn the mind toward."[citation needed] The

purpose of advertising may also be to reassure employees or shareholders that a company is viable or successful.

Advertising messages are usually paid for by sponsors and viewed via various traditional media; including mass media

such as newspaper, magazines, television commercial, radio advertisement, outdoor advertising or direct mail; or new

media such as blogs, websites or text messages.

Function of advertising

1. Promotion of sales of goods, services and ideas.

2. Introduction of new products

3. Creation of good public image.

4. Facilitates large- scale production.

5. Stimulates research and development activity. New substitutes.

6. Educating the people :Maggie's use.

7. To support press and T.V. Channels.

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Types of advertising

Television advertising / Music in advertising

The TV commercial is generally considered the most effective mass-market advertising format, as is reflected by the high

prices TV networks charge for commercial airtime during popular TV events. The annual Super Bowl football game in the

United States is known as the most prominent advertising event on television

Infomercials

An infomercial is a long-format television commercial, typically five minutes or longer.

Radio advertising

Online advertising

New media

Technological development and economic globalization favors the emergence of new and new communication channels

and new techniques of commercial messaging.

Product placements

Covert advertising, is when a product or brand is embedded in entertainment and media. For example, in a film, the main

character can use an item or other of a definite brand, as in the movie Minority Report, where Tom Cruise's character

John Anderton owns a phone with the Nokia logo clearly written in the top corner, or his watch engraved with the Bulgari

logo. Another example of advertising in film is in I, Robot, where main character played by Will Smith mentions his

Converse shoes several times, calling them "classics," because the film is set far in the future. I, Robot Press advertising

Billboard advertising

Billboards are large structures located in public places which display advertisements to passing pedestrians and motorists

Mobile billboard advertising

Mobile billboards are generally vehicle mounted billboards or digital screens.

In-store advertising

In-store advertising is any advertisement placed in a retail store. It includes placement of a product in visible locations in a

store, such as at eye level, at the ends of aisles and near checkout counters (aka POP—Point Of Purchase display), eye-

catching displays promoting a specific product, and advertisements in such places as shopping carts and in-store video

displays.

Coffee cup advertising

Coffee cup advertising is any advertisement placed upon a coffee cup that is distributed out of an office, café, or drive-

through coffee shop. This form of advertising was first popularized in Australia, and has begun growing in popularity in

the United States, India, and parts of the Middle East.[citation needed]

Street advertising

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Sheltered Outdoor Advertising

Celebrity branding

Consumer-generated advertising

Aerial advertising

Sales promotion :

Variety of short term incentives to encourage trial or purchase of a product or service. Sales promotion is one of the

seven aspects of the promotional mix. (The other six parts of the promotional mix are advertising, personal selling, direct

marketing, publicity/public relations, corporate image and exhibitions.) Media and non-media marketing communication

are employed for a pre-determined, limited time to increase consumer demand, stimulate market demand or improve

product availability. Examples include contests, coupons, freebies, loss leaders, point of purchase displays, premiums,

prizes, product samples, and rebates

Sales promotions can be directed at either the customer, sales staff, or distribution channel members (such as retailers).

Sales promotions targeted at the consumer are called consumer sales promotions. Sales promotions targeted at retailers

and wholesale are called trade sales promotions. Some sale promotions, particularly ones with unusual methods, are

considered gimmicks by many.

Sales promotion includes several communications activities that attempt to provide added value or incentives to

consumers, wholesalers, retailers, or other organizational customers to stimulate immediate sales. These efforts can

attempt to stimulate product interest, trial, or purchase. Examples of devices used in sales promotion include coupons,

samples, premiums, point-of-purchase (POP) displays, contests, rebates, and sweepstakes.

Public relations or publicity :

A variety of programs designed to promote and/or protect a company image or its individual product. Publicity is the

deliberate attempt to manage the public's perception of a subject. The subjects of publicity include people (for

example, politicians and performing artists), goods and services, organizations of all kinds, and works of art or

entertainment.

Publicity is the act of attracting the media attention and gaining visibility with the public, it necessarily needs the

compliment of the media it cannot be done internally because it requires the attention of the publicist and it is the

publicist that carries out publicity while PR is the strategic management function that helps an organization

communicate, establish and maintain relation with the important audiences, It can be done internally without the use

of media

From a marketing perspective, publicity is one component of promotion which is one component of marketing. The

other elements of the promotional mix are advertising, sales promotion, direct marketing and personal selling.

Examples of promotional tactics include:

Art exhibitions

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event sponsorship

Arrange a speech or talk

Make an analysis or prediction

Conduct a poll or survey

Issue a report

Take a stand on a controversial subject

Arrange for a testimonial

Announce an appointment

Invent then present an award

Stage a debate

Organize a tour of your business or projects

Issue a commendation

The advantages of publicity are low cost, and credibility (particularly if the publicity is aired in between news stories

like on evening TV news casts). New technologies such as weblogs, web cameras, web affiliates, and convergence

(phone-camera posting of pictures and videos to websites) are changing the cost-structure. The disadvantages are

lack of control over how your releases will be used, and frustration over the low percentage of releases that are taken

up by the media.

Publicity draws on several key themes including birth, love, and death. These are of particular interest because they

are themes in human lives which feature heavily throughout life. In television serials several couples have emerged

during crucial ratings and important publicity times, as a way to make constant headlines. Also known as a publicity

stunt, the pairings may or may not be according to the fact

Personal Selling :

Face to face interaction with one or more prospective purchasers for the purpose of making presentations , answer the

questions and procuring orders.

Personal selling is where businesses use people (the “sales force”) to sell the product after meeting face-to-face with the customer.

The sellers promote the product through their attitude, appearance and specialist product knowledge. They aim to inform and encourage the customer to buy, or at least trial the product.

A good example of personal selling is found in department stores on the perfume and cosmetic counters. A customer can get advice on how to apply the product and can try different products. Products with relatively high

prices, or with complex features, are often sold using personal selling. Great examples include cars, office equipment (e.g. photocopiers) and many products that are sold by businesses to other industrial customers.

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The main advantages and disadvantages of personal selling can be summarised as follows:

Advantages Disadvantages

High customer attention Message is customised Interactivity Persuasive impact Potential for development of relationship Adaptable Opportunity to close the sale

High cost Labour intensive Expensive Can only reach a limited number of customers

Point-of-sale merchandising can be said to be a specialist form of personal selling. POS merchandising involves face-to-face contact between sales representatives of producers and the retail trade.

A merchandiser will visit a range of suitable retail premises in his/her area and encourage the retailer to stock products from a range. The visit also provides the opportunity for the merchandiser to check on stock levels and to check whether the product is being displayed optimally.

Direct marketing :

In this we use mail, telephone , fax, e-mail and other non personal contact tools to communicate directly with or solicit a

direct response from specific customers or prospects. Direct marketing is a channel-agnostic form of advertising that

allows businesses and nonprofits organizations to communicate straight to the customer, with advertising techniques

that can include Cell Phone Text messaging, email, interactive consumer websites, online display ads, fliers, catalog

distribution, promotional letters, and outdoor advertising.

Direct Marketing Channels

Email Marketing

Online Tools

[edit]Mobile

[edit]Telemarketing

Another common form of direct marketing is telemarketing, in which marketers contact customers by phone.

[edit]Voicemail Marketing

Voicemail marketing emerged out of the market prevalence of personal voice mailboxes, and business voicemail systems.

Voicemail marketing presented a cost effective means by which to reach people directly, by voice. [edit]Broadcast Faxing

Couponing

Couponing is used in print and digital media to elicit a response from the reader. An example is a coupon which the

reader receives through the mail and takes to a store's check-out counter to receive a discount.

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[edit]Direct Response TV

[edit]Direct Mail

Direct Response Radio

Insert Media

Another form of direct marketing, insert media are marketing materials that are inserted into other communications,

such as a catalog, newspaper, magazine, package, or bill. Coop or shared mail, where marketing offers from several

companies are delivered via a single envelope, is also considered insert media.

Out-of-Home

Out-of-home direct marketing refers to a wide array of media designed to reach the consumer outside the home,

including transit, bus shelters, bus benches, aerials, airports, in-flight, in-store, movies, college campus/high schools,

hotels, shopping malls, sport facilities, stadiums, taxis — that contain a call-to-action for the customer to respond.

Direct Response Magazines and Newspapers

Direct Selling

Direct selling is the sale of products by face-to-face contact with the customer, either by having salespeople approach

potential customers in person, or through indirect means such asTupperware parties.

Grassroots/Community Marketing

The door-to-door distribution of flyers and leaflets within a local community is a business-to-consumer form of direct

marketing used extensively by restaurants, fast food companies, and many other business focusing on a local catchment.

Similar to direct mail marketing, this method is targeted purely by area and community, and costs a fraction of the

amount of a mailshot, since it is not necessary to purchase stamps, envelopes, or address lists with the names of home

occupants.

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Channels of Distribution

Looking at the diagram above:

Channel 1 contains two stages between producer and consumer - a wholesaler and a retailer. A wholesaler typically buys

and stores large quantities of several producers’ goods and then breaks into bulk deliveries to supply retailers with

smaller quantities. For small retailers with limited order quantities, the use of wholesalers makes economic sense.

Channel 2 contains one intermediary. In consumer markets, this is typically a retailer. The consumer electrical goods

market in the UK is typical of this arrangement whereby producers such as Sony, Panasonic, Canon etc. sell their goods

directly to large retailers such as Comet, Tesco and Amazon which then sell onto the final consumers.

Channel 3 is called a "direct-marketing" channel, since it has no intermediary levels. In this case the manufacturer sells

directly to customers. An example of a direct marketing channel would be a factory outlet store. Many holiday companies

also market direct to consumers, bypassing a traditional retail intermediary - the travel agent.

Emerging Channel Integrations Include:

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Mobile Messaging, Ad Delivery, SMS Integration and Opt-in Mobile Number Acquisition

Online Video Integration

Social Media Integration

Rich Media Integration

Distribution Decisions

Our discussions in the tutorials Product Decisions and Managing Products indicate product

decisions may be the most important of all marketing decisions since these lead directly to the reasons (i.e., offer benefits

that satisfy needs) why customers decide to make a purchase. But having a strong product does little good if customers

are not able to easily and conveniently obtain it. With this in mind we turn to the second major marketing decision area –

distribution.

Distribution decisions focus on establishing a system that, at its basic level, allows customers to gain access and purchase

a marketer’s product. However, marketers may find that getting to the point at which a customer can acquire a product is

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complicated, time consuming, and expensive. The bottom line is a marketer’s distribution system must be both effective

(i.e., delivers a good or service to the right place, in the right amount, in the right condition) and efficient (i.e., delivers at

the right time and for the right cost). Yet, as we will see, achieving these goals takes considerable effort.

Distribution decisions are relevant for nearly all types of products. While it is easy to see how distribution decisions

impact physical goods, such as laundry detergent or truck parts, distribution is equally important for digital goods (e.g.,

television programming, downloadable music) and services (e.g., income tax services). In fact, while the Internet is playing

a major role in changing product distribution and is perceived to offer more opportunities for reaching customers, online

marketers still face the same distribution issues and obstacles as those faced by offline marketers.

In order to facilitate an effective and efficient distribution system many decisions must be made including (but certainly

not limited to):

Assessing the best distribution channels for getting products to customers

Determining whether a reseller network is needed to assist in the distribution process

Arranging a reliable ordering system that allows customers to place orders

Creating a delivery system for transporting the product to the customer

For tangible and digital goods, establishing facilities for product storage

Marketing intermediaries: the distribution channel

Many producers do not sell products or services directly to consumers and instead use marketing intermediaries to

execute an assortment of necessary functions to get the product to the final user. These intermediaries, such as

middlemen (wholesalers, retailers, agents, and brokers), distributors, or financial intermediaries, typically enter into

longer-term commitments with the producer and make up what is known as the marketing channel, or the channel of

distribution. Manufacturers use raw materials to produce finished products, which in turn may be sent directly to the

retailer, or, less often, to the consumer. However, as a general rule, finished goods flow from the manufacturer to one or

more wholesalers before they reach the retailer and, finally, the consumer. Each party in the distribution channel usually

acquires legal possession of goods during their physical transfer, but this is not always the case. For instance,

in consignment selling, the producer retains full legal ownership even though the goods may be in the hands of the

wholesaler or retailer—that is, until the merchandise reaches the final user or consumer.

4 Types of Marketing Intermediaries

Agents

The agent as a marketing intermediary is an independent individual or company whose main function is to act as the

primary selling arm of the producer and represent the producer to users. Agents take possession of products but do not

actually own them. Agents usually make profits from commissions or fees paid for the services they provide to the

producer and users.

Wholesalers

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Wholesalers are independently owned firms that take title to the merchandise they handle. In other words, the

wholesalers own the products they sell. Wholesalers purchase product in bulk and store it until they can resell it.

Wholesalers generally sell the products they have purchased to other intermediaries, usually retailers, for a profit.

Distributors

Distributors are similar to wholesalers, but with one key difference. Wholesalers will carry a variety of competing

products, for instance Pepsi and Coke products, whereas distributors only carry complementary product lines, either

Pepsi or Coke products. Distributors usually maintain close relationships with their suppliers and customers. Distributors

will take title to products and store them until they are sold.

Retailers

A retailer takes title to, or purchases, products from other market intermediaries. Retailers can be independently owned

and operated, like small “mom and pop” stores, or they can be part of a large chain, like Walmart. The retailer will sell the

products it has purchased directly to the end user for a profit.

Functions of Marketing Intermediaries

Functions of an Intermediary

Deciding whether to use an intermediary in the distribution channel depends on many factors, but essentially it involves

determining whether the needs of the consumer can successfully be met by the available resources and skills of the

producer. The three basic functions performed by an intermediary in the distribution channel are:

1. Transactional: This function involves adding value to the distribution channel by bringing in the intermediary's

resources to establish market linkages and customer contacts. The intermediary either directly undertakes the

marketing and sales function or helps to establish buyer-seller relationships by serving as a link between the

manufacturer and the retailer.

2. Logistical: This function involves the physical distribution of goods. It involves sorting and storing supplies at

locations within the reach of the end customer. It also breaks up the bulk production of the manufacturer into

smaller portions and may include the transportation of smaller shipments to intermediaries or retailers further

down the channel of distribution.

3. Facilitating: Although often confused with logistics, the facilitating functions of intermediaries supplement the

entire marketing flow of the product and are separate from logistics. The facilitating functions include financially

supporting the marketing chain by investing in storage capabilities. They may include facilitating sales by helping

the consumer buy even when he or she does not have cash (through financing plans, purchase agreements, etc.).

Together, these functions performed by the intermediary ensure market coverage, reduce the cost of market coverage,

increase the availability of cash flow in the distribution channel, and increase end-user convenience. A producer can

bypass an intermediary by elimination or substitution, but the tasks performed by the intermediary cannot be

eliminated.

Advantages of Using an Intermediary

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The advantages of using intermediaries stem from the core economics of supply-chain management: market coverage,

customer contacts, lower costs, systematic cash flow, etc. The intermediary adds value to the marketing of the product by

bringing in specialization, marketing knowledge, capacity to segment the market, and selling skills that allow the marketer

to implement marketing strategies effectively.

Intermediaries providing logistic support increase convenience to both the producer and the consumer by offering

effective delivery and pre- and post-purchase customer service as well as facilitating manufacturer services, making them

indispensable to most mid- and small-scale producers.

Disadvantages of Using an Intermediary

Manufacturers quite often see intermediaries as parasites rather than assets. The disadvantages of using an intermediary

stem from psychological apprehensions, market antecedents which have created such apprehensions, and lack of

managerial skills or resources that are sufficient to balance and manage the intermediary. Fears, which may come true if

the producer fails to manage the intermediary, might include:

fear of losing control

fear of losing customer contact

fear of losing customer ownership

fear of opportunistic behavior

fear of inadequate communication

fear that the objectives of the intermediary will conflict with those of the producer

fear that the intermediary will extract rather than add to value

fear of poor market management

Furthermore, an intermediary may have many of the same fears (except for the last two on the list). These fears often

undermine the working relationship between a producer and an intermediary and keep them from effectively utilizing

each other's resources and maximizing the potential of the marketing mix.

How To Select An Intermediary

If you're considering hiring an intermediary to help you buy or sell a middle market company, here are ten keys to

selecting a good one. These tips are based on 20 years experience buying and selling my own companies with and without

an intermediary, being an intermediary personally, and dealing with intermediaries on the “other side of the table” in

transactions over the years.

Some of this guidance might be a little unconventional, but it’s a summary of what I’ve learned out in the marketplace -

seeing the good, the bad and the ugly. Like any profession, there are excellent intermediaries all across the country.

Unfortunately, there are many who are not so hot. Buying and selling a company is a serious and important matter, and

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you should have first rate representation. Hopefully, what follows will give you some ideas about what to look for so you

can select the right intermediary for your situation. It’s the advice I’d give my best friend if I was unable to represent him

personally.

1. Entrepreneurial Experience. Not counting his current brokerage business, has the intermediary ever started,

bought and sold his own companies? If someone has not paced the floor in the middle of the night sweating

about cash flow, if he’s not dealt with employees, vendors, landlords and bankers (on his own dime), if he’s not

ever managed a business profitably, then there is no way he can really fully relate to the concerns of business

buyers and sellers. Select an intermediary that is also an entrepreneur. His or her business experience will

manifest itself repeatedly throughout the transaction and both buyers and sellers will note in relief, “Ah, here’s

someone that understands!”

3. Street Smarts

4. Longevity. As my favorite flyfishing guide says, “There’s simply no substitute for time on the river.” An

intermediary who has not been closing deals out in the marketplace for at least ten years might be smart,

talented and well meaning, but they simply do not have enough seasoning to achieve optimum results

consistently. There is much turnover in the M&A profession. It looks like a great career (and it is). It’s pretty easy

to get started (print business cards), but it is extremely difficult to survive and thrive long term as a business

intermediary. It takes financial, physical and emotional staying power to last 10 years or more. Longevity brings

wisdom, patience, persistence and the emotional stability to ride the rollercoaster of a deal without getting overly

excited about positive developments or overly panicked by an adverse turn of events. Being an intermediary is a

lot like being an experienced flyfisherman – you’ve gotta love the process. When the fishing is good, you fish

harder and enjoy every minute. When it’s bad, you embrace the challenge. You fish even harder, and still enjoy it.

It’s that same kind of confidence, belief, commitment and passion that makes a good intermediary.

4. Lots of Deals. It takes brokering about 50 deals to really begin to get a solid handle on this profession. There are

simply too many variables in transactions to make a claim to mastery with any less. And it’s not just knowledge;

it’s the practice at anticipating potential problems, responding to the unexpected challenges and salvaging the

apparently unsalvageable. What I’ve seen repeatedly, both as an intermediary and as a buyer and seller, is that

you’re better off with an intermediary who’s closed 100 transactions, of any size, than by a guy who hit a home

run and completed 1 monster deal. Even novices can get lucky and hook a big fish, but you can bet an angler

who’s landed 1,000 trout knows how to fish. Same with deal makers.

5. Marketing and Sales Experience

6. Life Experience.

7. Competitive Fire

8. Technical Knowledge.

9. Values

10. Chemistry. Finally, you’ll invest the next 6 to18 months with the person you hire to help you buy or sell a

company. Mergers and acquisitions is a serious business, but it does not have to be grim. Will you enjoy the

process? Will you enjoy working with this person. Do you “click?” Do you think potential buyers (or sellers) will be

attracted to and trust your intermediary? Sometimes people say, “I don’t care whether I like the dealmaker or

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not. I want someone who is a fierce negotiator – the meaner and tougher the better – who will grind away on my

“opponent” to get me the best price.

It does not work that way in the real world. Here’s what buyers (for example) say when the seller’s intermediary is a jerk:

“This guy is a jerk. If he is any reflection of the seller’s character and judgment, this is not the deal for us. We’re out of

here.”

So hire an intermediary with strong character, communications skills and relational abilities. One who will reflect well on

you and your company and who can build a bridge between you and the other party in the transaction that leads to an

optimal, lasting and dignified deal.

Consumerism

Consumerism is a social and economic order that encourages the purchase of goods and services in ever-greater

amounts. In economics, consumerism refers to economic policies placing emphasis on consumption. In an abstract sense,

it is the belief that the free choice of consumers should dictate the economic structure of a society

(compare producerism, especially in the British sense of the term)

"Consumerism" is the concept that consumers should be informed decision makers in the

marketplace.[4] Practices such as product testing make consumers informed.

1. "Consumerism" is the concept that the marketplace itself is responsible for ensuring economic justice and

fairness in society.[4] Consumer protectionpolicies and laws compel manufacturers to make products safe.

2. "Consumerism" refers to the field of studying, regulating, or interacting with the

marketplace.[4] The consumer movement is the social movement which refers to all actions and all

entities within the marketplace which give consideration to the consumer.

While the above definitions were being established, other people began using the term "consumerism" to mean

"high levels of consumption".[4] This definition gained popularity since the 1970s and began to be used in these

ways:

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3. "Consumerism" is the selfish and frivolous collecting of products, or economic materialism. In protest to

this some people promote "anti-consumerism" and advocacy for simple living.[4]

4. "Consumerism" is a force from the marketplace which destroys individuality and harms society.[4] It is

related to globalization and in protest to this some people promote the "anti-globalization movement".[5]

2. As commonly understood consumerism refers to wide range of activities of government , business and

independent organisations designed to protect rights of the consumers. Consumerism is a process through which

the consumers seek redress(to set right) , restitution and remedy for their dissatisfaction and frustration with the

help of their all organised or unorganised efforts and activities.

“consumerism is not limited to organized effort only but , is a social movement seeking to augment(increase)

the rights and powers of buyers in relation to seller”

(Philip Kotler)

How did consumerism originate?

In our India the existing markets of products run in shortage , adulteration & black market prices. The profit

making attitude of the business failed to discharge social responsibilities of maintaining fair price, quality of goods &

providing services etc.

For example:-

1. tooth paste tube filled with air.

2. Adulteration in PURE GHEE etc.

To over come from that type of problem consumerism originate.

Benefits of Consumerism

• Consumer Education

• Consumer Groups can liaison between Government & Industry

• Product Research & Information to Consumer

• Inculcate Honesty, Responsiveness & Responsibility on to Manufacturers & Marketers.

• Move towards Societal Concept of Marketing

• Importance of consumerism:-

1. Stop unfair trade practices

2. Provide complete & latest information

3. Discourage anti-social activities

4. Implementation of consumer protection laws

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5. Protect against exploitation

Rural Marketing

• Collin’s cobuild dictionary describes the word rural as “places for away from towns or cities”

• Sociology point of view rural is defined as a group of people who are traditionalists inout look, rooted in the land

and who resist change.

Definition:-

• Rural Marketing is defined as any marketing activity in which one dominant participant is from a rural area. This

implies that rural marketing consists of marketing of inputs (products or services) to the rural as well as marketing

of outputs from the rural markets to other geographical areas.

• In simple words, is planning and implementation of marketing function for the rural areas.

• It is a two-way marketing process which encompasses the discharge of business activities that direct the flow of

goods from urban to rural areas(for manufactured goods) and vice-versa (for agriculture produce)

• R.Marketing has also been defined as the process of developing, pricing, promoting, distributing rural specific

goods and services leading to exchange between urban and rural markets, which satisfies consumer demand and

also achieves organisational objectives (Iyer)

Difference between Rural and Urban Marketing:-

• Intra community influences are relatively more important than inter- community ones. Word- of- mouth in close

knit communities is more powerful.

• Scarcity of media bandwidth. Rural individual’s access to media channels is limited and in the case of broadband

the comparable upload and download speed may be slower.

• Slow to adopt brands. Slow to give them up. Rural consumers will be slower to pick up trends or brands but will

remain loyal when accepted.

• Expenses are year long; income is seasonal. Many rural areas rely on seasonal tourism peaks when income will

be high and to a lesser extent agricultural incomes from seasonal crops. This means there will be more disposable

income at certain times with rural businesses and employees.

• Commercially profitability; and socially acceptable. Brands with demonstrable local, rural, environmental and / or

social credibility stand a better chance.

Rural Marketing Strategies

I) Segmentation : Income based i.e. land holding

Marginal farmers upto : 1 hectare

Small farmers upto : 1 to 2 hectare

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Semi- medium farmers upto: 2 to 4 hectare

Large farmers above: 10 Acres

II) Product Strategies:

a) Small Unit Packaging:- Tea sachets, Biscuits, Talcum, Skin Cream , Hair Oil, Soaps

b) Low Priced Packaging

c) New Product Design:- Shoes, pressure cookers ,chapels, towels.

d) Sturdy Products:- Heavier dry cell batteries

e) Utility Oriented Products:- Mobiles, TVs

f) Brand names:- Gatta Paint, Nili Tikki

Pricing Strategies

a) Low Cost/ Cheap products

b) Avoid sophisticated packing/ small packages

c) Refill/ reusable packs – Reusable sacks for fertilizers.

Distribution Strategies

a) 6 Lakhs villages approx. coverage based on population.

b) Use of cooperative societies.

c) Utilization of public distribution system.

• Utilization of multi- purpose distribution centers by petroleum and oil companies- ATM/ STD/ ISD.

• Distribution upto feeder markets/ towns

• Haats/ Melas

• Agricultural input dealers

Promotion Strategies:

a) Mass Media- TV, Newspapers, Cinemas, Radio

b) Hoardings, wall paintings

c) Haats/ Melas

d) Personal selling/ Opinion Leaders.

e) Special Campaigns

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Promotion strategies

f) 1.Think global act local

g) Rural population is diverse

h) But the commonalities of their ethos and simple living habits need to be understood for advertising to succeed(

context, story line, language and idioms)

i) 2. think in local idiom

j) ‘thanda matlab coca cola’

k) 3.simplicity and clarity

l) 4.Narrative story style

m) 5.Choice of brand ambassadors

n) govinda in the mirinda ad boosted the sales of the drink in rural market.

o)

Whether Rural Markets are Attractive?

Large population

� Rising prosperity

� Growth in consumption

� Life-style changes

� Life-cycle advantages

� Market growth rates higher than Urban

� Rural marketing is not expensive

�� Remoteness is no longer a problem.

Nature and characteristics of the rural market

large and scattered market

Heterogeneous market

• Not a homogeneous

• 24 languages and 1642 dialects- varies every 100 km

• Difficult to develop uniform message – caste, community, tradition values (from state to state, region to region

differ)

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Income from agriculture

• 55% of rural income comes from the agriculture sector

• Hence rural prosperity is tied with agricultural prosperity

Standard of living

• Lower standard of living

• 70% rural population is employed in small – scale agricultural and related occupation

• Seasonality’

• As it is unreliability in income- rural consumers are extremely conscious in their purchase behaviour

infrastructural facilities

• Road, warehouse, communication system and financial facilities are inadequate in rural area

• Roads donot connect nearly 50% villages in the country

• Inadequate infrastructure is single most important factor distinguishes urban and rural

• Promotion and physical distribution thus becomes very difficult

Social marketing

Social Marketing was born as discipline in 1970 when Philip Kotler and Gerald Zaltman realised that same

marketing principles those were being used to sell the products to consumers could be used to sell ideas ,

attitudes and behaviours.

Definition : According Kotler and Andreasen “ Social Marketing differs from other areas of marketing only with respect to

the objectives of the marketer and his/her organisation. Social marketing seeks to influence social behaviours not to

benefit but to benefit target audience and the general society.

Social marketing is systematic application of marketing along with other concepts and techniques , to achieve

specific behavioural goals for a social good .

Social marketing can be applied to promote merit goods or avoid demerit goods and thus promote society’s well

being .

Primary aim of Social Marketing is ‘Social Good’ while Commercial marketing aims at Financial gains.

The focus on consumer involves in-depth research and constant reevaluation of every aspect of program .

Research and evaluation together form the very corner stone of the social marketing process.

Examples of Social marketing are to promote :

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- Asking people not to smoke in public , to use seat belts, to follow speed limits in driving .

Societal marketing : It integrates issues of social responsibility into commercial marketing.

In contrast , social marketing uses commercial marketing theories , tools and techniques to social issues.

Components of social marketing :

1. A consumer orientation to realise organisational ( social ) goals.

2. An emphasis on the voluntary exchanges of goods and services between providers and consumers.

3. Research in audience analysis and segmentation strategies.

4. Use of formative research and message design and pretesting these materials.

5. An analysis of distribution ( or communication ) channels.

6. Use of marketing mix utilising and blending product , price , place and promotion characteristics in intervention

planning and implementation.

7. A process tracking system with both integrative and control functions.

8. A management process that involves problem analysis , planning , implementation and feedback/ control system.

Ps of Social Marketing

I. Product , Price , Place and Promotion are normal Marketing Mix of Social Marketing as Traditional Marketing .

II. Additional Ps of Social Marketing :

Publics– Effective Social Marketing knows its audience, and can appeal to multiple groups of people. “Public” is

the external and internal groups involved in the program. External publics Include the target audience, secondary

audiences, policy makers, and gatekeepers, while the internal publics are those who are involved in some way

with either approval or implementation of the program.

Partnership– Most social change issues, including “green” initiatives, are too complex for one person or group to

handle. Associating with other groups and initiatives to team up strengthens the chance of efficacy.

Policy– Social marketing programs can do well in motivating individual behavior change, but that is difficult to

sustain unless the environment they’re in supports that change for the long run. Often, policy change is needed,

and media advocacy programs can be an effective complement to a social marketing program.

Purse Strings– How much will this strategic effort cost? Who is funding the effort?

Reasons against social marketing

Cost – Social marketing programmes can cost considerable amounts of money. Criticisms of these expenditures are

heightened as they are often financed by public money in times of resource constraints and therefore have a high

opportunity cost. A related issue is that of the problems involved in assessing the success of these programmes due to

The long term nature of behavioural change and the difficulties in establishing cause–effect relationships .

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–marketing is often equated with selling and persuading people

to buy things that they do not really want. Interestingly, when people are asked if they have been persuaded they usually

say no. Lack of awareness of the potential of marketing, misunderstanding and the observation of some of the more

doubtful practices of the commercial sector are some of the reasons behind this.

ity – A final point emerges from marketing authors themselves. that the wider application

of marketing away from the commercial sector dilutes the content and nature of marketing as a discipline.

Direct Marketing

Definition : is an interactive marketing system that uses one or more advertising media to effect a measurable response

and / or transaction at any location. Direct marketing is a channel-agnostic form of advertising that allows businesses and

nonprofits organizations to communicate straight to the customer, with advertising techniques that can include Cell

Phone Text messaging, email, interactive consumer websites, online display ads, fliers, catalog distribution, promotional

letters, and outdoor advertising.

Direct marketing messages emphasize a focus on the customer, data, and accountability. Characteristics that distinguish

direct marketing are:

1. Marketing messages are addressed directly to the customer and/or customers. Direct marketing relies on being

able to address the members of a target market. Addressability comes in a variety of forms including email

addresses, mobile phone numbers, Web browser cookies, fax numbers and postal addresses.

2. Direct marketing seeks to drive a specific "call to action." For example, an advertisement may ask the prospect to

call a free phone number or click on a link to a website.

3. Direct marketing emphasizes trackable, measurable responses from customers — regardless of medium.

Basic characteristics/ properties of Direct marketing :

1. A definite offer to customer.

2. All necessary information provided to make a decision.

Basic characteristics/ properties of Direct marketing ( Cont…… ) :

3. A mechanism to respond to the offer . Within this frame work fall all direct marketing options : Sales letters,

catalogues, telemarketing , direct response , TV advertisements and internet.

Businesses that rely heavily on Direct marketing :

Magazines and news letter publishers

Mail order merchandisers.

Fund raisers

Book publishers

House hold durables

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Reasons to find Direct marketing attractive :

1. Investment required is low.

2. It does not require any specialized skill.

3. All that is required is a data base with consumer profiles.

4. Returns are quick and its effectiveness can be measured.

5. Consumer reaction can be known immediately.

Examples : Free delivery of items as in Amway,

Domino’s delivery system

Dell Computers

Amazon.com

Future of Direct Marketing in India

1. Reaching out to non-metro/non-urban markets depends on infrastructure available and increased use of

mobile phones.

2. Enhancing credibility of the offer: Experience of customer plays an important role.

3. Wider use of debit and credit card. (e-commerce)

4. Emergence of specialised data base firms.

Methods of Direct Marketing

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1. Tele-marketing/selling over phone

Example: Life Insurance, Vehicle Insurance, Banking products, real estate.

- database is given to telecaller with instruction that 100 calls must be made.

2. Sales on Internet:

- Sales of grocery and other items through internet, customer. Orders received through

internet. Deliveries made with assurance of quality and quantity.

- Payment are to be collected by cash.

3. Mail Order Sales:

Orders are received by post and goods are dispatched by VPP . In this case, selling function is

performed without intervention of personal salesman. Goods of well known brand are sold by this

method. There should be sufficient margins also, product of non-perishable nature and wide demand.

Example: Books, watches, electronic goods, patented medicines, leather goods.

4. Direct Selling:

Companies like Amway, Medicare, Eureka Forbes have been using Direct Selling.

In this customer relationship is built, even before the actual sales takes place.

Email

Display Ads are interactive ads that appear on the Web next to content on Web pages or Web services. Formats

include static banners, pop ups, videos, and floating

Social Media Sites, such as Facebook and Twitter, also provide opportunities for direct marketers to

communicate directly with customers by creating content to which customers can respond.

Location-Based Marketing: marketing messages delivered directly to a mobile device based on the user's

location; QR Codes (quick-response barcodes): This is a type of 2D barcode with an encoded link that can be

accessed from a smartphone. This technology is increasingly being used for everything from special offers to

product information

Voicemail

Broadcast Faxing

Broadcast faxing, in which faxes are sent to multiple recipients, is now less common than in the past

Couponing

Digital Coupons:

Direct Response TV Direct marketing via television (commonly referred to as DRTV) has two basic forms: long

form (usually half-hour or hour-long segments that explain a product in detail and are commonly referred to as

infomercials) and short form, which refers to typical 30-second or 60-second commercials that ask viewers for an

immediate response (typically to call a phone number on screen or go to a website). TV-response marketing —

i.e. infomercials — can be considered a form of direct marketing, since responses are in the form of calls to

telephone numbers given on-air. This allows marketers to reasonably conclude that the calls are due to a

particular campaign, and enables them to obtain customers' phone numbers as targets for telemarketing. One of

the most famous DRTV commercials was for Ginsu Knives by Ginsu Products, Inc. of RI. Several aspects of ad, such

as its use of adding items to the offer and the guarantee of satisfaction were much copied, and came to be

considered part of the formula for success with short-form direct-response TV ads (DRTV)

Direct Response Radio

Insert Media

Another form of direct marketing, insert media are marketing materials that are inserted into other

communications, such as a catalog, newspaper, magazine, package, or bill. Coop or shared mail, where marketing

offers from several companies are delivered via a single envelope, is also considered insert media.

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Out-of-Home

Out-of-home direct marketing refers to a wide array of media designed to reach the consumer outside the home,

including billboards, transit, bus shelters, bus benches, aerials, airports, in-flight, in-store, movies, college

campus/high schools, hotels, shopping malls, sport facilities, stadiums, taxis — that contain a call-to-action for the

customer to respond.

Direct Response Magazines and Newspapers

Direct

Direct selling is the sale of products by face-to-face contact with the customer, either by having salespeople

approach potential customers in person, or through indirect means such asTupperware parties.

Grassroots/Community Marketing The door-to-door distribution of flyers and leaflets within a local community is

a business-to-consumer form of direct marketing used extensively by restaurants, fast food companies, and many

other business focusing on a local catchment. Similar to direct mail marketing, this method is targeted purely by

area and community, and costs a fraction of the amount of a mailshot, since it is not necessary to purchase

stamps, envelopes, or address lists with the names of home occupant

Value addition in Direct Selling:

- Create direct selling process

- Identify the customer

- Make appointment with customer.

- Choose suitable time for demo and pitch.

- Ensure product performance at demo.

- Close the deal

- Follow up with prompt service.

Public and ethical issues in use of Direct Marketing

Public and ethical issues :

Irritation : Increasing number of hard sells and direct- marketing solicitations become nuisance for many people.

Unfairness : Impulsive and less sophisticated buyers become target of excessive claims and demonstrations

specially on TV .

Deception and fraud : Some direct marketers design mailers and write copy intended to mislead the buyers .

They may exaggerate product size , performance and price leading to deception and fraud.

Invasion of privacy : Direct marketing companies maintain data bases for customers and they use the same for

their company and also share data base with other companies . Data base include age , marriage status , income

level , etc , which is personal in nature . These companies make the information public resulting in invasion of

privacy.

Green Marketing

Definition:- According to American Marketing Association “Green Marketing” is the marketing of products that

are presumed to be environmentally safe.

• It incorporates a broad range of activities, including product modification , changes to the production process,

packaging changes as well as modifying advertising.

• Other similar terms used are “Environmental Marketing” and “Ecological Marketing”.

• Thus “Green Marketing” refers to holistic marketing concept where in the production, marketing, consumption,

disposal of products and services happen in a manner that is less detrimental to the environment with growing

awareness about the implications of Global Warming, non- biodegradable solid waste, harmful impact of

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pollutants, etc,. Both marketers and consumers are becoming increasing sensitive to the need for switching to

green products and services.

• While shift to green may appear to be expensive in the short term, it will definitely prove to be indispensable and

advantageous cost- wise too, in long run.

• Elkington defines “ Green Consumer” as one who avoids the products that are likely to endanger the health of

consumers or others, cause significant damage to the environment during manufacture, use or disposal, cause

unnecessary waste, use material derived from threatened species or environment involve unnecessary use of or

cruelty to animals, adversely affect other countries.

• Green marketing has got prominence in late 1980s and 1990s.

Why Green Marketing

Air pollution damage to people, crops and wild life. Human health problems are linked with Air and water

pollution.

As resources are limited and human wants are unlimited, it is important for marketers to utilize the resources

efficiently without waste as well as to achieve the organizations objectives so Green Marketing is inevitable.

There is a growing interest among the consumers all over the world regarding protection of environment.

Green marketing has emerged which speaks for growing market for sustainable and socially responsible products

and services

3 Phases of Green Marketing

I) Ecological Green Marketing :

All marketing activities were concerned to help environmental problems.

II) Environmental Green Marketing:

Focus shifted on, clean technology that involved designing of innovative and new products to take care of

pollution and waste issues.

III) Sustainable green marketing :

Leads to sustainable development

The Green Marketing Mix

I) 4 Ps of Green Marketing Mix :

Product: A producer should offer ecological products which not only must not contaminate the environment but

should protect it and even liquidate existing environmental damages.

Price: Prices for such products may be a little higher than conventional alternatives but target groups may be

willing to pay extra for green products.

Place: A distribution logistics is of crucial importance; main focus is on ecological packaging. Marketing local and

seasonal products e.g. vegetables from regional farms is more easy to be marketed “green” than imported

products.

Promotion: A communication with the market should put stress on environmental aspects . For example that the

company possesses ISO 14000 certification . This may be publicized to improve the firm’s image. Furthermore,

the fact that a company spends on environmental protection should be advertised. Third, sponsoring the natural

environment is also very important. And last but not the least, ecological products will probably require special

sales promotions.

Additional Social Marketing "P's" that are used in this process are as followed:

Publics-- Effective Social Marketing knows its audience, and can appeal to multiple groups of people. "Public" is

the external and internal groups involved in the program. External publics include the target audience, secondary

audiences, policymakers, and gatekeepers, while the internal publics are those who are involved in some way

with either approval or implementation of the program.

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Partnership-- Most social change issues, including "green" initiatives, are too complex for one person or group to

handle. Associating with other groups and initiatives to team up strengthens the chance of efficacy.

Policy--Social marketing programs can do well in motivating individual behavior change, but that is difficult to

sustain unless the environment they're in supports that change for the long run. Often, policy change is needed,

and media advocacy programs can be an effective complement to a social marketing program.

Purse Strings-- How much will this strategic effort cost? Who is funding the effort?

GREEN PRODUCTS AND ITS CHARACTERISTICS

The products those are manufactured through green technology and that caused no environmental hazards are called

green products. We can define green products by following measures:

• Products those are originally grown .

• Products those are recyclable, reusable and biodegradable.

• Products with natural ingredients.

• Products containing recycled contents, non- toxic chemical.

• Products contents under approved chemical.

• Products that do not harm or pollute the environment.

• Products that will not be tested on animals.

• Products that have eco- friendly packaging i.e. reusable, refillable containers etc.

GOLDEN RULES OF GREEN MARKETING

1. Know your Customer: Make sure that the customer is aware of and concerned about the issues that your product

attempts to address.

2. Educating your customers: isn’t just a matter of letting people know you’re doing whatever you’re doing to

protect the environment but also a matter of letting them know why it matters.

3. Being Genuine & Transparent: means that

a) You are actually doing what you claim to be doing in your green marketing campaign and

b) The rest of your business policies are consistent with whatever you are doing that’s environmental

friendly.

4. Reassure the Buyer: Consumers must be made to believe that the product performs the

job it’s supposed to do – they won’t forgo product quality in the name of the environment.

5. Consider Your Pricing: If you’re charging a premium for your product- and many environmentally

preferable products cost more due to economics of scale and use of higher –quality ingredients-

make sure those consumers can afford the premium and feel it’s worth it.

6. Giving your customers an opportunity to participate: means personalizing the benefits of your

environmentally friendly actions, normally through letting the customer take part in positive environmental action.

7.Thus leading brands should recognize that consumer expectations have changed: It is not enough for a

company to green its products; consumers expect the products that they purchase pocket friendly and also to help

reduce the environmental impact in their own lives too.

CHALLENGES IN GREEN MARKETING

• Need for standardization

It is found that only 5% of the marketing messages from “Green” campaigns are entirely true and there is a lack

of standardization to authenticate these claims.

• New Concept

Indian literate and urban consumer are getting more aware about the merits of Green products. But it is still a

new concept for the masses. The consumer needs to be educated and made aware of the environmental threats.

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• Patience and Perseverance

The investors and corporate need to view the environment as a major long- term investment opportunity, the

marketers need to look at the long – term benefits from this new green movement.

• Avoiding Green Myopia

The first rule of green marketing is focusing on customer benefits i.e. the primary reason why consumers buy

certain products in the first place.

Green marketing cases

Phillips's "Marathon" CFL lightbulb

Philips Lighting's first shot at marketing a standalone compact fluorescent light (CFL) bulb was Earth Light, at $15

each versus 75 cents for incandescent bulbs.[31] The product had difficulty climbing out of its deep green niche.

The company re-launched the product as "Marathon," underscoring its new "super long life" positioning and

promise of saving $26 in energy costs over its five-year lifetime.[31] Finally, with the U.S. EPA's Energy Star label to

add credibility as well as new sensitivity to rising utility costs and electricity shortages, sales climbed 12 percent in

an otherwise flat market.[32]

Car sharing services [edit]

Car-sharing services address the longer-term solutions to consumer needs for better fuel savings and fewer traffic

tie-ups and parking nightmares, to complement the environmental benefit of more open space and reduction

of greenhouse gases

Electronics sector [edit]

The consumer electronics sector provides room for using green marketing to attract new customers. One

example of this is HP's promise to cut its global energy use 20 percent by the year 2010.[35]

Products & Services [edit]

Now companies are offering more eco-friendly alternatives for their customers. Recycled products for example,

are one of the most popular alternatives that can benefit the environment. These benefits include sustainable

forestry, clean air, energy efficiency, water conservation, and a healthy office. One example, is the E-commerce

business and office supply company Shoplet which offers a web tool that allows you to replace similar items in

your shopping cart with greener products.

Introduction of CNG in Delhi

Online Marketing

in its simplest form, the term online marketing refers to using the power of Internet advertising to generate a

response from your audience. Also known as Internet marketing or web marketing, online marketing is used by

companies selling goods and services

directly to consumers as well as those

who operate on a business-tobusiness

model.

Common areas of interest

Affiliate Marketing: In affiliate marketing, a

business recruits associates to promote the

company's products or services. The

associates receive a commission or other

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similar rewards for every sale, visitor,subscriber, or customer they bring to the

company. Amazon.com Associates Central

is an example of an affiliate marketing

program that Amazon.com uses to

encourage private website owners to bring

traffic to its site.

Display Advertising: Display

advertising involves the use of web

banners or banner ads placed on a

third-party website to drive traffic to a

company's own website and increase

product awareness.

Email Marketing: Companies that use

email marketing send promotional

emails directly to customers.

However, it can often be hard to

distinguish between spam and

legitimate email marketing messages

Interactive Advertising: Interactive

advertising involves the use of

animations and other graphic

techniques to create ads that engage

the viewer and invite participation

Search Engine Marketing: Search

Engine Optimization (SEO), paid

placement, and paid inclusion are

search engine marketing techniques

that companies can use to increase

their visibility in the search engine

page results from Google and its

competitors.

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Viral Marketing: Viral marketing is a

technique is which companies

encourage customers to pass along

information about their products or

services. Company websites that let

visitors email interactive games or

funny video clips to their friends are

an example of a viral marketing effort

Advantages of online marketing

1. Reduced Cost

2. Everything Is Measurable

3. Brand Engagement

4. Demographic Targeting

5. Real-Time Results

6. Easily Refine Strategy

7. Long-Term Exposure

8. Product Information

9. Holds customers’ Attention