Marketing Management

Presented by:
Preeti Chahar

MODULE -1 (Introductionof Marketing Management)

- Introduction: Conceptand Scope of Marketing
- Philosophiesof MarketingManagement
- Elements of Marketing - Needs, Wants, Demands, Customer, Markets and
Marketers;
- Marketing Vs. Selling
- ,Marketing – Mix, The Modern Components ofthe Mix- The Additional 3Ps
- Holistic MarketingConcept.
- Co-Creation and Customer Engagementconcept.

- Introduction: Conceptand Scope of Marketing

The term Marketing is derived from the word ‘Market’ . Here, Market refers to the
place or geographical area where buyers and sellers gather and enter into transactions
involvingtransfer of ownership ofgoods andservices.
 Definitionof Marketing
 Traditional Concept: The term ‘traditional marketing’ can be expressed as the
business activity through which goods and services directly move from producers to
consumers or users.
 Modern Concept: The term ‘modern marketing’ can be expressed as the
achievement of corporate goals through meetingand exceedingcustomer needs betterthan
the competition.
According to Philip Kotler, the term ‘marketing’ is a social and managerial process by
which individual groups obtain what they needand want through creating, offering andfreely
exchanging product andservices of value with others.
Marketing is a process or a set of processes used to understand the target audience better,
develop a valuable offering, communicate and deliver value to satisfy the needs, wants, and
desires of the target audience at a profit.
In simple terms, marketingis an umbrella that includes –
 Identifyingthe unfulfil ed needs, wants, and desires of the target market,
 Developinga valuable offeringthat satisfies the unmet needs,
 Communicatingthe valu e tothe target audience,
 Deliveringvalue to meet the needs, wants, anddesires ofthe customers, and
 Earninga profit.

A would be, as Kotler puts it, “meeting the needs of your

customer at a profit.” Thus, marketing involves everything that a business requires to meet
the needs of its customers, and that too, at a profit.

Nature ofMarketing
The Nature of Marketing (or Modern marketing) may be studied underthe followingpoints:
1. Human activity: Originally, the term marketing is a human activity under which human
needs are satisfied by human efforts. It’ s a human action forhuman satisfaction.
2. Consumer-oriented:A business exist to satisfy human needs, hence business must
find out what the desire of customer (orconsumer) and thereby produce goods&services as
per the needs of the customer. Thus, only those goods should be produce that satisfy
consumerneeds and at a reasonable profit to the manufacturer (orproducer).
3. Art as well as science: In the technological arena, marketing is the art and science of
choosing target markets and satisfying customers through creating, delivering, and
communicating superior customer value. It is a technique of making the goods available at
right time, right place, into right hands, right quality, in the right form andat right price.
4. Exchange Process: All marketing activities revolve around commercial exchange
process. The exchange process implies transactions between buyer and seller. It also
involves exchange of technology, exchange of information andexchange of ideas.
5. Starts and ends with customers:Marketing is consumer oriented and it is crucial to
know what the actual demand of consumer is. This is possible only when required
information related to the goods and services is collected from the customer. Thus, it is the
starting of marketing and the marketing end as soon as those goods and services reach into
the safe hands of the customer.
6. Creation of Utilities: Marketing creates four components of utilities viz. time, place,
possession and form. The form utility refers to the product or service a company offers to
their customers. The place utility refers to the availability of a product or service in a location
i.e. Easier for customers. By time utility, a company can ensure that products and services
are available when customers need them. The possession utility gives customers ownership
of a product orservice and enables them to derive benefits in their own business.
7. Goal oriented: Marketing seeks to achieve benefits for both buyers and sellers by
satisfying human needs. The ultimate goal of marketing is to generate profits through the
satisfaction of the customer.
8. Guiding element of business: Modern Marketing is the heart of industrial activity that
tells what, when, how to produce. It is capable of guiding and controlling business.
9. System of Interacting Business Activities: Marketing is the system through which a
business enterprise, institution ororganization interacts with the customers with the objective
 to earn profit, satisfy customers and manage relationship. It is the performance of business
activities that direct the flow of goods and services from producer to consumeror user.
10. Marketing is a dynamic process. Series of interrelated functions: Marketing is a
complex, continuous and interrelated process. It involves continuous planning,
implementation andcontrol.
Scope/Functions of Marketing
The term scope of marketing can be understood in terms of the functions of the marketing
manager. The major purpose of marketing manager is to generate revenue for the business
by selling goods and services to the consumers. It lies in insuring the customer needs and
converting them into product or services and moving the product and services to the final
user or customer, to satisfy the wants and needs of specific segment of customers with
emphasis on profitability and ensuring the optimum use of resources available with the
organization. The marketing manager has to perform the research functions and exchange
functions. They are discussedbelow:
Marketingisn’ t limited to just physicalgoods. Today, even human, places, andexperiences
are marketed.
 Product Marketing: Tangible offerings manufacturedin bulk andrequiring proper
marketingtomake it available to the right customer at the right time. Example –
mobile phones, televisions, etc..
 Service Marketing:Intangible activities that can’ t be separatedbythe provider.
Example – hotels, airlines, barbers, etc.
 EventMarketing:Time based events like trade shows, artistic performances, etc.
 Experience Marketing:An orchestrated mix of services and goods which leads toan
experience. Example – amusement park experience, foreign trip experience, etc.
 Person Marketing: A person known forhis skil s, profession, art, experience, etc.
Example – Ronaldo, MichaelJackson, etc.
 Place Marketing: Places, cities, states, and countries with an aim to attract potential
investors and/ortourists. Example – Hawaii.
 Property Marketing: Intangible rights of ownership of the realestate, stocks,
securities, debentures, etc.
 OrganizationMarketing:Corporations and not forprofit organizations like schools,
colleges, universities, NGOs, etc.
  InformationMarketing:Information related to healthcare, technology, science, media,
law, tax, market, finance, accounting, etc. offeredby books, schools, universities,
websites, media houses, etc.
 Idea Marketing: The basic ideas that result in the entity, offering, etc.

Scope Of Marketing
When compared to other functions of the business, marketing’ s scope seems to be a bit
more vast. It flows within almost all of the business activities and present at all stages of the
customerbuying cycle.
Even a separate type of marketing, known as digital marketing, has evolved to expand the
scope of marketingoverthe internet.
 Market Research: Researchingconsumerdemands and consumer behavior.
 Product Planning and Development: Planning and developing the offering according
to what’ s needed in the market.
 Product Pricing: Pric ing the offering according to the product value and the buyer’ s
payingcapacityto maximize profits.
 Distribution:Distributing the offering, so it is available wherever and whenever the
customerdemands it.
 Promotion:Communicatingthe right message that results in demandcreation.
 Sales:Offeringincentives that increase sales.
 After-Sales:Providing after-sales support to the customer to maintain a good brand
image in the market.
Marketing VsSales
While sales and marketing have the same goal – generate revenue and increase the profits
of the company, there’ s a big difference between them.
Marketingis an umbrella that includes all the activities that result in meeting the needs, wants,
or demands of the customers at a profit.
Sales, on the other hand, is a process that results in a transaction between two or more
parties in which the buyer(s) receive the offering and seller(s) get something of value in
return which is usually money.
In simple terms, sales is asubset of marketing.
Marketing Sales

Systematic planning, A transaction between two or

implementation, andcontrol of more parties where the buyer
Definition business activities to fulfil the receives the offeringand the
needs ofthe customerat a seller gets something ofvalue
profit. in return.

Broaderapproach that involves

identifying, anticipating, and Narrow approach to make the
Approach satisfying customers’ customer’ s demand match
requirements with the purpose what the company offers.
to make profits.

Focus On fulfil ing the customers’

need andmakingprofit out of it. Fulfil sales volume goals.

Strategy Pull Push

Used

Horizon Long Term Short Term

 - Philosophiesof MarketingManagement
The five marketing philosophiesare:
 Production Concept.
 Product Concept.
 SellingConcept.
 MarketingConcept.
 SocialMarketingConcept (Societal Marketing Concept)

ProductionConcept
This concept works on an assumption that consumers prefer a product which is inexpensive
and widely available. This viewpoint was encapsulated in Says Law which states ‘Supply
creates its own demand’ . Hence companies focus on producing more of the product and
makingsure that it is available to the customer everywhere easily.
Increase in the production of the product makes the companies get theadvantage of
economies of scale. This decreased production cost makes the product inexpensive and
more attractive to the customer.
A low price may attract new customers, but the focus is just on production and not on
product quality. This may result in a decrease in sales if the product is not up to the
standards.
This philosophy only works when the demand is more than the supply. Moreover, a
customer not always prefers an inexpensive product over others. There are many other
factors which influence his purchase decision.
Examplesof ProductionConceptof Marketing Management Philosophies
 Companies whose product market is spreadall over the world may use this approach.
 Companies havingan advantage of monopoly.

 Anyother company whose product’ s demandis more than its supply.

Product Concept
This concept works on the assumption that customers prefer products of ‘greaterquality’
and ‘price and availability’ doesn’ t influence their purchase decision. Hence the
company devotes most of its time in developing a product of greater quality which usually
turns out to be expensive.
Since the main focus of the marketers is the product quality, they often lose or fail to appeal
to customers whose demands are driven by otherfactors like price, availability, usability, etc.
Examplesof Product Concept of Marketing ManagementPhilosophies
 Companies in the technology industry.
 Companies havingan advantage of monopoly.

Selling Concept
Production and product concept both focus on production but selling concept focuses on
making an actual sale of the product. Selling Concept focuses on making every possible sale
of the product, regardless of the quality of the product or the need of the customer. The
main focus is to make money. This philosophy doesn’ t include building relations with
customers. Hence repeatedsales are very less. Companies followingthis concept may even
try todeceive the customers tomake them buy their product.
Companies which follow this philosophy have a short-sighted approach as they ‘try to sell
what they make rather than what market wants’ .
Examplesof Selling Conceptof Marketing Management Philosophies
 Companieswithshort-sightedprofitgoals. This oftenleads tomarketing myopia.
 Fraudulent companies.
Marketing Concept
Selling Concept cannot let a company last long in the market. It’ s a consumers market after
all. To succeed in the 21st century, one has to produce a product to fulfil the needs of their
customers. Hence, emerged the marketing concept. This concept works on an assumption
that consumers buy products which fulfil their needs. Businesses following the marketing
concept conduct researches to know about customers’ needs and wants and come out
with products to fulfil the same better than the competitors. By doing so, the business
establishes a relationship with the customerandgenerates profits in the long run.
However, this isn’ t the only philosophy that should be followed by all the businesses. Many
businesses stil follow otherconcepts and make profits. It totally depends on the demandand
supply and the needs of the parties involved.
Examplesof Marketing Concept of Marketing ManagementPhilosophies
 Companies in perfect competition.
 Companies who want to stay in the market for alongtime.
Societal Marketing Concept
Adding to the marketing concept, this philosophy focuses on society’ s well-being as well.
The business focuses on how to fulfil the needs of the customer without affecting the
environment, natural resources and focusing on society’ s well-being. This philosophy
believes that the business is a part of the society and hence should take part in social
services like the elimination of poverty, il iteracy, and controlling explosive population growth
etc.
Many of the big companies have includedcorporate social responsibility as a part of their
marketingactivities.
- Elements of Marketing- Needs, Wants, Demands, Customer, Markets andMarketers;

1. Needs, Wants&Demand.
The marketer must try tounderstand the target market needs, wants& demands.
Needs are the basic human requirements. The needs become wants when they are
directed towards specific objects that might satisfy the need.
Demand is wanted fora specific product which is backedby ability & wil ingness but it
is mostly criticized that marketers create need & influence customer to buy the
Increase in the production of the product makes the companies get theadvantage of
economies of scale. This decreased production cost makes the product inexpensive and
more attractive to the customer.
A low price may attract new customers, but the focus is just on production and not on
product quality. This may result in a decrease in sales if the product is not up to the
standards.
This philosophy only works when the demand is more than the supply. Moreover, a
customer not always prefers an inexpensive product over others. There are many other
factors which influence his purchase decision.
Examplesof ProductionConceptof Marketing Management Philosophies
 Companies whose product market is spreadall over the world may use this approach.
 Companies havingan advantage of monopoly.

 Anyother company whose product’ s demandis more than its supply.

Product Concept
This concept works on the assumption that customers prefer products of ‘greaterquality’
and ‘price and availability’ doesn’ t influence their purchase decision. Hence the
company devotes most of its time in developing a product of greater quality which usually
turns out to be expensive.
Since the main focus of the marketers is the product quality, they often lose or fail to appeal
to customers whose demands are driven by otherfactors like price, availability, usability, etc.
Examplesof Product Concept of Marketing ManagementPhilosophies
 Companies in the technology industry.
 Companies havingan advantage of monopoly.

Selling Concept
Production and product concept both focus on production but selling concept focuses on
making an actual sale of the product. Selling Concept focuses on making every possible sale
of the product, regardless of the quality of the product or the need of the customer. The
main focus is to make money. This philosophy doesn’ t include building relations with
customers. Hence repeatedsales are very less. Companies followingthis concept may even
try todeceive the customers tomake them buy their product.
Companies which follow this philosophy have a short-sighted approach as they ‘try to sell
what they make rather than what market wants’ .
Examplesof Selling Conceptof Marketing Management Philosophies
 Companieswithshort-sightedprofitgoals. This oftenleads tomarketing myopia.
 Fraudulent companies.
Marketing Concept
Selling Concept cannot let a company last long in the market. It’ s a consumers market after
all. To succeed in the 21st century, one has to produce a product to fulfil the needs of their
customers. Hence, emerged the marketing concept. This concept works on an assumption
that consumers buy products which fulfil their needs. Businesses following the marketing
concept conduct researches to know about customers’ needs and wants and come out
with products to fulfil the same better than the competitors. By doing so, the business
establishes a relationship with the customerandgenerates profits in the long run.
However, this isn’ t the only philosophy that should be followed by all the businesses. Many
businesses stil follow otherconcepts and make profits. It totally depends on the demandand
supply and the needs of the parties involved.
Examplesof Marketing Concept of Marketing ManagementPhilosophies
 Companies in perfect competition.
 Companies who want to stay in the market for alongtime.
Societal Marketing Concept
Adding to the marketing concept, this philosophy focuses on society’ s well-being as well.
The business focuses on how to fulfil the needs of the customer without affecting the
environment, natural resources and focusing on society’ s well-being. This philosophy
believes that the business is a part of the society and hence should take part in social
services like the elimination of poverty, il iteracy, and controlling explosive population growth
etc.
Many of the big companies have includedcorporate social responsibility as a part of their
marketingactivities.
- Elements of Marketing- Needs, Wants, Demands, Customer, Markets andMarketers;

1. Needs, Wants&Demand.
The marketer must try tounderstand the target market needs, wants& demands.
Needs are the basic human requirements. The needs become wants when they are
directed towards specific objects that might satisfy the need.
Demand is wanted fora specific product which is backedby ability & wil ingness but it
is mostly criticized that marketers create need & influence customer to buy the
 product but needs are been pre-exit & by understandingneeds of customerthe need
of customer the marketerproduces the product.
Customer
A customer is an individual or business that purchases another company's goods or
services. Customers are important because they drive revenues; without them,
businesses cannot continue to exist. All businesses compete with other companies
to attract customers, either by aggressively advertising their products, by lowering
prices to expand their customer bases, or by developing unique products and
experiences that customers love. Think Apple, Tesla, Google, or TikTok.
Market and Marketers
The phrase "market" refers to a gathering of parties who convene to exchange goods,
services, and information for a fee. The term "transaction" refers to the buying and selling of
goods between two people. The buyer and seller are the two parties involved in a
transaction. The transaction might take place directly or via intermediaries such as agents or
institutions.
In a market, there are many buyers and sellers, which plays an important role in determining
the price of goods and services. Demand is determined by buyers, while supply is
determined by sellers. It's a system in which trade is easily completed and resources are
distributedamongsociety's many members.
A marketer is someone who is in charge of developing an involvement chain between the
customer and the company's product or service. This engagement is gained by keeping
large inventories of products on hand for supply or by properly marketing the product to
encourage large sales. A marketer, on the other hand, is focused on each individual
consumer and assists in the development of one-on-one relationships between customers
andthe brand. A marketer’ s job is to make the best use ofeach customer's time andshape
their perception of the product orservice.

Marketing Mix
The marketing mix is a familiar marketing strategy tool, which as you wil probably know, was
traditionally limited to the core 4Ps of- The 4Ps marketing mix was designed at a time when
businesses were more likely to sell products, rather than services. The 4 Ps represented an
early focus on product marketing, when the role of customer service in helping brand
development wasn't so well known.
1. Product [How can you develop your products or services]
2. Price [How can we change ourpricingmodel]
3. Place [What new distribution options are there for customers to experience our
product, e.g. online, in-store, mobile etc]
4. Promotion [How can we add to or substitute the combination within paid, owned
andearnedmedia channels]
Product
This refers towhat the company produces (whetherit is product or service, ora combination
of both) and is developed to meet the core need of the customer – for example, the need
for transport is met with a car.
The challenge is to create the right ‘bundle of benefits’ that meet this need.
So what happens as customer needs change, competitors race ahead or new opportunities
arise? We have to add to the ‘bundle of benefits’ to improve the offering, create new
versions of existing products, or launch brand new products. When improving the product
offering think beyond the actual product itself – value can be added and differentiation
achieved with guarantees, warranties, after-sales or online support, a user-friendly app or
digitalcontent like a video that helps the user tomake the most out ofthe product.
Price
This is the only revenue-generating element of the mix – all other marketing activities
represent a cost. So it’ s important to get the price right to not only covercosts but generate
profit! Before setting prices, we need to research information on what customers are wil ing
to pay and gain an understanding of the demand for that product/service in the market. As
price is also a strong indication of the positioning in the market against competitors (low
prices=value brand), prices needtobe set with competitors in mindtoo.
Place
This is the ‘place’ where customers make a purchase. This might be in a physical store,
through an app or via a website. Some organizations have the physical space, or online
presence to take their product/service straight to the customer, whereas others have to
work with intermediaries or ‘middlemen’ with the locations, storage and/orsales expertise
to help with this distribution. The decisions to be made in this element of the marketing mix
concern which intermediaries (if any) wil be involved in the distribution chain and also the
logistics behind getting the product/service to the end customer, including storage and
transportation.
Promotion
So we have afantastic product, at an appealing price, available in all the right places,but how
do customers know this? Promotionin our marketing mix is about communicating messages
to customers, whichever stage they are in the buyer journey, to generate awareness,
interest,desire or action.
We have different tools for communication with varying benefits. Advertising is good for
raising awareness and reachingnew audiences, whereas personal selling using a sales team
is great for building relationships with customers and closing a sale. The challenge? To
choose the best tool for the job, andselect the most effective media to reach our audiences
based on what we know about them. If your customer is a regular on Instagram then that’ s
where you needto be talking to them!
This doesn’ t just apply to customers. Communicate to other stakeholders too like
shareholders and the wider public to build company reputation. The same principles apply;
choose the right tools andmedia that fit with what you are trying to achieve.
The Modern Components of the Mix-The Additional3Ps
 People [ Who are our people and are there skills gaps ]
 Process [ Are there internal process barriers in the way to delivering the best
customer value ]
 Physical evidence [How we reassure our customers, e.g. impressive buildings,
well-trained staff, great website]
People
A company’ s people are at the forefront when interacting with customers, taking and
processing their enquiries, orders and complaints in person, through online chat, on social
media, or via the call centre. They interact with customers throughout their journey and
become the ‘face’ of the organization for the customer. Their knowledge of the
company’ s products and services and how to use them, their ability to access relevant
information and their everyday approach andattitude needs to be optimized.
People can be inconsistent but with the right training, empowerment and motivation by a
company, they can also represent an opportunity to differentiate an offering in a crowded
market andto build valuable relationships with customers.
Process
All companies want to create a smooth, efficient and customer-friendly journey – and this
can’ t be achieved without the right processes behind the scenes to make that happen.
Understanding the steps of the customer journey – from making an enquiry online to
requesting information and making a purchase – helps us to consider what processes need
to be in place to ensure the customer has a positive experience.
When a customer makes an enquiry, how long wil they have to wait before receiving a
response?
How long do they wait between booking a meeting with the sales team to the meetingtaking
place?
What happens once they make an order?
How do we make sure reviews are generated after a purchase? How can we use
technology to make our processes more efficient?
All of these considerations help build a positive customerexperience.
Physical Evidence
 Physical evidence provides tangible cues of the quality of experience that a company is
offering. It can be particularly useful when a customer has not bought from the organization
before and needs some reassurance, or is expected to pay for a service before it is
delivered.
For a restaurant, physical evidence could be in the form of the surroundings, staff uniform,
menus andonline reviews to indicate the experience that could be expected.
For an agency, the website itself holds valuable physical evidence – from testimonials to
case studies, as well as the contracts that companies are given to represent the services
they can expect to be delivered.

Holistic Marketingconcept
3 Features of Holistic Marketing Philosophy
There are three main features of holistic marketingphilosophy: a common goal, aligned
activities, and integratedactivities.
1. Common Goal - All partsof thebusiness focusona singlegoal to provide a great customer
experience.
2. Aligned Activities - All activities, processes, and communicationthatoccurwithin the
business should bealignedtowards theachievementof thecommon goal.
3. IntegratedActivities- All activitiesdone withinthe business should bedesignedand
integratedsuch that they work in a cohortto provide a seamless andconsistentcustomer
experience.

5 Reasons toHave Holistic Marketing

The needs of customers are constantly changing. Customers make purchases only after a
lot of research both offline and online for the right product. Thus holistic marketing is the
need of the hour to ensure that the customer chooses your product over your competition.
Here are some more reasons why you need holistic marketing:
1. Brand Building
One of the best ways to build brand awareness is by highlighting the core values of a brand
across all platforms. Since consumer behaviors are always changing, it is necessary that a
company maintains consistency across multiple channels to ensure maximum branding
capacity.
2. Focus
A consistent and clear messaging allows the customer to focus on the core values of a
business. These core values make people associate the brand with its values and not just its
products.
3. Efficiency
Holistic marketing increases the communication between different parts of a business as
everyone has a shared goal. Furthermore, it ensures that all business processes are in
harmony with one another to boost brandawareness.
4. Effectiveness
Holistic marketing focuses on long-term goals andallows a business to flourish andmake the
best use of its resources. Apple is another company that successfully uses holistic
marketing. Most people usually make a purchase decision for an iPhone or Mac even before
they enter the showroom.
5. Cohesiveness
Rather than having conflicting information in different areas of your brand, holistic marketing
brings everything under one roof. This presents greater consistency and cohesiveness to all
your customers.
Holistic Marketing Concepts andComponents

Holistic marketing has five different components that come together to unify a company’ s
brand image.
1. Relationship Marketing
Relationship marketingis centered on the relationships you have with your potential and
existing customers, employees, partners, and competitors. This component of holistic
marketing focuses on creating a comprehensive business plan with long-term goals that
cover the whole business system. The main goal is to focus on marketing activities that
create a strong, emotional bond and cultivate loyalty from these stakeholders, rather than
simply interactingwith them only when required.
2. InternalMarketing
Holistic marketing sees two types of customers - internal and external. While external
customers are the top priority for any business, internal customers (employees) also play a
vital role in the marketing process. Internal marketing treats employees as customers who
must be convinced of the company’ s core values just as aggressively as its external
customers. This ensures that they understand their role in the marketingprocess.
3. IntegratedMarketing
Integrated marketing creates a seamless experience for the consumer to interact with the
brand by integrating various communication channels (sales promotion, public relations,
advertising, direct marketing, digitalmarketing, etc). This ensures that the communication is in
sync and projects astrongand focusedbrand image.
4. SocietalMarketing
Societal or social y responsible marketing involves a broader concern for society at large. It
follows the philosophy that a business is part of a society and should give back to it. This
requires following certain business ethics and focusing on philanthropy and community
organizations. Societal marketing encourages all stakeholders of a business to have a
positive impact on society.
5. Performance Marketing
Performance marketingis focused on the different activities of a business, such as selling a
product or service, ethical and legalresponsibilities as abusiness, brandandcustomer equity,
etc.
Co-Creation and Customer Engagementconcept.
Be it fora small or alarge marketplace brand, customer alignment creates a significant impact
on the positive side. The more the customer perceives the brand is listening and responding
to them the more they are involved with the brand. Companies are now looking to get the
customers “Involved in” and this is through Co-creation.

.
Whatis co-creation?
Co-creation is when businesses include outsiders in the ideation and development
[Link] companies keep new products and processes strictly internal; some even
work hardtokeepthem secret.
But co-creation lets companies collaborate outside the business to gather fresh ideas and
break from their own status quo. They acknowledge that they don’ t have all the answers
in-house, andthey make it easy forothers to bring the answers to them.
This idea is nothing new. In fact, the term was popularized by a Harvard Business Review
article in 2000. In this article, the authors focused on the relationship between abusiness and
its customers:
“Thanks largely to the Internet; consumers have been increasingly engaging themselves in
an active andexplicit dialogue with manufacturers of products andservices.”
And it’ s true - most of the time we think of co-creation between a company and
consumers. But co-creation can also include:
 Employees

 Prospective buyers (not j ust current fans)

 Suppliers (workingtogether to improve the chain)

 Competitors

 Industry influencers

The goal is to approach issues from a new perspective and come away with better
products and processes. And while most businesses wil feel more comfortable working
with current customers, there may be more opportunities available elsewhere.
How do you co-create?
As we’ l see shortly, there are plenty of different ways to make outsiders part of your
ideation and development processes. In fact, many “old fashioned” research and
development techniques - focus groups, surveys, and polls - are co-creation efforts in their
own right.
But modern software like Braineet Crowdsourcing makes it easier to involve employees
and customers earlier in the process and at scale. Social media, internet forums, and online
 portals mean that co-creating can occur at every stage of the development process - from
the initial idea, through to reviewingproducts once they hit the market.
Businesses need to find the most direct way to involve customers in product innovation. In
many cases, the simplest solution is to use a platform where users can suggest ideas, give
feedback toone another, andstay connectedto all co-creation projects
It helps in engaging your audience, build stronger relationships, create awareness and
strengthen the loyalty with the brand. It can be implemented in any area of business be it
marketing, design and communication. The goal is to partner with the strategic customer to
jointly create value, solve a problem or improve performance.
People associate with brands, the chances that they choose a new variant of the existing
brand as compared to a new brand is relatively high. People are loyaltowards the brand they
trust in, and though they are satisfied with the products from their trusted brand, there is
always scope for improvement.
With the advent of social media, people nowadays especial y the mil ennial demand more
from the products and services they utilize every day. They expect two-way communication
with the brand theytrust.
Let’ s look at some of the reasons the Mil ennialassociate with a brand.
1. Representation:
In a crowded world, people carry a brand to represent themselves. They look for brands with
a similar character to what they aspire to be; theychoose the brand. “I am what I buy” .
2. A Sense of belonging:
“Communities” drive the success of socialsites. Social media is about connecting people
andcreatingcommunities. People share, like or comment toshow agreement or dislike with
a community type.
3. Rewards:
Finally, people share or post about a brand to get something in return like discounts,
vouchers etc.
With this in mind, let’ s see a few examples of how brands drove customers to get
“involved in” co-creation.
Lego:
Lego’ s Idea website attractedsome genuine responses and is asuccess in the co-creation
space. Each Idea posted on the site required 10,000 supporters to qualify for a review from
Lego. After a successfulreview, the Ideas were implemented in their products.

IKEA:
IKEA “Home TourProgram” . IKEAmade avideo series where its employees closely
workedwith customers to create their dream homes. The series was successful, andabout
210 video series has been streamedso far.

Nestle:
Nestle’ s Maggi bounced backafter the downfall with this campaign.
When Maggi was banned in some regions, Maggi co-created a video series with their loyal
customers on “How they miss this delicious snack” . The video series built up the hype in
the market before it was even back in the shelves andthe effects of the ban were minimal.
 Five factorsto be considered before implementingthe co-creationplan.
1. Objective: Before starting on the implementation plan, the aim should be clear. What
do you want to achieve? Is it Idea generation for an existing product/service or is it a new
product development?
2. Channels:How is the implementation of the plan? Is it going to be digital or is it going
to be physical? If digital, what are the mediums to target?
3. Collaborators:Who are the people who are going to be invited to participate in this
co-creation? Experts, everyday users or lead-users. The segment which is going to be
involved in the strategic partnership for co-creation should be decidedin prior.
4. Tools: Tools help in facilitating co-creation. The tools that boost the productivity for
co-creation. Which tools are people goingtouse to create the Ideas?
5. Contracts: What do people get in return for their work? How to acknowledge
co-creators?
Whatare the benefits of co-creation?
- Better productsbased oncustomer desires
- Better financial performance
- New and unexpected ideas
- Makingthe consumer partof the creation process
- Removing barriersbetween industries
What is CustomerEngagement?
Customer engagement is the ongoingcultivation of a relationship between the companyand
consumer that goes far beyond the transaction. It's an intentional, consistent approach by a
company that provides value at every customerinteraction, thus increasingloyalty.
Customer engagement is sometimes confused with customer satisfaction and experience,
and there is some overlap, but each is distinct. We'l discuss these concepts in much greater
detail later, but for now, you need to understand that customer experience is the perception
that consumers form based on everythingthey see, hear, or learn about your company.
On the other hand, customer satisfaction is how much consumers like or dislike your
product, service, or experience. Both are essential when interacting with consumers, but
customer engagement also involves listening to build a rapport and provide a tailored
solution. Effective listeningis apowerfulskil that affects the entire customer experience. The
better a rep can listen, the more they can tailor a solution based on the customer’ s distinct
jobrole, problems, and intended results. As a result, brands that betterengage customers are
also more profitable.
The Benefits of Customer Engagement
- Improves CustomerRelationships
- Boosts LoyaltyandCustomerRetention
- UncoverUp-Sell Opportunities
- Streamline Purchase Cycles
- Increases Users
Strategies forBoostingCustomer Engagement
- Identify Your IdealCustomers
- Create Awesome Content
- DevelopaCustomer-Centric Approach
- Utilize the Right Tools
- Gather CustomerFeedback
 Marketing Management
[M-104]
MODULE -2 (Marketing Environment &Marketing Strategy)
- Marketing Environment: Internal andExternal
- Factors Affecting MarketingEnvironment,
- Functionsof Marketing Management
- Strategic Marketing Planning
- Managing and controlling marketingprogram

Marketing Environment: Internal and External

Several internal and external factors affect a business’ s marketing activities. While some of
the factors are in the control of the business, most of these are not and the business has to
adapt itself to avoid being affected by changes in these factors. These external and internal
factors grouptogether to form amarketing environment in which the business operates.
WhatIs Marketing Environment?
Marketing environment is the combination of external and internal factors and forces that
affect the company’ s ability to establish a relationship and serve its customers.
The marketing environment of a business consists of an internal and an external
environment.
 The internal environment is company-specific and includes owners, workers,
machines, materials etc.
 The external environment is further dividedinto two components: micro&macro.
o The micro or the task environment is also specific to the business but is
external. It consists of factors engaged in producing, distributing, and promoting
the offering.
o The macro or the broad environment includes larger societal forces which
affect society as a whole. It is made up of six components: demographic,
economic, physical, technological, political-legal, and social-culturalenvironment.

WhatAre The ComponentsOf MarketingEnvironment?

The marketing environment is made up of the internal and external environment of the
business. While the internal environment can be controlled, the business has less or no
control over the externalenvironment.
A marketing environment mostly comprises of the followingtypes of environment:
1. Micro Environment
2. Macro Environment
1. Micro Environment:
Micro environment refers tothe environment, which is closely linkedto the organization, and
directly affects organizationalactivities. It can be dividedintosupply side and demandside
environment. Supply side environment includes the suppliers, marketing intermediaries, and
competitors who offer raw materials or supply products. On the otherhand, demandside
environment includes customers who consume products.
Let us discuss the micro environment forces in the followingpoints:
- Suppliers:
It provides raw material to produce goods and services. Suppliers can influence the profit of
an organization because the price of raw material determines the final price of the product.
Organizations need to monitor suppliers on a regular basis to know the supply shortages and
change in the price of inputs.
- Marketing Intermediaries: It helps organizations in establishing a link with customers. They
help in promoting, selling, anddistributingproducts.
Marketingintermediaries include the following:
a. Resellers: It purchases the products from the organizations and sell to
the customers. Examples of resellers are wholesalers andretailers.
 b. Distribution Centers: It helps organizations to store the goods. A
warehouse is an example of distribution center.
c. Marketing Agencies: It promotes the organization’ s products by
makingthe customers aware about benefits of products. An
advertisingagency is an example of marketing agency.
d. Financial Intermediaries: It provides finance for the business
transactions. Examples of financial intermediaries are banks, credit
organizations, and insurance organizations.
- Customers: Customers buy the product of the organization forfinalconsumption. The
main goalof an organization is customersatisfaction. The organization undertakes the
research anddevelopment activities to analyze the needs of customers andmanufacture
products accordingto those needs.
- Competitors: It helps an organization to differentiate its product to maintain position in the
market. Competition refers to a situation where various organizations offer similar
products and try to gain market share by adopting different marketingstrategies.
2. Macro Environment:
Macro environment involves a set of environmental factors that is beyond the control
of an organization. These factors influence the organizational activities to a significant
extent. Macro environment is subject to constant change. The changes in macro
environment bringopportunities andthreats in an organization.
Let us discuss these factors in details:
- Demographic Environment:
Demographic environment is the scientific study of human population in terms of elements,
such . It also includes the
increasing role of women and technology. These elements are also called as demographic
variables. Before marketing a product, a marketer collects the information to find the suitable
market for the product.
Demographic environment is responsible for the variation in the tastes and preferences and
buying patterns of individuals. The changes in demographic
Environment persuades an organization to modify marketing strategies to address the
alteringneed.
-Economic Environment: Economic environment affects the organization’ s costs structure
and customers’ purchasing power. The purchasing power of a customer depends on the
current income, prices of the product, savings, and credit availabilities.
The factors economic environment is as follows:
a. Inflation:
It influences the customers’ demand for different products. For example, higher petrol
prices leadtoa fall in demand for cars.
b. Interest Rates: It determines the borrowing activities of the organization. For example,
increase in interest rates for loan may lead organizations to cut their important activities.
c. Unemployment: It leads to a no income state, which affects the purchasing power of
an individual.
d. Customer Income: It regulates the buying behavior of a customer. The change in the
customer’ s income leads to changed spending patterns for the products, such as food
andclothing.
e. Monetary and Fiscal Policy: It affects all the organizations. The monetary policy
stabilizes the economy by controlling the interest rates and money supply in an
economy; whereas, fiscal policy regulates the government spending in various areas by
collecting the revenue fromthe citizens by taxingtheir income.
i i. Natural Environment:
Natural environment consists of natural resources, which are neededas raw materials to
manufacture products by the organization. The marketing activities affect these natural
resources, such as depletion of ozone layer due to the use of chemicals. The corrosion
of the naturalenvironment is increasing day-by-dayand is becominga globalproblem.
Followingnaturalfactors affect the marketingactivities of an organization in a great way:
a. Natural Resources: It serves as raw material for manufacturing various products.
Every organization consumes natural resources for the production of its products.
Organizations are realizing the problem of depletion of resources and trying best to
use these resources judiciously. Thus, some organizations have indulged in
de-marketingtheir products.
for example, Indian Oil Corporation (IOC) tries to reduce the demand for its products
bypromotingadvertisements, such as Save Oil, Save India.
b. Weather: It leads to opportunities or threats for the organizations. For example, in
summer, demand for water coolers, air conditioners, cotton clothes, and water
increases while in winter, the demand for woolen clothes and room heaters rises.
The marketing environment is greatly influenced by the weather conditions of a
country.
c. Pollution: It includes air, water, and noise pollution, which lead to environmental
degradation. Now-a-days, organizations tend to promote environment friendly
products through its marketing activities. For example, the organizations promote the
usage of jute andpaper bags instead of plastic bags.
iv. Socio-Cultural Environment: Socio-cultural environment comprises forces, such as
society’ s basic values, attitudes, perception, and behavior. These forces help in
determining that what type of products customers prefer, what influences the purchase
attitude or decision, which brandthey prefer, and at what time they buy the products.
The socio-cultural environment explains the characteristics of the society in which the
organization exists. The analysis of socio-cultural environment helps an organization in
identifyingthe threats and opportunities in an organization.
For example, the lifestyles of people are changing day-by-day. Now, the women are
perceived as an active earning member of the family. If all the members of a family are
working then the family has less time to spend for shopping. This has led to the
development of shopping malls and super markets, where individuals could get
everything under one roof to save their time.
v. Technological Environment: Technology contributes to the economic growth of a
country. It has become an indispensible part of our lives.
Organizations that fail to track ongoing technological changes find it difficult to survive in
today’ s competitive environment. Technology acts as a rapidly changing force, which
creates new opportunities for the marketers to acquire the market share. Marketers with
the help of technology can create and deliver products matching the life style of
customers. Thus, marketers should observe the changingtrends in technology.
Following points explain the technologicaltrends that affect the marketing environment:
a. Pace of Technological Change: It leads to product obsolescence at a rapid pace. If
the pace of technologicalchange is very rapid then organizations needto modify their
products as andwhen required.
On the other hand, if the technology is not changing at a rapid pace then there is no
needfor the organization tobring constant changes in the product.
b. Research and Development: It helps in increasing growth opportunities for an
organization. Many organizations have developed a separate team for R&D to bring
innovation in its products. Pharmaceutical organizations, such as Ranbaxy and Cipla,
have started putting greater force in R&D and these efforts have led to great
opportunities in globalmarket.
c. Increased Regulation: It refers to government guidelines to ban unsafe products.
Marketers should be aware of these regulations to prevent their violation. Every
pharmaceutical organization takes the approval of the Drugs Controller of India, which
lays down the standards for drugs manufacturing.
vi. Political and Legal Environment: Political and legal environment consists of legal
bodies and government agencies that influence and limit the organizations and
individuals.
Every organization should take care of the fact that marketing activities should not
harm the politicaland legal environment prevailing in a country.\
The political and legal environment has a serious impact on the economic
environment of a country. For example, in some regions of Uttar Pradesh, Reliance
Fresh hadto shut down its stores because ofthe lack of political support.
Various legislations affectingthe marketing activities are as follows:
a. Anti-pollution laws, which affect the production or manufacturing of various
products. b. Customer legislation, which tries to protect the customer’ s interest.
The important acts set by the Indian government, which effect the marketing
environment of an organization:
i. Prevention of Foodand Adulteration – 1954
i. Drugs ControlAct – 1954
i i. Company Act – 1956
iv. Standard Weights andMeasurement Act – 1956
v. MRTP- Monopoly and Restrictive Trade Practices – 1969
vi. Display of Price Order – 1963 vii. Indian Patents Act – 1970
 vii. PackagedCommodities Order – 1975
vii . Environment Act – 1986
ix. Consumer Protection Act – 1986
Needfor Analyzingthe Marketing Environment:
The business environment is not static. It is continuously changing with fast speed. The
marketingenvironmental analysis wil help the marketer to:
i. Become well acquainted with the changes in the environment.
i . i . Gain qualitative information about the business environment; which wil help him to
develop strategies in order tocope with everchangingenvironment.
i i. i i. Conduct marketing analysis in order to understand the markets needs and wants
soas to modify its products to satisfythese market requirements.
iv. iv. Decide on matters related to Government-legal-regulatory policies in a particular
countryso as to formulate its strategies successfully amidst these policies.
v. v. Allocate its resources effectively and diversify eitherinto anew market segment or
totally intoa new business which is outside the scope of its existingbusiness.
vi. vi. Identify the threats from the environment in terms of new competitors, price wars,
competitor’ s new products or services, etc.; and prepare its strategies on the
basis of that.
vii. vii. Identify the opportunities in the environment and exploit these opportunities to
firm’ s advantage. These opportunities can be in terms of emergence of new
markets; mergers, joint ventures, or alliances; market vacuum occurred due to exit
of a competitor, etc.
 vii . vii . Identify its weaknesses such as lower quality of goods or services; lack of
marketing expertise; or lack of unique products and services; and prepare
strategies to convert its weaknesses intostrengths.
ix. ix. Identify its strengths and fully exploit them in firm’ s advantage. These strengths
can be in terms of marketing expertise, superior product quality or services, or
giving unique innovative products orservices.

Importance ofMarketing Environment

Every business, no matter how big or small, operates within the marketing environment. Its
present and future existence, profits, image, and positioning depend on its internal and
external environment. The business environment is one of the most dynamic aspects of the
business. In order to operate and stay in the market for long, one has to understand and
analyze the marketing environment and its components properly.
- Essentialfor planning
An understanding of the external and internal environment is essential for planning for the
future. A marketer needs to be fully aware of the current scenario, dynamism, and future
predictions of the marketingenvironment if he wants his plans to succeed.
- Understanding Customers
Thorough knowledge of the marketing environment helps marketers acknowledge and
predict what the customer actually wants. In-depth analysis of the marketing environment
reduces (and even removes) the noise between the marketer and customers and helps the
marketer to understandconsumer behavior better.
- Tapping Trends
Breaking into new markets and capitalizing on new trends requires a lot of insight into the
marketing environment. The marketer needs to research about every aspect of the
environment to create a foolproof plan.
 - Threats andOpportunities
Sound knowledge of the market environment often gives afirst-mover advantage to the
marketer as he makes sure that his business is safe from future threats and taps the future
opportunities.
- Understanding the Competitors
Every niche has different players fighting for the same spot. A better understanding of the
marketing environment allows the marketer to understand more about the competitions and
about what advantages dothe competitors have over his business andvice versa.
Features Of Marketing Environment
The marketingenvironment surrounding a business possesses the followingfive features:
 Specific and general forces: The marketing environment is made up of both specific
and general forces. Specific forces such as customers and investors directly affect
the business’ s working, while general forces like social, legal, technological, or
politicalfactors indirectly affect the business’ s working.
 Complex: The marketing environment is a complex interaction of several elements,
factors, conditions, and forces that affect the business’ s ability to establish a
relationship andserve its customers.
 Dynamic:The environment surrounding a business is very dynamic as its
constituents do not remain stable and change over time. Moreover, while marketers
can control some of the marketing environment elements, several elements are out
of the marketer’ s control.
 Uncertain:Forces that rule the marketing environment are highly uncertain, and it
becomes tough for a marketer to predict market forces to develop marketing
strategies and plans.
 Relative: Marketing environments are also relative in nature. A specific product might
have a good demand in the USA but not in India because of the different marketing
environments in the two countries.
FactorsAffecting Marketing Environment
There are many forces or factors affecting the marketing environment and strategies
considerably and hence the marketing manager should adjust and adapt to these
forces/factors while preparinghis marketingplans, policies, andstrategies.
If possible, efforts should also be made to take advantage of these factors
Marketing environment scanning is a continuing process of gathering information regarding
the company’ s internal and external environment, analyzing it, forecasting its trend and
impact on the operations andperformance of the company.
Marketing environment refers to those factors and forces which affect a company or
business.
[Link] Factors
it helps to developan understanding of prospective consumers and the market potential of a
product andfacilities market segmentation.
It provides clues as regards their age, sex, income, and capacity to incur expenditure on the
satisfaction of their wants.
The demographic study provides all the requisite information about consumers which
is essential for market segmentation.
2. Ecology of PhysicalEnvironment
In modern economics, Ecology, or the nature of the physical environment also occupying an
important place in the field of distribution and marketing under the concept of intensive
marketing.
Today the marketer is not only required to satisfy the needs of his consumers but also the
needs of society as a whole. In order to maintain balance in the physical environment, it is
essential that all types of pollution should be stopped and efficient utilization of the Limited
valuable resources should be done.
Proper attention should be paid to the economic and efficient utilization of energy and
physicalresources.
3. Social and Cultural Environment
Our society is ever-changing. According to time, new demands are created and old
demands are extinguished.
It is essential for the marketing managementthat it should prepare the marketing plans
according to the changing needs of the society thereby satisfy new growingneeds.
The social and cultural environment is also responsible for the growing importance of social
responsibility of the industry and the consumer-orientedMarketingconcept.
The social and culturalconcept of marketing is coexistent with consumer welfare along with
public welfare.
4. Public Policy Environmentof Legaland PoliticalForces
The public policy environment is also an uncontrollable factor that affects the marketing
environment.
Political and legal intervention in the field of marketing and business activities has now
become a common factor.
Monetary and fiscal policies, import and export policies and custom duties, etc. affect the
marketingsystem of a country.
In the case of India, price and supply regulation of products like iron, steel, cement, and
drugs, etc. has often been resorted to by the government.
The range of government legislation directed at protecting consumer interest and the
organization of the consumer’ s resistance groups have affected the marketing
environment considerably, such as Monopoly and Preventive Trade Practices Act.
The managers should keep public policy in mind while preparing the manager’ s plans,
policies, andstrategies.
5. Scientific andTechnological Environment
The scientific and technological environment also affects the marketing environment
of a country. For example, there is a considerable change in the living style and the
pattern of consumption on account of the development of the scientific and
technologicalenvironment.
These are an absolute change in the living standards of developed and developing
countries. The scientific and technological developments have given birth to new
marketingopportunities, such as the computer industry.
6. Market Competition
- The existence of competition in the market is essential for building a strong market of
particularly in the case of a democratic society.
- In the free market economy, it is not possible to take any marketing decision without
evaluating the existence of competition.
- In such an economy, the marketing manager has no control over competitors’
activities.
- However, the marketing manager should study the prevailing competitive conditions
in the market.
- For this purpose, He should take into account the basis of competition, the
competitor’ s viewpoint towards the consumers, the quality, and characteristics of
the competitor’ s products, and their marketing strategies before preparing the
marketingplans.
[Link] Demand
Consumer demandis always changing and hence it is not possible to assess it correctly.
Thus, it is also an uncontrollable marketingenvironment.
It affects the overall market environment.
Under the modern consumer-oriented Marketing concept, the consumer is the center of
marketingactivities.
Hence, the marketing manager must study the needs, preferences, and tastes of the
products vis a vis consumers’ needs and thereby produce and market the products
accordingly.
Every business, in order to survive and grow, must serve the needs of consumers and
citizens.
8. Economic Environment
By economic environment, we mean the purchasing poweralongwith the desire to incur the
expenditure of the consumers.
Effective demanddepends on the economic environment.
It also determines the market potentialof a product.
Speedy economic developmentleads to a rapid rise in the level of income and employment
andconsequently, there is an increase in the marketingopportunities of different products.
In this way, the economic environment affects the marketing environment of a company.
9. Corporate Resources
Corporate resources include man, material, money, management, ideas, and information,
locatingresearch anddevelopment programs and public image, etc.
They are the constraints or limitations on the expectations of marketingopportunities.
They affect the marketingenvironment of a company considerably.
A company’ s marketingopportunities depend on the availability of corporate resources.
There should be a happy marriage between the corporate resources and corporate
opportunities so that the company can accomplish the set goals.
10. MarketingMix
The policies adopted by manufacturers to attain success in the market constitute the
marketingmix.
Under marketing with we include mainly product mix, distribution mix, communication mix,
andservice mix.
Strategic Marketing Planning

Planning is vital to marketing. It provides a roadmap to the final marketing goal andunifies the
team's efforts to achieve common objectives. In today's explanation, let's look at strategic
marketingplanningandhow it works.
Strategic MarketingPlanningDefinition
Strategic marketing planning is one of the main functions of marketing management. It is the
process in which the company develops marketing strategies to meet its strategic goals and
objectives. The main steps include identifying the company's current situation, analysing its
opportunities andthreats, and mapping out marketingaction plans forimplementation.
Strategic marketing planning is the development of marketing strategies based on the
overall business strategy.
Marketing plans are developed based on the scope of the strategic plan. Once the plan is
concluded, it is implemented to achieve the company's objectives.

Importance ofStrategic Planningin Marketing

Strategic planningin marketing is vital as it comes with many benefits. Let's take a closer look
at some ofthem.
[Link] the company's currentsituation
A significant part of strategic planning is developing a SWOT analysis that considers the
internal and external environment's influence on business performance. This analysis wil
likely include the company's strengths, weaknesses, opportunities, and threats. This
information helps managers understand the company's situation and develop appropriate
marketingstrategies.

[Link]
Marketing plans include marketing strategies and specific goals and deadlines for achieving
them. Thus, by developing a plan, marketers can ensure marketing activities are carried out
within the set timeframe and meet the overall objectives.
[Link] taken
While goals are vital to business success, they are rather vague for implementation. A
company can set a goal to increase its sales by 10% within two years, but without an action
plan with clear steps on what to do, this is unlikely to happen. That's where strategic
marketing planning comes into play. Along with marketing goals, the plan outlines specific
steps to take to reach the set goal.

ProcessofStrategic MarketingPlanning

Sectionsofastrategic marketingplan
While strategic marketing plans vary from one company to another, they tend to include the
followingsections:
Sections Details
Executive Brief summary of goals and recommendations
summary
SWOT Analysis of the company's current marketing situation along
analysis with opportunities andthreats it might face.
Marketing Specification of the marketing objectives following the overall
objectives strategic objectives
Marketing Strategies for the target market, positioning, marketing mix,
strategies andexpenditures.
Action Specification of steps to implement the marketing strategies.
program
Budgets Estimation of marketingcosts andexpected revenue.
Controls Description of how the monitoring process wil be carried out.
[Link] summary
The executive summary is the shortened version of the entire marketing plan. It outlines
high-level objectives, marketing goals, and activities of the company. The summary must be
clear, concise, andeasyto understand.
[Link]
The next part of the strategic marketing plan is market analysis orSWOT analysis. The SWOT
analysis considers the company's strengths, weaknesses, opportunities andthreats and how
it can exploit ortackle them.
[Link] plan
This is the central part of the strategythat specifies:
  Marketing goals:Goals should be SMART (Specific, Measurable, Achievable,
Realistic, and Time-bound).
 Marketing strategy: Details on how to engage customers create customer value,

build customer relationships, etc. The company should develop strategies for each
marketingmix element.
 Marketing budget: Estimate the costs for carrying out marketingactivities.

[Link]
This section outlines the specific steps forthe marketingcampaign to be carried out. It should
also include measures for progress and returns on marketing investment.

Stepstoplanning amarketingstrategy
Strategic marketing planning includes five main steps:
[Link] buyer personas
The buyer persona is the fictional representation of a company's target customers. It may
include their age, income, location, job, challenges, hobbies, dreams, andgoals.
[Link]
Marketers should create marketing goals based on the strategic objectives of the business.
For example, if the company aims to increase its sales by 10%, a marketing goal can be to
generate 50% more leads from organic search (SEO).
[Link]
The development of a new marketing campaign may require the adoption of new tools
andmarketing channels. However, it doesn't mean the company should dismiss its existing
marketing platforms and assets. Marketers should look at the company's owned, earned, or
paid media to audit the existing marketing resources.
[Link] previouscampaignsandplannew ones
Before developing new marketing plans, the company should audit its previous marketing
campaigns to identify future gaps, opportunities, or issues to prevent. Once done, it can plan
new strategies forthe upcomingmarketingcampaign.
[Link] andmodify
After implementing the new marketing strategies, marketers need to measure their progress
andmake changes when something is not working as planned.

DigitalMarketingStrategic Planning
With the advent of the Internet and digital technology, traditional marketing via offline
channels such as TVs or newspapers are no longer enough for brands to make themselves
known. To succeed in the digital age, companies must incorporate digital marketing -
marketingvia digital channels - in their strategic planning.
Digital marketing strategic planning includes creating a plan for establishinga brand
presence on the Internet through digital channels such as social media, organic search, or
paid ads.
The main goals of the digitalmarketing strategy are the same as for traditional ones -
to increase brand awareness and attractnew customers. Thus, the steps are also similar.
Some examples of digitalmarketingcampaigns include:
 Creatinga blog,
 Running social media advertisingcampaigns,
 Giving out digital products, e.g. eBooks, templates, etc.,
 Running an email marketingcampaign.

Strategic MarketingPlanningExample
To see how strategic marketing planning works out in real life, let's consider some examples
from Starbucks' mission statement, SWOT analysis, and marketing strategy:
Missionstatementexample
The mission statement showcases human connection as the core value Starbucks offers its
customer.

SWOTanalysis example

Starbucks' SWOT analysis

Strengths
 Number one coffee
chain retailer
 Strong financial
performance Weaknesses
 Highly recognizable
brand  High prices due to premiu m coffee
 Happy workers beans
providing excellent  All products have substitutes
service
 An extensive
network of suppliers
 Strong loyalty
program
Opportunities Threats
Convenientcoffee  Many riv als,i ncludi ng small coffee


buying - shops and reputable brands such as

drive-through McDonald's Cafe and Dunkin'
locations,pick-up Donuts.
options  Risk ofcoffeehouse close-down
due to Covid-19
Table 2. Starbucks SWOT Analysis, Study Smarter Originals
Marketingstrategyexample
Starbucks'MarketingMix 4Ps:
 Product -premiu m coffee, adaptive menus basedon regions, anda wide selection of
food and beverages.
 Price - valu e-based prices, targetingmiddle and high-income individuals.
 Pla ce - coffeehouses, mobile apps, retailers.
 Promotion -spend ahuge amount of money on advertising, developa highly effic ient

loyaltyprogram, and exert corporate socialresponsibility.

Strategic MarketingPlanning- Keytakeaways
 Strategic marketing planning is the development of marketing strategies basedon the
overall business strategy.
 Strategic marketing planning helps marketers understand the current situation of the
business and develop matching strategies.
 The main sections of a strategic marketingplan include an executive summary, SWOT
analysis, marketing objectives andstrategies, action plans, budgets, andcontrols.
 Steps to developing a marketing plan include creating buyer personas, defining

marketing goals, surveying existing marketing assets, auditing past marketing

campaigns and creatingnew ones.
 Digital marketing planning is the development of marketing strategies for online

channels.
Managing andcontrolMarketing Program
Definition: Marketing control refers to the measurement of the company’ s marketing
performance in terms of the sales revenue generated, market share captured, and profit
earned. Here, the actual result is compared with the standard set, to find out the deviation
andmake rectifications accordingly.
Marketing is one of the crucial functions of any organization. Therefore, the management
must exercise proper control over the marketing operations to ensure error-free results,
optimum utilization of the resources and achievement of the plannedobjectives.
Marketing Control
1. Types
 Annual PlanControl
 ProfitabilityControl
 Efficiency Control
 Strategic Control
Process
Typesof Marketing Control
When we say control, it is not about overpoweringthe personnel, but it means enhancement
of efficiency, by reducing the chances of errors and meeting the standards set by the
management.
Let us now discuss the four majortypes of control, implementedin an organization:

Annual PlanControl
As the name suggests, the plans which are determined for one year for the control of
operational activities through the successful implementation of management by objectives is
termedas annual plan control.
Such programs are usually framed and controlled by the top management of the
organization.
Following are the five vitaltools used underthe annualplan controlmechanism:
Sales Analysis
The first one is the sales analysis, where the managerdetermines whether the sales target of
the organization has been achieved or not. For this purpose, the actual sales are compared
with the desired sales anddeviation is computed.
This method is also used for finding out the efficiency of sales personnel by comparing the
individualsales with the target set foreach salesperson.
Market Share Analysis
To evaluate the competitiveness, the management needs to find out the market share
acquired by the organization.
However, it is quite challenging to determine the market share of other organizations which
constitute of unorganizedfirms, due to lack of sufficient data.
Marketing Expense to SalesAnalysis
Sometimes the firms spend much on the marketing of products, which diminishes their profit
margin orincreases the product price.
Therefore, a marketing expense to sales ratio is calculated to know the percentage of sales
value paid off as amarketing expense
Let us now go through the other ratios computed to determine the share of each marketing
expense in sales value:
 Sales Force Cost to Sales Ratio estimates the percentage of sales value used to pay
the salespeople.
 Sales Administration to Sales Ratio determines the share of sales amount utilized for
meeting the selling and administration expenses.
 Sales Promotion to Sales Ratio is the value of sales invested in the sales promotion
activities.
 Advertising to Sales Ratio is the percentage of sales value, which is contributed to
the advertisingexpenses of the products.
 Distribution Expenses to Sales Ratio is the value of sales, which is utilized for paying
off distribution expenses.
Financial Analysis
The management needs to handle its finances well. It should examine the reasons and
factors which influence the rate of return and financial leverage and return on assets in the
organization through financialanalysis tools.
It also helps to enhance the financialleverage position of the company.
Customer Attitude Tracking
Consumer satisfaction has been considered as an essential parameter to analyze the
organization’ s performance. It is a qualitative analysis tool which can be of the following
three types:
1. Customer Surveys: The companies get the questionnaires fil ed or make calls to the
past customers for finding out the level of consumer satisfaction. It provides a direction
to the sales team and the management.
2. Customer Panels: The organizations form consumer panels where the customers are
hired to review the products, advertisements and other marketing activities. It helps the
management toknow about the consumer’ s perception and attitude.
 3. Feedback and Suggestion Systems: Market performance of the products can be
analyzed with the help of genuine feedback from the customers, and the same can be
improved through their suggestions and input.
ProfitabilityControl
Maximizing the profit margin has become a difficult task in today’ s highly competitive
market. This has enforcedpressure on the marketingteam of the organizations too.
They now need to frame strategies for profit assessment and control in the different product
line, trade channels andterritories.
Following is the process of profitability controlin an organization:

The is to understand the functional expenses, i.e., selling, distribution, administrative

and advertising expenses incurred while carrying out the marketing function of a territory
or marketing channel.
The is to segregate the non-marketing expenses from the marketing
overheads and then to associate these pure marketing expenses to the marketing entities
(like apportioningthe buildingrent into marketingfunction).
 , to compile everything systematically and to ascertain the profit or loss incurred on
carrying out the particular marketing activity, an individual profit and loss account is prepared
for each operation.
Efficiency Control
The management and the marketers are regularly involvedin finding out ways toimprove the
task performance in the organization. These improvements bring in efficiency and perfection
in marketingoperations.
The three essential mechanisms usedunder efficiency controlare as follows:

Sales Force Efficiency Indicators

The competence of the sales team can be determined by evaluating the various factors. It
includes acquisition of new customers, customer turnover, average cost incurred on each
sales call, return on time invested on the prospective customers, market share lost to the
competitors, average sales made by each person perday, etc.
Advertising Efficiency Indicators
To know the effectiveness of the advertising activities, the marketers analyze the various
advertisingfunctions on different grounds. Forthis purpose, it finds out the brand awareness,
cost incurred on each enquiry, media cost to reach per thousand customers, advertising
campaign reach, etc.
Distribution Efficiency
The performance of the distribution channels in comparison to the cost incurred on channel
partners and distribution of products can be analyzed through the distribution efficiency
control.
It includes the measurement of the channel member’ s market reach, cost incurred on
operating a particular channel and the contribution of each channel member in selling the
brand’ s products.

Strategic Control
The external environment creates a significant impact on the organization’ s marketing
strategies. To understand and align the plans with the prevailing external environment, the
organization can adopt any of the following controlfunctions:

Customer Relationship Barometer

To determine the customer’ s loyalty towards the brand and its products, the organization
uses the relationship barometer.
Here, the company studies the customer’ s perception based on the criteria like
organization’ s core values, system, policies, structure, customer orientation strategy,
technology, personnelattitude, knowledge, skil s andbehavior.
Marketing Audit
Like accounting audits, marketers carry out marketing audit to get a clear picture of the
company’ s performance while executing the various marketingoperations.
It is a systematic record which periodically examines the problem areas andprovides for the
means of rectification, to overcome the weakness by utilizingthe organizationalstrength and
grab the current opportunities.

Marketing Control Process

Marketing control is a systematic and integrated process. A marketer follows the following
steps while exercisingcontrol over the marketing operation in an organization:

1. Determining Marketing Objectives: The initial step in marketing control is the setting
upof the marketing goals, which are in alignment with the organizational objectives.
2. Establishing Performance Standards: To streamline the marketing
process, benchmarking is essential. Therefore, performance standards are set for
carryingout marketing operations.
3. Comparing Results with Standard Performance: The actual marketing performance
is comparedand matchedwith the set standards and variation is measured.
4. Analyzing the Deviations: This difference is then examined to find out the areas
which require correction, and if the deviation exceeds the decided range, it should be
informed to the top management.
 5. Rectification and Improvement: After studying the problem area responsible for low
performance, necessary steps should be taken to fil in the gap between the actual and
expected returns.
Thus, marketing can be seen as a complete function, which needs to be performed
successfully through proper control over the related activities, to ascertain the achievement
of the set goals and objectives.
Marketing Management
[M-104]
MODULE -3 (Segmentation, Targeting and Positioning :)
- Introduction
- TheSTP process
- Concept of Market Segmentation
- Benefits of Market Segmentation
- Requisitesof EffectiveMarket Segmentation
- Processof Market Segmentation
- Basesfor Segmenting Consumer Markets
- Targeting strategies
- Positioning concept and strategies.
 (Segmentation, Targeting and Positioning)
- Introduction
The awareness about the product amongst the consumers is the basic requirement of
marketing. It is the responsibility of the marketer to effectively communicate with
customers in order to inform them about the products and services being offered by
the company. The marketing planning has to have such campaigns made so that USPs
[Unique Selling Prepositions] is logically and clearly communicated to the customers. A
single product cannot satisfy all customers. Therefore due to varying needs and
requirements, it is essential to make different segments of consumers and plan foreach
segment separately.
This process in marketingis calledTarget Marketing’ which is also termed as STP
[Segmentation, Targeting and Positioning]
Today, the STP marketing model (Segmentation, Targeting, and Positioning) is a familiar
strategic approach in modern marketing. It is one of the most commonly applied marketing
models in practice, with marketing leaders crediting it for efficient, streamlined
communications practice.
STP marketing focuses on commercial effectiveness, selecting the most valuable segments
for a business and then developing a marketing mix and product positioning strategy for
each segment.
- TheSTP process
- The STP model is useful when creating marketing communications plans since it helps
marketers to prioritize propositions and then develop and deliver personalized and
relevant messages to engage with different audiences. The three-stepfunnelconsists of
market segmentation, market targeting, and product positioning.
- Within your research-based market segmentation phase, you are aiming to identify a
basis for the segmentation of your target customers, and determine important
characteristics todifferentiate each market segment.
- When creating your targeting and positioning strategy, you must evaluate the potential
and commercial attractiveness of each segment, and then develop detailed product
positioning for each selected segment, including a tailored marketing mix based on your
knowledge of that segment.
STPmarketing asa planningtool
Segmentation, targeting, and positioning is an audience-focused rather than
product-focused approach to marketing communications which helps deliver more relevant
messages to commercial y appealingaudiences.
STP is a critical strategy and planning tool, featured in our RACE Growth System. Our RACE
Growth System supports marketers, managers, and business owners to create a 90-day
marketingplan across each stage of their marketing funnel.
So, while STP sits within the planning activities, the benefits of effective segmentation,
targeting and positioning can be felt across the types of customers you reach, interact with,
convert, andengage.
- Concept of Market Segmentation
- Market segmentation is aprocess that consists of sectioningthe target market into
smallergroups that share similarcharacteristics, such as age, income, personality traits,
behavior, interests, needs orlocation.
- These segments can be used to optimize products, marketing, advertising and sales
efforts.
- Segmentation allows brands to create strategies for different types of consumers,
depending on how they perceive the overall value of certain products and services. In
this way they can introduce a more personalized message with the cert
is the practice of dividing your target market into approachable groups.
Market segmentation creates subsets of a market based on demographics, needs,
priorities, common interests, andotherpsychographic or behavioralcriteria usedto better
understandthe target audience.
- According to Philip Kotler, “Market segmentation is the process of dividing a targeted
audience into subgroups based on commonalities, ranging from age, gender or location
to priorities, values andbehavior”
Nature Of A Market Segment
A market segment needs to be homogeneous. There should be somethingcommon among
the individuals in the segment that the marketer can capitalize on. Marketers also need to
check that different segments have different distinguishing features which make
them unique. But segmenting requires more than just similar features. Marketers must also
ensure that the individuals of the segment respond in a similar way to the stimulus. That is,
the segment must have a similar type of reaction to the marketing activities being pitched.
externally heterogeneous andinternally homogeneous
-
- Benefits of Market Segmentation
  Cost effective marketing: Market segmentation can help you get the most out of
your marketing strategies, as it allows you to direct your resources at the right
audience with the right message. Segmenting your target audience correctly is also
the most efficient way to increase your revenue.

 Better conversion rate: The more specific you are in addressing the needs of your
prospects, the more likely they are to convert. You wil have a better sense of what
motivates your audience, which can help you make more informed decisions, such as
writing effective calls-to-action on your site. As a result, you could increase your
conversion rate.
 Customer retention: Segmentation is a good way of keeping customers satisfied and
retention rates high. With the data you’ ve captured from your market segmentation,
you’ l know how to tailor your customers’ experience to meet their individual
needs. One way to do so is to employ different marketing automation methods to
ensure you’ re targeting them at each strategic milestone of their customer journey.
 Expand your business: Segmentation can reveal new areas where you can expand. It
can help businesses, who are now armed with a plethora of information about their
prospects, findnew audiences they may not be currently tapping.

 Improve product development: With your target audience segmented, you are more
likely to identify new interests your customers have. This can lead to development of
new products or services that wil bettercaterto their needs.
Other benefits include:
1. Stronger marketing messages: You no longer have to be generic and vague – you
can speak directly to a specific group of people in ways they can relate to, because
you understandtheir characteristics, wants, andneeds.
2. Targeted digital advertising: Market segmentation helps you understand and define
your audience’ s characteristics, so you can direct your marketing efforts to specific
ages, locations, buyinghabits, interests etc.
3. Developing effective marketing strategies: Knowingyourtarget audience gives you a
head start about what methods, tactics and solutions they wil be most responsive to.
 4. Better response rates and lower acquisition costs: These wil result from creating
your marketing communications both in ad messaging and advanced targeting on
digitalplatforms like Face book and Google using yoursegmentation.
5. Attracting the right customers: Market segmentation helps you create targeted, clear
anddirect messaging that attracts the people you want tobuy from you.
6. Increasing brand loyalty: when customers feel understood, uniquely well served and
trusting, they are more likely to stick with your brand.
7. Differentiating your brand from the competition: More specific, personal messaging
makes your brandstandout.
8. Identifying niche markets: segmentation can uncover not only underserved markets,
but also new ways of serving existing markets – opportunities which can be used to
grow yourbrand.
9. Staying on message: As segmentation is so linear, it’ s easy to stay on track with
your marketingstrategies, andnot get distracted into less effective areas.
10. Driving growth: You can encourage customers tobuy from you again, or trade up
from a lower-pricedproduct or service.
11. Enhanced profits: Different customers have different disposable incomes; prices can
be set accordingto how much they are wil ingto spend. Knowingthis can ensure you
doesn’ t over (or under)sell yourself.
12. Product development: You’ l be able to design with the needs of your customer’ s
top of mind, anddevelopdifferent products that cater to your different customer base
areas.

.
- Requisitesof EffectiveMarket Segmentation
Identifying the requirements for effective market segmentation allows companies to
create marketing campaigns that are essential for their growth and development. Here
are the five criteria for effective market segmentatio n:
[Link]
The size and purchasing power profiles of your market should be measurable, meaning
there is quantifiable data available about it. A consumer’ s profiles and data provide
marketing strategists with the necessary information on how to carry out their
campaigns.
It would be difficult to create advertisements for markets that have little to no data or for
audiences that can’ t be measured. Always ask whether there is a market for the kind of
product or service that your business wants to produce then define how many possible
customers and consumers are in that market.
[Link]
Accessibility means that customers and consumers are easily reached at an affordable
cost. This helps determine how certain ads can reach different target markets and how to
make ads more profitable.
A good question to ask is whether it’ s more practical to place ads online, on print, or out
of house. For example, gather data on the websites a specific target market usually visits
so you can place more advertisements on those websites instead.
3. Substantial
The market a brand should want to penetrate should be a substantial number. You should
clearly define a consumer’ s profiles by gathering data on their age, gender, job,
socio-economic status, and purchasing power.
It doesn’ t make sense to try and reach an unjustifiable number of people — you’ re
just wasting resources. However, you also don’ t want to market the brand to a group
too small that the business doesn’ t become profitable.
4. Differentiable
When segmenting the market, you should make sure that different target markets
respond differently to different marketing strategies. If a business is only targeting one
segment, then this might not be as much of an issue.
But for example, if your target market is college students, then it’ s essential to create a
marketing strategy that both freshman students and senior students react to in the same
positive way. This process ensures that you are creating strategies that are more efficient
and cost-effective.
5. Actionable
Lastly, your market segments need to be actionable, meaning that they have practical
value. A market segment should be able to respond to a certain marketing strategy or
program and have outcomes that are easily quantifiable.
As a business owner, it’ s important to identify what kind of marketing strategies work
for a certain segment. Once those strategies have been identified, ask yourself if the
business is capable of carrying out that strategy.
- Processof Market Segmentation
Identifying the target market starts with segmentation. Once you understand your
customers and are able to segment the market, you can identify the target market with
the most potential. There is a process of segmentingthe market and then selecting and
reaching the target segments.
The process has five steps as shown in the figure below.

Market Segmentation Process. The process of market segmentation consists of 5 steps:

1) Group potential buyers into segments;
2) Groupproducts intocategories;
3) developmarket-product grid andestimate market sizes;
4) Select target markets; and
5) Take marketing actions to reach target markets.
Step 1: GroupPotential Buyers into Segments
There are five main criteria touse when formingthe segments:
1. Potential for increased profit: Segmentation is costly. Businesses apply segmentation
only if it wil lead to higherprofits. If there is no chance of increasing profits, then there
is no need for segmentation.
2. Similarity of needs of potential buyers within a segment: Potentialconsumers who are
in the same segment must share similar needs and wants. Businesses take marketing
actions towards each segment and they expect to get the same reaction from the
consumers who are in the same segment.
3. Difference of needs of buyers among segments: Potential consumers who are in
different segments must have different needs and wants. If they share similar needs
and wants, they should be in the same segment. Different segments require different
marketing actions, which mean greater costs. It helps to lower the costs if the firm
combines the segments that are not significantly different so that it reduces the
number of marketingactions.
4. Potential of a marketing action to reach a segment: Reaching a segment requires
effective marketing actions. If the actions are very complicated or impossible to take
then there is no point in segmentation.
5. Simplicity and cost of assigning potential buyers to segments: As mentioned earlier,
segmentation is costly. It requires research to identify specific needs of potential
buyers. If the research shows the needs are very diverse and that trying to segment
wil lead to so many micro segments to which it wil be very costly to reach out then
there is no point in segmentation.
When segmenting, we can pick from many segmentation variables. There are four main
dimensions of segmentation: Geographic, demographic, psychographic, and behavioral
segmentation. The table below shows these dimensions and the variables corresponding to
each dimension.
Main Variables TypicalBreakdown
Dimensions
Geographic Region Atlantic provinces, Quebec, Ontario, Prairie provinces, British Col
Segmentation
City or census Under 5,000; 5,000-19,999; 20,000-49,999; 50,000-99,9
metropolitan area 250,000-499,999; 500,000-999,999;1,000,000-3,999,999; 4,
(CMA)size
Density Urban, suburban, rural
Climate East, west
Demographic Age Infant; preschool; child; youth; collegiate; adult; senior
segmentation
Gender Male, female
Family size 1-2; 3-4; 5+

Maritalstatus Nevermarried; married; separated; divorced; widowed

Income Under $10,000; 10,000-19,999; 20,000-29,999; 30,000-39
55,000-74,999; 75,000+
Education Grade school or less; some high school; high school grad
university graduate
 Race White, Black, Asian, Native, Other
Home ownership Own home; rent home
Psychographic Personality Gregarious; compulsive; extroverted; introverted
association
Lifestyle (PRIZMS) Grads&Pads; Fresh Air Families; Our Time; Pets and PCS; etc.
Behavioral Benefits sought Quality; service; low price
segmentation
Usage rate Light user; medium user; heavy user
User status Non-user; ex-user; prospect; first-time user; regular user
Loyalty status None; medium; strong
ConceptCheck Question:
Whichof the followingstatements is false regarding segmentation?
Education is a demographic variable.
User status is a psychographic variable.
Personalityis apsychographic variable.
Usage rate is a behavioral variable.

Step 2: Group Productsto be Sold into Categories

Businesses pay close attention to the differences in the needs of consumers in each
segment. In order to address the needs in the best way possible, businesses create
differentiated products. These products could be different based on the features of the
product, pricing, distribution, etc. As you have learned, companies have full control over the
marketing mix elements (4Ps) which allows them to create different mixes of the 4Ps to
create differentiated products.
Segmentation and green consumerism
It is very common to apply demographic segmentation, or segmenting a market based on
population characteristics. However, there are many other variables that could be used, as
you have seen in the chart above.
In addition to the variables listed so far, there is also segmentation based on environmental
friendliness. Companies with a green focus pay attention to segmentation aligned with
consumers’ environmental orientation.
One important point is that segmentation can be done using a combination of different
variables rather than just a single variable. Using a single variable is also fine but in many
cases a single demographic variable may not be sufficient in understanding and segmenting
a given market. As a result, marketers combine a number of variables that might be relevant
to their target market.
Example:Cosmetics companies, such as Clinique, combine many variables in their
segmentation, specifically gender, income, and occupation. These variables help to
distinguish segments fordifferent lines of cosmetic products.
Step 3: Develop a Market-ProductGrid and Estimate Size of Markets
You have seen an example of a market-product grid from Sleep Country. Below is an
additional example from a fast food restaurant that is located next to an urban university. We
label the market segments in the horizontal rows and products in the vertical columns as
shown in the table below. The market sizes are estimates from zero to three. Zero means no
potential. One represents small potential. Two represents medium size potential. Three
shows the most potential.

Products:Meals
Markets Breakfast Lunch Between-meal Snack Dinner A
Student Dormitory 0 1 3 0
Apartment 1 3 3 1 1
Day commuter 0 3 2 1 0
Night commuter 0 0 1 3 2
Non-student Facultyor staff 0 3 1 1 0
Live in area 0 1 2 2 1
Workin area 0 3 0 1 0

The blue-shaded area in the table shows the target markets. The reason behind the selected
target market is comingfrom the potential market size estimates. There is almost no potential
for breakfast. For that reason, the restaurant decided not to serve breakfast at all. The
non-student segment is also eliminated from the target market due to lower potential
compared to the student segment. The restaurant stil serves non-students but all marketing
activities are directed towards students since they are promising the highest market size
estimates.
Step 4: Select Target Markets
Once you developa market-product grid, it is fairly easy to identify the target market from the
grid based on the highest market size estimates.
The grid is the tooltouse when selecting a target market.
Critical Thinking Activity: Develop a market-product grid for your group project. Remember
that you are not identifying their current target market. Rather, you are developing the grid
basedon market-product strategy and segmentation.
ConceptCheck Questions:
[Link] first step in segmenting and targeting markets thatlinkcustomer needsto marketing
actionsis to
Grouppotential buyers into segments.
Groupproducts to be sold intocategories.
Developa market-product grid andestimate size of the overall market.
Select target markets.
[Link] market-productgrid,whatfactor is estimated or measured for each of the cells?
The size of the market in each cell
The competitive products in each cell
The governmentalregulations applied to each cell
The purchase methodapplied to each cell

Step 5:Take Marketing Actions to Reach Target Markets

Identifyingtarget markets makes it possible to take actions towards the segments we include
in the target market. Based on the characteristics of each segment, marketers decide on the
best tools to reach out to these segments. We wil cover promotional strategies in future
lessons.

- Basesfor Segmenting Consumer Markets

[Link] segmentation: The
Widely used by D2C ecommerce brands, demographic segmentation is one of the simplest
yet effective kinds of segmentation. You can use demographic segmentation to split your
audience and create customer personas based on objective information, such as:
 Age
 Gender
 Income

 Levelof education
 Religion
 Profession/role in a company

For example, if you segment your audience based on your customers’ income, you can
target them with products that fall within the constraints of their budget. If you’ re a small
business ornew to ecommerce, this is a straightforwardtype of segmentation with three key
advantages:
 It’ s easy to collect information
 It’ s simple to measure&analyze
 It’ s cost-effective

Luxury goods manufacturer Montblanc worked with Yieldify to present a selection of offers
across their website. They lifted conversions by 118% with a Father’ s Day deal offering a
free gift to customers spending over £200 – a threshold that took the spending
expectations of Montblanc’ s target audience into account.
. Psychographic segmentation:The
Psychographic segmentation is the process of grouping people together based on similar
personal values, political opinions, aspirations and psychologicalcharacteristics.
Forexample, you can group customers accordingto their:
 Personality
 Hobbies
 Socialstatus
 Opinions
 Life goals
 Valu es andbeliefs

 Lifestyle

Because these characteristics are subjective, psychographic is a harder segment to identify

– but it’ s also the most valuable. The best places to gather data for psychographic
segmentation are through your audience analytic tools and social media, but you should also
use surveys, interviews and focus groups to strengthen your customer understanding in this
segment.
Through psychographic segmentation, you can get a deep insight into your customers’
likes, dislikes, needs, wants and loves. You can then create marketing campaigns that
resonate with their psychographic profile.
Yieldify’ s personalization technology helps you create on-site experiences that capture
more psychographic information about your customers. For example, Heidi, a leading online
travel agency, collected information about their customers’ preferred skiing style with
layeredlead capture experiences.
3. Geographic segmentation:The
Geographic segmentation is the process of grouping customers based on where they live
andwhere theyshop. People who live in the same city, state or zip code typically have similar
needs, mindsets andculturalpreferences.
The real advantage of geographic segmentation is it provides an insight into what your
customers’ location says about anumberof geo-specific variables, such as their:
 Climate
 Culture

 Language
 Population density – (urban vs. rural)

As with all market segmentation methods, you’ l need to analyze your data to understand
how each factor influences your customers’ shopping behavior. For example, people living
in colder climates are likely to be in the market for winter clothing and home heating
appliances.
You can also use geographic segmentation to solve practical problems. With Yieldify, global
fashion brand Nautica used geo-targeting to show different customers when they could
guarantee Christmas delivery. Customers in rural areas had to order earlier than urban areas,
soNautica’ s delivery countdown timers adapted according to the customer’ s location.
4. Behavioralsegmentation: The
Behavioralsegmentation is the process of grouping customers basedon common behaviors
they exhibit when they interact with yourbrand.
Forthis type of segmentation, you can group your audience based on their:
 Spendinghabits
 Purchasing habits
 Browsing habits
 Interactions with yourbrand
 Loyalty toyourbrand
 Product feedback
Gather this objective data through your website analytics and you can identify patterns in
your customers’ behavior that help predict how they’ l interact with your brand in the
future.
Then you can leverage this hypothesis to provide personalized recommendations that
address your customer’ s needs. For example, Spottify provides its users with curate daily
mixes based on the types of genresand artiststhey’ ve listened to previously.
At Yieldify, we use behavioral segmentation to deliver highly relevant and targeted
campaigns based on behaviors including:
 Number of sessions toyourwebsite
 Number of pages visited

 Time spent on site

 URLs visited
 Page types visited
 Exit intent
 Inactivity
 Shopping cart value

 Campaign history
 Referralsource

For example, Petal&Pup tailor their email lead generation messaging for visitors arriving from
Facebook.
Other typesof marketsegmentationwithexamples
Demographic, psychographic, geographic, and behavioral are the four pil ars of market
segmentation, but considerusing these four extra types to enhance your marketing efforts.
Technographic segmentation
Techno graphic segmentation group’ s people based on the technology they use and how
they interact with it. For example, you could segment early adopters of new tech and target
them when you launch a new product tomarket.
Alternatively, you could present customers with deals depending on what device they use to
shop online. Forexample, you could show Apple products to consumers whouse Safari.
Generational and life stage segmentation
Generational segmentation expands on demographic segmentation by grouping customers
basedon their generation – Boomers, Gen Z, Mil ennial, etc.
You can also segment customers by factors including marital status, home ownership and
number of children.
For example, Bank of America successfully incorporated life stage segmentation in their
digital marketing strategy. They invited customers using their Family Life Banking program to
specify their life stage circumstances when they signed up. From there, they directed
customers to a micro site designed specifically forthat segment.
Transactionalsegmentation
Using transactional segmentation you can group customers based on their previous
purchase interactions with your brand, including:
 Source of branddiscovery – e.g. social media, organic
 Date of most recent order
 Total number of transactions
 Average order value

Firm graphic Segmentation

Most of the market segments I’ ve discussed focus on D2C brands, but firm graphic
segmentation is a toolB2B companies use to create more impactfulmarketingcampaigns.
Firm graphic segmentation is the process of analyzing and classifying B2B customers based
on shared company characteristics, and is similar to how D2C marketers use demographic
segmentation.
Use these 7 factors to create firm graphic customersegments:
  Industry
 Location
 Company size
 Status
 Number of employees
 Performance
 Executive title
 Sales cycle stage

ExamplesOf Market Segmentation

Market segmentation is a common practice among all the industries. It is not possible for a
marketer to address the mass with same marketing strategy. Here are some examples of
market segmentation to prove this point.
Beauty Products
While marketing beauty products, marketers often segment the target market according to
the age of the users, the skin type, and also the occasion. A perfect example of this is Olay.
The company developed its ‘Age Defying’ product range to cater to mature adults and
‘Clearly Clean’ range to cater to youngadults andteens.
Fast Food
Fast foodchains like McDonald’ s often segment their target audience into kids andworking
adults and develop different marketing plans for both. Marketing efforts like distributing a toy
with every meal works well for kids and providing the food within 10 minutes, free WiFi, and
unlimitedrefil s work well for working adults.
Sports
Sports brands like Nike, Adidas, Reebok, etc. often segment the market based on the sports
they play which help them market the sports-specific products to the right audience.
Targeting strategies
What Is a Target Market?
A target market is a group of people that have been identified as the most likely potential
customers for a product because of their shared characteristics such as age, income, and
lifestyle.
Identifying the target market is a key part of the decision-making process when a company
designs, packages, andadvertises its product.
Targeting in marketing involves breaking the target audience into segments and then
designing marketing activities that wil reach the segments most likely to be responsive
 to yourefforts. Target marketing can greatly increase the success you have in reaching
potentialcustomers.
Target marketingis a marketing strategy that breaks a market into segments and then
concentrates your marketing efforts on one or a few key segments consisting of the
customers whose needs and desires most closely match your product or service
offerings. It can be the key to attracting new business, increasing sales, and making
your business a success.

When evaluating different market segments to decide the best segment for the product, the
organization must consider three main factors to identify the most approachable market
targeting strategies for the business.
 1. Segment Size and growth– The size of the market segment should be aligned with
the organization’ s production capability and development characteristics. The
market segment should cater growth capacity and the growth capacity should be
able to handle bythe organization
2. Segment structural attractiveness – The organization should analyze the long-run
attractiveness of the market segment.
3. Company objectives and resources– The organization’ s objectives should match
the output of the market segment and the available resources should have the
capability of cateringto the need of the target market segment.
The market targetingstrategies can be identified under four main segments.
1. Undifferentiated Marketing
2. Differentiated Marketing
3. Concentrated Marketing
4. Micromarketing

Undifferentiated Marketing
This is also known as the Mass marketing strategy. Under this strategy, the organization
decides to ignore the market segmentation and decide to produce it to the entire market.
This is suitable for productions such as garment and necessary food. This type of strategy
focuses on the common needs of the consumers and products to satisfy those common
needs. There is no uniqueness or specification for the product. The organization should
invest a large amount of capital for mass production.
Differentiated Marketing
Differentiated Marketing strategy is also known as the segmented marketing strategy. It
decides to select several target markets in the industry andproduce customizedproducts for
each market segment. By offering separate product types for each market segment, the
organization is expecting to achieve a higher market share in each market segment and plan
to stabilize separately in each segment. This strategy requires many research and
development skil s, innovative and creative skil s to produce products that can satisfy all the
selectedmarket segments.
Differentiated marketing is a highly costly strategy. Apart from that, it can be considered as
one of the safest ways of production. If one marketing segment fails to achieve the
expectedincome, the organization has a few more options to improve and encourage.
Concentrated Marketing
Concentrated marketing is known as Niche marketing as well. Under the concentrated
marketingstrategy, the organization focuses on a large share of one or more small segments
(niches). Through concentrated marketing, the organization is planning to achieve a strong
market share and create brand loyalty in the customers. By focusing on one or a few niches
the organization is planning to obtain better knowledge on the customer needs and provide
exactly what they are expecting from the product.
This strategy helps smallercompanies to focus on their resources and provide with minimum
waste and achieve biggerandbetter market share.
Micromarketing
Micromarketing strategyis about producingthe product and the marketingmethod to suit the
taste of a specific individual or specific location. Rather than producing for every customer,
micromarketing concentrates on satisfying the needs of specific, prestigious customers.
Micromarketing can be divided into two categories naming local marketing and individual
marketing.
1. Local Marketing – This is about providing a product or a service based on the
requirement of a customer group
2. Individual Marketing – This is about providing a product or a service based on an
individual customer. This can be identified as one-to-one marketing or mass
customization.
The organizations use the above-mentioned market targeting strategies to find the best
market segmentation for their product and try to expand the market share within that market
segment.
Market Targeting Process
There are two steps of market targeting process, the first step is to evaluate market
segmentation and select those segments that suit the business. In the second step,
marketers select appropriate market targetingstrategies.
Step1. Evaluation MarketSegments
The market targeting process involves assessing those segments marketers already
identified in the market segmentation. But when we talk about evaluating market segments, it
is based on certain criteria. Business owners and marketers must answer these questions
while assessingthe market segments.
What are the sizes of the segments I am lookingfor?
What are the demographics of identified segments?
What is the competition levelof each segment?
What is the growth potentialin the segments?
What segments can help to achieve company goals?
How to best utilize company resources pursuingthe segments?
These are not the only questions. The questions may vary according to industry, business
nature and the depth of research you conducted.
Step 2. Market TargetingStrategies
In todays’ business environment every business needs market targeting strategies.
Targeting the right market is very important. Here we wil discuss four types of market
targeting strategies with examples.
Undifferentiated Market Targeting
Undifferentiated market targeting strategy ignores market segmentation and goes after the
whole market. This strategy considers buyers as homogeneous group. Undifferentiated
marketing is also known as mass marketing. In this strategy, companies do not produce
different products for different market segments.
This type of marketing strategy relies on mass distribution and mass advertising. Companies
aim to create superior image of the product in the minds of consumers. Company uses this
strategy to appeal a wider audience based on common customer needs and wants other
than differentiatedand concentrated strategies.
It has a narrow product line which leads to low advertising cost. Lack of segment marketing
reduces the costs of marketingresearch.

Henry Ford adopted undifferentiated marketing strategy for T Ford Model. This model was
available in only black color in 1930s. Another example of undifferentiatedstrategy is Hershey
Company, few years back they have only one chocolate candybar forall.
Differentiated Market Targeting
In Differentiated market targeting strategy, a company opts to target multiple market
segments and design different and effective marketing mix for each market segment.
A Differentiated market targeting approach is likely to create more sales than does
undifferentiated marketing. But due to distinct marketing mix, the promotion cost also
increases. The increasing sales must be weighedwith increasingcosts.
Number of different companies adopted differentiated marketing strategies. ,
the segmentation of Unilever generates more sales by achieving higher market share
through various detergent brands which they could not with just one brand.
Market TargetingDefinition Strategies andExamples
In this article, we wil discuss market targeting. What is it and why need to know it. We have
already discussed market segmentation and learnt that companies are unable to reach all
customers in the market. The company cannot fulfil all customers’ needs that is too large.
Therefore, to solve this problem marketers segment the market into small segments. After
this, one should target those segments which can be better served is market targeting.
There are some businesses who believe that everyone wil be their customer. It is not true.
Targeting is focused on evaluating available segment’ s attractiveness and select one or
more segments to serve. You only want those people who have a needfor the products and
services you are offering.
Many of your customers belongto multiple target markets at a time, for example, I am a man,
a father and a husband. Each category has some products and services that I need to fulfil
my wants, needs and responsibilities in each respective position. Here you noticed that
everything about me puts me in a target market for some marketers.
Market Targeting Process
There are two steps of market targeting process, the first step is to evaluate market
segmentation and select those segments that suit the business. In the second step,
marketers select appropriate market targetingstrategies.
Step1. Evaluation MarketSegments
The market targeting process involves assessing those segments marketers already
identified in the market segmentation. But when we talk about evaluating market segments, it
is based on certain criteria. Business owners and marketers must answer these questions
while assessingthe market segments.
What are the sizes of the segments I am lookingfor?
What are the demographics of identified segments?
What is the competition levelof each segment?
What is the growth potentialin the segments?
What segments can help to achieve company goals?
How to best utilize company resources pursuingthe segments?
These are not the only questions. The questions may vary according to industry, business
nature and the depth of research you conducted.
Step 2. Market TargetingStrategies
In today’ s’ business environment every business needs market targeting strategies.
Targeting the right market is very important. Here we wil discuss four types of market
targeting strategies with examples.
Undifferentiated Market Targeting
Undifferentiated market targeting strategy ignores market segmentation and goes after the
whole market. This strategy considers buyers as homogeneous group. Undifferentiated
marketing is also known as mass marketing. In this strategy, companies do not produce
different products for different market segments.
This type of marketing strategy relies on mass distribution and mass advertising. Companies
aim to create superior image of the product in the minds of consumers. Company uses this
strategy to appeal a wider audience based on common customer needs and wants other
than differentiatedand concentrated strategies.
It has a narrow product line which leads to low advertising cost. Lack of segment marketing
reduces the costs of marketingresearch.

Henry Ford adopted undifferentiated marketing strategy for T Ford Model. This model was
available in only black color in 1930s. Another example of undifferentiatedstrategy is Hershey
Company, few years back they have only one chocolate candybar forall.
Differentiated Market Targeting
In Differentiated market targeting strategy, a company opts to target multiple market
segments and design different and effective marketing mix for each market segment.
A Differentiated market targeting approach is likely to create more sales than doe’ s
undifferentiated marketing. But due to distinct marketing mix, the promotion cost also
increases. The increasing sales must be weighedwith increasingcosts.
Number of different companies adopted differentiated marketing strategies. ,
the segmentation of Unilever generates more sales by achieving higher market share
through various detergent brands which they could not with just one brand.
Another example is McDonalds, they have developed unique menus for local consumers in
many countries of the world. In India McDonald create a unique menu forlocalconsumers i.e.
the McCurry Pan which a vegetarian dish. The Indian version of Big Mac is called the
Maharaja Mac “the Social Burger” makes with gril ed chicken, tomatoes and onions. Both
products are according to the Indian religious sensitivities as beef is not consumed.
Concentrated Market Targeting
In concentrated / niche market targeting strategy, resources are focused and target specific
market segments. Concentrated marketing strategies are effective for those small
companies having limited resources. Due to focused strategy they can perform better
compare to large businesses.
Due to better knowledge of specific segment’ s needs, company can achieve a higher
market position. If company chooses the right segment at the right time, it can achieve
lucrative rate of return on investment.
Examples
Pizza Hut successfully developed database of 9 mil ion pizza lovers’ customers. By using
this database, Pizza Hut developedtarget market campaigns to reach its consumers.
MicromarketingMarket Targeting
Micromarketing strategy involves developing products, services and marketing programs
best match with individuals and locations. Small business owners can use micromarketing
strategy to target customers at personal level. Micromarketing includes local marketing and
individuals marketing.
Example
A good market targeting examples is Citibank, it offers different services on branch level
basedon neighborhooddemographics. Walmart andSears Store customize its inventoryand
promotion to meet the requirements of specific clients.
Individual marketing examples include hotel industry, clothing, and furniture and bicycle
industry. This strategy is basedon the preferences on individual’ s customers.
Whether a company, business owner or marketer, you should evaluate and target the
market very carefully and effectively. Market targeting strategies are designed to promote a
brand or resonate a message to target audience. Evaluate market segments and select
target market according to your overall business objectives and plans.
Positioning Concept andStrategies
Whatis MarketPositioning?
Market Positioning refers to the ability to influence consumer perception regarding a brand or
product relative to competitors. The objective of market positioning is to establish the image
or identityof a brand orproduct so that consumers perceive it in a certain way.
Forexample:
 A handbag maker mayposition itself as a luxury status symbol
 A TVmakermay position its TV as the most innovative andcutting-edge
 A fast-food restaurant chain may position itself as the providerof cheapmeals

Whatare the typesof positioning?

 You can position your product by:
 Customer needs: Knowing your target market and how you wil fulfil their specific
needs.
 Product price:Positioningyourbrand/product as competitively priced
 Product quality: Positioning yourbrand/product as high quality:
 Product use and application: Associating your brand/product with a specific use
 Competitors:Positioningyourbrand as better than yourcompetitors
Whatis the meaning of market positioning?
Market positioning is a strategic exercise we use to establish the image of a brand or product
in a consumer’ s mind.
This is achieved through the four Ps: promotion, price, place, and product. The more detailed
your positioningstrategy is at definingthe Ps, the more effective the strategy wil be.
Typesof Positioning Strategies
There are severaltypes of positioningstrategies. A few examples are positioning by:
 Product attributes and benefits: Associating your brand/product with certain
characteristics or with certain beneficialvalue
 Product price:Associating your brand/product with competitive pric ing
 Product quality: Associating your brand/product with high quality
 Product use and application: Associating your brand/product with a specific use
 Competitors:Making consumers think that your brand/product is better than that of
your competitors

Whatis the importance of market positioning?

Positioning can make or break a product, do it right and you’ l have a receptive audience,
confident they’ ve made the right decision despite a slew of other options. Do it wrong and
you’ l be lucky if yourproduct registers with consumers at all.
 Market positioning is integral to your company’ s branding and how your target market
perceives you.
It should embody your core values and communicate your principles to customers. Forming
a successful product positioning strategy is one of the most fundamental elements of
marketing because it allows your business the opportunity to differentiate itself from its
competitors.
Well-executed product positioning also helps internal teams such as sales, marketing, and
customer success in delivering exciting customer experiences, oftentimes leading to an
upturn in customerretention andstronger advocacy programs.
How marketpositioninghelpsyou connect withcustomers
The objective of market positioning is to get customers to view your product and brand as
the leader in your respective market.
When market positioning is well executed and completed correctly, this opens up the
opportunity for you to connect with your customers. People are interested in purchasing
products that resonate with them. If consumers think your product is capable of delivering
the benefits they’ re looking for, then the likelihood is they’ l buy your product ahead of
others that are available.
April Dunford, Founder of Ambient Strategy, explains how to master positioning forgrowth.
Examplesof marketpositioning
 A ladies' shoe company might position its products as a status symbol,
 A fast-food chain that serves sandwiches might position itself as the healthier
fast-food option, or
 A car company might position itself as the safest option for a family.
Whatis a brand positioning strategy?
Brandpositioningis when a company positions its brand in the mindof its customers.
 Whatare the 3 levels of brand positioning?
There are three types of positioning strategies: comparative, differentiation, and
segmentation.
Comparative positioning
Comparative positioning is when a company compares its product or service with
alternatives that are available to its target demographic.
This helps establish their USPs and highlights their value when compared with other
companies on the market.
Differentiation positioning
Differentiation positioning is when a company focuses on features that can’ t be copied by
a market rival, i.e. they use the feature to ‘differentiate’ themselves from competitors.
This approach is useful because it allows companies to earmark a particular feature they’ re
able to offer, that others cannot.
Segmentation positioning
If a company is targeting more than one target audience, segmentation positioning is
beneficial, as it helps address the specific needs of each group.
Whatis the importance of brand positioning?
Brand positioning plays an important role in helping you stand out from other companies
offeringsimilarproducts.
Brand positioning examples
 Pepsi vs. Coca-Cola
 Starbucks vs. Caribou Coffee
 Netflix vs. Apple TV
 Zoom vs. Microsoft Teams
 Whatis product positioning?
Product positioning is a strategic exercise we use to finda product or service’ s place in the
market. Positioning defines what makes your product different from the others on the market
soyou can focus on messaging and effectively explain its value to potential customers.
Whatare the 4 main componentsof a productpositioning statement?
A positioning statement can be split into four segments: the target, the category, the
differentiator, and the payoff.
1. The target - It’ s important to establish the target before you begin working on your
marketing activity. The target market ought to be based on essential criteria including
demographics, geography, psychographics, pains, customerneeds, and soon.
2. Category - When prospective customers are evaluating a purchase, they need a frame of
reference. You need to outline the category in which your brand wil be competing. For
example, technology, fashion, etc. Proving context for your customer wil help establish
brand relevance. Gives the brand relevance to the customer.
3. Differentiation - When writing a positioning statement, include a solitary point of
differentiation; it’ s regarded that multiple benefits or features shouldn’ t be included as
differentiators for your product. This is because the unique features or benefits of your
product/service wil support the main differentiator.
Remember, don’ t use a bold claim that your product is the "the global leader" as your point
of differentiation. Instead, explain in detail you’ re the globalleader.
Also, ensure you differentiate your product from your customer’ s perspective and not a
business angle. While having a healthy market share or a large turnover may appeal to ,
this relevant to yourcustomer.
4. The payoff - This part of your positioning statement is the differentiation with the needs or
goals of the target market.
Here, it’ s essential to communicate to your target personas exactly how your differentiator
wil address their user needs.
To reinforce our earlier point, a successful positioning statement hinges on an in-depth
understanding of your target market. Any understanding needs to be based on bona fide
market research - never rely on internal assumptions.
 Marketing Management
[M-104]
MODULE -4 (ConsumerBuying Behavior)
- Introduction
- Characteristics
- Typesof Buying Decision Behavior
- Factors influencing Consumer Buying Behavior
- Buying Decision Process
- Buying Motives
- Buyer Behavior Models
 (Consumer Buying Behavior)
- Introduction
Consumer buying behavior is the sum of a consumer's attitudes, preferences, intention,
and decisions regarding their behavior in the marketplace when buying a product or
service. This lesson explores the factors of consumer buying behavior and purchasing
patterns, as well as how these choices can be best understood in order to develop a
deeper consumerunderstanding.
Whatis Consumer Buying Behavior?
Definition of BuyingBehavior:
BuyingBehavior is the decision processes and acts of people involved in buyingandusing
products.
Consumer Buying Behavior refers to the actions taken (both on and offline) by consumers
before buying a product or service. This process may include consulting search engines,
engagingwith social media posts, ora variety of other actions. It is valuable for businesses to
understand this process because it helps them better tailor their marketing initiatives to the
marketingefforts that have successfully influencedconsumers to buy in the past.
Consumer behavior may be defined as the decision process and physical activity
individuals engage in whenevaluating, acquiring,using or disposing of goods and services.
According to Belch and Belch "consumer behavior is the process and activities people
engage in when searching for, selecting, purchasing, using, evaluating and disposing of
products and services soas to satisfy their needs and desires".
Needto understand:
 Why consumers make the purchases that they make?
 What factors influence consumer purchases?
 The changingfactors in oursociety.

Consumer Buying Behavior refers to the buying behavior of the ultimate consumer. A firm
needs toanalyze buyingbehavior for:
 Buyer’ s reactions to a firms marketing strategy has a great impact on the firm’ s
success.
 The marketing concept stresses that a firm should create a Marketing Mix (MM) that
satisfies (gives utility to)customers, therefore need to analyze the what, where, when
andhow consumers buy.
 Marketers can better predict how consumers wil respond to marketingstrategies.

Characteristicsof Consumer Behavior

Systematic process :Consumer behavior is a systematic process relating to buying
decisions of the customers. The buyingprocess consists of the followingsteps:

 Needidentification to buythe product

 Information search relating to the product
 Listing and evaluatingthe alternative
 Purchase decision

 Post purchase evalu ation by the marketer

Influenced by various factors: Consumer behavior is influenced by a number of factors the

factors that influence consumers include marketing, personal, psychological, situational,
socialandculturaletc.
Different for different customers : All consumers do not behave in the same manner.
Different consumers behave differently. The different in consumer behavior is due to
individualfactors such as nature ofthe consumer's lifestyle, culture etc.
Different for different products: Consumer behavior is different for different products there
are some consumers who may buy more quantity of certain items and very low quantity of
some other items.

Vary across regions: The consumer behavior vary across States, regions and countries. For
instance, the behavior of urban consumers is different from that of rural consumers.
Normally rural consumers are conservative (traditional) in their buyingbehavior.

Vital for marketers: Marketers need to have a good knowledge of consumer behavior they
need to study the various factors that influence consumer behavior of the target customers.
The knowledge of consumer behavior enables marketers to take appropriate marketing
decisions.

Reflect status: Consumer buying behavior is not only influenced by status of a consumer
coma but it also reflect it. Those consumers who owned luxury cars, watches and other
items are considered byothers as persons of higher status.

Result in spread effect: Consumer behavior as a spread effect. The buying behavior of one
person may influence the buying behavior of another person. For instance, a customer may
always prefer to buy premium brands of clothing, watches and other items etc. This may
influence some of his friends, neighbors and colleagues. This is one of the reasons why
marketers use celebrities like Shahrukh Khan, sachin to endorse their brands.
Undergoes a change : The consumer behaviour undergoes a change over a period of time
depending upon changes in age , education and income level etc, for example, kids may
prefercolourfuldresses but as they grow upas teenagers andyoungadults, they may prefer
trendy clothes.
Information search: Search for information is a common consumer behavior. Consumers
cannot purchase goods and services if they are unaware that a good orservice exists. When
a consumer decides to buy a certain item, his decision must be based on the information he
has gathered about what products our services are available to fulfil his needs. There might
be a product available that would be better suited to the consumers needs, but if he is an
aware of product, he wil not buyit.
Brand loyalty: Brand loyalty is another characteristic of consumer behavior. Brand loyalty is
the tendency of a consumer to buy product products or services from a certain company
that one likes or equates with having high quality goods and services. For example, if Naina's
first car was a Honda as a teenager and the car lasted 200,000 miles, she might have a
tendency to buy Hondas again in the future due to her previous positive experience. This
brand loyalty may be so strong that she forgoes the information search all together when
considering for next vehicle.

Scope of Consumer Behavior:

1) Consumer behavior and marketing management: Effective business managers realize
the importance of marketing to the success of their firm. A sound understanding of
consumerbehavioris essentialtothe long run success of any marketingprogram. In fact, it is
seen as a comer stone of the Marketing concept, an important orientation of philosophy of
many marketing managers. The essence of the Marketing concept is captured in three
interrelated orientations consumers needs andwants, company integratedstrategy.
2) Consumer behavior and non profit and social marketing: In today's world even the
non-profit organizations like government agencies, religious sects, universities and charitable
institutions have to market their services for ideas to the "target group of consumers or
institution." At other times these groups are required to appeal to the general public for
support of certain causes or ideas. Also they make their contribution towards eradication of
the problems of the society. Thus a clear understanding of the consumer behavior and
decision makingprocess wil assist these efforts.
3) Consumer behavior and government decision making: In recent years the relevance of
consumer behavior principles to government decision making. Two major areas of activities
have been affected:
i) Government services: It is increasingly and that government provision of public services
can benefit significantly from an understanding of the consumers, or users, of these
services.
i ) consumer protection: Many Agencies at all levels of government are involved with
regulatingbusiness practices for the purpose of protecting consumers welfare.
4) Consumer behavior and demarketing: It has become increasingly clear that consumers
are entering an era of scarcity in terms of some naturalgas and water. These scarcities have
led to promotions stressing conservation rather than consumption. In other circumstances,
consumers have been encouraged to decrease or stop their use of particulargoods believed
to have harmful effects. Programs designed to reduce drug abuse, gambling, and similar
types of conception examples. These actions have been undertaken by government
agencies nonprofit organizations, and other private groups. The term "demarketing" refers to
all such efforts to encourage consumers to reduce their consumption of a particular product
or services.
5) Consumer behavior and consumer education: Consumer also stands to benefit directly
from orderly investigations of their own behavior. This can occur on an individual basis or as
part of more formal educational programs. For example, when consumers learn that a large
proportion of the bil ions spent annually on grocery products is used for impulse purchases
and not spend according to pre planned shopping list, consumers may be more wil ing to
plan effort to save money. In general, as marketers that can influence consumers'
purchases, consumers have the opportunity to understand better how they affect their own
behavior.
Importance ofconsumer behavior:
1)Production policies: The study of consumer behavior effects production policies of
enterprise. Consumer behavior discovers the habits, tastes and preferences of consumers
and such discovery enables and enterprise to plan and develop its products according to
these specifications. It is necessary for an enterprise to be in continuous touch with the
changes in consumer behavior sothat necessary changes in products may be made.
2)Price policies: The buyer behavior is equally important in having price policies. The buyers
of some products purchase only because particular articles are cheaper than the competitive
articles available in the market.
3) Decision regarding channels of distribution: The goods, which are sold and solely on the
basis of low price mast and economical distribution channels. In case of those articles, which
week T.V. sets, refrigerators etc. Must have different channels of distribution. Thus, decisions
regardingchannels of distribution are taken on the basis of consumerbehavior.
4) Decision regarding sales promotion: Study of consumer behavior is also vital in making
decisions regarding sales promotion. It enables the producer to know what motive prompt
consumer to make purchase and the same are utilized in promotional campaigns to awaken
desire to purchase.
5) Exploiting marketing opportunities: Study of consumer behavior helps the marketers to
understand the consumers needs, aspirations, expectations, problems etc. This knowledge
wil be useful to the marketers in exploiting marketing opportunities and meeting the
challenges of the market.
6)Consumer do not always act or react predictably: The consumers of the past used to
react toprice levels as if price andqualityhad positive relation. Today, week value for money,
lesser price but with superior features. The consumer’ s response indicates that the shift
hadoccurred.
7)Highly diversified consumer preferences: This shift has occurred due to availability of
more choice now. Thus study of consumerbehavioris important tounderstand the changes.
8) Rapid introduction of new products:Rapid introduction of new product with technological
advancement has made the job of studying consumer behavior more imperative. For
example, the information Technologies are changing very fast in personalcomputerindustry.
9) Implementing the "Marketing concept": These calls for studying the consumer behavior,
all customers need have to be given priority. Thus identification of target market before
production becomes essential to deliver the desired customer satisfaction anddelight.

Applications of consumer behavior:

1)Analyzing market opportunity: Consumer behavior study help in identifying the unfulfil ed
needs and wants of consumers. This requires examining the friends and conditions
operating in the Marketplace, consumer’ s lifestyle, income levels and energy influences.
This may reveal unsatisfied needs and wants. Mosquito repellents have been marketed in
response to a genuine and unfulfil ed consumer need.
2)Selecting target market: Review of market opportunities often helps in identifying district
consumer segments with very distinct and unique wants and needs. Identifying these
groups, behaves and how they make purchase decisions enable the marketer to design and
market products or services particularly suited to their wants and needs. For example, please
sleeprevealed that many existingandpotentialshampoo users did not want to buy shampoo
fax price at rate 60 for more and would rather prefer a low price package containing enough
quantity for one or two washers. This finding LED companies to introduce the shampoos
sachet, which become a goodseller.
3) Marketing-mix decisions: Once unsatisfied needs and wants are identified, the marketer
has to determine the right mix of product, price, distribution and promotion. Where too,
consumer behavior study is very helpful in finding answers too many perplexing questions.
The factors of marketingmix decisions are:
i) productii) price i i) promotion iv) distribution
4) Use in social and non profits marketing: Consumer behavior studies are useful to design
marketing strategies by social, governmental and not for profit organizations to make their
 program more effective such as family planning, awareness about AIDS.
- Typesof Buying Decision Behavior
4 Typesof Consumer Behavior
A consumer’ s buyingdecision depends on the type of products that they needto buy. The
behavior of a consumerwhile buyinga coffee is a lot different from while buying a car.
Based on observations, it is clear that purchases that are more complex and expensive
involve higher deliberation andmany more participants.
Consumer buying behavior is determinedby the level of involvement that a consumershows
towards a purchase decision. The amount of risk involvedin a purchase also determines the
buying behavior. Higher priced goods tend to high a higher risk, thereby seeking higher
involvement in buying decisions.

There are four types of consumer buying behavior:

1. Complex buying behavior
2. Dissonance-reducingbuying behavior
3. Habitual buyingbehavior
4. Variety seeking behavior
[Link] buying behavior
Complex buying behavior is encountered particularly when consumers are buying an
expensive product. In this infrequent transaction, consumers are highly involved in the
purchase decision. Consumers wil research thoroughly before committingtoinvest.
Consumer behaves very differently when buying an expensive product or a product that is
unfamiliar to them. When the risk of buying a product is very high, a consumer consults
friends, family, andexperts before makingthe decision.
For example, when a consumer is buying a car for the first time, it’ s a big decision as it
involves high economic risk. There is a lot of thought on how it looks, how his friends and
family wil react, how his social status wil change afterbuyingthe car, andso on.
In complex buying behavior, the buyer wil pass through a learning process. He wil first
develop beliefs about the product, then attitudes, and then make a thoughtful purchase
choice.
For complex buying behavior customers, marketers should have a deep understanding of
the products. It is expected that they help the consumer to understand their product. It is
important to create an advertising message in a way that influences the buyer’ s beliefs and
attitudes.
[Link]-reducing buying behavior
In dissonance-reducing buying behavior, consumer involvement is very high. This might be
due to high prices and infrequent purchases. In addition, there is low availability of
choices with fewer significant differences among brands. In this type, a consumer buys a
product that is easily available.
Consumers wil be forced to buy goods that do not have too many choices and therefore
consumers wil be left with limited decision making. Based on the products available, time
limitations, or budget limitations, consumers buy certain products without a lot of research.
For example, a consumer who is looking for a new collapsible table that can be taken for
camping quickly decides on the product based on a few brands available. The main criteria
here wil be the use and the feature of the collapsible table and the budget available to him.
Marketers should run after-sale service camps that deliver focused messaging. These
campaigns should aim to support consumers andconvince them to continue with the choice
of their brand. These marketing campaigns should focus on building repeat purchases and
referrals byoffering discounts and incentives.
3. Habitual buying behavior
Habitual Buying Behavior is depicted when a consumer has low involvement in a purchase
decision. In this case, the consumer perceives only a few significant differences between
brands.
When consumers are buying products that they use for their daily routine, they do not put a
lot of thought. They either buy their favorite brand or the one that they use regularly – or the
one available in the store or the one that costs the least.
For example, when a consumer buys a loaf of bread, he tends to buy the brand that he is
familiar with without actually putting in a lot of research and time. Many products fit into this
category. Everyday use products, such as salt, sugar, biscuits, toilet paper, and black pepper
all fit intothis product category.
Consumers just go for it and buy it – there is no brand loyalty. Consumers do not research
or needinformation regarding the purchase of such products.
Habitual buying behavior is influenced by radio, television, and print media. Moreover,
consumers are buying based on brand familiarity. Hence marketers must use repetitive
advertisements to build brand familiarity. Further to initiate product trial, marketers should use
tactics like price droppromotions andsales promotions.
Marketers should attract consumers using visual symbols and imagery in their advertising.
Consumers can easily remember visual advertisements and can associate with a brand.
4. Variety seeking buying behavior
In variety-seeking consumer behavior, consumer involvement is low. There are significant
differences between brands. Here consumers often do a lot of brand switching. The cost of
switching products is low, and hence consumers might want to try out new products just out
of curiosity or boredom. Consumers here, generally buy different products not because of
dissatisfaction but mainly with an urge to seek variety.
For example, a consumer likes to buy a cookie and choose a brand without putting much
thought into it. Next time, the same consumer might choose a different brand out of a wish
for a different taste. Brand switchingoccurs often andwithout intention.
 Brands have to adopt different strategies for such types of consumer behavior. The market
leader wil persuade habitual buying behavior by influencing the shelf space. The shelf wil
display a large numberof related but different product versions.
Marketers avoid out-of-stock conditions, sponsor frequent advertising, offer lower prices,
discounts, deals, coupons, and free samples to attract consumers.
- Factors influencing Consumer Buying Behavior

1. PsychologicalFactors
2. SocialFactors
3. Cultural Factors
4. Personal Factors
5. Economic Factors
Consumer behavioris influenced by many different factors. A marketer should try to
understand the factors that influence consumer behavior. Here are 5 major factors that
influence consumer behavior:
[Link] Factors
Human psychology is a major determinant of consumer behavior. These factors are difficult
to measure but are powerfulenough to influence a buying decision.
Some of the important psychologicalfactors are:

i. Motivation
When a person is motivated enough, it influences the buying behavior of the person. A
person has many needs such as social needs, basic needs, security needs, esteem needs,
andself-actualization needs. Out of all these needs, the basic needs andsecurity needs take
a position above all other needs. Hence basic needs and security needs have the power to
motivate a consumerto buy products andservices.
i . Perception
Consumer perception is a major factor that influences consumer behavior. Customer
perception is a process where a customer collects information about a product and
interprets the information to make a meaningful image of a particular product.
When a customer sees advertisements, promotions, customer reviews social media
feedback, etc. relating to a product, they develop an impression about the product. Hence
consumerperception becomes a great influence on the buying decision of consumers.
i i. Learning
When a person buys a product, he/she gets to learn something more about the product.
Learningcomes over a period of time through experience. A consumer’ s learningdepends
on skil s and knowledge. While skil can be gained through practice, knowledge can be
acquired only through experience.
Learning can be either conditional or cognitive. In conditional learning the consumer is
exposed to a situation repeatedly, thereby making a consumer to develop a response
towards it.
Whereas in cognitive learning, the consumer wil apply his knowledge and skil s to find
satisfaction anda solution from the product that he buys.
iv. Attitudes and Beliefs
Consumers have certain attitudes and beliefs which influence the buying decisions of a
consumer. Based on this attitude, the consumer behaves in a particular way towards a
product. This attitude plays a significant role in defining the brand image of a product. Hence,
marketers try hard to understand the attitude of a consumer to design their marketing
campaigns.
[Link] Factors
Humans are social beings and they live around many people who influence their buying
behavior. Humans try to imitate other humans and also wish to be social y accepted in the
society. Hence their buying behavior is influenced by other people around them. These
factors are considered as socialfactors. Some of the socialfactors are:
i. Family
Family plays a significant role in shaping the buying behaviorof a person. A person develops
preferences from his childhood by watching family buy products and continues to buy the
same products even when they grow up.
i . Reference Groups
A reference groupis a groupof people with whom a person associates himself. Generally, all
the people in the reference grouphave common buyingbehaviorandinfluence each other.
i i. Rolesand status
A person is influenced by the role that he holds in the society. If a person is in a high position,
his buying behavior wil be influencedlargely by his status. A person who is a Chief Executive
Officer in a company wil buy according to his status while a staff or an employee of the
same company wil have different buying pattern.
3. Culturalfactors
A groupof people is associated with a set of values and ideologies that belong to a particular
community. When a person comes from a particular community, his/her behavior is highly
influenced by the culture relating to that particular community. Some of the cultural factors
are:
i. Culture
Cultural Factors have a strong influence on consumer buying behavior. Cultural Factors
include the basic values, needs, wants, preferences, perceptions, and behaviors that are
observed and learned by a consumer from their near family members and other important
people aroundthem.
i . Subculture
Within a cultural group, there exist many subcultures. These sub cultural groups share the
same set of beliefs and values. Subcultures can consist of people from different religion,
caste, geographies andnationalities. These subcultures by itself form acustomer segment.
i i. Social Class
Each and every society across the globe has the form of social class. The social class is not
just determined by the income, but also other factors such as the occupation, family
background, and education and residence location. Social class is important to predict the
consumerbehavior.
4. Personal Factors
Factors that are personal to the consumers influence their buying behavior. These personal
factors differ from person to person, thereby producing different perceptions and consumer
behavior.
Some of the personal factors are:
i. Age
Age is a major factor that influences buying behavior. The buying choices of youth differ
from that of middle-aged people. Elderly people have a totally different buying behavior.
Teenagers wil be more interested in buying colorful clothes and beauty products.
Middle-agedare focused on house, property and vehicle for the family.
i . Income
Income has the ability to influence the buying behavior of a person. Higher income gives
higher purchasing power to consumers. When a consumer has higher disposable income, it
gives more opportunity for the consumer to spend on luxurious products. Whereas
low-income or middle-income group consumers spend most of their income on basic needs
such as groceries andclothes.
i i. Occupation
Occupation of a consumer influences the buying behavior. A person tends to buy things that
are appropriate to this/her profession. For example, a doctor would buy clothes according to
this profession while a professor wil have different buyingpattern.
iv. Lifestyle
Lifestyle is an attitude, and a way in which an individual stay in the society. The buying
behavior is highly influenced by the lifestyle of a consumer. For example when a consumer
leads a healthy lifestyle, then the products he buys wil relate to healthy alternatives to junk
food.
5. Economic Factors
The consumer buying habits and decisions greatly depend on the economic situation of a
country ora market. When a nation is prosperous, the economy is strong, which leads to the
greater money supply in the market and higher purchasing power for consumers. When
consumers experience a positive economic environment, they are more confident to spend
on buyingproducts.
Whereas, a weak economy reflects a struggling market that is impacted by unemployment
andlower purchasingpower.
Economic factors bear a significant influence on the buying decision of a consumer. Some of
the important economic factors are:
i. Personal Income
When a person has a higher disposable income, the purchasing power increases
simultaneously. Disposable income refers to the money that is left after spending towards
the basic needs of aperson.
When there is an increase in disposable income, it leads to higher expenditure on various
items. But when the disposable income reduces, parallels the spendingon multiple items also
reduced.
i . Family Income
Family income is the total income from all the members of a family. When more people are
earning in the family, there is more income available for shopping basic needs and luxuries.
Higher family income influences the people in the family to buymore. When there is a surplus
income available for the family, the tendency is to buy more luxury items which otherwise a
person might not have been able to buy.
i i. Consumer Credit
When a consumer is offered easy credit to purchase goods, it promotes higher spending.
Sellers are making it easy for the consumers to avail credit in the form of credit cards, easy
installments, bank loans, hire purchase, and many such other credit options. When there is
higher credit available to consumers, the purchase of comfort and luxury items increases.
iv. Liquid Assets
Consumers who have liquid assets tend to spend more on comfort and luxuries. Liquid
assets are those assets, which can be converted into cash very easily. Cash in hand, bank
savings and securities are some examples of liquid assets. When a consumer has higher
liquid assets, it gives him more confidence to buy luxury goods.
v. Savings
A consumer is highly influenced by the amount of savings he/she wishes to set aside from
his income. If a consumer decided to save more, then his expenditure on buying reduces.
Whereas if a consumer is interested in savingmore, then most of his income wil go towards
buying products.
- Buying Decision Process
There are six stages to the Consumer Buying Decision Process (for complex decisions).
Actual purchasing is only one stage of the process. Not all decision processes lead to a
purchase.

1.
1. Problem Recognition(awareness of need):
Problem Recognition (awareness of need) difference between the desired state and the
actual condition. Deficit in assortment of products. Hunger—Food. Hunger stimulates your
need to eat. Can be stimulated by the retailer through product information- a commercial for
a new pair of shoes stimulates your recognition that you need anew pair ofshoes.
[Link] search:
 i. Internal search- memory.
  i . External searches-- if you need more information. Friends and relatives (word of
mouth). Marketerdominated sources; comparison shopping; public sources, etc.
A successful information search leaves a buyer with possible alternatives, the evoked
set.
Hungry,wantto go out and eat, evoked set is:
i. Chinese food.
i . Indian food.
i i. Mexican Food.
3. Evaluationof Alternatives:
Need to establish criteria for evaluation, features the buyer wants or does not want.
Rank/weight alternatives or resume search. May decide that you want to eat
somethingspicy, Indian gets highest rank etc.
If not satisfied with your choice, then return to the search phase. Can you think of another
restaurant? Look in the yellow pages etc. Information from different sources may be treated
differently. Marketers try toinfluence by “framing” alternatives.
4. Purchase decision:
Choose buyingalternative, includes product, package, store, methodof purchase etc.
5. Purchase:
May differ from decision, time lapse between 4&5, product availability.
[Link]-Purchase Evaluation– outcome:
Satisfaction or dissatisfaction. Cognitive Dissonance, have you made the right decision. This
can be reduced by warranties, aftersales communication etc.
After eating an Indian meal, you may think that really you wanted aChinese mealinstead.
Consumer Buying Motives
Buying motives of a buyer refers to the influences or motivations forces which determine his
buying. In other words, a buying motive is the inner feelings, urge, instinct, drive, desire,
stimulus, thoughts, or emotionthat makes a buyerbuy a certain product or service to satisfy
his needs.
Every human activity has a motive behind it. So also, the buying activity of every buyer has a
motive behind it. A buyer does not simply purchase something. He takes a decision to
purchase somethingonly when a motive (i.e., inner feeling orurge)make him to buyit.
Buying motives of a buyer refers to the influences or motivations forces which determine his
buying. In other words, a buying motive is the inner feelings, urge, instinct, drive, desire,
stimulus, thoughts, or emotion that makes a buyer buy a certain product or service to satisfy
his needs.
Classificationof buying motives or Typesof Buying Motives:
Buyingmotives can be classifiedas follows:
[Link] buying motives
a) Emotional buyingmotives b) Rational buyingmotives
[Link] buying motives
a) Emotional buyingmotives
b)Rationalbuying motives
[Link] Buying Motives:
Product buying motives refer to those influences and reasons which prompt (i.e., induce) a
buyerto choose aparticular product in preference to other products. Product buying motives
may be sub-divided into two groups, viz., emotional product buying motive, and rational
buying motive.
Emotional Product Buying Motives: When a buyer decides to purchases a product without
thinking over the matter logically and carefully, he or she is said to have been influenced by
emotional product buyingmotives. Emotionalproduct buying motives include the following-
a) Pride or Prestige: Many buyers are proud of possessing some product (i.e.,
they feel that the possession of the product increases their social prestige or
status). In fact, many products are sold by the sellers by appealing to the pride
or prestige of the buyers.
b) Emulation or imitation: emulation i.e., the desire to imitate others is one of the
important emotional buying motives. For instance, a housewife may like to
have a silk saree for the simple reason that all the neighboring housewives
have silk sarees.
c) Affection: many goods are purchasedby the buyers because of their affection
or love for others. For instance, a father may buy a costly watch for his son or
daughter out of his affection or love.
d) Comfort or desire for Comfort: many products are bought because of the
desire for comfort. For instance, fans refrigerators washing machine, cushion
beds, etc. are bought by the people because of their desire for comfort.
e) Sex appealor sex attraction: buyers buy anduse certain things, as they want to
be attractive to the members of the opposite sex. Men and women by cosmetics, costly
dresses, etc. because of this emotional motive.
f) Ambition: ambition refers to the desire to achieve a definite goal. It is because of this
buying motive that, sometimes, customers buy certain things. For instance, it is the ambition
that makes many people, who do not have the facilities.
g) Desire for distinctiveness or individuality: Customers buy certain things because they want
to be in possession of things which are not possessed by others. Purchasing and wearing a
particular type of dress by some people is because of their desire for distinctiveness or
individuality.
h) Desire for recreation or pleasure: desire for recreation or pleasure is also one of the
emotional buying motives. For instance, radios, musical instruments, etc., are bought by
people because of their desire forrecreation.
i) Hunger and thirst: Hunger and thirst are also one of the important emotional buying
motives. foodstuffs, drinks, etc., are bought by the people because of their motive.
Rational Product Buying Motives: When a buyer decides to buy a certain thing after careful
consideration, he is said tohave been influenced byrationalproduct buying motives. Rational
product buying motives include the following:
1. Safety and Security: Desire for safety or security is an important rational
buying motive influencing many purchases. For instance, iron safes or safety
lockers are bought by the people because of this motive. Similarly, vitamin
tablets, tonics, medicines, etc. are bought by the people because of this
motive, i.e., they want to safeguardtheir health andprotect themselves against
diseases.
2. Economy: Economy, i.e., saving in operating costs, is one of the important
rational buying motives. For instance, maruti Suzuki cars are preferred by the
people because of the economy or saving in the operating costs.
3. Relatively low price: most of the buyers compare the prices of competing
products and buy things which are relatively cheaper.
4. Suitability: intelligent buyers consider the suitability of the products before
buying them. For instance, a buyer who has a small dining room, naturally,
goes in for asmall dining table that is suitable.
5. Utility or versatility: versatility or the utility of a product refers to that quality of
the product which makes it suitable for a variety of uses. People, often
purchase things which have utility.
6. Durability of the Product: Durability of the product is one of the most important
rational buying motives. Many products are bought by the people only on the
basis of their durability.
7. Convenience of the product: many products are bought by the people
because they are more convenient to them.
Patronage Buying Motives: Patronage buying motives refers to those
considerations or reasons which prompt a buyer to buy the product wantedby
him from a particular shop in preference to other shops. Patronage buying
motives alsomay be sub-divided into two groups. They are:-
a) Emotional patronage buyingmotives.
b)Rationalpatronage buyingmotives.
EmotionalPatronage buying motives: When a buyer patronizes a shopwithout
applying his mind or without reasoning, he is said to have been influenced by
emotional patronage buyingmotives.
Emotionalpatronage buyingmotives include the following
1) Appearance of the shop: some people make their purchases from a
particularshopbecause of the good orattractive appearance of the shop.
2) Display of goods in the shop: Attractive display of goods in the shop also
makes the buying patronize a particular shop.
3)Recommendation of others: some people purchase their requirements from
a particular shop because that shop has been recommended to them by
others.
4) Imitation: people make their purchases from a particular shop just because
otherpeople make their purchases from that shop.
5) Prestige: Prestige is one of the emotional patronage buying motives of the
buyers. For instance, some people consider it a prestige to take coffee from a
five-starhotel.
6) Habit: some people make their purchases from a particular shop for the
simple reason that they have been habitually making their purchases from that
shop.
Rational Patronage Buying Motives:- When a buyer patronizes a shop after
careful consideration, he is said to have been influenced by rational patronage
buying motives. Rationalpatronage buyingmotives include the following:
1) Convenience: convenient location or proximity of a shop is one of the
considerations influencing the purchases of many buyers from a particular
shop. Many buyers, usually, buy their requirements from a nearby shop, as it is
convenient to them to make their purchases.
2) Low price charged by the shop: if the price charged by a shop for a
particular product is relatively cheaper, naturally, many people wil make their
purchases from that shop.
3) Credit facilities offered: people who do not have enough money to make
cash purchases every time prefer to make their purchases from a shop which
offers credit facilities.
4) Service Offered: the various sales and after-sale services, such as,
acceptance of order through phone, home delivery of goods, repair services
etc. offered by a shop also induce the buyers to buy their requirements from
that shop.

5) Wide Choice: People, generally, prefer to make purchases from a shop

which offers wide choice.
6) Treatment: people would like to purchase their requirements from a shop
where they get courteous treatment.
7) Reputation of the shop: people would like to make their purchases from a
store having reputation for fair dealings.
 Consumer Buyer Behavior Models
A consumer behavior model is a theoretical framework for explaining why and how
customers make purchasing decisions. The goalof consumerbehaviormodels is to outline a
predictable map of customer decisions up until conversion, thus helping you steer every
stage of the buyer’ s journey.
Consumer behavior models may sound complicated, but they’ re not. They’ re a way to
create a “buyer behavior story” that you can use to refine and improve your customer
experience.
As a whole, buyer behavior refers to an individual's buying habits based on influences from
their background, education, personalbeliefs, goals, needs, desires, andmore.
Businesses aim to understand buyer behavior through customer behavior analysis, which
involves the qualitative and quantitative analysis of a target market. Even though this datacan
tell you your customer’ s favorite brand of socks, it doesn’ t mean much if it doesn’ t tell
you why theypurchased that brand of socks.
Customer behavior models help you understand your unique customer base and more
effectively attract, engage, and retain them. These models are either traditional or
contemporary.
TRADITIONAL CONSUMER BEHAVIOR CONTEMPORARY CONSUMER
MODELS BEHAVIOR MODELS
LearningModel Engel-Kollat-Blackwell (EKB)Model
Psychoanalytical Model Black Box Model
SociologicalModel Hawkins Stern Model
Economic Model HowardSheth Model
 Nicosia Model
Webster andWind Model
Traditional Behavior Models
Traditional behavior models were developed by economists hoping to understand what
customers purchase based on their wants and needs. Traditional models include the
following:
 LearningModel
 Psychoanalytical Model
 SociologicalModel
 Economic Model
1. Learning Modelof Consumer Behavior
The Learning Model of customer behavior theorizes that buyer behavior responds to the
desire to satisfybasic needs requiredforsurvival, like food, and learnedneeds that arise from
lived experiences, like fear or guilt. This model takes influence from psychologist Abraham
Maslow’ s Hierarchy of Needs (picturedbelow).
The bottom level of this hierarchy represents basic needs, and ascending sections describe
learned needs, or secondary desires, that allow consumers to feel as though they’ ve
reached self-fulfil ment.
The Learning Model says that consumers first make purchases to satisfy their basic needs
and then move on to meet learned needs. For example, a hungry customer would fulfil their
needfor food before a learned needto wear trendy clothing.
If you’ re a multipurpose business that sells products that meet all levels of customerneeds,
this model applies to you. For example, Target is a United States-based department store
that sells hundreds of products. Super Targets are larger versions of the chain that also sell
groceries.
When a customer visits a Super Target, they first see products that satisfy their basic needs
— the grocery section. They’ re probably also seeing produce first, as these items are seen
as the most nutritious and necessary for survival. After produce, customers move on to
other aisles that satisfy learned needs, like purchasing their favorite cookies, clothing items,
or beauty accessories.
You can think of it like this: If you’ re a business with a significant amount of in-store options,
improve the customer experience and speak to their buyer behavior by first leading them to
the products that wil satisfy their innate needs. Without doing this, they may navigate
through your store anxious about meeting those needs and spend less time browsing other
products and making additional purchases. Once they feel comfortable, they’ l move on to
satisfythe desires that bringthem joy ratherthan help them survive.
2. Psychoanalytical Model of ConsumerBehavior
 Sigmund Freud is the father of psychoanalysis. The psychoanalytical model draws
from his theories and says that individual consumers have deep-rooted motives, both
conscious and unconscious, that drive them to make a purchase. These motives can
be hidden fears, suppressed desires, or personal longings.
 Thus, customers make purchases depending on how stimuli from your business, like
an advertisement on Instagram, appeal to their desires. It’ s important to note that,
since these desires can be unconscious, customers don’ t always know why it
appeals to them; they just know it feels right to have it.
 This model is unique in terms of applic ation, but it’ s relevant to businesses that sell
an image that accompanies their products or services. For example, say you sell
glasses. We all long to fit in and feel like we’ re valued and seen as capable, smart
people. Glasses are sometimes a symbolof intelligence, so you’ d want to appeal to
this desire when craftinga customerexperience.
 You may instruct marketing to create ad campaigns that display pictures of people
wearing your glasses in educational settings or doing things that society labels as
‘smart.’

3. Sociological Model
 The Sociological Model of consumer behavior says that purchases are influenced by
an individual's place within different societal groups: family, friends, and workgroups,
as well as less-defined groups like Mil ennial or people who like yoga. An individual wil
essential y purchase items based on what is appropriate or typical of the groups
they’ re in.
  For instance, C-Suite executives are expected to be professional and formal. People
who hold these jobs wil make purchases that speak to and uphold this group’ s
rules, like formal business wear.
 This model can apply to most businesses, especial y those that create products and
services relevant to specific groups. To use the Sociological Model, you’ d want to
create experiences that speak to how these groups usually act. One example is
brands that sell exercise equipment.
 You sell to and appealtoconsumers that are part of a societal group that lik es to work
out. To delight these customers, you’ d want to sell to their desires, like equipment
that improves performance or an insulated water bottle that stays cold and leaves
them satisfied during their breaks. By doing this, you’ re speakingto the consumer in
that specific group and showing them that your product wil help them retain their
position in that group.
 Check out this ad from Nike. They’ re selling this shoe to the undefined group of
people who like to run, claimingthat it wil improve their speed and help them fit in with
the group.
4. Economic Modelof Consumer Behavior
The economic model of consumer behavior is the most straightforward of the traditional
models. This model argues that consumers try to meet their needs while spending as few
resources (e.g. money) as possible.
That means that businesses and manufacturers can predict sales based on their
customers’ income and their products’ price. If companies offer the lowest-priced
product, they may feel that they’ re guaranteeda consistent levelof profit.
While the economic model is the easiest to understand, it’ s also the most limited. A buyer
may have otherreasons forpurchasinga product aside from price andpersonalresources.
One such example would be prescription medicine in the U.S. healthcare industry. While the
price of a prescription drugmay exceedthe buyer’ s resources, the buyer would stil have to
find a way to purchase it and meet their needs. They might open a credit card or take out a
 personal loan to pay for the medicine. Thus personal income and price don’ t affect the
purchasingdecision here; instead, needdoes.
Contemporary Models
Contemporary models of consumer behavior focus on rational and deliberate
decision-makingprocesses ratherthan emotions orunconscious desires. The contemporary
models include:
Engel-Kollat-Blackwell (EKB) Model
 Black Box Model
 Hawkins Stern Model
Howard Sheth Model
Nicosia Model
 Webster and Wind Model
1. Engel-Kollat-Blackwell (EKB) Model of Consumer Behavior
The Engel-Kollat-Blackwell model of consumer behavior outlines a five-stage decision
process that consumers gothrough before purchasinga product or service.
 Awareness: During this stage, consumers view advertisements from a business and
become aware of their need, desire, orinterest, to purchase what they've just discovered.
 InformationProcessing: Afterdiscoveringa product or service, a consumer begins to
think about how the product or service relates to their past experiences or needs and
whether it wil fulfil any current needs.
 Evaluation: At this point, consumers wil research the product they’ ve discovered
and research options from competitors to see if there is a better option or if the original
product is the best fit.
 Purchasing Decision: A consumer wil follow through with a purchase for the product
that has beat out competitors to provide value. A consumer may also stop the process if
they change their mind.
 Outcome Analysis: After making a purchase, a customer wil use what they’ ve
bought and assess whether their experience is positive or negative. After a trial period,
they’ l keep a product and maybe decide to become repeat customers or express
dissatisfaction andreturn to stage three.
Overall, EKB says that consumers make decisions based on influencing factors that they
assess through rationalinsight.
This model applies to businesses that have many competitors with similar products or
services. If your product market is highly saturated and competitive, the goal is to outshine
your competitors by meetingcustomers at every stage of their journey.
Increase visibility for your business during the awareness stage through Search Engine
Optimization. Show them how your product or service wil benefit them and give them the
resources they need to weigh you against your competitors, like customer reviews and
testimonials, free trials, discounts forbulk purchases. Lastly, and provide excellent after-sales
support to show them that you care about their business even if they make areturn.
4. Howard Sheth Model of Buying Behavior
The Howard Sheth model of consumer behavior posits that the buyer’ s journey is a highly
rational and methodical decision-making process. In this model, customers put on a
“problem-solving” hat every step of the way — with different variables influencing the
course ofthe journey.
According to this model, there are three successive levels of decision-making:
 Extensive Problem-Solving: In this stage, customers know nothing about the product
they’ re seekingor the brands that are available to them. They’ re in active problem-solving
mode tofinda suitable product.
 Limited Problem-Solving: Now that customers have more information, they slow
down andbegin comparing their choices.
 Habitual Response Behavior: Customers are fully aware of all the choices they have
and know which brands they prefer. Thus, every time they make a purchase, they know
where to go.
 We’ ve all gone through some version of these stages. Let’ s look at an anecdotal
example.
When I first started buying glasses online, I had no idea which retailers I should use or
whether the glasses sold online would be the same quality as the opticians’ offerings. I
searchedonline tofinda high-quality online glasses retailer (extensive problem-solving).
I found a few choices and started comparingthem from both a pricing and quality standpoint
(limited problem-solving). I eventually chose one, and that’ s the retailer I’ ve used ever
since (habitual response behavior).
But these stages aren’ t that simple. According to the HowardSheth model, I was under the
sway of several stimuli duringthis process:
 Inputs: This refers to the marketing messages and imagery a consumer receives
while they’ re going through the decision-making process. “Inputs” also refers to any
perceptions and attitudes that come from the consumer’ s social environment, such as their
friends, family, andculture.
 Perceptual and Learning Constructs: This may sound complicated, but this stimulus
is simply the customer’ s psychological makeup and psychographic information. Perceptual
andlearningconstructs may include needs, preferences, andgoals.
 Outputs: After inputs and perceptual and learning constructs are mixed together, you
get the output. The output is the customer’ s resulting action under the influence of
marketing messages, social stimuli, and internal psychological attributes. It can result in the
customerpayingmore attention to a certain brand over another.
 External Variables: This is anything that’ s not directly related to the decision-making
process, such as weather orreligion, that stil may sway the customer’ s decision.
5. Nicosia Model
The Nicosia Model places emphasis on the business first and the consumer second. It
argues that the company’ s marketing messages determines whether customers wil buy.
Simple, right?
While it’ s an attractive model because it places all the power on businesses, it’ s unwise to
ignore the customer’ s internal factors that lead to a purchase decision. In other words,
 while you may offer the wittiest and most effective marketing copy ever, a customer’ s
internalattributes may have more sway in some instances overothers.
The model is comprisedof four “fields” :
 One: The business’ characteristics and the customer’ s characteristics. What
does your marketing messaginglook like? Andwhat’ s your customer’ s perception of that
messaging? Are they predisposed to be receptive to your message? The latter is shaped by
the customer’ s personality traits andexperiences.
 Two: Search and evaluation. Similar to the Howard Sheth model’ s “limited
problem-solving” stage, the customer begins to compare different brands here based on
the company’ s messaging.
 Three: Purchase decision. The purchase decision wil occur after the company
convinces the customerto choose them as their retaileror provider.
 Four: Feedback. During the feedback field, the company wil determine whether it
should continue using the same messaging, and the customer wil decide whether they wil
continue to be receptive to future messages.

Marketing Management
[M-104]
MODULE -5 (Product Management- Brand and Branding
Strategy)
- Key Concepts
- Levels of Products
- Classificationof Products
- Product Hierarchy
- Product Line Strategies
- Product Mix Strategies
- Packaging and Labeling
- New Product development Process
- Product Life Cycle [PLC]-Stages and Strategies
- Concept of Brand, Brand Elements and Types

MODULE -5 (Product Management- Brand and Branding

Strategy)
- Key Concepts
A product is the item that is developed and refined for sale in the market. It aims to meet the
customers’ needs and wants. A product concept is a general idea of the product you
want to create or market.
 It is that can be changed andimprovedas time goes by.
  A product concept deals with business ideas or

 The key to a successful product concept is to findwhat the customer wants and
how they want it.
 In other words, the product concept is the initial idea that leads to developing a new
product.
 The product concept wil drive the new product’ s design, materials, andmarketing.
 The product concept includes how customers perceive a product and solve their
problems.
 It is what differentiates one firm from anotherin an industry.
Product Concept states that customers or consumers prefer product which is of the highest
quality, performance and features. Product concept is a mandatory concept in order to give
the best possible product tothe customer as per the demand and expectation.
A product is not complete in itself and requires other factors of business like marketing,
distribution, sales, service etc. to be successful. Product concept relies completely on the
superiority and functional value of the product being sold to the customer and assumes that
the customer would also demand and buy the product because of its values for the money
offered.

According to George Fisk,-Product is a Cluster of psychologicalsatisfactions.

According to Philip Kotler, “ Aproduct is a Bundle of physicalservices and symbolic
particulars expectedtoyield satisfactions orbenefits to the buyer.”
Characteristics of Product
Tangibility
Intangible Attributes
 Associated Attributes
Exchange Value
Customer Need
Customer Want:
Customer Demand:
- Levels of Products

The five product levels are:

1. Core benefit:
The fundamental needor want that consumers satisfy by consuming the product or
service. For example, the needto process digitalimages.
2. Generic product:
Aversion of the product containingonly those attributes or characteristics absolutely
necessary for it to function. Forexample, the need to process digital images could be
satisfied bya generic, low-end, personal computer usingfree image processing software
ora processing laboratory.
In our hotel example, this could mean a bed, towels, a bathroom, a mirror, anda wardrobe.
3. Expectedproduct:
The set of attributes or characteristics that buyers normally expect and agree to when
they purchase a product. For example, the computer is specified to deliverfast image
processingandhas a high-resolution, accurate color screen.
In our hotel example, this would include clean sheets, some clean towels, Wi-fi, and a
clean bathroom.
4. Augmentedproduct:
The inclusion of additional features, benefits, attributes or related services that serve to
differentiate the product from its competitors. For example, the computer comes
pre-loadedwith high-endimage processingsoftware for no extra cost orat a deeply
discounted, incrementalcost.
In our hotel example, this could be the inclusion of aconcierge service or a free mapof the
town in every room.
5. Potentialproduct:
This includes all the augmentations andtransformations a product might undergo in the
future. Toensure future customer loyalty, abusiness must aim tosurprise anddelight
customers in the future by continuing to augment products. Forexample, the customer
receives ongoing image processing software upgrades with new and usefulfeatures.
In our hotel, this could mean a different gift placed in the room each time a customerstays.
For example, it could be some chocolates on one occasion, and some luxury water on
another. By continuing to augment its product in this way the hotel wil continue to delight
and surprise the customer.
Five Product Levels Example: Coca-Cola
1. Core Benefit
The core benefit of Coca-Cola is to quench a thirst.
2. Generic Product
The generic product is a burnt vanil a smelling, black, carbonated, and sweetened fizzy drink.
3. Expected Product
The expected product is that the customer’ s Coca-Cola is cold. If this isn’ t the case then
expectations won’ t be met and the drink wil not taste its best in the mindof the customer.
4. Augmented Product
Coca-Cola’ s augmented product is that it offers Diet-Coke. How does Coca-Cola exceed
customer’ s expectations with this product? By offeringall the great taste of Coca-Cola, but
with zero calories.
5. PotentialProduct
One way in which Coca-Cola delights customers is by running competitions. The prizes in
these competitions are often things that, “money can’ t buy” , such as celebrity
experiences. To continue to delight customers over time the competition prizes change
frequently.
Five Product Levels Advantages
The real advantage of the model is that it enables an organization to identify the needs and
wants of customers. The organization can then:
 Match the features they create to what the customer wants.

 Match operational processes to what customers want. In our hotel example, this
would mean strict processes around cleaning each room.
 Match marketingefforts toappeal to customers wants.
  Classificationof Products

Anything of value offered by an organization to the market for satisfying their want or
need is known as a Product. The concept of product not only relates to the physical
product, but also the benefits offered by the product.
For example, while purchasing a washing machine, a consumer does not only look for
its physical qualities but also some intangible factors such as its brand name, guarantee
offered, company’ s image, status symbol, etc. Hence, it can be said that a product is
a mixture of tangible and intangible features; a consumer can exchange for a value in
return to satisfy their needs. The three types of benefits provided by a product to the
customers are; namely, Psychologicalbenefits, Functional benefits, andSocial benefits.
For instance, Sayeba purchased a wall painting from an art gallery arranged by an NGO.
After making the purchase the functional benefits gained by her wil be the decoration
of her living room. Similarly, she wil get psychological benefits in the form of satisfaction
with her interest in art and creativity. However, as she has purchased the painting from
an NGO’ s art gallery, the money wil be used as a donation which provides her social
benefits in the form of acceptance and a good image in the eyes of people. .
Products can be classified into two categories; viz., Consumer Products and Industrial
Products.
1. Consumer Products
The products which directlysatisfy the wants and needs of a consumer are known
as Consumer Products. For instance, soap, clothes, bread, jam, butter, etc. Consumer
products are used by consumers for their personal needs. These products can be further
classified into two categories: On the Basis of Durability and On the Basis of Shopping
Efforts.
A. On the Basis of Durability
 Based on Durability there are three types of consumer products; namely, Non-Durable
Products, Durable Products, andServices.
i) Durable Products
The goods that can be used for a long period of time are known as Durable Products. For
example, sewing machines, washing machines, refrigerators, air conditioners, etc. The
durable goods include higher profit margins for the producer and needs greater personal
selling efforts and vario us after-sales service by the organization.
i ) Non-durable Products
The goods that can be consumed for a short period of time (one or few uses only) are
known as Non-durable Products. For example, soap, shampoo, toothpaste, biscuits, etc.
These products need heavy advertising and have fewer profit margins.
i i) Services
The activities, satisfaction, or benefits offered by an organisation for sale are known
as Services. For example, services offered by a CA, teacher, doctor, etc. Services are
intangible in nature, which means that we cannot see, touch, or feel them. They are also
inseparable from their source and cannot be stored because of their perishability. Another
feature of services is that they are highly variable because the quality and experience
gained by a consumer vary with the person providing them.
B. Onthe Basis of Shopping Efforts
Based on Shopping Efforts there are three types of products; namely, Convenience
Products, Shopping Products, and Speciality Products.
i) Convenience Products
The products which are purchased immediately, frequently, and with the least effort and
time are known as Convenience Products. Convenience goods require minimum shopping
effort. For example, newspapers, salt, matchbox, medicines, etc.
Some of the features of Convenience Products are as follows:
 Convenience goods are purchased in small numbers.
 Generally, they are of low price.
 These products are usually purchased at convenient locations with the least time
and effort.
 The price of convenient products is standardised, as they are brandedproducts.
 As these are essentialproducts, they have regular andcontinuous demand.
 Different sales promotion schemes, such as discounts, contests, cashback, etc.,
also help in the marketing of convenience products.
 However, convenience products face stiff competition; therefore, need heavy
advertisement.
i ) Shopping Products
The products in which consumers devote considerable effort and time in shopping are
known as Shopping Products. For these products, the buyer first compares the price,
style, quality, etc., of different brands at different stores before making the final decision of
purchase. For example, shoes, clothes, mobile phones, jewellery, etc.
Some of the features of ShoppingProducts are as follows:
 Shopping products are usually durable.
 The unit price as well the profit margin of the shopping products are high.
 Consumers usually plan in advance to purchase these products.
 Before making the final decision of the purchase, the consumers first compare
products of different companies andat different stores.
 The retailers help the manufacturer in the sale of shopping products, as they play a
crucial role in persuading the consumers in buying the product.
i i) Specialty Products
The products with some special features for which the consumers make special efforts,
while purchasing them are known as Specialty Products. Demand for specialty products
is relatively inelastic. It means that even though the price of specialty products rises, their
demand does not reduce. For example, antique paintings, exotic perfumes, expensive
watches, brandedsneakers, etc.
Some of the features of Specialist Products are as follows:
 Specialist products are usually expensive andare available at a few selected places.
 Because of their high cost, only a few people purchase these products which make
their demandlimited.
 An organization need to perform aggressive promotion activities for these
products.
 The job of the marketer of specialty products does not end with the sales. They
have to provide after-sales services to the consumers also.
Convenience Productsv/s Shopping Products v/s Specialty Products
Basis Convenience Products Shopping Products Specialty Products
The products which are The products in The products with some
purchased immediately, which consumers specialfeatures for which
frequently, and with the devote considerable the consumers make
least effort and effort and time in special efforts while
purchasing time are shoppingare known purchasing them are
known as Convenience as Shopping known as Specialty
Meaning Products. Products. Products.
The price of The price of
convenience products is shopping products The price of specialty
Price low. is high. products is very high.
Considerable time
and effort are
Least time and effort are required in Special efforts are
Shopping required in purchasing purchasing required in purchasing
Efforts convenience products. shoppingproducts. specialty products.
These products are These products are
available at convenient available at specified These products are
Availability locations. shops. available at a few places.
As these products As these products are
As these products are are usually durable, bought by a few people,
Nature of essential products, they they have no regular they have limited
Demand have regular demand. demand. demand.
There is a high There is a very high
Profit There is a low margin in margin in shopping margin in specialty
Margin convenience products. products. products.
Role of These products require These products These products require
Basis Convenience Products Shopping Products Specialty Products
Promotion heavy advertisement and require personal aggressive promotional
sales promotion selling. activities.
schemes.
After-sales services are After-sales service After-sales services are
After-sales not required for is required in some very crucial for specialty
service convenience products. cases. products.
Salt, Medicines, Shoes, Refrigerator, Expensive watches,
Examples Newspapers, etc. Clothes, etc. Antique Paintings, etc.

2. Industrial Products
The products used by the organizations as inputs for the production of other products are
known as Industrial [Link] example, lubricants, tools, equipment, machines, etc.
Features of Industrial Products
1. Number of Buyers
The number of buyers of industrial products is limited as compared to the buyers of
consumer products. For example, buyers of wheat are less as compared to flour.
2. Channels Level
The channel of distribution for industrial products is usually shorter, as the number of
buyers is limited for these products.
3. Geographic Concentration
As industries are usually located in specific regions, the demand for industrial products is
concentrated in one geographical location.
4. Derived Demand
The demand for industrial products is derived from the demand for consumer
products. For example,industries wil have a demand for fur, if people demand fur jackets
or other products.
5. Reciprocal Purchasing
 A common case of industrial product purchasers, in which one organization buys from
another company, on one condition that the latter wil buy from the former is known
as Reciprocal Purchasing. For example, a shoe company purchases leather from a leather
company, only if it buys the manufacturedshoes from the shoe company.
6. Role of Technical Considerations
Industrial Products are complex in nature; therefore, they require higher technical
considerations in their purchase.
7. Leasing Out
As the cost of industrial products is high, organizations usually lease out these products
instead of purchasing them. For example, a road construction company may hire or lease
out a road-rollerinstead of purchasing it.
Classificationof Industrial Products
Industrial Products can be classified into three categories; namely, Materials and Parts,
Capital Items, andSupplies and Business Services.
i) Materials and Parts
The goods which enter the products of a manufacturer completely are known as Materials
and Parts. These goods are of two types; namely, Raw Material andManufactured
Material and Parts.
 Raw Material: It consists of farm products such as sugarcane, cotton, etc.
 Manufactured Material and Parts: It consists of component materials such as iron,
glass, etc., and other components parts, such as batteries, tyres, etc.
i ) Capital Items
The fixed assets which are used by an organization for the production of finished goods
are known as Capital Items. For example, fax machines, laptops, etc.
i i) Supplies and Business Services
The goods and services which are used by organizations to facilitate the development and
management of the finished products are known as Supplies and Business Services. For
example, maintenance items such as paint, nails, etc., and operating supplies, such as
writing paper, lubricants, etc.
Consumer Products v/s Industrial Products
Basis Consumer Products Industrial Products
The products used by the
The products which directly satisfy organizations as inputs for the
the wants and needs of a consumer production of other products are
Meaning are known as Consumer Products. known as IndustrialProducts.
Consumer products are purchased Industrial products are purchased
Buying with the motive of personal with the motive of manufacturing
Motive consumption. other products.
The buyers of consumer products
are more impulsive and spend less The buyers of industrial products are
time and effort in comparing more rational and spend more time
Nature of different brands available in the and effort in comparing different
Buyers market. brands available to them.
Factors
affecting Advertisements and Sales Technical factors, cost, and goodwil
Purchase Promotion Schemes affect the of the supplier affect the purchasing
Decision purchasing decision of the buyers. decision of the buyers.
Number of The number of buyers of consumer The number of buyers of industrial
Buyers products is large. products is limited.
As these products indirectly satisfy
As these products satisfy the wants the wants of consumers, they have a
Nature of of consumers directly, they have a derived demand (derived from the
Demand direct demand. demand for consumer products).
Geographic The demand for consumerproducts The demand for industrial products is
Distribution is widely spread. concentrated at fixed locations.
Channel These products have longer These products have shorter
Basis Consumer Products Industrial Products
Levels channels of distribution. channels of distribution.

What is Product Hierarchy?

Product hierarchy, also called a product tree, is a product family that shares common
characteristics and is sold together.
Parent-child relationships between products may define product hierarchy.
Products may be grouped into categories (e.g., "car" and "truck"), subcategories (e.g.,
"sedan" and "SUV"), or both categories and subcategories (e.g., "SUV" or "sedan").

Businesses often use product hierarchies to organize the products on websites,

catalogs, and price lists. Organizing your products allows customers to find their desired
outcomes more efficiently.
The product hierarchy at six levels:
Product Need
The first step in creating a product hierarchy is identifying the need you want to address.
For example, you may want to address the need for transportation.
Product Family
The product family is the second level of the hierarchy. It is a set of products that share
common attributes and are often related by function or use.
For example, all cars are part of the same product family because they all share the
same purpose: transportation.
However, customers may consider different brands and types of toothpaste products
within that family because they have distinct features and characteristics.
Product Class
The product line is the third level of the hierarchy. It is a group of similar items that
perform the same function that companies design for different end uses or applicatio ns.
For example, companies could design several different types of refrigerators for various
uses.
Stil , they would all be part of the same product class because they share specific
characteristics (size, insulation material, etc.).
Product Line
The product line is the fourth level of the hierarchy. It is a group of products with similar
functio ns that differ in appearance or performance capabilities (i.e., features).
For example, many different types of cameras are available today (DSLR cameras,
point-and-shoot cameras, actio n cameras). Stil , they all fall under the same umbrella
category because they have similar functions (taking photos).
Product Type
The product type is the fifth level of the hierarchy, representing the general category of
products you want to display on your website.
Businesses can use product types for various kinds of products, such as clo thing,
electronics, or books.
For example, if you have a site that sells shoes and clothing, you could have two
different product types: one for shoes and another for clo thing.
Product Item
The product item is at the sixth level in the hierarchy. It is where you specify what each
product looks like on your site.
For example, if you have a pair of Nike shoes available in different sizes and colors on
your site, each pair would have its product item.

Product Line-Strategies
Product Line Strategiesand ProductMix Strategies
Product line is a group of any products. They are related to one another. Such products fulfil
similar nature of functions. Electrical product line includes electrical goods such as radio,
television, telephone, computer, refrigerator, air conditioner, fan etc. Similarly, the line of soap
includes detergent, shampoo, gel, surfetc.
Same line products should be supplied to market through same distribution channel. Some
products of the same line do the same works. Their target market also becomes the same.
[Link] line length
Product line length denotes all the products of the same line. Product line length should be
long to expand and increase the market segment. Product length should be short for the
increase in profit. However, profit can also be increased by increasing the length of product
line according to the context. Decisions can be taken for adopting two strategies to increase
or decrease the length of the product line. Two strategies are mentioned as follows:

The task of adding any other related new products to product line is called line expansion.
This includes two strategies. They are fil ing the line and expanding the line. If nay textile
industry produces three types of jackets pricing Rs. 1000 to 2500, it can be expanded to
produce fourth type jackets. In this way, same products can be produced to fil the gap and
widening the product length. The same task is called line fil ing. The task of adding new more
products of the same line going beyondthe current prices is calledproduct stretching. Three
types of strategies can be adoptedto stretch the products. Theyare mentioned as follows:
i. Stretching up: The task of adding new goods of more prices to the existing
same product line is calledstretching up.
i. The task of adding new products of low prices to the
existing same product line is called stretching down. This is made clearer
bythe given figure:
i i. Many types of products can be includedin any product
line. In this way, the task of adding new products of both more price and
low price is called stretching both ways. This is made clearer by the
followingfigure:
b) Line Contraction
Some products of same line cannot influence target market segments. Such products which
cannot influence market and cannot meet market demand should be abandonedor given up.
The task of decreasing products or removingthem from market is called line contraction. The
products which are demanded in market should be encouraged and supplied by removing
unnecessary dump of the unsold products. This can help to face market competition and the
product can controlmarkets.
[Link] line modification
Any firm or organization should meet market competition and customers’ wants in any
way. Besides, improved technology also should be gradually adjusted. This means, product
line should be regularly modified and modernized. Such activities are called product line
modification. The task of product line modification is compulsory for any firm or business
organization. So, the product line manager should take proper decision by researching,
studying and analyzingmarket.
3. Productline featuring
Attention of various groups and classes of customers should be attracted towards products.
Forthis, both low price and high price products should be included in product line. Low priced
products attract price sensitive group of customers and the high pricedproducts attract class
sensitive customers. That means, low priced products attract the customers having low
purchasing capacity and high priced products attract the customers having high purchasing
capacity. This can meet the goalof the company or firm.
Product Mix Strategies
The form of all products as a whole presented by producer or seller to sell in the target
market is called product mix. In this, product line and unit of the products are integrated. The
main products of four product lines of Avon have been mentioned here. They are called
cosmetics product line, jewelry product line, fashion line, fashion product line and household
product line. In each product line, sufficient auxiliary product line or products may be included.
The decision to be taken on width, depth, length and consistency of products is called
product mix strategy. In otherword, the decision to be taken on product line, auxiliary product
line or on product is called product mix strategy.
At the time of distributing products for sale, product mix strategy should be adopted.
Generally, four strategies can be given priority in product mix strategy. Such
strategy helps product sellers in their functions. The main strategies which also help sellers
can be mentionedas follows:
[Link] the product
If any firm makes clear the number of product lines, it is called width of the product. Product
line or product width can be expandedor contracted. The followingtable also has made easy
to understand it.
[Link] product
Length of product means all the things of product mix. Length of products can be changed
by increasing the number of products or decreasing it. So, length of product can be
increased ordecreasedaccording to the capacity of firm andwants of markets.
3. Depth of product
Depth of product indicates the number of the products belonging to a product line. Product
depth can be changed by increasing or decreasing the number of units of products. In the
above mentionedtable, there are fourthings belonging to the tooth paste product line.
4. Consistency of product
Consistency of product line shows how many things are related to the use, production and
distribution of the products. To increase the consistency of the product, related product
should be added to the product line. If the consistency of the product is to be decreased, the
unrelated products of the product line should be added.
Packaging
Packaging refers to the various activities that are carried out for designing and developing a
suitable package for a product, which may be in the form of a container, wrapper, box, tube,
plastic bottle, tetra pack or tin etc. The packaging must be properly and solidly done so that it
can protect the product from contamination, leakage, evaporation, spoilage or damage
duringits storage, transportation and promotionalactivities
Labeling
Labeling is done on the product packaging and presents all important information about the
product and its manufacturer. It is often made part of the product package but, if necessary,
the information can also be printedon the product itself.
Labeling helps manufacturers communicate the product details to their customers who can
use this information to perform a comparison with similar products and then decide their
preferred product tobuy. For example, labeling presents information about the content in the
package (i.e., the actual product including accessories etc.), features, price, name of
manufacturer, date of production, expiry date, weight, usage instructions and suggestions
regardingstoring ordisposingof the product etc. All this information enables the customer to
decide whether or not the product inside the package can meet his or her needs

What is the Difference between Packagingand Labeling

Whatis Packaging?
Packaging is the activity that involves designing and manufacturing of a wrapper, container,
box, etc., for a product. While crafting a packaging material the primary responsibilities like
protection of the product, easy handling and storage space should be taken into
consideration. Packaging is one of the essential marketing tools, because it gives customers
the first impression of the product, encouraging them to buy. In simple words, the packaging
is a process not only to create a container where the product is kept to protect it from
physicaldamage but at the same time has to be appealing to attract the customers.
Whatis labeling?
Labeling is the display of all the information on the packaging material or product itself. While
labeling a product the company has to fulfil and adhere to all the legal requirements like
ingredients, nutritional and safety information mentioned under Competition and Consumer
Act 2010. Most of the customers make a decision according to the details mentioned on the
labelingof the product. There are three types of label.
 Brand label: This part of labelinggives information about the product.

 Descriptive la bel: This specifies product usage.

 Grade label: It specif ies the aspect and features of the product.

.
Parameters Packaging Labeling
Meaning It is a process of designing and It is a display of all the
creatinga container for aproduct information on the packaging
materialor product itself.
Purpose To protect the product, product To provide product features
identification, marketing tool and influence the customer’
s decision
Function It helps the customers’ with the To give clear information about
decision-making process the product
Advantages Product safeguard, facilitates Helps in selling the product by
storage, helps in the sales process, giving a clear picture of the
minimizes adulteration product
New Product Development
New Product Development (NPD) is the set of design, engineering, and research processes
which combine to create and launch a new product to market. Unlike regular product
development, NPD is specifically about developing a brand new idea and seeing it through
the entire product development process.
In today's competitive market, the ability to offer products that meet customers' needs and
expectations has never been more important.
Customer requirements and behaviors, technology, and competition are changing rapidly,
and businesses cannot rely on existing products to stay ahead of the market. They need to
innovate, andthat means to develop andsuccessfully launch new products.
Whatis new productdevelopment?
New Product Development refers to the process of bringing a new product to
market. This can apply to developing an entirely new product, improving an existing one to
keepit attractive and competitive, or introducingan old product to a new market.
The emergence of new product development can be attributed to the needs of companies
to maintain a competitive advantage in the market by introducing new products or innovating
existing ones. While regular product development refers to building a product that already
has a proof of concept, new product development focuses on developing an entirely new
idea—from ideageneration todevelopment to launch.
The 7 stages of new productdevelopment
 When it comes to new product development, each journey to a finished product is different.
Although the product development process can vary from company to company, it's
possible tobreak it down intoseven main stages. Let's have a look at them one by one.
[Link] generation
Idea generation involves brainstorming for new product ideas or ways to improve an existing
product. During product discovery, companies examine market trends, conduct research,
and dig deep into users' wants and needs to identify a problem and propose innovative
solutions.
A SWOT Analysis is a framework for evaluating your Strengths, Weaknesses, Opportunities,
and Threats. It can be a very effective way to identify the problematic areas of your product
andunderstandwhere the greatest opportunities lie.
There are two primary sources of generating new ideas. Internal ideas come from different
areas within the company—such as marketing, customer support, the sales team, or the
technical department. External ideas come from outside sources, such as studying your
competitors and, most importantly, feedback from your target audience.
Some methods you can use are:
 Conducting market analysis
 Working with product marketing and sales to check if your product's value is being
positioned correctly
 Collectinguserfeedback with interviews, focus groups, surveys, anddata analytics
 Running user tests to see how people are using your product and identify gaps and
room forimprovement
Ultimately, the goal of the idea generation stage is to come up with as many ideas as
possible while focusing on delivering value to yourcustomers.
[Link] screening
This secondstep of new product development revolves aroundscreeningall yourgenerated
ideas andpickingonly the ones with the highest chance of success. Decidingwhich ideas to
 pursue and discard depends on many factors, including the expected benefits to your
consumers, product improvements most needed, technicalfeasibility, or marketing potential.
The idea screening stage is best carried out within the company. Experts from different
teams can help you check aspects such as the technical requirements, resources needed,
andmarketability of your idea.
3. Concept development andtesting
All ideas passing the screening stage are developed into concepts. A product concept is a
detailed description or blueprint of your idea. It should indicate the target market for your
product, the features and benefits of your solution that may appeal to your customers, and
the proposed price for the product. A concept should also contain the estimated cost of
designing, developing, andlaunching the product.
Developing alternative product concepts wil help you determine how attractive each
concept is to customers andselect the one that would provide them the highest value.
Once you’ ve developed your concepts, test each of them with a select group of
consumers. Concept testingis a great way to validate product ideas with users before
investing time andresources into buildingthem.
Concepts are also often used for market validation. Before committing to developing a new
product, share your concept with your prospective buyers to collect insights and gauge how
viable the product idea would be in the target market.
4. Marketing strategyand business analysis
Now that you’ ve selected the concept, it’ s time to put together an initial marketing
strategy to introduce the product to the market and analyze the value of yoursolution from a
business perspective.
 The marketing strategy serves to guide the positioning, pricing, and promotion of
your new product. Once the marketing strategy is planned, product management can
evaluate the business attractiveness of the product idea.
 The business analysis comprises a review of the sales forecasts, expected costs,
and profit projections. If they satisfy the company’ s objectives, the product can move to
the product development stage.
5. Product development
The product development stage consists of developing the product concept into a finished,
marketable product. Your product development process and the stages you’ l go through
 wil depend on your company’ s preference for development, whether it’ s agile product
development, waterfall, or another viable alternative.
This stage usually involves creating the prototype and testing it with users to see how they
interact with it and collect feedback. Prototype testingallows product teams to validate
design decisions and uncover any flaws or usability issues before handingthe designs to the
development team.
[Link] marketing
Test marketing involves releasing the finished product to a sample market to evaluate its
performance underthe predetermined marketing strategy.
There are two testingmethods you can employ:
 Alpha testing is software testing used to identify bugs before releasingthe product to
the public
 Beta testingis an opportunity for actual users to use the product and give their
feedback about it
The goal of the test marketingstage is to validate the entire concept behindthe new product
andget ready to launch the product.

7. Product launch- Commercialization

A successful product launch is about setting your key results as early as possible,
understanding how to track them, and then figuring out how to use the learning’ s to
make changes or adapt.
At this point, you’ re ready to introduce your new product to the market. Ensure your
product, marketing, sales, and customer support teams are in place to guarantee a
successfullaunch and monitorits performance.
For better understand how to prepare a go-to-market strategy, Here are some
essential elements to consider.
 Customers: Understand who wil be making the final purchasing decisions and why
they wil be purchasing your product. Create buyer personas and identify their roles,
objectives, and pain points.
 Value proposition: Identify what makes you different from the competition and why
people should choose to buy your product
 Messaging: Determine how you wil communicate your product’ s value to potential
customers
 Channels: Pick the right marketing channels to promote your products, such as email
marketing, social media, SEO, and more
FACTORS THAT INFLUENCE
PRODUCT DEVELOPMENT

Why new product Fail: Failure of New Products

Product Failure means falling short of the strategic Objectives&Key Results (OKRs) metrics
set for the product. Objectives can be multidimensional and go beyond financial goals for
revenue and profit, such as establishing a new competitive advantage or providing a new up
sell opportunity foranotherproduct.
Strategic objectives toconsider:
 Financial: Top line revenue, profit, gross margin %, cost of goods sold, cost of sales
 Development: Cost, time to market, reduce technical debt, increase stability, reduce
bugs
 Buyer adoption: Units sold, repeat customers, adoption within target market
segments
 User adoption: Usage of features, reduction in support calls, ease of use, satisfaction
metrics
 Competition: Closingof feature gaps, increasedmarket share, creatingdifferentiation

ReasonsProductsFail
1. Product Doesn’ t Solve the Right Problems
2. Picked the WrongMarket
3. Product is TooExpensive or Provides PoorValue to Customer
4. Business Case is Flawed
5. Product is Not GoodEnough/Poor Execution
6. Delayed Market Entry
7. Poor Marketing Plan
A product life cycle and its strategies
A product life cycle is the length of time from a product first being introduced to
consumers until it is removed from the market. A product’ s life cycle is usually
broken down into four stages; introduction, growth, maturity, anddecline.
Product life cycles are used by management and marketing professionals to help
determine advertising schedules, price points, and expansion to new product
markets, packaging redesigns, and more. These strategic methods of supporting a
product are known as product life cycle management. They can also help determine
when newer products are ready to push olderones from the market.
There are four stages in a product’ s life cycle - introduction, growth, maturity, and decline
– but before this a product needs to go through design, research and development. Once a
product is found to be feasible and potential y profitable it can be produced, promoted and
sent out to the market. It is at this point that the product life cycle begins.
The various stages of a product’ s life cycle determine how it is marketed to consumers.
Successfully introducing a product to the market should see a rise in demand and popularity,
pushing older products from the market. As the new product becomes established, the
marketing efforts lessen and the associated costs of marketing and production drop. As the
product moves from maturity to decline, so demandwanes andthe product can be removed
from the market, possibly to be replacedby a neweralternative.
Managing the four stages of the life cycle can help increase profitability and maximize
returns, while a failure to do so could see a product fail to meet its potential and reduce its
shelf life.
Stages of PLC
There are four stages of a product’ s life cycle, as follows:
[Link] Development
This product life cycle stage involves developing a market strategy, usually through an
investment in advertising and marketing to make consumers aware of the product and its
benefits.
At this stage, sales tend to be slow as demand is created. This stage can take time to move
through, depending on the complexity of the product, how new and innovative it is, how it
suits customer needs and whether there is any competition in the marketplace. A new
product development that is suited to customer needs is more likely to succeed, but there is
plenty of evidence that products can fail at this point, meaning that stage two is never
reached. For this reason, many companies prefer to follow in the footsteps of an innovative
pioneer, improvingan existing product andreleasingtheir own version.
[Link] Growth
If a product successfully navigates through the market introduction it is ready to enter the
growth stage of the life cycle. This should see growing demand promote an increase in
production andthe product becomingmore widely available.
The steady growth of the market introduction and development stage now turns into a sharp
upturn as the product takes off. At this point competitors may enter the market with their
own versions of your product – either direct copies or with some improvements. Branding
becomes important to maintain your position in the marketplace as the consumer is given a
choice to go elsewhere. Product pricingand availability in the marketplace become important
factors to continue driving sales in the face of increasing competition. At this point the life
cycle moves to stage three; market maturity.
3. MarketMaturity
At this point a product is established in the marketplace and so the cost of producing and
marketing the existing product wil decline. As the product life cycle reaches this mature
stage there are the beginnings of market saturation. Many consumers wil now have bought
the product and competitors wil be established, meaning that branding, price and product
differentiation becomes even more important to maintain a market share. Retailers wil not
seek to promote your product as they may have done in stage one, but wil instead become
stockiest andorder takers.
4. MarketDecline
Eventually, as competition continues to rise, with other companies seeking to emulate your
success with additional product features or lower prices, so the life cycle wil go into decline.
Decline can also be caused by new innovations that supersede your existing product, such
as horse-drawn carriages going out offashion as the automobile took over.
Many companies wil begin to move onto different ventures as market saturation means
there is no longer any profit to be gained. Of course, some companies wil survive the decline
and may continue to offer the product but production is likely to be on a smaller scale and
prices and profit margins may become depressed. Consumers may also turn away from a
product in favor of a new alternative, although this can be reversed in some instances with
styles andfashions comingback into play to revive interest in an olderproduct.
Product Life Cycle Strategy and Management
Having a properly managed product life cycle strategy can help extend the life cycle of your
product in the market.
The strategy begins right at the market introduction stage with setting of pricing. Options
include ‘price skimming,’ where the initial price is set high and then lowered in order to
‘skim’ consumer groups as the market grows. Alternatively, you can opt for price
penetration, setting the price low to reach as much of the market as quickly as possible
before increasing the price once established.
Product advertising and packaging are equally important in order to appeal to the target
market. In addition, it is important to market your product to new demographics in order to
grow yourrevenue stream.
Products may alsobecome redundant or needtobe pivotedto meet changingdemands. An
example of this is Netflix, who moved from a DVD rental delivery model to subscription
streaming.
Understanding the product life cycle allows you to keep reinventing and innovating with an
existingproduct (like the iPhone) toreinvigorate demandand elongate the product’ s market
life.
Examples
Many products or brands have gone into decline as consumer needs change or new
innovations are introduced. Some industries operate in several stages of the product life
cycle simultaneously, such as with television entertainment, where flat screen TVs are at the
mature phase, on-demand programming is in the growth stage, DVDs are in decline and
video cassettes are now largely redundant. Many of the most successful products in the
world stay at the mature stage for as long as possible, with small updates and redesigns
along with renewed marketing to keep them in the thoughts of consumers, such as with the
Apple iPhone.
Here are a few well-known examples of products that have passed or are passing through
the product life cycle:
[Link]
The typewriter was hugely popular following its introduction in the late 19th century due to the
way it made writing easier and more efficient. Quickly moving through market growth to
maturity, the typewriter began to go into decline with the advent of the electronic word
processor and then computers, laptops and smart phones. While there are stil typewriters
available, the product is now at the end of its decline phase with few sales and little demand.
Meanwhile, desktop computers, laptops, smart phones and tablets are all experiencing the
growth or maturity phases of the product lifecycle.
[Link] Cassette Recorders(VCRs)
Having first appeared as a relatively expensive product, VCRs experienced large-scale
product growth as prices reduced leading to market maturation when they could be found in
many homes. However, the creation of DVDs and then more recently streaming services,
VCRs are now effectively obsolete. Once a ground-breaking product VCRs are now deep in
a decline stage from which it seems unlikely they wil ever recover.
3. Electric Vehicles
Electric vehicles are experiencing a growth stage in their product life cycle as companies
work to push them into the marketplace with continued design improvements. Although
electric vehicles are not new, the consistent innovation in the market and the improvingsales
potential means that they are stil growing andnot yet intothe mature phase.
4. AI Products
Like electric vehicles, artificial intelligence (AI) has been in development and use for years,
but due to the continued developments in AI, there are many products that are stil in the
market introduction stage of the product life cycle. These include innovations that are stil
being developed, such as autonomous vehicles, which are yet tobe adoptedby consumers.
Product life cycle strategies
The product life cycle contains four distinct stages: introduction, growth, maturity and
decline. Each stage is associated with changes in the product's marketing position. You can
use various marketing strategies in each stage to try to prolong the life cycle of your
products.

Marketingstrategies used in the introduction stages include:

 rapid skimming- launchingthe product at a high price andhigh promotionallevel

 slow skimming - launching the product at a high price and low promotional level

 rapid penetration - launching the product at a low price with signific ant promotion

 slow penetration -launching the product at alow price and minimalpromotion

Duringthe introduction stage, you should aim to:

 establish a clear brandidentity

 connect with the right partners to promote yourproduct

 set upconsumer tests, or provide samples or trials to key target markets

 price the product or servic e as high as you believe you can sell it, and to reflect the
qualitylevel you are providing
You could also try to limit the product or service to a specific type of consumer - being
selective can boost demand. Readmore about the introduction stage of a product life cycle.

Marketing strategies used in the growth stage mainly aim to increase profits. Some of the
common strategies to try are:
  improving product quality
 adding new product features orsupport servic es to grow yourmarket share

 entering new markets segments

 keeping pricing as high as is reasonable to keepdemand and profits high

 increasingdistribution channels to cope with growingdemand

 shiftingmarketingmessages from product awareness toproduct preference

 skimming product prices if yourprofits are too low

The growth stage is when you should see rapidly rising sales, profits and your market share.
Your strategies should seek tomaximize these opportunities.

When your sales peak, your product wil enter the maturity stage. This often means that your
market wil be saturated and you may find that you need to change your marketing tactics to
prolong the life cycle of your product. Common strategies that can help during this stage fall
under one of twocategories:
 market modification - this includes entering new market segments, redefining target
markets, winningovercompetitor's customers, converting non-users
 product modification - for example, adju sting or improving your product's features,
quality, pricing anddifferentiatingit from otherproducts in the marking
Read more about the growth and maturity stage of a product life cycle.

During the end stages of your product, you wil see declining sales and profits. This can be
caused by changes in consumer preferences, technological advances and alternatives on
the market. At this stage, you wil have to decide what strategies to take. If you want to save
money, you can:
 reduce your promotional expenditure on the products

 reduce the number of distribution outlets that sell them

 implement pric e cuts to get the customers to buy the product

 find another use for the product

 maintain the product and wait forcompetitors to withdraw from the market first
  harvest the product orservice before discontinuing it
Another option is for your business to discontinue the product from your offering. You may
choose to:
 sell the brandto another business

 significantly reduce the pric e toget rid of all the inventory

Many businesses find that the best strategy is to modify their product in the maturity stage to
avoid entering the decline stage. Findout more about product life cycle - decline stage.

Conceptof Brand, Brand Elementsand itstypes

The term brand refers to a business andmarketingconcept that helps people identify a
particular company, product, or individual. Brands are intangible, which means you can't
actually touch or see them. As such, they help shape people's perceptions of companies,
their products, or individuals. Brands commonly use identifyingmarkers to help create brand
identities within the marketplace. They provide enormous value to the company or individual,
giving them a competitive edge over others in the same industry. As such, many entities
seek legalprotection for their brands by obtaining trademarks.
The brand is any service, product or concept which is publicly different from that of other
services, products and concepts so that it can be communicated as well as marketed easily.
The brand name is the name of that distinctive service, product or concept and branding is
the process of creatinganddistributing the brandname.
Definitionof Brand
Branding is the name, design, type, symbol or any other features which tend to distinguish a
tangible product or intangible product, service or concept from that of its competitors in the
eyes of customers. With time, the image of the product, service or concept is associated
with a certain levelof quality, credibilityand satisfaction for the customers
Why is Branding important for the Success of any Business?
Branding is very important for businesses as it creates a memorable impression on
customers and allows both customers and clients to know what they can expect
from it. It is a great way to distinguish the product or service from competitors and
 makes it easier for customers to understand why the product, service or concept is a
better choice.
A strong and consistent brand image is very helpful in establishing a business. Brand
enables customers to recognize, remember and recommend the product or service
to others. Brand image is usually a brand logo which should be designed so that it has
a strong impression on the target market at first glance.
In addition to this, a business can benefit from branding to generate future
businesses. A well-known and strong brand can increase the value of your business
and wil provide more leverage in the industry. In this way, businesses can capitalize
on potentialinvestment opportunities as it is firmly established in the marketplace.
Establishing an effective brand also allows companies to win referral businesses.
Having a strong brand means that customers have a positive impression of that
product or service and wil likely be associated with other businesses because of the
assumed familiarity and dependability of that name which can be trusted upon.
Brand Concepts
Brand Name: It is that name which is given by the manufacturer or maker of the
product or arange of products. A brand name is most oftentrademarks.
Brand Attribute: This includes brand characteristics and its core values. Brand
attributes include consistency, credibility, sustainable, relevancy and appealing.
Brand Positioning: This involves determining where the brand is standing in the
competitive market. Positioning is that unique or distinctive position that the brand
holds in the market or in the mindof consumers.
Brand Identity: This is the way in which any business perceives its brand. This is
basically the image of the brand from the point of view of its maker and how the maker
wants it to be perceived by consumers.
Brand Image: It is the perception of customers about a particular brand. It is basically
how consumers perceive the brand.
Brand Personality: Brands also have the characteristic to speak and behave with
customers. Brand personality can be associated with human personality traits such as
the brandof beingcaring, luxurious, and honest, etc.
 Brand Awareness: This refers to the degree to which customers are familiar with a
particularbrand.
Brand Loyalty: This refers to the tendency of a particular group of customers who wil
continue buyingthe particular brand insteadof othersimilarbrands in the market.
Brand Association:Brand association is a link which a customer creates in his mind
about the brand. This link should be positive so that the brand is perceived as positive.
Brand Equity: This is theimpact a brand can impose over the purchasing decision of a
customer. it is a set of brand assets andliabilities which can either add or subtract from
the brandvalue.
Brand Extension: This type of branding strategies basically uses a well-established
brand name for launching a new product or new product category.
Co-Branding: This is amongst brand management strategies which make use of
multiple brandnames of a product or service as apart of a strategic alliance.
Sonic Branding:This refers to the use of sound in advertising a particular product or
service. The underlying concept is that when a customer hears that sound, they wil
think of that particularproduct.
Types of Brands
 Corporate Brands: Corporate branding is a way for companies to market themselves
in order to give themselves an edge against their competition. They make a series of
important decisions in order to accomplish this, such as pricing, mission, target
market, and values.
 Personal Brands:As mentioned above, branding isn't j u st for companies anymore.
People use tools like social media to build their own personas, thereby boosting their
brands. This includes regular social media posts, sharing images and videos, and
conducting meet-and-greets.
 Product Brands: This type of branding, which is also known as merchandise
branding, involves marketing one particular product. Branding a product
requires market research and choosingthe proper target market.
 Service Brands: This kind of branding applies to servic es, which often requires some

creativity, as you can't actually show services in a physical way.

7 Types of Branding Strategies
There are several types of brandingthat may add value to yourcompany depending on your
target audience, industry, budget, and marketing campaigns. Here are seven types of
brandingstrategies that have the potential to build brandequity foryourbusiness.
Personal Branding
Personal branding describes branding that is used for an individual person, instead of
branding for a whole business. This type of branding is often used to establish a person’ s
character, personality, orwork as a brand.
Celebrities, politicians, thought leaders, and athletes often use this form of branding to
present the best version of themselves tothe public..
Product Branding
This is one of the most popular branding types. Product brandingfocuses on making a single
product distinct and recognizable. Symbols or designs are an essential part of product
brandingto help your customers identify yourproduct easily.
For example, Monster Energy drinks have distinct packaging and logos that make it easily
distinguishable from Red Bull energydrinks.
Corporate Branding
Corporate branding is a core value of business and a philosophy that a business develops to
present itself to the world andits own employees.
Effective corporate brands often seek to display the company’ s mission, personality,
andcore values in each point of contact it has with prospective customers, current
customers, andpast customers.
For example, Nike’ s core values and mission are recognizable across all of their platforms
and products. Nike’ s mission statement is “To bring inspiration and innovation to every
athlete in the world.” And its slogan, next to their famous swoosh check mark logo, is
“Just doit” .
As a corporate brand, Nike positions themselves as a brand for athletes, sports enthusiasts,
and anyone who is passionate about fitness. They also make it clear that they believe
anyone can be an athlete.
Service Branding
Service brandingleverages the needs of the customer. Companies that use service branding
seek to provide their customers with world-class service. They aim to use excellent
customerservice as a way to provide value to their customers.
For example, Chick-fil-A is known for its excellent customer service – making it now
synonymous with its brand.
Co-Branding
Co-brandingis a form of branding that connects companies together. Essential y,
co-branding is a marketing partnership between two or more businesses. This helps brands
impact each other positively, and it may result in one growing its business, spreading brand
awareness, and breaking intonew markets.
For example, Frito Lay and Taco Bell came together and made the Doritos Locos Taco that
appealed to both audiences.
Online Branding
Online branding, also known as internet branding, helps businesses to position themselves
as a part of the online marketplace. This type of branding includes a company’ s website,
socialmedia platforms, blogs, andother online content.
Most companies use some aspect of online orinternet brandingin today’ s marketplace.
No-Brand Branding
This type of branding is also known as minimalist branding. These brands are often generic
brands that seek to let their products speak forthemselves without all the extras manyothers
provide their consumers with.
Some of the most noteworthy no-branding branding examples include Brand less and m/f
people. As you can see on Brand less ‘website, their packaging, colors, and overall
aesthetic is very simple. This aligns with their mission of providingfairly pricedfood to people
without a typical brand.
Despite the fact that Brand less recently announced its closure, it is an excellent example of
no-brandbranding that saw great success forseveral years.
M/f people adopts simplicity in everything, from their brandingandpackagingtotheir product
designs. For example, their skincare products are packaged in bottles with black and white
colors anda simple font.
How to Selectthe Best Branding Strategiesfor Your Business
Many businesses use several brand strategies to reach their goals. Selecting the right
strategies is important for your success. Follow these steps to find the best approach that
fits your business.
1. Define Your Brand Identity.
Before you select the proper brand strategies for your business, you should define
your brand identity. This involves asking yourself and others involved in the marketing and
sales process a series of questions, such as:
 What are my company’ s mission and core values?

 If I hadtodescribe my company in three words, what would theybe?

 What doI want to be known for in the marketplace?

 What kindof difference doI want to make in my industry?

 What doI want my brandto look like visually?

Asking yourself these questions helps you to determine your goals and direction in the
marketplace as a unique brand.
2. Determine Your Brand Objectives.
Once you identify your brand identity and answer the key questions mentioned above, you
should be able to determine your brand objectives. For example, your objective may be to
position yourself as an industry leader in a set period of time or to increase customer
interactions through reviews, website visits, oronline product purchases.
This way, you’ l be able to select a brand strategy that aligns with your business goals and
objectives.
3. Define Your Brand’ sAudience.
The best way to define your target audience is to consider what they’ re interested in,
where they’ re located, their age, what they think of your brand currently, and how you wil
attract them toyourservices or products.
Knowing your target market allows you to gather enough data to solidify your message and
select the correct brandstrategy that helps you appealto your target audience.
4. Consider Your Industry.
Each industry likely has different goals and objectives it would like to achieve. Each brand
strategy has different things to offer your business. However, not every strategy wil fit your
specific industry.
To help you decide which brand strategies to choose, you may consider conducting a
competitive analysis with the competitors in your industry. Conducting such an analysis wil
help you to uncoveryouropportunities andthreats in your respective marketplace.
Advantagesof Brand
1. Customer Recognition
In the world of ads, when a customer recognizes a brand’ s color, theme, logo, etc., they
are more likely to choose that product over all others. This is because they are already
familiar with your brand and what it stands for. From something simple and minimalistic to
somethingwild andeye-popping, agoodbrand wil always be recognizedin a sea of others.
2. Customer Loyalty
Once a customer begins to recognize and buy a product or a service, good branding wil
keep them coming back for more. A good company with great products combined with
effective branding hits all the right notes with customers. This wil increase customerloyalty in
the long run. A good example of customer loyalty is Apple, which has one of the most
successful branding stories in the world. It managed to build a loyal followingby building an
emotional connection with its customers. Brand loyalty is one of the major reasons behind
Apple’ s massive success in the market.
3. Consistency
A good brand sets the foundation for a business. Once a business has found its branding -
company philosophy, colors, typography, etc., all other efforts can be modeled around it. All
future marketing efforts can branch off of this foundation. This creates consistency within a
brand and helps customers relate to it more. Imagine a company changing its logo every
other month. Most customers would get confused and not even want to buy the products
andservices from inconsistent brands.
4. Credibility
Every customer has their trust issues whenever it comes to trying a new product or service,
however, a strong brand can help you set yourself apart as a well-established business with
strong values that customers can resonate with. Innovative marketing coupled with
exceptional products andservices, phenomenal customer service, and interesting visuals wil
surely help even a small company establish itself as a serious professional business.
5. Improve Company Values
If yourbrandhas a personality, it is easierforpeople torelate to your company’ s values and
motives. When people relate to your company values, they are more likely to want to do
business with you. Take Toms’ shoes, for instance. Theyare one of the most popularshoe
brands in the world, but the main thing the brand is known for is their donations. For every
pair of shoes that you buy, they donate a pair of shoes in partnership with humanitarian
organizations. This fosters a shared emotional connection between the company and the
customerandis one of the main factors of branding.
[Link] Ahead of Competitors
If you have so many competitors in the market andyou are just starting, it may be a tough job
to get ahead of them. However, a personalized and unique brand can help attract the right
 customers for you. You can also charge extra for premium quality products with good
branding.
7. BrandEquity
One of the most important benefits of branding is that it helps to promote new products and
services. If people are loyalto a brand, they are automatically interested in whatever new the
brand has to offer. When Apple first introduced Air Pods in 2018, it dominated the wireless
earphones surpassing giants like Samsung and Xiaomi in the global market. A study by
Strategy Analytics shows that Air Pods has over 50 percent of the global market share.
8. Attracts Talent
When a business has effective branding, it is hard for people to not notice. This attracts
influencers, content creators, social media marketers, and other concept builders. When a
business draws these kinds of people in, they increase their creative powerhouse.
Collaborations with the right people can go a long way to promote your brand and uplift your
brand’ s digital presence. This helps you reach an even larger audience because people
trust the recommendations of their favorite influencers andcontent creators.

Whatis Co-branding?
Haven’ t you heard about co-branding? Well, as the name suggests, it is an association
between 2 businesses where they come together to support each others’ success.
Co-branding is powerful when companies with similar target markets come together and
create a unique-value-add product / service / content for their potential customers. Some
example of co-brandingare -
1. Nykaa partneringwith beauty influencers
2. Toothpaste brands partneringwith dentists
3. Skincare brands partneringwith dermatologists
4. Sportswear brands partnering with cricketers.
MODULE -6 (Pricing and Channel Decisions)
- Pricing Objectives
- Policies, Methodsof Setting Price
- PricingStrategies
- Distribution ChannelManagement
- Member channel functions
- FactorsAffectingChannels of Distribution
- Distribution channels design strategy
- Introduction to logisticsmanagement
- Current Trendsin Wholesalingand Retailing
- B2B,B2C

MODULE -6 (Pricing and Channel Decisions)

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

 The cost of similargoods andservices in the market

 The target audience forwhom the goods andservices are produces

 The total cost of production (raw material, labor cost, machinery cost, transit,
inventory cost etc).
 Externalelements like government rules and regulations, polic ies, economy, etc.,

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

for the consumers and also for the producer to survive in the market. Every company
is in danger of getting ruled out from the market because of rigorous competition,
change in customer’ s preferences and taste. Therefore, while determining the cost
of a product all the variables and fixed cost should be taken into consideration. Once
the survivalphase is over the company can strive for extra profits.
 Expansion of current profits-Most of the company tries to enlarge their profit margin
by evaluating the demand and supply of services and goods in the market. So the
pricing is fixed according to the product’ s demand and the substitute for that
product. If the demandis high, the price wil also be high.
 Ruling the market- Firm’ s impose low figure for the goods and servic es to get hold

of large market size. The technique helps to increase the sale by increasing the
demand and leadingtolow production cost.
 A market for an innovative idea- Here, the company charges a high price for their
product and services that are highly innovative and use cutting-edge technology. The
price is high because of high production cost. Mobile phone, electronic gadgets are a
few examples.
Factor Influencing Pricing Decisions
An enormous number of factors affect pricing decisions. A marketing manager should
identify and study the relevant factors affecting the pricing. Some factors are internal to
organization and, hence, controllable while other factors are external or environmental and
are uncontrollable.
Factors are also classified in terms of competition-related factors, market-related factors,
product- related factors, and so forth.

A)Internal Factors:
Internal factors are internal to organization and, hence, are controllable. These factors play
vital role in pricing decisions. They are also known as organizational factors. Manager, who is
responsible to set price and formulae pricing policies and strategies, is required to know
adequately about these factors.
[Link] Management:
Top-level management has a full authority over the issues related to pricing. Marketing
manager’ s role is administrative. The philosophy of top-level management is reflected in
forms of pricingalso. How does topmanagement perceive the price?
How far is pricing considered as a toolfor earningprofits, and what is importance of price for
overall performance? In short, overall management philosophy and practice have a direct
impact on pricing decision. Price of the product may be high or low; may be fixed or variable;
or may be equal ordiscriminative depends on top-level management.
[Link] of Marketing Mix:
Price is one of the important elements of marketing mix. Therefore, it must be integrated to
other elements (promotion, product, and distribution) of marketing mix. So, pricing decisions
must be linked with these elements so as to consider the effect of price on promotion,
product anddistribution, and effect of these three elements on price.
For example, high quality product should be sold at a high price. When a company spends
heavily on advertising, sales promotion, personal selling and publicity, the selling costs wil go
up, and consequently, price of the product wil be high. In the same way, high distribution
costs are also reflected in forms of high selling price.
3. Degree of ProductDifferentiation:
Product differentiation is an important guideline in pricing decisions. Product differentiation
can be defined as the degree to which company’ s product is perceiveddifferent as against
the products offered by the close competitors, or to what extent the product is superior to
that of competitors’ in terms of competitive advantages. The theory is, the higher the
product differentiation, the more wil be freedom to set the price, and the higher the price wil
be.
4. Costs:
Costs and profits are two dominant factors having direct impact on selling price. Here, costs
include product development costs, production costs, and marketing costs. It is very simple
that costs and price have direct positive correlation. However, production and marketing
costs are more important in determiningprice.
5. Objectives of Company:
Company’ s objectives affect price of the product. Price is set in accordance with general
and marketing objectives. Pricing policies must the company’ s objectives. There are many
objectives, and price is set to achieve them.
[Link] of ProductLife Cycle:
Each stage of product life cycle needs different marketing strategies, including pricing
strategies. Pricing depends upon the stage in which company’ s product is passingthrough.
Price is kept high or low, allowances or discounts are allowed or not, etc., depend on the
stage of product life cycle.
[Link] Quality:
Quality affects price level. Mostly, a high-quality-product is sold at a high price andvice versa.
Customers are also ready to payhigh price fora qualityproduct.
8. Brand Image and Reputationin Market:
Price doesn’ t include only costs and profits. Brand image and reputation of the company
are also added in the value of product. Generally, the company with reputed and established
brand charges high price for its products.
9. Category of Product:
Over and above costs, profits, brand image, objectives and other variables, the product
category must be considered. Product may be imitative, luxury, novel, perishable,
fashionable, consumable, durable, etc. Similarly, product may be reflective of status, position,
andprestige. Buyers pay price not only for the basic contents, but also for psychological and
socialimplications.
10. Market Share:
Market share is the desired proportion of sales a company wants to achieve from the total
sales in an industry. Market share may be absolute or relative. Relative market share can be
calculated with reference to close competitors. If company is not satisfied with the current
market share, price may be reduced, discounts may be offered, or credit facility may be
provided to attract more buyers.
(B) External Factors:
External factors are also known as environmental or uncontrollable factors. Compared to
internalfactors, theyare more powerful.
Pricing decisionsshould be takenafter analyzingfollowing externalfactors:
[Link] the Product:
Demand is the single most important factor affecting price of product and pricing policies.
Demand creation or demand management is the prime task of marketing management. So,
price is set at a level at which there is the desired impact on the product demand. Company
must set price according to purchase capacity of its buyers.
[Link]:
A marketer has to work in a competitive situation. To face competitors, defeat them, or
prevent their entry by effective marketing strategies is one of the basic objective
organizations. Therefore, pricingdecision is taken accordingly.
A marketer formulates pricing policies and strategies to respond competitors, or, sometimes,
to misguide competitors. When all the marketing decisions are taken with reference to
competition, how can price be an exception?
Sometimes, a company follows a strong competitor’ s pricing policies assuming that the
leader is right. Price level, allowances, discount, credit facility, and other related decisions are
largely imitated.
3. Price of Raw Materials andother Inputs:
The price of raw materials and other inputs affect pricing decisions. Change in price of
needed inputs has direct positive effect on the price of finished product. For example, if price
of raw materials increases, company has to raise its selling price to offset increased costs.
4. BuyersBehavior:
It is essential to consider buyer behavior while taking pricing decision. Marketer should
analyze consumer behavior to set effective pricing policies. Consumer behavior includes the
study of social, cultural, personal, and economic factors related to consumers. The key
characteristics of consumers provide a clue to set an appropriate price for the product.
5. Government Rulesand Restrictions:
A company cannot set its pricing policies against rules and regulations prescribed by the
governments. Governments have formulated at least 30 Acts to protect the interest of
customers. Out of them, certain Acts are directly related to pricing aspects. Marketing
manager must set pricing within limit of the legal framework to avoid unnecessary
interference from the outside. Adequate knowledge of these legal provisions is considered
to be very important for the manager.
[Link] Consideration or Codesof Conduct:
Ethics play a vital role in price determination. Ethics may be said as moral values or ethical
code that governs managerial actions. If a company wants to fulfil its social obligations and
when it believes to work within limits of the ethics prescribed, it always charges reasonable
price for its products. Moral values restrict managerialbehavior.
[Link] Effect:
Certain products have seasonal demand. In peak season, demand is high; while in slack
season, demand reduces considerably. To balance the demand or to minimize the
seasonal-demand fluctuations, the company changes its price level and pricing policies. For
example, during a peak season, price may be kept high andvice versa. Discount, credit sales,
andprice allowances are important issues relatedtoseasonalfactor.
8. Economic Condition:
This is an important factor affecting pricing decisions. Inflationary or deflationary condition,
depression, recovery or prosperity condition influences the demand to a great extent. The
overall health of economy has tremendous impact on price level and degree of variation in
price of the product. For example, price is kept high during inflationary conditions. A manager
should keep in mind the macro picture of economy while setting price for the product.
- Policies, Methodsof Setting Price
How to price a product

Step 1: Selecting the pricing objective

Pricing can make reaching the company’ s positioning goals easier. If the company has to
work over its capacity or handle tough competition, the price of the product would need to
take into account two factors. The variable costs anda part of the fixedcost.
Although short-term, this strategy can help boost initial performance for companies who are
introducingrevolutionary products orservices.
If a company is looking to maximize the profit, it can set a higher price by considering costs
and the competition. On the other hand, if a company is looking to improve and maximize its
market share, it wil set alowerprice togenerate maximum volume.
Step 2: Determining demand
According to the law of economics, there’ s a definite demand for a product at every price
level. However, this law depends on the nature of the product in question. For instance,
demand rises with the price increase for luxury goods, while the demand fora commodity wil
fall as the price rises.
What companies must do is plan the demand curve while understandingprice sensitivity. It is
possible to estimate the demand curve by analyzing historical data or performing
price-related tests. That way, a company can gain a deeper insight into how much the
consumers are wil ing to pay fora specific product orservice.
Step 3: Estimatingcosts – ensuring profits
In order to continue working successfully, companies need to manage their costs so that
they are left with a good profit margin. Therefore, to achieve this, a company needs to
establish a production levelat which it wil be able to maintain it’ s fixed and variable costs.
In general, the cost per unit decreases as production level increases. That is simply due to
the learning curve effect that comes with increased experience. So to ensure you profit with
this strategy, you need to allocate the costs andset the price accordingly.
Step 4: Analyzing Competitors’ Costs,Prices, andOffers
Every company has to track its competitors carefully. That especial y goes for pricing, costs,
and promotional offers. Companies need to know just how many their competitors prices
can fluctuate in comparison to their own. They also need to be ready to adjust to those
fluctuations with their own offers.
Step 5:Choosing your pricing method
There are several methods you can go for with regards to the pricing process of your
products orservices.
These are the most popular ones:
 The markup method means that you’ re setting a price based on your desired profit

level.
 Target return means that you’ re setting a price based on the company’ s desired
ROI.
 Perceived value is as simple as setting a price based on how much your consumers
believe yourproduct or service is worth to themin reality.
There are also auction type pricing and group pricing methods, but they are less popular.
Step 6: Determining the finalprice
 The previous steps wil help youset a price, but the final word goes to your consumers. Do
market research to make sure that you’ re not under or overcharging for your products or
services.
Whatis pricing Method?
Pricing method is a technique that a company apply to evaluate the cost of their products.
This process is the most challenging challenge encountered by a company, as the price
should match the current market structure and also compliment the expenses of a company
and gain profits. Also, it has to take the competitor’ s product pricing into consideration so,
choosingthe correct pricingmethodis essential.

Typesof Pricing Method:

The pricingmethods can be broadly classifiedinto two parts:
1. Cost Oriented PricingMethod
2. Market OrientedPricing Method
  Cost Oriented Pricing Method– It is the base for evaluating the price of the finished
goods, and most of the company applies this method to calculate the cost of the
product. This method is dividedfurther into the following ways.
 Cost-Plus Pricing- In this pric ing, the manufacturer calculates the cost of
production sustained and includes a fixed percentage (also known as mark up)
to obtain the selling price. The mark up of profit is evaluated on the total cost
(fixed andvariable cost).
 Markup Pricing-Here, the fix ed number or a percentage of the total cost of a
product is added to the product’ s end price to get the selling price of a
product.
 Target-Returning Pric ing- The Company or a firm fix the cost of the product
to achieve the Rate of Return on Investment.
Market-Oriented Pricing Method- Underthis category, the is determinedon the base
of market research
 Perceived-Value Pric ing- In this method, the producer establish the cost
taking into consideration the customer’ s approach towards the goods and
services, including other elements such as product quality, advertisement,
promotion, distribution, etc. that impacts the customer’ s point of view.
 Value pricing- Here, the company produces aproduct that is high in quality but
low in price.
 Going-Rate Pric ing- In this method, the company reviews the competitor’ s
rate as a foundation in deciding the rate of their product. Usually, the cost of
the product wil be more orless the same as the competitors.
 Auction Type Pricing- With more usage of internet, this contemporary pricing
method is blooming day by day. Many online platforms like OLX, Quicker,
eBay, etc. use online sites to buyandsell the product to the customer.
 Differentia lPric ing- This methodis applied when the pricinghas to be different
for different groups or customers. Here, the pricing might differ according to
the region, area, product, time etc.
Pricing Strategies
A pricing strategy is an approach taken by businesses to decide how much to charge for
their goods and services. The interaction between margin, price, and selling level is given
specific consideration while pricing products. Therefore, it’ s important and complicated to
design aproper pricing plan that ensures business success.
The price is a component that affects a company’ s revenue significantly. It forms the key
variable in the company’ s financial modeling and affects its income, profits, and
investments in the long term. Price reflects the idea of a business and shows its behavior
towards competitors andthe value it gives customers.

Pricing strategy in marketing, in simple terms, is adjusting prices according to market

determinants. Price is the value one assigns to a good or service which they determine by
research. A pricing strategy considers market conditions, consumer wil ingness to pay,
competition, trade margins, costs incurred, etc. Pricing involves setting a price for ownership
andusage of goods.
[Link] pricing
Penetration pricing strategy aims to attract buyers by offering lower prices on goods and
services than competitors. This strategy draws attention away from other businesses and
can help increase brand awareness andloyalty, which can then lead to long-term contracts.
Penetration pricing can be risky because it can result in an initial loss of income for the
business. Over time, however, the increase in brand awareness can drive profits and help
small businesses standout fromthe crowd.
In the long run, after penetrating a market, business owners can increase prices to better
reflect the status of the product’ s position within the market.
Best for: Small businesses with the main goalof building brandloyalty and reputation
Pros:
 Allows aproduct to be quic kly adoptedandaccepted bycustomers
 Generates a high sales quantity
 Creates a large inventory turnoverrate since demandwil be higher
 Encourages positive word ofmouth

Cons:
 Can create pricing expectations for customers—meaningthey might always expect a
low price andbe dissatisfied if the price rises
 May reduce customerloyalty since most wil be bargain hunters
 Can trigger price wars

 May hurt brand image as customers could perceive discounted products as cheap or
badquality
Penetrationpricing example
Imagine a competitor selling a product for $100. You decide to sell the same product for $97,
even if it means you’ re going to take aloss on the sale.
[Link]
Economy pricing is a pricing strategy that aims to attract the most price-conscious
consumers. A wide range of businesses use this strategy, including generic food suppliers
anddiscount retailers.
This is a no-fril s approach that involves minimizing marketing and production expenses as
much as possible. Because of the lower cost of expenses, companies can set a lower sales
price and stil turn a slight profit.
Best for:Small businesses that want to keep their overhead costs low and that sell
commodity goods
Pros:
 Easyto implement
 Keeps customer acquisition costs low
 Attracts price-sensitive customers
 Best strategyto use during an economic downturn or recession

Cons:
 Can be challengingtocut production costs
 Small businesses may not have enough brandawareness to forgo custom branding
 Works only if there’ s a steady stream of customers

 Potentialto negatively impact brandperception

Economy pricing examples

Businesses that utilize the economy pricing strategy include budget airlines and
supermarkets. Budget airlines wil use economy pricing to fil any empty seats and lower the
cost perunit.
This strategy also applies to generic food brands that are sold in supermarkets—they’ re
pricedlowerbecause they require minimal promotion and marketing expenses.
3. Premium pricing
With premium pricing, businesses set costs higher because they have a unique product or
brand that no one can compete with. You should consider using this strategy if you have a
considerable competitive advantage and know that you can charge a higher price without
being undercut bya product of similarquality.
Because customers need to perceive products as being worth the higher price tag, a
business has to work hard to create the perception of value. Along with creating a
high-quality product, business owners should ensure that the product’ s packaging, the
store’ s decor, and the marketing strategy associated with the product all combine to
support the premium price.
Best for: Small businesses that have a considerable competitive advantage and know that
they can charge a higher price without beingundercut by aproduct of similarquality
Pros:
 Makes your brandappear more desirable
 Higher profit margins

 Provides a competitive advantage

Cons:
 Higher cost of production andmarketing
 Smallertarget audience

 Reduced sales volume

Premium pricing examples

Examples of this strategy can be seen in the luxury car and tech industries. Car companies
like Tesla can get away with higher prices because they’ re offering products, like
autonomous cars, that are more unique than anything else on the market.
Additionally, tech giants like Apple can sell their products at a premium price compared to
their competitors because of their name.
4. Price skimming
Price skimming is a type of dynamic pricing strategy that is designed to help businesses
maximize sales on new products and services. This involves setting rates high during the
initial phase of a product, and then gradually lowering prices as competitor goods appear on
the market.
Best for: Small businesses that have products that are in high demand, like tech companies
Pros:
 Allows businesses to maximize profits through early adopters
 Helps small businesses recoupdevelopment costs
 Creates an il usion of exclusivityandquality
Cons:
 Excess inventory may occur if this strategy fails
 The qualityof the new service orproduct must ju stif ythe higher cost to be effective
 Won’ t work if your competitors are creatingsim ilarproducts

Price skimming examples

An example of price skimming strategy is seen with tech companies with the introduction of
new technology. An 8K TV would benefit from a higher marked price when only 4K TVs and
HDTVs currently exist on the market.
This also works well with iPhones—the expected sales volume and speed of developing
new products is so high that lowering prices throughout the skimming cycle wil have very
minimaleffects on overall sales volume.
5. Psychological pricing
Psychological pricingrefers to techniques that marketers use to encourage customers to
respond basedon emotionalimpulses, ratherthan logicalones.
One explanation for this strategy is that consumers tend to give more attention to the first
number on a price tagthan the last. The goalof psychology pricing is to increase demandby
creating an il usion of enhancedvalue for the consumer.
Best for: Small businesses aimingtowardshort-term goals andquick wins
Pros:
 May offera high return on investment
 Allows forcost transparency
  Simplifies the decision-makingprocess forcustomers
Cons:
 Could cause customers to feelas though they’ re being manipulated
 Doesn’ t set you apart from competitors since it’ s apopular strategy
 Requires consistent demandfor your product

Psychologicalpricing example
Psychological pricing is often seen in retail. For example, setting the price of a watch at $199
is likely to attract more new customers than setting it at $200, even though the actual price
difference is quite small.
Other tactics retailers use is the use of “buy one get one free” language versus “50% off
two items.” This strategy relies on the customer favoring one wording over another even
though they’ re the exact same deal.
[Link] pricing
With bundle pricing, small businesses sell multiple products for a lower rate than selling each
item individually.
Customers feel as though they’ re receiving more bangs for their buck. Many small
businesses choose to implement this strategy at the end of a product’ s life cycle,
especial y if the product is slow-selling.
Small business owners should keep in mind that the profits they earn on the higher-value
items must make up for the losses they take on the lower-value product. They should also
consider how much they’ l save in overhead and storage space by pushing out older
products.
Best for: Small businesses that want to create large margins while offering a lower price than
competitors
Pros:
  Increases the value perception in the eyes of yourcustomers
 An effective way to reduce inventory
 Lowers marketingand selling costs
Cons:
 May affect products that may be selling better than the other if they’ re bundled
(product cannibalization)
 Some customers may not want all products offered in the bundle, resulting in an

unwantedor unusedproduct
 May cause a negative perception of the brand due to customers assuming the
product is of lower qualitysince it’ s bundled
Bundle pricing examples
An example of bundle pricing occurs at your local fast food restaurant where it’ s cheaper
to buy a mealthan it is to buy each item individually.
Internet service providers wil also use this strategy and take advantage of cable TV
packages andbundledmobile plans.
[Link] pricing
Geographical pricing involves setting a price point based on the location where a product or
service is sold. Factors forthe changes in prices include:
 Taxes
 Tariffs
 Shippingcosts
 Location-specific rent
 Supply anddemand

If you expand your business across state or international lines, you’ l need to consider
geographicalpricing.
Best for: Small businesses that have markets in many different locations
Pros:
 Allows you to gain localappeal
 Can boost perceived value in certain locations
Cons:
 Localregulations need to be considered, such as pricinglaws
 Accounting and bookkeeping can become more complicated since there are
different regions to be accounted for
Geographical pricing example
Geographical pricing applies to retailers or service providers who charge different prices in
different states. For example, a gym may charge a higher price for membership in California
than they would at the same location in Louisiana.
8. Promotional pricing
Promotionalpricingis anothercompetitive pricingstrategy that involves offering discounts on
a particular product. These strategies are often run during a holiday, like Memorial Day
weekend. By offering these deals as short-term offers, business owners can generate buzz
andexcitement about a product.
Promotional pricing campaigns often consist of short-term efforts and incentivize customers
to act now before it’ s too late. This pricingstrategy plays to a consumer’ s fear of missing
out.
Best for: Small businesses that want to generate quick demand for their products or
services
Pros:
 Increases sales volume in the short term

 Increased inventory turnover

 Promotions can build customer loyalty
Cons:
 More calculations are required to ensure the sales volume compensates for the
discounted prices
 Loweredperception by customers due to “cheaper” prices
 Customers may be relu ctant to purchase again if you don’ t keep offering

promotions
Promotional pricing examples
An example of promotional pricing can apply to a retail store that implements a “Buy One
Get One” campaign during a holiday weekend, like Black Friday or Cyber Monday. Loyalty
programs also apply here as well—retailers wil offer rewards to their loyal customers for a
limitedtime.
9. Value pricing
Value pricing is a way of setting your prices based on your customer’ s perceived value of
what you’ re offering. This occurs when external factors, like a sharp increase in
competition or a recession, encourage the small business to further provide additional value
to its customers to maintain sales.
This pricing strategy works because customers feel as though they are receiving an
excellent value for the good or service. The approach recognizes that customers don’ t
care how much a product costs a company to make, so long as the consumer feels they’
re gettingan excellent value by purchasingit.
Best for: Small businesses that specialize in SaaS orsubscriptions
Pros:
 Potentialforhigh profit margins
 Increased perceivedvalue in your brandandservices
 Increased customer loyalty

Cons:
  Requires additional market research todetermine what is of value to youraudience
 Markets that work well with this strategy tend to be very niche since they’ re
high-end
 Goods wil cost more to produce

Value pricingexamples
An example of value pricing can be seen in the fashion industry. A company may produce a
product line of high-end dresses that they sell for $1,000. They then make umbrellas that
they sell for $100.
The umbrellas may cost more than the dresses to make. However, the dresses are set at a
higher price point because customers feel as though they are receivingmuch more value for
the product. Would you pay $1,000 for an umbrella? Probably not. Thus, external factors like
customerperceptions guide the value pricing strategy.
10. Captive pricing
Captive pricingis a strategy used to attract a high volume of customers to a product intended
for a one-time purchase. The method behind captive pricing is to generate profits from
addedaccessories that goalongwith the core product you’ re selling. Small businesses can
implement price increases so long as the cost of the secondary product does not exceed
the cost that customers would pay a competitor.
Best for:Small businesses that have a product that customers wil continually renew or
update
Pros:
 Increases flow of traffic to the core product
 Boosts sales each time the upgradedaccessoryis released

 Customer loyalty increases

Cons:
 Customers may begin to feel unsatisfied with having to update their products
repeatedly
  High-priced accessories can lead to a loss of sales
 You’ l need to continuously offer new and improved products each time to maintain
revenue and customer interest
Captive pricing examples
A perfect example of a captive pricing strategy is seen with a company like Dollar Shave
Club. With Dollar Shave Club, customers make a one-time purchase for a razor. Then, every
month, they purchase new razor blades to replace the existingone on the headof the razor.
Because the customer purchased a DSC razor handle, they have no choice but to buy
blades from the company as well. The company holds customers “captive” until they
decide to break away and buy a razorhandle from anothercompany.
[Link] pricing
Dynamic pricing is when you charge different prices depending on who is buying your
product or service or when they buy it. It’ s a flexible pricing strategy that takes many factors
intoaccount—particularly changes in supply and demand.
You might have hearddynamic pricingreferredtoas:
 Demandpricing
 Surge pric ing
 Time-based pricing

While dynamic pricing is relatively common in e-commerce andthe transportation industry, it

doesn’ t work for every type of business. The greatest risks can come when variable prices
are applied to products orservices that are typically bought by price-sensitive customers.
Best for: Small businesses lookingto maximize their profit margins and boost declining sales
Pros:
 Allows forpric ingto reflect the market demandfor the product orservice
 Provides more insight into customerdemand andpurchase patterns
 Enables you tomaxim ize your profits bymatching your price to the demand
Cons:
 Customers maybe scaredoff by prices that are always fluctuating
 Higher risk of price wars
 Increases competition within the industry

Dynamic pricing example

A good example of dynamic pricing comes from the airline industry. If you’ ve ever noticed
how much flight prices can change depending on when you book, you’ ve experienced
dynamic pricingfirsthand.
12. Competitive pricing
Competitive pricing is when your prices either match or beat those of similar products that
are sold by competitors. Oftentimes this simply means selling your products or services at a
better price, but you could choose to offer betterpayment terms instead.
To determine if this strategy is right for you, gather as much information as possible about
your target market and what your competition is doing. If you combine this with the
assistance of advanced pricing software solutions, you can analyze and update price data
continuously.
Best for: Small businesses that are just starting out
Pros:
 Simple implementation
 Can be combined with other strategies such as cost-plus pricing to make efforts
more rewarding
Cons:
 Not good to use long-term since competitors wil catch on andmodify their strategy

 Not a strategy to use if you want to stand out since your competitors are likely using
the same methods
Competitive pricing examples
An example of a company that takes advantage of competitive pricing is Amazon. Amazon
wil compare the prices of products sold on their platform and utilize that information to offer
the lowest price in the market.
This can also be seen in the tech industry with Apple and Samsung using competitive pricing
for their phones.
[Link]-pluspricing
Cost-plus pricing is a strategy of marking up (adding a fixed percentage) the cost of services
andgoods to arrive at your sellingprice.
As a seller, you would use a calculation that includes fixed and variable costs that wil be
incurred in manufacturing your product and then apply the markup percentage to that cost.
This strategy is widely used since it’ s easy to justify and is typically fair and
nondiscriminatory.
Best for: Small businesses with a cost advantage or an interest in usingprice transparency as
a differentiator
Pros:
 May lead to positive dif ferentiation andcustomertrust
 Reduced risk of price wars
 Can provide predictable profits
 Simple to implement

Cons:
 Discourages efficiencyand cost containment
 Potentialforcustomers to perceive the product negatively
 Not guaranteedto coverall costs since much of the calculation is a guesstimation
 Can be diffic ult to change prices when needed

Cost-plus pricing example

Grocery stores and supermarkets work on a cost-plus basis to determine the prices of items
such as eggs and milk. Oftentimes, these businesses wil purchase from a wholesaler or
producer andthen apply a markup price forthe product sold at their store.
[Link] pricing
Freemium pricing is a strategy in which a service or product is given to a customer free of
charge unless they want to access premium features or services within that product.
Best for:Small businesses that intend to offer both free and paid versions of their product
andthose that offerfree trials
Pros:
 Potentialto unlock viralgrowth

 Creates a no-risk environment that attracts customers who want to try something for
free
 Opportunity to monetize on advertising

Cons:
 A higherpercentage of free users may neverconvert
 Cash reserves can be depletedquickly due to a large number of non-paying users
 May require additional customer service support for freemium users, which can be
costly
Freemium pricing examples
Freemium pricing examples include free apps that require customers to pay a premium price
if they want an ad-free experience.
This also includes online magazine and newspaper subscriptions that only give you a certain
amount of free articles until you have to pay to receive unlimited access.
- DistributionChannel Management
What is distribution channel management?
Distribution channel management is the method of regulating the movement of products
from the manufacturers or producers to the end customer. A distribution channel is a means
to which businesses transport their products. It is an important aspect of business because it
delivers products toretailers andcustomers in all feasible conditions.
Why is distribution channelmanagement important?
Every business develops large quantities of products for prospective customers in several
locations. Although these products are manufactured in a production facility, it is crucial to
track how these products wil be distributed to depots, wholesalers, merchants, and, finally,
customers. Distribution channel management ensures an appropriate, cost-effective,
long-term, anddependable supply chain, which enhances a company’ s profitability.

For brand promotions, businesses experiment with various tactics. Some companies
consider multichannel distribution andmarketing strategy. Some succeed, while others, on
the other hand, face obstacles within channel conflict. To understand channel conflicts
better, let’ s talk about channels first.

The Three Typesof Distribution Channels

There are three ways to make sure a product gets tothe final consumer.
[Link] Channels
With direct channels, the company is fully responsible for delivering products to consumers.
Goods do not go through intermediaries before reaching their final destination. This model
gives manufacturers total controlover the distribution channel.
This is the case with people who docatalogsales, for example.
Since the manufacturer alone is responsible for delivering products, this channel generally
makes it impossible to have a high number of customers.
At the same time, it’ s possible to offer lower prices, since the company does not have to
paycommission to intermediaries.
[Link] Channels
With indirect channels products are delivered byintermediaries, not by the sellers.
Who are these intermediaries? They could be wholesalers, retailers, distributors, or brokers,
for example.
In this case, manufacturers do not have totalcontrol over distribution channels.
The benefit is that this makes it possible to sell larger volumes and sell to a range of
customers. However, products have higher prices due to the commissions paid to
intermediaries.
3. Hybrid Channels
Hybrid channels are a mix of direct andindirect channels.
In this model, the manufacturer has a partnership with intermediaries, but it stil takes control
when it comes to contact with customers.
One example is brands that promote products online but don’ t deliver them directly to
customers.
Instead, they nominate authorized distributors.
Three Methodsfor DistributionChannels
There are three different delivery methods for distribution.
Basically, they concern who wil be allowed to sell yourproducts.
[Link] Distribution
With exclusive distribution, intermediaries take the company’ s products to specific sales
outlets.
This is usually done by a sales representative.
This means that only exclusive retail outlets wil be able to sell the items to consumers.
Depending on the quality of the product, this is a great strategy not only for manufacturers
but alsofor the retail outlets or chain stores selected.
[Link] Distribution
With selective distribution, the company allows sales to a specific group of intermediaries
who are responsible for sellingitems to finalcustomers.
An important factor in how successful this strategy wil be is the reputation of the
intermediaries since they have a direct impact overthe company’ s performance.
In this case, the intermediary becomes the real consultant for consumers, answering
questions and recommendingappropriate products for their needs.
3. Intensive Distribution
In intensive distribution, the manufacturer tries to place their product in as many sales outlets
as possible.
The manufacturers themselves, sales teams, andcommercial representatives are all involved
in this method. They are responsible fordistributingproducts to sales outlets.
This distribution method is generally used by manufacturers of low-cost products with a high
frequency of consumption.
Distribution ChannelLevels
Besides the types and methods of distribution channels, they may also operate on different
levels.
Their levels represent the distance between the manufacturerandthe final consumer.
Level 0Distribution Channel
In this level, there is a close anddirect relationship between the manufacturer andthe client.
Forthe company, the costs of the relationship with the consumer are higher.
Level 1Distribution Channel
In level 1, the manufacturer sells the products to the distributor, who might sell it to
consumers via retailers or wholesalers.
The distributor keeps some of the rights tothe product, but not all.
The distributor is also responsible for the costs of sales and transportation to sales outlets.
Level 2Distribution Channel
Level2 is similar to level1.
The difference is that in this case, the distributor delivers products only to retailers, who sell
them to consumers.
Level 3DistributionChannel
Level3 channels are a traditionaldistribution model.
The product’ s journey from the manufacturerinvolves distributor, retailer, andcustomer.
The costs relative to sales andmarketingare dividedbetween the parties.
The advantage of this model is that it’ s possible toreach alarger number of consumers.
On the other hand, products have a higher price because of the operational costs of all the
parties involved.
The Nine Main Intermediariesin DistributionChannels
After finding out more about operation details, it’ s time to see who the main intermediaries
who take products to consumers are.
[Link]
Retailers are intermediaries used frequently by companies.
Examples include supermarkets, pharmacies, restaurants, and bars. Each of these types of
businesses has full sales rights.
Generally, product prices are higherin retailers.
[Link]
Wholesalers are intermediaries that buy and resell products to retailers. Wholesalers sell to
those who are goingto put products in their own stores.
These intermediaries generally don’ t sell small quantities to final consumers, though there
are exceptions, like supermarkets that sell in the wholesale model.
Prices are lowerbecause sales involve large quantities.
3. Distributors
Distributors sell, store, and offer technical support to retailers and wholesalers. Their
operations are focusedon specific regions.
4. Agents
Agents are legal entities hired to sell a company’ s goods to final consumers and are paid a
commission fortheir sales.
In this case, the relationships between intermediaries and companies are forthe long term.
5. Brokers
Brokers are also hired to sell andreceive a commission.
The difference between agents and brokers is that brokers have short term relationships
with the company.
That’ s the case with realestate agents andinsurance brokers, forexample.
[Link] Internet
To those who sell tech andsoftware, the internet itself works as the intermediary of the
distribution channel.
The consumeronly has to downloadthe material to have access to it.
E-commerce companies also use the internet as adistribution intermediary.
 [Link] Teams
A company can also have its own sales team who are responsible for selling goods or
services.
There is also the possibility of creating more than one team to sell to various segments and
audiences if the company has a wide range of products.
8. Resellers
Resellers are companies or people who buy from manufacturers or retailers to later sell to
consumers in retail.
9. Catalog
Catalog sales, as the name indicates, is when a salesperson is connected to a company and
sells its products using a magazine. Salespeople in this modelalso usually earn a commission
for their sales.
This type of sales is common in the beauty segment, with brands like Avon and the Brazilian
Natural.
Functionsof Distribution Channel
In addition to facilitating the delivery of products or services to consumers, a distribution
channelservers many otheressentialfunctions. These include:
 Assembling, storing, bulk breaking, andsorting of products
 Moving goods from warehouses to customers
 Managingpayment flow pre-sales orpost-purchases
 Providing market information to producers
 Promotingthe brandand its benefits to end-customers
 Maintaining price stability by absorbingany price increase
 Sharingthe market risk with manufacturers
 Getting a chance topromote themselves through the distribution of products
 Facilitate sellingby being physically close to customers
 Gather information about potential and current customer competitions, other factors
andforces of the environment
  Provide distributional efficiency by bridging the gap between the manufacturer and
the user efficiently andeconomically
 Assemble products into assortments to meet buyers’ needs
 Match segments of supply with segments of demand
 Assist in sales promotion
 Assist in introducingnew products
 Assist in implementing the price mechanism
 Assist in developing sales forecast
 Provide market intelligence and feedback
 Maintain records
 Take care of liaison requirements
 Standardize transaction

Factors Affecting Channelsof Distribution

The followingfactors determine the choice of channels.
i) Product Type
The choice of channel of distribution is based on the type of the product that is produced. It
is important to check whether the product is perishable or non-perishable, whether it is an
industrial or a consumer product, whether its unit value is high or low and also, the degree of
complexityof the product. For instance, if agoodis perishable then short channels should be
usedratherthan the longones. Similarly, if a product has a low unit value then longerchannel
are preferred. In a similar manner, consumer products are distributed through long channels
while industrialproducts are distributed through short channels.
i ) Characteristics of the Company
The two important characteristics of a company that affect the choice of channel are its
financial strength and the degree of control that the company wishes to hold on the
intermediaries. Shorter channels require greater funds than longer channels and also offer
greater control over the members of the channel (intermediaries). Thus, companies that is
financial y strong or wishes to command greater control over the channel of distribution opt
for shorter channels of distribution.
i i) Competitive Factors
The degree of competition andthe channels opted byother competitors affect the choice of
distribution channel. Depending on its policies a company can adopt a similar channel as
adopted by its competitors or opt for a different channel. For example, if competitors of a
company opt for sale through retail store, it may also do the same or it can opt a different
channelsuch as direct selling.
iv)Environmental Factors
Environmental factors such as economic constraints and legal policies play an important role
in the choice of channelof distribution. For example, requirement of complex legal formalities
at each stepof distribution induces the companies to opt for shorter channels.
v) MarketFactors
Various other factors such as size of the market, geographical concentration of buyers,
quantity demanded, etc. also affect the choice between the channels. For instance, if
potential buyers are concentrated in small geographical area then, shorter channels is used.
As against this, if the buyers are dispersedin a largerareathen longer channels of distribution
may be used.

MajorChannels of Distribution
Here is alist of some of the majorchannels of distribution −
 Manufacturer→ Consumer
 Manufacturer→ Retailer→ Customer
 Manufacturer→ Wholesaler →Customer
 Manufacturer→ Wholesaler →Retailer →Customer
 Manufacturer→ Agent → Retailer→ Customer
 Manufacturer→ Agent → Wholesaler →Customer
 Manufacturer→ Agent → Wholesaler →Retailer →Customer
Profit distribution decreases as the channellength increases.
Designing Distribution Channels
We have seen what a distribution channel is. Let us now see the designing process of a
distribution channel.
The followingsteps are involvedin the designingof a channelsystem −
  Formulating the channelobjectives
 Identifyingthe functions to be performedby the channel
 Analyzingthe product and linking the channel design tothe product characteristics
 Evaluatingthe distribution environment, including legalaspects
 Evaluatingcompetitor’ s channel designs
 Evaluatingcompany resources andmatching the channeldesign tothe resources
 Generating alternative designs, evaluating them and selecting the one that suits the
firm best
Classification of Wholesalers
A wholesaler purchases from the manufacturer and further distributes the product to
customers orretailers. Wholesalers can be classified into the following categories as per area
of functioning −
 Merchant wholesalers
 Agents and brokers
 Manufacturer’ s sales branches and offices
The planning, implementation, andcontrolling of the physicalflow of material or product from
one point to another to meet the customer requirements in the market is known as physical
distribution.
Importance of Physical Distribution
The importance of physical distribution becomes significant when the manufacturers and
market are geographically far from each other. The following points highlight the importance
of physicaldistribution −
 Execute physical flow of product from the manufacture to the customers.
 Grant time andplace for the product
 Build customerfor the product
 Cost reduction
 Fulfil the demandof the product in the market so that business takes place
Steps in Designinga PhysicalDistribution System
To design a physicaldistribution system for a product, followingsteps need to be followed−
 Step 1− Defining distribution objective and services required forproduct distribution
  Step 2− Articulating customer requirement
 Step 3− Comparingthe strategywith market competitors
 Step 4 − Managing the cost of distribution to decrease cost without compromising
on the quality of service
 Step 5 − Building physical distribution system that is flexible for implementation of
changes, if required
Designing of a physical distribution system involves these steps. It is necessary to consider
all steps involved forsmooth distribution of goods andservices.
Components of a PhysicalDistribution System
Physical distribution can be controlled and monitored by its different components. Each
component should be evaluated and managed in order to accomplish physical distribution
without any problems.
The followingare the different components of the physicaldistribution system −
 Planning of physicaldistribution system
 Storage planningin plant
 Logistics
 Warehousing on field
 Receiving
 Handling
 Sub distribution of product
 Management of inventory at various levels
 Execution of order
 Accounting transactions
 Communication at different levels
Supply Chain Management (SCM)
Supply Chain Management (SCM) involves managing of goods and services. It includes
different stages like storage of goods, logistics and supply of goods to the customer after
manufacturing.
It can also be referred as the combination of materials management and product distribution
of an enterprise.
Advantages of SCM
Supply chain management increases the flexibility and efficiency for the logistics of a
product. The following are the advantages of supply chain management −
 It increases the efficiency todeliver on time by approximately 20 %.
 It reduces inventory requirement by approximately 50 %.
 It increases the sales of product from 3 to 6 %.
 It provides integrated controlling for the function of logistics at the front and back end
of business.
Disadvantages of SCM
The followingare the disadvantages of supply chain management −
 It considers material management important andcustomerrequirement for logistics as
superfluous for the supply cycle.
 Consequently, customer requirement for logistics is not executed with high
importance.
Thus, supply chain management has both advantages and disadvantages and both have to
be consideredforimplementation in an organization.
Logisticsmanagement
Logistics management is a supply chain management component that is used to meet
customer demands through the planning, control and implementation of the effective
movement and storage of related information, goods and services from origin to destination.
Logistics management helps companies reduce expenses andenhance customer service.
The logistics management process begins with raw material accumulation to the final stage
of deliveringgoods tothe destination.
By adhering to customer needs and industry standards, logistics management facilitates
process strategy, planning and implementation.
Logistics is basically a process of transporting goods (either raw material or finished
products) from one point to another point. So, the two major functions of logistics
are transportation and warehousing.
The operations include planning, implementing, and maintaining the transportation and
storage of goods that include service as well as information of the initial point and the
endpoint.
Typesof Logistics
Since you have known the meaning and definition, now you should also know what the
types of logistics are. Following are the major types of logistics-
 InboundLogistic s

 OutboundLogistics
 Reverse Logistics
 Third-Party Logistic s (3PL)
There are manymore types apart from these also but the most used ones are these four.
Inbound Logistics
It is one of the primary types of Logistics. Basically, inbound logistics means transportation,
storage, and the receiving of the incoming resources (such as raw material or other goods)
that you require to manufacture a product.
Moreover, it can be the deliveryof goods that you wil procure in your inventory.
The below diagram shows the placement of inbound as well as outbound logistics in an
organization. For example- If you are dealing in footwear, then the inbound logistics in your
company wil be the rubber foryourshoes, the thread to be usedfor knittingthe shoes, etc.

Outbound Logistics
Outbound logistics is a process of delivering the product to the customer on the committed
time.
Customer satisfaction is the main objective here and the logisticians take care that the
product should reach the customer safely in minimum cost
For example- If you are dealing in footwear, then the outbound logistics in your company wil
be the shipping ofthe final product which are shoes, sandals, slippers etc toyourcustomers.
Reverse Logistics
Reverse logistics is a process of transporting product from the end customer to the seller. It
includes the collection, inspection, and sorting, refurbishing android distribution.
You have undoubtedly facedit at least once that you have ordered a product online and it did
not match your requirements. Then you raise a request for a replacement or refund
regardingthe product.
The company picks up that product from your address. So, the process of reaching the
product from your side tothe company is reverse logistics.

Third-Party Logistics (3PL)

The third-party logistics are focused only on the transportation of products from one end to
another end and nothingelse.
It doesn’ t matter whether it’ s a seller to consumer or consumer to the seller. They take
the responsibility of deliveringthe products two right places at the right time.
It helps the businesses to focus on their primary operations instead of engaging their time in
monitoringthe deliveryservices.
Importance ofLogistics
Whether you are a manufactureror a reseller, you can reach to your customers by marketing
techniques or by word of mouth. But, your product can reach them by a proper distribution
network.
It depends on the seller whether they want to manage the delivery system by themselves or
outsource the logistics toa reliable company tohandle their supply chain management.
Many distributors, dealers and retailers depend on logistics for the delivery of products they
require. The major responsibility of any logistics is to deliver the right product in the right
quantity to the right customer at the right time.
Processof LogisticsCycle
Now let’ s talk about the logistic cycle. Following are the processes involved in a logistic
cycle-
 ServingCustomers

 Product Selection
 Quantific ation
 Inventory Management
 Logistic s Management Information System
Serving Customers
The main objective of the logistics is to serve the customers by providing them with the
products they need. The logisticians continuously monitor the demand for the products in
different locations
Product Selection
Selection of the right products is very important in any logistics system. It directly impacts the
supply chain system.
If you are a logistician, then it depends on you that which category products you want to
move from one point to another point. It is essential to define this so that you can plan your
transportation methods, yourwarehouse andyour place of establishment accordingly.
Quantification
Quantification means the procurement or sourcing of the material from the manufacturer or
the supplier. It focuses on the calculation of the estimate of the quantities.
You know that sometimes it happens that you get an unexpected demand for material or
sometimes an order in large quantity. For this, either you have to import it or you have to
procure it toget ready for fulfil ingfuture demands
InventoryManagement
In the logistics management system, the role of inventory management is the storage and
distribution of goods.
When the goods are procured in sufficient quantity, they are stored until a customer places a
purchase request.
LogisticsManagement Information System
The logistics management system of the supply chain system runs on the communication
between the sender, the supplier andthe receiver.
It is very important to establish proper coordination among them to make the process
smooth and free from errors.
This process is defined as the Logistics Management Information System (LMIS) that plays a
significant role in the delivery of right products, in the right quantity, at the right place, on the
right time.

Current TrendsinWholesaling
Although the pandemic has put many businesses in very tough positions throughout the
year, manybusinesses got creative in orderto keep their operations afloat.
Let’ s take a look at six ofthe toptrends in wholesale distribution in 2020.

[Link] ecommerce
Online shoppinghas grown very popular amongconsumers in recent years, but retailers and
wholesalers have taken a bit longer to settle into the online B2B marketplace.
Ecommerce platforms for B2B are becoming more and more accessible to wholesalers and
buyers alike.
Wholesale distributors used to send their past clients and mailing list physical catalogs.
Making these catalogs available online opens up many possibilities and makes the
experience more convenient forall parties involved.
For one, making an online order is so much more convenient. Retailers can easily add items
to their cart in their selectedqualities and know how much their order wil cost.
On the other hand, distributors can reach audiences beyond their current list of contacts
since many B2B ecommerce marketplaces are designed as search engines. That means
buyers can easily connect with suppliers who offer what they need, even if they had never
heard ofthem before.
[Link] is a prime example of a B2B ecommerce marketplace that is expanding to
further cater to the needs of wholesale distributors. Our platform connects buyers and sellers
from aroundthe world in afashion that offers maximum flexibility for all parties involved.
Forexample, sellers can communicate with buyers and customize products ororders to best
suit the buyers’ needs. Additionally, buyers can post a Request for Quotation (RFQ) that
sellers can answer if they are able tofulfil the request.

[Link]-DrivenDecisionMaking
Business has always been a number game, but state-of-the-art technology makes it possible
for both wholesalers and retailers to make data-driven decisions in terms of how much
inventory to hold, when to buy andwhat to buy.
Additionally, access to advanced analytics and detailed consumer behavior reports helps
these types of businesses make decisions formarketing, sales andeven internaloperations.
Turning to data and analytics takes a lot of guesswork out of business, which makes it
possible for businesses to finetune their strategies and allocates their funding for
investments with more confidence.

3. Supply Chain Flexibility

Supply chain flexibility is another trend that has been useful in the wholesale distribution
industry this year. Supply chain flexibility refers to the ability to adjust the use of raw materials,
production andshippingtomake the process most cost-effective and profitable.
This year came with so many unpredictable disruptions in supply and demand due to the
global crisis. B2B retailers with no plan for supply chain flexibility had a hard time making it
through.
The pandemic has taught wholesale distributors the importance of investing in supply chain
flexibility1. Taking a more flexible approach can help build a resilient foundation to pull your
business through times of economic distress.
4. Global Expansionand International Trade
Global trade has been on the rise for decades, but thanks to advanced technology geared
towards enterprise use; this trendhas made leaps andbounds in 2020.
Again, [Link] is at the forefront of the global growth of wholesale distribution. Our
platform offers unique tools that allow buyers and sellers to communicate with automatic
translation.
That means you can communicate with whoever is on the other side of the screen no
matterwhat language theyspeak.
[Link] also offers shipping services via [Link] Freight which further streamlines
the process, since this service is equipped to navigate the rules and regulations that come
with internationaltrade.
Platforms with this full range of global B2B resources are making it easier for wholesale
distributors to break intothe globalmarket.

5. Artificial Intelligence for Efficiency

Automation is key in scaling almost any business model. Wholesale distribution companies
are calling on advanced technology and artificial intelligence to make their business
processes more efficient.
Artificial intelligence has been developing for years, and many wholesale distributors are
starting to benefit as advanced programs and technology become more easily accessible to
businesses with smaller budgets.
Artificial intelligence in the wholesale distribution industry currently involves mostly programs
gearedtowards automation in sales, bil ing, accountingandother administrative tasks.
However, many people are hopeful of a future where access to artificial intelligence that can
take over warehouse operations—includingpackaging, labeling, shipping, etc.—and minimize
the needfor manpower.
This would give businesses the opportunity to focus on human intelligence and related
resources on growth-centered tasks.

[Link] channel Marketing

Omni channel marketing is a tactic used to provide buyers with a streamlined experience.
The purpose of omnichannel marketing is to enhance customer experience and provide
consistent customer satisfaction.
Omni channel marketing is an advanced alternative to more dated practices where
businesses outsource different departments and leave a disconnect between different parts
of a buyer’ s account.
How omnichannel marketing works is pretty straightforward, any customer-related
departments are linked internally. These way customers are not bounced around from one
customer representative to another in order to receive access to the information needed to
solve the customer’ s problem.
For example, if a buyer has an order fulfil ment issue, the same representative should be able
to access the information related to the initial order, the shipment, the delivery and the bil ing
issue.
This minimizes the need to transfer a call tomultiple departments if one representative has all
of the information in front of them.
Recent Trends in Retailing
Two retail trends that every business can count on in 2023 are change and innovation.
Online and in-person retail is moving fasterthan ever. Technologicalinnovation is leading that
charge. Andso are shiftingconsumer expectations.
Businesses need to stay on top of retail trends that wil impact their success in order to get
ahead of the curve. Embracing that change wil help retailers thrive this year and beyond. But
we know it can be hard to stay aware of trends on top of everything you have going on as a
busRetail businesses need to keep a finger on the pulse of their industry and market.
Trackingretail trends ensures that you are aware of what’ s important todayand tomorrow.
Understanding current and future market forces means that you can address them. In the
last few years, online shopping has risen drastically. In 2022, 58.4% of global Internet users
reported buying something online every week! And 30.6% of those purchases were made
on a mobile device.
 A takeaway from that is that if your business doesn’ t have a mobile-friendly ecommerce
store, and you’ re not selling on social, then you’ re already a step behind the rest of the
industry.
Stay on top of trends. That way, you can incorporate them into yoursocial media marketing
strategies forretail brands going forward.
Anticipate customer needs
Customer expectations are shifting. How you engage customers next year won’ t be the
same as last year. And new competitors in your industry are addressing those needs in
innovative new ways.
Retail trends help you stay on top of customer needs, purchasing wants, and expectations.
And they let you keep tabs on how your competition wil address them. This lets you pivot
your strategyto meet new demands as needed.
Get ahead of the curve
Online and offline retail is changing rapidly. New technology is being introduced all the time to
offer:
 Omni channelshopping
 Self-serve commerce
 Socialselling
 Automations
 Same-day delivery
 Interactive retail experiences
 New customeracquisition channels
Staying on top of retail trends—especial y technology trends—helps you stay one step
ahead of the competition. It also ensures you can take advantage of new technology as it’ s
released.
 The retail industry is rethinking the shopping experience in 2022, redefining not only how we
shop and sell, but the incredible advantages independent retailers have right now. The
cutting-edge retail trends below are guidingeach stepof the way.
The boutique on your town’ s main drag, the shoppable post that appears in your Instagram
feed, and the marketing email sending you to an online store may all come from the same
retailer. And that retailer may be fundamentally different than they were last year.

The 8 biggesttrendsfor the retail industry

1. Sellingonline is non-negotiable
2. Omni channeltools are creating more meaningfulshoppingexperiences
3. Automatedtechnology is helpingretailers manage the labor shortage
4. Same-day delivery is giving retailers a clear advantage
5. Socialcommerce is one of the biggest digitaltrends in the retail industry
6. Interactive retail experiences are bridging the gap between the online and offline parts
of a store
7. The borders between retail and other industries continue to blur
8. Community investments from retailers may be here to stay.

Wholesaling versusRetailing
BASIS FOR WHOLESALE RETAIL
COMPARISON
Meaning Wholesale is a business in When the goods are sold to
which goods are sold in large the final consumer in small
quantities to the retailers, lots, then this type of
industries and other businesses. business is termed as retail.
Creates link Manufacturer and Retailer Wholesaler and Customer
between
Price Lower Comparatively higher
 BASIS FOR WHOLESALE RETAIL
COMPARISON
Competition Less Very high
Volume of Large Small
transaction
Capital Huge Little
Requirement
Deals in Limited products Differentproducts
Area of Extended to various cities Limited to a specific area
operation
Art of selling Not Required Required
Need for No Yes
advertisement
B2B Marketing/ Industrial marketing
B2B marketing means business-to-business marketing. It's any marketing strategy or
content used by one business to target and sell to another business. For instance,
companies that sell services, products, or SaaS to other companies or organizations typically
use B2B marketing.
Two good examples of B2B marketing are [Link] B2B brand strategy
on LinkedIn. Another out-of-the-box example is the way Gong plans and executes its Super
Bowl adverts. It's companies like these that sell solutions to help businesses automate or
enhance their processes.
The goal of B2B marketing is to attract and convert leads into customers. In the digital age,
this means that you needtobe able tocapture a prospect's attention quickly andkeepit. This
can be done through educationalcontent like white papers or value-driven blogposts.
As the name suggests, business-to-business marketing refers to the marketing of products
or services to other businesses and organizations. It holds several key distinctions from B2C
marketing, which is orientedtoward consumers.
In a broad sense, B2B marketing content tends to be more informational and straightforward
than B2C. This is because business purchase decisions, in comparison to those of
consumers, are based more on bottom-line revenue impact. Return on investment (ROI) is
rarely a consideration for the everyday person—at least in a monetary sense—but it’ s a
primary focus for corporate decision makers.
In the modern environment, B2B marketers often sell to buying committees with various key
stakeholders. This makes for a complex and sometimes challenging landscape, but as data
sources become more robust and accurate, B2B marketers’ ability to map out committees
andreach buyers with relevant, personalizedinformation has greatly improved.
Any company that sells to other companies. B2B can take many forms:
software-as-a-service (SaaS) subscriptions, security solutions, tools, accessories, office
supplies, you name it. Manyorganizations fall under both the B2B and B2Cumbrellas.
B2B marketing campaigns are aimed at any individual(s) with control or influence on
purchasing decisions. This can encompass a wide variety of titles and functions, from
entry-level end-users all the wayuptothe C-suite.
Creating a B2B Marketing Strategy
Competition for customers, and their attention, is high. Building out a B2B strategy that
delivers results requires thoughtful planning, execution, and management. Here’ s a
high-level look at the process B2B companies use to standout in a crowded marketplace:
Step 1: DevelopanOverarchingVision
Fail to plan, plan to fail. This truism remains eternally accurate. Before you start cranking out
ads and content, you’ l want to select specific and measurable business objectives. Then,
you’ l want to establish or adopt a framework for how your B2B marketing strategy wil
achieve them. For more insights on strategy, for your content and your execution, check
out The LinkedIn Pages Enterprise Playbook.
Step 2: Define Your Market andBuyer Persona
This is an especial y vital stepfor B2B organizations. Whereas B2C goods often have a wider
and more generalaudience, B2B products and services are usually marketed to a distinct set
of customers with particular challenges and needs. The more narrowly you can define this
audience, the betteryou’ l be able to speak to them directly with relevant messaging.
We recommend creating a dossier for your ideal buyer persona. Research demographics,
interview people in your industry, and analyze your best customers to compile a set of
attributes you can match against prospects to qualify leads.
Step 3: Identify B2B Marketing Tactics andChannels
Once you’ ve established solid Intel aroundyour target audience, you’ l need to determine
how and where you intend to reach them. The knowledge you’ ve attained through the
previous step should help guide this one. You’ l want to answer questions like these about
your idealcustomers andprospects:
 Where do they spend their time online?
 What questions are they askingsearch engines?
 Whic h socialmedia networks do theyprefer?
 How can you fil opportunitygaps that your competitors are leavingopen?
 What industry events dothey attend?

Step 4: Create Assetsand RunCampaigns

With a plan in place, it’ s time to put it into motion. Follow best practices for each channel
you incorporate into your strategy. Critical ingredients in effective campaigns include a
creative approach, usefulinsights, sophisticatedtargeting, and strong calls to action.
Step 5:Measure and Improve
This is the ongoing process that keeps you moving in the right direction. In the simplest
terms, you want to figure out why your high-performing content performs and why your
low-performing content doesn’ t. Understand this, and you’ l more wisely invest your
effort and budget. The more vigilant you are about consulting analytics and applying your
learnings, the more likely you are to continually improve and surpass your goals. Even with a
well-researched foundation, the creation of content and campaigns inherently requires a lot
of guesswork until you have substantive engagement and conversion data to rely on.
Let your audience dictate your path. Consult metrics to pinpoint the channels, topics, and
media that resonate most, then double-down. Meanwhile, cut or alter anything that isn’ t
performing.
B2B Marketing Tactics
The most common B2B marketing tactics and content formats to consider including in your
strategy:
Blogs: A mainstay for almost any content team. Regularly updated blogs provide organic
visibility and drive inbound traffic to your site. Your blog can house any number of different
content types andformats.
Search:SEO best practices change as often as Google’ s algorithm (a lot), making this a
tricky space to operate in, but any B2B marketing strategy needs to account for it. Lately the
focus has been shifting away from keywords and metadata, and more toward searcher
intent signals.
Social Media:Both organic and paid should be in the mix. Social networks allow you to reach
and engage prospects where they’ re active. B2B buyers increasingly use these channels
to research potentialvendors forpurchase decisions.
Whitepapers, eBooks, and info graphics: Standalone assets containing valuable information,
these downloadable documents can either be gated (meaning a user must provide contact
information or perform another action to access) or unrated. Often used as aB2B lead
generation tool.
Email: While its effectiveness is waning somewhat in the age of spam filters and inbox
shock, email won’ t disappear anytime soon.
Video:This content type can be appliedin severalof the previous categories mentioned here
(blogs, social media, emails) but is worth singling out because it is the driving force behind
many successfulB2B strategies.
Live stream events and webinars: LinkedIn Live videos get, on average, 7x more reactions
and 24x more comments than native video produced by the same broadcasters. LinkedIn
Live isn’ t just great for promoting an event. Take advantage of this feature for
demonstrating expertise, showcasing innovation, or giving LinkedIn members a
behind-the-scenes view into your company’ s culture.
Case studies and customer testimonials:Establishing credibility is a must for B2B marketing
strategists. Case studies and customer testimonials may not be the most creative ventures,
but they’ re crucialnonetheless.
Podcasts: Podcasting is projected to become even more popularthan it already is. Got a
podcast geared toward a professional audience? Thinking about starting one? Grow your
listeningaudience by marketingyourpodcast on LinkedIn.
The 6 differences betweenB2Band B2C marketing
Now that you know the answerto the question, “What's B2B marketing?” it's time to look
at how B2B andB2C marketing differ.
There are manykey differences between B2B vs. B2Cmarketing, but the most important are
the audiences theytarget:
👉 B2C marketingtargets an audience of individual consumers like you and me who are
interested in buying products or services for themselves rather than a corporation. B2C
companies look at the needs, interests, and challenges of everyday individuals who often
buy on a desire orwhim rather than waiting for facts to be checked or an expected ROI to be
delivered.
Examples of B2C products are anything you might find available in a mall, from toothpaste to
t-shirts.
👉 B2Bmarketing sells to individuals or groups looking to solve a pain point at their
company. Examples of B2B products are anything that provides a solution to a challenge,
such as sales automation software which makes B2B prospecting easier. B2B marketing
funnels and sales funnels are a lot longer as there are more decision-makers who all have a
say in the final purchasing decision.

B2C Marketing
Whatis B2C marketing?
Business to customer marketing, commonly known as B2C marketing, is a set of strategies,
 practices, and tactics that a company uses to push its products or services to customers.
B2C campaigns don’ t just focus on the benefit or value that a product offers, but also on
invokingan emotionalresponse from the customer.
“B2C” stands for “business-to-consumer.” It’ s a type of business model geared
toward individual buyers. This is a common sales model that applies to both brick and mortar
and online retailers. The brands that most people are familiar with are probably B2C, for
example:
 Amazon
 Walmart
 Google
 Facebook
B2C marketing works on the basis that customers look for goods or services to meet an
immediate need. Therefore, they tend to purchase without doing much research on the
product or service. With B2C purchases, users typically complete their purchase within the
first hours or days of becoming aware of a product or service. For a successful B2C
campaign, a business owner should understand their customers’ buying habits, trends in
the market, andwhat strategies the competitors use.
B2C promotions should be bright, easy for consumers to understand, and focused on
solving the precise problem faced by their customers. With this information and the right
tools, it is easy tocreate a campaign that triggers the right reactions from customers and as a
result, drives sales.
Why is B2Cmarketingimportant?
 Boosts website visits
 Helps brands grow their subscriberlist
 Offers more refined interactions with customers
 Gives businesses better rankings on search engines
  Increases conversion and brand awareness
B2C marketing is vital for all businesses that sell consumer-based products or services.
These include restaurants, drug stores, car companies, fashion businesses, software
companies, grocery stores, and so forth. Today, however, the internet has become the most
preferred channel for B2C brands to promote their goods or services and for
conductingmarket research. Almost every B2C company wants to get a share of the $2.3
tril ion e-commerce industryand shift its marketingoutreach online.
B2C e-commerce sales stood at $1.5 bil ion in 2013, with forecasts showing steady growth
to 2.35 bil ion in 2018. These figures show that B2C marketing is worth the investment for
higher ROI andbusiness growth. B2C marketing is beneficialin the followingways, it:
 Boosts website visits: B2Ccampaigns are created to woo prospective customers into
visiting your brand’ s website to earn more about yourbrand.
 Helps brands grow their subscriber list: when the number of leads that visit a
business’ s website increases, the number of new subscribers also goes up.
 Offers more refined interactions with customers: with knowledge about your target
audience, B2C companies can send more specific messages at strategic times.
Here segmentation proves to be useful.
 Gives businesses better rankings on search engines: by using targeted keywords, a
website can increase its position in search results. As a result, there are more
chances for users to find YOUR Company.
 Increases conversion and brand awareness: B2C marketing strategies enable
businesses to reach and connect with large audiences through bulk emailing, social
media outreach, and other channels. As a result, a brand becomes popular,
andconversion rates increase.
Features of B2C Marketing
B2C marketing can be characterized by a list of features that makes it stand out.
 A short sales cycle. Unlik e B2B marketing, in which the sales cycle is much longer,
B2C clients don’ t spend hours on research, hesitating, and comparing every single
 feature. B2C customers usually buy products that were advisedby their friends so the
entire process is less intimidatingfor clients and sellers.
 Domination of an emotional element over the rational one. B2C customers look for
instant solutions to their problems based on their desires. They rarely think
strategically over the purchase. They are just lookingfor a fast solution that wil satisfy
their needs here and now. So if a brand manages to provide them with this solution,
they wil definitely return to forthe same emotionalexperience.
 Working with the end-user. B2C companies usually deal directly with the consumers

of their products. This makes it easier to convince a person, find the right words, and
use special techniques. While in B2B, a salesperson needs to negotiate with multiple
influencers whomake decisions on behalf of the entire company.
 The high im portance of social media. Working with the end consumers is impossible
today without investing in social media marketing. While choosing a product, people
desperately look for customer feedback. They investigate each channelthey know to
make the right decision. They not only look for reviews but prefer Face book and
Instagram to talk to the brand via chat bots. You wil hardly find a person who wil give
a call or visit the company’ s office. So, brands create chat bots to provide clients
with 24/7 support, collect reviews, share updates, and run retargetingcampaigns to
bringin new customers andmaintain relationships with them.
B2C Marketing vs.B2B Marketing
B2C andB2B marketing differ significantly; therefore, understanding these differences can
make a brand’ s marketing campaigns more relevant and successful. The following is a
comprehensive comparison of the two:
B2C Marketing B2B Marketing
Sells to the final customer directly. Targets a companyor business.
Customers are impulsive and want to see all Customers are likely to do more research
the information about the product at once. before purchasing and compare the product
They wil rarely do more research to with competing options.
understandthe product.
Targets the emotional drive associated with Focuses on the features and value of a
purchasinga product. product.
Works around benefits anddesires. Is more about the characteristics and logic.
The goal of customers is a personal The aim of target customers is to power
improvement. their business.
Makes small-scale sales for personal use. Sales are large-scale. The customers are
These are low-volume sales spread across limited, but the purchasing volume is large.
many consumers.
Consumers make purchases instantly after Customers typically go through a much
seeing the product ad or within a very short longer buying process. They want to fulfil
time. They look for immediate results. long-term goals.

B2C Marketing Channels

 Email marketing
 Mobile marketing
 Webpush marketing
 Socialmedia marketing
 SEO
 Paid Search Advertising
B2C marketing has been in existence for a longtime and relies on various communication
channels to reach the final customer. Just like other types of marketing, growth in technology
has also increased the number ofmarketing channels in B2C.
The most important channels forB2C marketers include the following:
Email marketing
Email marketing is a popular and effective way for consumer brands looking to increase their
sales to reach the target audience. It primarily involves sending out email blasts or
personalized promotional emails to new leads or loyal customers. Email marketing, however,
is only useful if it is relevant to the recipients.
Mobile marketing
It is estimated that over half of all internet shoppers buy things from their mobile devices.
Therefore, successful B2C companies should work on reaching mobile users through
interactive and mobile-optimized promotions. Mobile marketing aims to reach mobile users
through websites, apps, SMS, MMS, and socialmedia.
Web push marketing
Push notifications are a way to deliver messages about sales, discounts, or offers to
customers in real-time when they visit a website. Push notifications usually pop upon
users’ computers ormobile screens andhelp elicit an immediate response from the viewer.
Socialmedia marketing (SMM)
SMM is the use of social media networks like Face book, Instagram, and Twitter to promote
goods or services directly to customers. It entails creating and sharing marketing content on
social media platforms. Usually, B2C businesses use social media as a channel to market
their brands' potential target customers, loyalclients, andthe general public.
SEO
Search Engine Optimization is a natural or organic marketing process for increasing the
visibility of a site or webpage on a search engine’ s non-paid results. Good SEO practices
and tools help businesses drive more traffic to their websites and consequently increase
sales.
Paid SearchAdvertising
This form of marketing is a type of pay-per-click advertising where brands pay for their digital
advertisements to appear on the results page of a search engine like Google or Yahoo. The
placement andfrequency of these ads depend on one’ s quality score and bid.
B2C Marketing Tools
 Email marketing
 SMS marketing

 Webpush marketing

 Messengermarketing

 Combination of an online chat + behavior-based scripts + chat bots

B2C marketers, sales executives, and business owners can benefit from marketing tools
offered by services such as SendPulse. Here are the most prominent services:
Email marketing
Email marketing tools with Send Pulse can be used to build and segment mailing lists, create
andsend personalized email campaigns, automate email sending, analyze subscriber activity,
and monitor results. This channel assists marketers with user on boardingand moves users
down the sales funnel.
Example
Let's increase your income!
Send segmented email campaigns to convert leads to clients. We offer a free plan,
ready-made templates, marketingautomation, andeven more.
Register and create an email campaign!
SMS marketing
SMS marketing tools enable brands to reach prospects and loyal customers on their mobile
devices. With Send Pulse, brands can send bulk promotional or non-commercial SMS
messages to 800 mobile networks in more than 190 countries worldwide. You can schedule
SMS sendingto a specific date and time or choose gradual sending at defined times. You
can perform B2C marketing with Send Pulse at speeds of up to 500 SMS messages per
second.
Web push marketing
Send Pulse helps brands send browser push notifications about sales, exciting updates, new
content, and products that get the attention of visitors and drive traffic back to websites.
They are easy to set upandwork on most browsers, includingChrome, Opera, and Firefox.
Messengermarketing
You can promote your products via messengers as well as answer users' frequently asked
questions, help them order, and register for events using a Chabot. With Send Pulse you can
create a Chabot for Face book andTelegram andsend up to 10,000 messages every month
at no cost.
B2C Marketing Strategies
1. Content marketing. You've definitely heard the quote published on Microsoft's site
"Content is King." Every famous brand invests in content marketing. This strategy
helps businesses generate leads, increase their target audience, boost engagement,
nurture leads, build brand awareness, blow up sales, and raise customer loyalty.
Different content formats help effectively reach these goals. You can start a blog
both to drive traffic to your site andeducate your audience about your products.
2. Search Engine Optimization. Now, that you're in content marketing, it's high time you
take SEO seriously. This strategy means optimizing your site pages to rank high in the
search engine results page. In short, this is a set of techniques that enables the
search engine robots to make your content visible and help people find it. This is a
long-term strategy that implies working with users' search queries, the load speed of
your pages, andbuildinglinks toyourwebsite.
3. Paid advertising. This strategy is similar to SEO; the only difference is that you have to
pay for it. It includes PPC, ads on Face book, and Instagram, retargeting campaigns.
All these ads help drive users who are already interested in your product to your site.
Dependingon the ad format, you can either payforviews or forclicks.
4. Email marketing. With a well-thought email marketing strategy, you can increase your
outreach, build long-lasting relationships with your audience, increase brand
recognition, and boost sales. Combine promotional emails with transactional
campaigns to perform better. With Send Pulse’ s Automation 360, you can send
emails triggeredby users'actions automatically.
5. Social media. People spend hours per day on social media channels and they DO use
them to buy products online. They look for reviews and customer feedback on Face
book and seek more behind-the-scenes information about brands on Instagram.
Besides, they tend to share content they liked with their friends, so you can both
increase sales and user engagement. In addition, you can use Face book and
Instagram to talk to your audience, find out which improvements wil make you brand
the best choice.
6. Influencer marketing. Find the most popular bloggers in your niche. They wil help you
promote your brand to their vast audience in favorable terms. If they enjoy using your
product, you’ l get the benefits of long-term cooperation and increase sales
significantly. You only need to carry out research to find the right influencers.
7. Membership and rewarding programs. Your loyal clients let your brand prosper. They
not only increase your ROI but bring in new clients, spread a good word about your
brand, and can help you improve. Create programs to reward their loyalty. Offer them
to collect points that they can change for a product ora discount.
MODULE -7 (Integrated Marketingcommunication)
- Role of Marketingcommunicationsmix
- Marketing Communications Tools-Advertising
- SalesPromotion
- Personal Selling
- Public Relations
- Direct Marketing
- SocialMedia Marketing
- Marketing Communications Planning,
MODULE -7 (Integrated Marketingcommunication)
- Role of Marketingcommunicationsmix
Marketing Communication
Definition:The Marketing Communication refers tothe means adopted by the companies to
convey messages about the products and the brands they sell, either directly or indirectly to
the customers with the intention topersuade them to purchase
In other words, the different medium that company adopts to exchange the information
about their goods andservices tothe customers is termedas Marketing Communication.
 The marketer uses the tools of marketing communication to create the brand awareness
among the potential customers, which means some image of the brand gets created in their
minds that help them to make the purchase decision.
Marketingcommunication offersolutions tothe following questions:
 Why shall the product be used?
 How can the product be used?
 Whocan use the product?
 Where can the product be used? And
 When can the product be used?
Marketing communication includes Advertising, Sales Promotion, Events and Experiences
(sponsorship), Public Relations and Publicity, Direct Marketing, Interactive Marketing,
Word-of-Mouth Marketing, Personal Selling. These tools of communication are collectively
called as MarketingCommunicationMix.

Elements of Marketing Communication Mix

1. Advertising: It is an indirect, paid method used by the firms to inform the customers
about their goods and services via television, radio, print media, online websites etc
Advertising is one of the most widely used methods of communication mix wherein the
complete information about the firm’ s product and services can be communicated easily
with the huge target audience coverage.
2. Sales Promotion: The sales promotion includes the several short-term incentives to
persuade the customers to initiate the purchase of the goods and services. This promotion
technique not only helps in retaining the existing customers but also attract the new ones
with the additional benefits. Rebates, discounts, paybacks, Buy- one – get- one free
scheme, coupons, etc. are some of the sales promotion tools.
3. Events and Experiences:Several companies sponsor the events such as sports,
entertainment, nonprofit or community events with the intention to reinforce their brand in
the minds of the customers and create a long term association with them.
The name of the firm sponsoring the event can be seen on the playground boundaries,
player’ s jerseys, trophies, awards in the entertainment shows, hoardings on stage, etc.
4. Public Relations and Publicity: The companies perform several social activities with a
view to creating their positive brand image in the market. The activities that companies are
undertaking such as, constructing the public conveniences, donating some portion of their
purchase to the child education, organizing the blooddonation camps, planting trees, etc. are
some of the common moves of enhancingthe Public Relations.
5. Direct Marketing:With the intent of technology, the companies make use of emails,
fax, and mobile phones, to communicate directly with the prospective customers without
involvingany third party in between.
6. Interactive Marketing: Interactive Marketing has recently gained popularity as a
marketing communication tool, wherein the customers can interact with the firms online and
can get their queries resolvedonline.
Amazon is one of the best examples of interactive marketing wherein the customers make
their choice and can see what they have chosen or ordered in the recent past. Also, several
websites offer the platform to the customers wherein they ask questions and get the
answers online such as [Link].
7. Word-of- Mouth Marketing: It is one of the most widely practiced methods of
communication tool wherein customer share their experiences with their peers and friends
about the goods and services they bought recently. This method is very crucial for the firms
because the image of the brand depends on what customer feels about the brand and what
message he conveys to others.
8. Personal Selling: This is the traditional method of marketing communication wherein
the salesmen approach the prospective customers directly and inform them about the
goods and services they are dealing in. It is considered as one of the most reliable modes of
communication because it is done directly either orally, i.e., face to face or in writing via
emails or text messages.
Thus, marketing Communication mix refers to the different tools that a firm can adopt to
inform, persuade, andremind the customerabout the product andservices it sells.
MarketingCommunication –Role in Brand Building
Marketing communication has a vital role in brand building in the market and the opening
case of micromax mobiles rightly supports this notion. Mass media advertising, personal
selling, public relations, publicity and sales promotion – are the various communication tools
that a marketer generally uses to address the communication problem which the brand faces
in the market andas apart of product promotion.
 These tools are combined differently for different brands and each such combination
constitutes the promotion mix for a brand. As, different brands have different
communication problems, the promotion mix for each one of them differs in terms of the
type and also the extent of emphasis on the use of various promotion tools.

[Link] andmaintaining relationships

In order to have effective and long term relationships with its stakeholders, a marketer
needs to have good interpersonal skil s. It is important to create an emotional connection
with your clients. It is necessary to make your potential customers feel valued and
comfortable while telling themabout your goods andservices.
[Link] innovation when marketing
Innovation is one of the most important elements of the marketing process. To market
the goods and services better than its competitors one needs to be creative. Forthis one
needs to have effective communication skil s, so that you are able to convey their ideas
well.
3. Enhancingtransparency
One needs to be completely transparent with its marketers because they are the brand
ambassadors of the business. They are the ones who wil be convincing the customers
across the globe to trust your brand. Moreover, effective communication makes
employees and customers sure that their needs are consideredandunderstood.
4. Overcoming marketingobstacles
There are many challenges that a business has to face. These could be cultural barriers,
language barriers, etc. which hinder the process of marketing. Therefore one needs an
effective communication system to make the marketing process effective. If a person
has the right communication skil s and approaches for specific target groups, then it
becomes easier to understand the needs andestablish connections with the customers.
 5. Establishing professionalism while marketing
There is always a professional relationship between the business and its customers and
clients. It is required to use a professional language while dealing with customers. As a
marketer, one must possess good interpersonalskil s to connect with prospective clients.
Marketing Communication Tools- marketing communication is a complex process which
makes use of numerous communication tools integratedtogether. Simply put, these tools are
a set of diversifiedprograms designedto communicate with the target audience effectively.

1. Advertising
This is one of most prominent and widely used communication tools in a marketing
campaign. It can be in both paid and unpaid forms. The main driving force behind this tool is
mass media such as television, radio, digitalcampaigns, print campaigns, etc.
More often than not, advertising makes use of ‘above the line (ATL)’ media campaigns
because of the kind of reach it has. However, companies that are running low on budget or
companies that require more exposure (apart from ATL marketing) use ‘below the
line (BTL)’ advertising. Now let us have a close look at these twotypes of advertisingtools.
a) Above The Line Marketing: Brands that are after mass appeal often opt for this type of
marketing technique, because brands having mass appeal do not generally have a
genuine target market or aparticular demographic to aim for. They wil have to aim for a huge
and diversifiedmarket in general. In such cases, above the line marketing or mass
media/digitalmarketingcan prove tobe the idealtechniques to run the marketingcampaign.

Some examples of ATL marketingare mentionedbelow:

 TV
 Radio
 Print Media
 Cinemas
  Outdoor Media (Bil boards, Transit Advertising, CommuterDisplays, etc.)
b) Below The Line Marketing: Brands that do not have a great mass appeal often opt for this
BTL technique. They have genuine target markets and small audiences to aim for. In this type
of marketing, the advertising agencies that are hired to run the campaign do not take any
commission but do send invoices for the services rendered. These expenses typically
appear below the line on the bil inginvoice sent tothe firm, hence the name BTL marketing.
Some examples of BTL marketingare mentioned below:
 Internet Marketing
 SocialMedia Marketing
 Email Marketing
 Outdoor Advertisements
 Sales Promotions
 Pamphlets andBrochures
2) Sales Promotions
This is a direct communication tool. It is usedtocommunicate with the consumerdirectly and
effectively in an attempt to promote a product. Sales promotions are widely used in FMCG
andretail sectors. Some techniques involved in these promotions are:
 Temporary Discounts
 Telemarketing
 Free Gift Vouchers
 Distributingfree samples, etc.
3) Publicity
This is generally a free communication tool and the firm generally does not pay for it. This
kind of marketing campaign includes product reviews, free surveys, newspaper articles, etc.
However, with the risingmarketplace competition, even such free communication tools have
become paid platforms topromote products.
4) PersonalSelling
Personal selling is a communication tool wherein a sales person gets directly in touch with
the potential consumer making him/her understand the pro’ s and con’ s of the product.
While doing so, the sales person has to go through the key aspects of AIDAS (Attention,
Interest, Desire, Action and Satisfaction) cycle, which are primary requirements for a sale to
be considered as complete. Though this process is a bit time consuming and costly, the
outcome is generally positive, often leadingtoa loyalcustomer.
5) Public Relations
This communication tool primarily concentrates on increasing the brand image of a
business. Maintainingpublic relations with influential persons across various industries,
scholars, andcelebrities forms important part of this tool. However, making use of these
relations at the right time and in the right way is where the success of this marketing
technique lies in.
6) Direct Marketing
Direct Marketing is a type of integrated marketing communication that focuses on presenting
brand information to only those with similar interests.
Although direct marketing has features of mass advertising, its use of the target market
makes it more susceptible to achievingbrand goals.
The methods of communication focus on a greater need for customer communication. This
is why direct marketing methods include telemarketing, EDM marketing, brochures, and
online targeted displayads.
7) Digital and socialMedia Marketing
Digital Marketing is probably one of the most common methods of integrated marketing
communication that you would see today. In our current technologically driven environment,
using the internet and other digitals mediums as a way of promoting brands is a no brainer.
With such a broad range of marketing tactics, from EDMs, search engine optimization,
blogs, sponsorships,and more, brands are left with a plethora of choices to best target their
audience.
Example
A modern day interpretation of this is the League of Legends and Mercedes-Benz sports
collaboration for Worlds 2020 & 2021. Worlds are a global sports event that runs primarily
through online streaming platforms. This year Mercedes-Benz has partnered with League of
Legends topromote their A-class and B-class vehicles.
With tailor made videos, content, and imagery, they are able to effectively promote their
brand through advertising via the streaming platforms and YouTube. Their use of
sponsorship allows the brand to keep their high-class persona, whilst appealing to a different
age and interest demographic bracket. They are also able to receive a two way response by
the audience interacting live to the advertisement or commenting on the social content and
YouTube videos.
MarketingCommunicationplanning
Communication is a critical part of any marketing campaign, and the success or failure of a
campaign depends on how well you communicate with the target audience. A marketing
communication plan is a document that outlines the communication strategies and activities
for a marketing campaign. Learning about it is important for understanding how to create an
effective communication plan of your own. In this article, we discuss what it is, highlight how
to create one, provide details on when you need one, and explain its importance.

The various types of plans within the marketing and communications disciplines can be
structuredhierarchically, anddivided between strategic and operational.
The activities of an organization start with a business plan, leading to a marketing plan,
followed by a marketing/communications plan and a communications plan (advertising
and/or media plan). That's why we recommend utilizing the RACE Framework to optimize
your strategybefore gettingstuck into the operationalplans.
A marketing communication plan is a document that outlines the advertising and marketing
efforts for a product or service to deliver information to its stakeholders. It includes
information such as the target market, communication objectives, channels of distribution,
and message strategy. The plan also outlines the budget and media mix involved. It's
important to have a clear and concise plan to avoid wasting time and money on marketing
efforts that can't reach the target audience. A good communication plan can also help track
andmeasure progress.
How to create a communicationplan for marketing
A good communication plan is an easy way to organize your thoughts and create a clear
path formarketingsuccess. By takingthe time to understand your target market andcreate a
well-defined strategy, you can create a plan that can save you time and money while
achieving your desiredresults. You can follow these steps to create your plan:
[Link] your current situation
It's important to analyze your current marketing situation objectively. This helps you
understand what has worked in the past andwhat hasn't. You can do this by evaluating your
previous marketing campaigns, lookingat yoursales data, doinga SWOT analysis, andtalking
to your customers. These audits give you a good starting point to understand where you are
andwhat needs changes.
[Link] goals based onyour findings
After understanding your current situation, you can set realistic goals for your communication
plan. You can base these goals on your findings from the previous step. For example, if you
want to increase sales by 20%, you can set a goal to increase your marketing budget by
20%. Make sure your goals are specific, measurable, attainable, relevant, and time-bound
(SMART).
3. Understandyour target market
This is a crucial stepin creating your communication plan, as it can help you understand who
you are trying to reach. For example, if your target market is investors, you may want to use
different marketing strategies than if your target market is consumers. To segment your
target market, you can focus on age, location, gender, interests, andincome.
4. Plan your communication strategy
After you understand your target market, you can plan your communication mix. This
includes the goals and objectives of your strategy, how to assign roles and responsibilities,
what your competitors are doing, and a response plan. You can also add the challenges you
expect and how to overcome them. Having a clear and concise communication strategy
helps ensure yourcommunication plan is successful.
5. Choose your marketingchannels
Now that you have a communication strategy in place, it's time to select the channels
through which you can execute your plan. The best channel mix depends on your target
market, product, andbudget. Some of the most common ones are:
 E-mail marketing: It's one of the most commonly used channels for marketing
communications as it allows you to reach a large audience at a low cost. You can use
e-mail to send newsletters, announcements, coupons, and other promotional
materials.
 Social media: Social media is a great way to connect with your target market and
create a two-way dialogue. You can use social media to share news, blog posts,
images, andothercontent.
 Press releases: Press releases are a good way to generate media coverage for your
product or service. You can use press releases to announce new products, services,
or company milestones.
 Podcasts: Podcasts are a great way to reach a large audience with your marketing
message. You can use podcasts to share your expertise, build thought leadership,
andgenerate leads.
[Link] channels
After selectingyour channels, it's important to align your messages with the right ones at the
right time. This helps ensure that your target market receives your message when they are
most likely to be receptive. For example, if you're launching a new product, you can
announce it on social media, through press releases, and by e-mail. It can also be helpful to
create a content calendar to plan your messages.
[Link] your plan
Once you have your channels and messages aligned, it's time to execute your plan. This
involves creating and distributing your content, monitoring your results, and making
adjustments. You can use various tools to help with this, such as marketing automation
software, socialmedia management tools, and e-mail marketing platforms.
8. Measure your results
After you've executed your plan, it's important to measure your results. This helps you
understand what's working and what's not, so you can make adjustments as needed. You
can calculate your results by focusing on website traffic, leads generated, sales, and social
media engagement.
Whendo you needa communication planfor marketing?
A communication plan is a helpful tool you can use on various occasions. Some of the most
common reasons include:
 Launching a new product or service: You may need a plan to generate awareness
and interest if you're launching a new product or service. It can also help you ensure
your target market receives the right messages at the right time.
 Enteringa new market: A communication plan can help you introduce your product or
service to a new market. It can also help you build relationships with key stakeholders,
partners, suppliers, andcustomers.
 Rebranding: If you're rebranding a company, you may need a communication plan to
help ensure that your target market understands the changes. A rebranding plan can
also help you manage negative perceptions and build excitement for the new brand.
 Developing a crisis communication plan: A communic ation plan can help you manage
a negative situation, such as a product recall or data breach. It can also help you
protect your reputation and build trust in your target market.
 Conducting a marketing campaign: A communication plan can help you coordinate
your marketing campaign and help ensure that you align all of your messages. It can
also help you track yourresults andmake adjustments as needed.
Whatis the importance of a communicationplan for marketing?
There are several benefits of having a communication plan. A few of the most notable
benefits include that it:
Helps you reach your targetmarket
A communication plan can help you reach your target market more effectively. It can also
help you ensure your target market receives your message at the right time. For example, if
you want to sell your product to a new market, you can launch a social media campaign to
generate interest.
Buildsrelationships
A communication plan can help you build relationships with key stakeholders. For example, if
you're launching a new product, distribute a press release to partners andsuppliers that they
can share with their networks. This can help you generate interest and build relationships
with key influencers.
Improvescoordination
A communication plan can help you coordinate your marketing efforts by aligning your
messages with the right channels. This can help improve the effectiveness of yourmarketing
campaigns and prevent duplication of effort. Plus, it can help you avoid conflicting messages
that can confuse your target market.
Savestime andmoney
A communication plan can save you time and money by helping you focus your efforts on
the most effective channels and messages. This can help you avoid wasting time and
money on marketing efforts that don't produce results. For example, if you're conducting a
socialmedia campaign, focus on platforms where your target market is most active.
IncreasesROI
A communication plan can help you increase your return on investment (ROI) by helping you
track your results and make necessary adjustments. This can help you use your marketing
budget effectively to achieve your desired results. It can also help you measure the success
of your marketing campaigns andadjust your strategyas needed.
MODULE -8
TrendsinMarketing)
(Evaluating Marketing Performanceand Recent

- Marketing Strategy Implementation and Tools of measuring marketing performance-

annualplan control, profitability control, efficiency controlandstrategic control.,
- Introduction toimportance of Data Analytics in Marketing Strategies
- Customer Relationship Marketing
- Digital Marketing
- Sustainable marketing,
- RuralMarketing. Introduction to GlobalMarketing,
- Inco terms and its types
MODULE -8
TrendsinMarketing)
(Evaluating Marketing Performanceand Recent
Marketing Strategy Implementation and Tools of measuring marketing performance-
annualplan control, profitability control, efficiencycontroland strategic control.
When evaluating marketing performance, companies should measure marketing outcomes
from the consumers ' points of view, include all marketing activities, measure across a
continuous time period, andmeet statisticaland technical criteria requiredof all measurement
systems.
What is marketingstrategy implementation?
 Marketing implementation is the process of turning your marketing strategy into real-life
actions: tasks and projects, people responsible for them, and deadlines. In other words, it's
about bringingyour marketingplan to life.
Marketing implementation is the process of turning your marketing strategy into real-life
actions: tasks and projects, people responsible for them, and deadlines. In other words, it’ s
about bringing your marketing plan to life. Instead of living on paper, it starts living on a
day-to-day calendarbecause it’ s translated into action.
With marketing implementation, it becomes a lot easier to identify if the issue is with the way
a strategyis executed, orwith the strategy itself.
Factors consideredin marketingimplementation
Marketing strategy is potential y the most essential factor in growing your business. It can
help you create products and services that connect to your target market and maintain
customerloyalty. So, without one, you maystruggle toexpandor fail for good.
But having a strategy doesn't always lead to a 100% success. This is because internal and
externalforces can influence the marketingenvironment. If you want to beat those odds, you
have toknow what those forces are.
Here, we highlight the six factors that can affect your marketing strategy.
Internalfactors
The internal factors are the only aspects of marketing that you can control. Much of your
marketing endeavors wil stem from there. So, failure to understand how internal factors can
influence your efforts to reach out to your potential and existing customers wil hurt your
business.
There are many internal influences, but one is your business' financial position. Your
profitability, cash flow, and liquidity can all directly affect the scope and scale of your
marketingactivities.
It wil be hard to meet the demand of your target market if you have a limited budget. The
good thing is, there are financing options you can tap anytime to fund your marketing plan.
You can use websites like [Link] toapply for additional business financial resources.
Other internalfactors you need to considerinclude the following:
 Corporate objectives
 Human resources
 Communication tactics
 Operational issues
 Business culture
Socialfactors
Your marketing strategy should be prepared for potential changes in the structure and
attitudes of society. Social media is one of the best ways to understand and meet the needs
and preferences of customers. No matter how good your product and service are, people
are unlikely to buy a product orservice if they don't resonate with your target market.
Note that people usually follow certain values and norms when making purchasing decisions.
The rise in social media usage has affected how people buy things. Bearing this in mind can
allow you tomake better use of socialmedia when marketingyour products and services.
Competition factors
Competition is inevitable in every market sector. If you want to create a winning marketing
strategy and stay one step ahead, you need to understand how your competitors are
reacting to customerneeds and changes in the industry.
Remember that you're selling similar products and services to your competitors. It's always
important to adjust your marketing plan to gain a competitive advantage over them. You can
introduce new functions and features to your products or use pricing. But whatever you do,
make sure that you don't lose sight of your marketing objectives.
Biggercompetitors are likely to spendmuch more marketing their products or services. Sobe
careful when planning your strategy and make sure you don't overstretch your budget. At
the endof the day, your customers should stil be the main focus of every marketingstrategy
andyour business in general.
Economic factors
Recession (andfactors like the ongoingpandemic)can affect your marketing strategy. In that
scenario, it's likely you wil have a smaller budget and fewer resources. It's also worth noting
that consumers are less likely to make purchases if they don't feel confident in the economy
or their financial situation.
Duringan economic downturn, unemployment rates may rise, and consumers may not have
a stable income. That could mean their purchasing power is reduced. With less disposable
income, consumers tend to reduce expenditure and priorities their outgoings.
Therefore, it's crucial you consider your target customers'finances in your strategy. Consider
marketing your product or service as essential to a consumer's lifestyle and show them how
makinga purchase wil benefit them.
Regulatory factors
Laws and regulations can influence your marketing strategy at the national or local level.
Rules connected to health and safety, product labeling, and consumer rights can all impact
your ability to market and sell your goods. Regulatory factors can differ by region, but they're
all designed to protect consumers andbusinesses.
It's extremely important to ensure that your marketing activities don't breach any of them.
You need to know what is and isn't legal if you are to market your product or service
successfully.
Technological factors
The technologicallandscape is constantly changing, andit can affect your marketing in many
different ways. There are always new ways to produce, distribute, and market your products
andservices.
Keeping an eye on these trends wil give you the opportunities to better communicate with
your target market and deliver products that wil match their lifestyle and preferences.
Remember, people always consider convenience in addition to price.
Tools of marketing measuring marketing performance
Marketing performance measurement (MPM) is a term used by marketing professionals to
describe the analysis and improvement of the efficiency and effectiveness of marketing.
This is accomplished by focusing on the alignment of marketing activities, strategies, and
metrics with business goals.
The ways and means or the techniques and devices that are employed to assess the
marketing performance over a given period are classified into four broad categories by
Professor Philip Kotler who also calls these as types of control because, each type of control
makes use of specific techniques and tools of control. As noted earlier, these types control
delineate the scope of marketingcontrol process.
(i) Annual plancontrol
i ) Profitabilitycontrol
(ii ) Efficiency control and
(iv) Strategic control
I. Annual PlanControl:
Annual plan control is the monitoring of current marketing efforts and results to ensure that
the annual sales and the profit goals are achieved. Annual plan control signifies continuous
ongoing performance verification against the annualplan andtaking the necessarycorrective
actions.
It is the responsibility of the top and middle management and the purpose is to examine
whether plannedresults are being achieved in terms ofsales, profits, costs, finance, attitudes
of participants in marketing operations.
The heart of annual plan control is the management by objectives. Under this, four steps
are involved namely:
1. Setting monthly or quarterly goals in the annualplan
2. Monitoringthe actualperformance in the back-ground of plannedgoals.
3. Determination ofcauses of exceptional or serious deviations.
4. Taking necessary corrective action to plug the gaps between goals and performance.
This entails even changing the originalprogress, plans and goals.
The marketing personnel charged with the control responsibility make’ s use of five tools
namely:
1. Sales analysis
2. Market share analysis
3. Market expense analysis
4. Financial and
5. Attitude tracking.
Followingis the brief explanation of these tools:
[Link]:
It refers to detailed study of sales performance undertaken to develop a comprehensive
understandingof its multidimensional aspects and its overall behavioralpattern.
The purpose of sales analysis is to trace and understand sales pattern over a period of time,
compare it with the target pattern, analyze variations, if any, and prescribe the corrective
action warranted.
Such a sales analysis may be of total sales or dissected into regions, products and
customers. Break-up analysis is undertaken to ascertain whether the 80-20 rule applies; if it
doesn’ t then the management is to redirect the sales efforts region product and customer
wise to adhere to 80-20 principle. Thus, sales analysis and Break of analysis project the sales
rise or fall or the consistency over the period to provide guidelines for necessary corrective
actions.
[Link] share analysis:
Market share analysis is the study of firm’ s sales in relation to its competitor or
competitors’ performance; rather it is to ascertain the percentage share of the firm in the
industry’ s sales.
The purpose is to identify the company’ s hold or the status in the industry vis-a-vis
competitors and to determine whether it has attained the target market share both in
aggregate andbreak-up aspects like products, regions andthe customers.
If used in combination with sales analysis, market share analysis should reveal certain useful
clues regarding the firm’ s marketing performance. Thus, it is impossible to trace whether
changes in the firm’ s sales behavior were due to defects in its market planning or external
forces. Similarly, the firm’ s rank in the industry is known in comparison with competitors.
3. Marketing expense to sales analysis:
It is also known as marketing expense analysis. The firm is to make sure that the managers
are not spending more than the set limits on marketing expenses to achieve the sales goals.
There can be preset marketingexpense to sales ratio and the component expense ratios.
Thus, a firm may have 25 per cent marketing expenses to sales ratio. It is made up of
components sales-force expenses to sales ratio say 12 per cent; sales promotion expenses
to sales say 3 per cent; marketing research expenses to sales say 1 per cent; and sales
administration expenses to sales say 3 percent.
During the plan period, the actual expenses and sales are to be compared with those of
planned and the deviations are to be noted, causes are to be found and remedial measures
are to be prescribed for correcting the situation. For this purpose, control charts could be
used. Control of costs means controlof profitability indirectly.
4. Financialanalysis:
Marketing organizations are interested in not just building up sales but finding and applying
profitable strategies through financial analysis. It is also known as Ratio analysis. Ratio
analysis is the process of determining and interpreting the numerical relationship between
twovariables.
A ratio is a statistical yardstick to measure the relationship between two variables expressed
either as a quotient or a percentage. Financial analysis or Ratio analysis reveals the nature of
the kinship between two marketing variables that are strategic from controlpoint of view.
Followingare some of the significant ratios thatare relevant to the marketers:
A. Gross profit ratio:
This profitability ratio measures the relationship between the sales and the net sales. It
speaks of the efficiency of marketingoperations.
It is expressed as:
Gross Profit /Net Sales orGross Profit / Net Sales x 100
Higher the ratio of the percentage, more effective is the management of marketing
operations.
[Link] turnover ratio:
It is the ratio measuring the relationship between finished goods in inventory and the sales. It
signifies the frequencywith which inventory is turned-over orsold.
Cost of Goods sold / Average Inventory or Sales / Closing Inventory
Higher the rate or the number of times better is the inventory management. However, very
high turnover also means stock-out situation and lost sales.
C. Receivable turnover ratio:
This ratio is one that measures the relationship between the credit sales and the average
receivables or the sundrydebtors outstandingduringthe accounting period.
In fact, it warrantscalculationof two ratiosas under:
1. Credit Sales / Average Debtors
2. Days in a year / Debtors Turnover
3. Debtors x Days in a year/Sales
The first ratio spells out the number of times on an average the debtors have turned over
during the period. Naturally, higher the ratio better it is for the management as a mark of
efficiency.
The second ratio is one that helps in tracing the average collection period. The average
collection period indicates the average number of days for which a firm is expected to wait
for converting credit sales into cash or collection from customers. This ratio must be lower,
as shortercollection periodis a sign ofbetter management.
D. Rate of return onnet-worth:
This ratio is alsocalledas ‘Return on equity’ .
The formula is:
Net Profit afterTax / Net – worth x 100
What should be the standard rate of return is a matter of company’ s internal policy
decision. It may be in the range of 15 to 20 per cent in marketing operations. This return on
net-worth is the reflection of two more ratios namely, return on assets and the financial
leverage.
To improve its return on net worth, the firm is either to increase the ratio of its net profits to its
assets or to increase the ratio of its assets to its net-worth. It is a matter of sound asset
management on one handandreturn on sales on the other.
5. Customer attitude tracking:
Customer attitude tracking is a qualitative measure of market share changes. It is a system
that monitors the attitudes of customers, dealers and other participants in marketing efforts.
Constant monitoringof consumer preferences andsatisfaction provide early warnings to the
management to take early action.
There are three major customer attitude tracking systems namely:
(a)Complaint suggestion system,
(b) Customer panels and
(c) Customersurveys.
‘Complaint suggestion system’ is to record, analyze and respond to written and oral
complaints from the customers. This is the finest way of knowing consumer reactions to
company products andservices.
‘Customer panel’ consists of customers who have agreed to communicate their attitudes
periodically through personaland impersonal means. ‘Customer surveys’ are the surveys
conducted periodically by encouraging the customers to answer the questionnaires sent to
them; these questions may be on friendliness of staff, quality of service rendered and the
like.
i . Profitability Control:
Profitability control is to determine the actual profitability of the firm’ s products, territories,
market segments and trade channels. Profitability control is exercised to examine whether
the company is makingandlosingthe money.
The prime responsibility of profitability control rests on marketing controller. All marketing
companies should measure the profitability of their products, territories, customer groups,
trade channels andordersizes, in addition to annualplan control.
This profitability control information is so vital to the management that it is possible to take
discerning decisions on expansion, contraction or suspension of marketing activities.
Profitability control or profit analysis refers to the study of profit generated and contribution
made to it by different products, regions andthe customers.
Profitability control warrants that first thesales are determined and the cost of goods is
subtracted so as to arrive at gross margin. After this, expenses directly attributable to
products, territories, customer groups, trade channels, sales orders are to be deducted from
gross margin so as to arrive at the contribution made to meet the indirect expenses for
determiningthe net profit.
The validity of the profitability analysis is hinged on the validity of sales and the marketing
costs analysis. Therefore, as said above, profitability analysis involves a definite methodology
consisting of three steps namely, identifying the functional expenses, assigning the
functional expenses to the marketing entities and preparing income-statement for each
marketingentity.
i i. Efficiency Control:
Efficiency control is the task of improving the efficiency of such marketing activities as
personal selling, advertising, sales-promotion anddistribution. Efficiency controlis undertaken
to evaluate and improve the spending efficiency and impact of marketing expenditures on
the marketing operations.
The responsibility rests with the marketing controller and marketing departmental line and
staff people. There is close relationship between profitability and efficiency. Poor profits
mean less efficient management of sales-force, advertising, sales-promotion and physical
distribution. It also means that the firm is to hunt out more efficient ways and means to
manage these entities.
These performing entities are to be assessed as to their efficiency; there wil be, therefore,
four suchareasfor efficiency control as outlined below:
[Link]:
The sales manager at each level regional, district and area is expected to keep track of the
key indicators of the sales-force efficiency in his territory like, average number of calls per
salesman per day calls time per contact revenue per sales call cost per sales call
entertainment cost per sales call percentage of orders per 100 calls number of new
customers per period number of lost customers per period and sales-force cost as a
percentage of total sales. Such efficiency investigation paves the way for possible
improvements in specific areas.
[Link] efficiency:
Though it is a very strong and general feeling that is impossible to measure advertising
efficiency in concrete terms, every effort should be made to keep track of the outcome of
the following indicators. It is because; it pays to walk in the dark with a torch in hand than
without it.
These indicators are Average cost per thousand target buyers reached by the media
category and media vehicle consumer opinions on the advertisement content and efficiency
or effectiveness pre and post attitude towards product numberof enquiries stimulated by the
adand the cost perenquiry.
Ad efficiency can be improved by better product positioning, defining ad objectives, pre and
post-testing of messages, use of computer guidance for admedia selection and the like.
3. Sales-promotionefficiency:
As discussed at length earlier, sales- promotion includes a compendium of devices for
stimulating buyer interest and product trial. In order to improve sales-promotion efficiency,
the manager in charge should record the costs and sales impact of each sales-promotion
device.
He is expected to keep track of percentage of sales affected on dial display costs per sales
rupee percentage of coupons redeemed and the number of inquiries resulting from a
demonstration. This helps in arriving at most cost efficient promotions.
4. Distributionefficiency:
Physical distribution economies are equally important. Good many mathematical models are
designed to bring about improvement in inventory control, warehouse locations and
transportation modes. Finally, totalcost approach has been recommended to really enjoy the
economies in distribution costs.
The examples of such models are level setting economic order quantity ABC analysis and
perpetual inventory system. In the area of warehousing, Baumol and Wolfe, Kuehn and
Hamburger, and Eilon and Waston Grandy models are worth emphasizing; in the area of
modes of transport, specific criteria are developed.
iv. Strategic Control:
Strategic controlis the crucial task of makingsure that the company’ s marketing objectives,
strategies and systems are optimally adapted to the current and forecasted marketing
environment.
Strategic controlrefers to the in-depth study undertaken to examine whether the company is
pursuingits best opportunities with respect tomarkets, products and channels.
It is the responsibility of the top management and the marketing auditor. Such an
investigation is a must because; marketing is an area where rapid obsolescence of
objectives, policies, strategies and programis aregular possibility.
In effect, it is a crucialreview of overall marketingeffectiveness. The tools of strategic control
are two namely, marketingeffectiveness ratingreview and marketing audit.
[Link] marketingeffectivenessratingreview:
Perhaps the most difficult task in marketing area is the assessing of marketing effectiveness.
Marketing effectiveness is situational; there is no guarantee that good results are the
outcome of excellent marketing management for change in management may throw good
results intoequally bador worse.
The marketing effectiveness of a firm is reflected in the degree to which it exhibits the major
attributes of a marketing orientation; customer philosophy integrated marketing organization
adequate marketinginformation strategic orientation andoverall optimal efficiency.
Therefore, to measure the marketing effectiveness, one should measure these five
attributes. Experts have devised a “Marketing EffectivenessRating Instrument” based on
the above five attributes.
It contains three questions in each attribute area and three possible answers to be ticked by
the managers of marketing and other divisions of the firm. The total scores are then
summarized in six point ranking ranging between ‘one’ to ‘superior’ with intermediate
ranks as ‘poor’ , ‘fair’ , ‘good’ , and ‘verygood’ .
For readers’ benefit,a summarized ‘Review Instrument” is presentedbelow:
Marketing Effectiveness Rating Instrument:
Note:
Check one Answerto Each Question.
A. Customer Philosophy:
1. Does management recognize the importance of designing the company to serve the
needs andwants of chosen markets?
SCORE: ()No ()Somewhat () Yes
2. Does management developdifferent offerings and marketing plans for different segments
of the market?
SCORE: ()No ()Somewhat () Yes
3. Does management take a whole marketing view (supplier’ s channels, competition,
customers, andenvironment)in planningits business?
SCORE: () No ()Somewhat () Yes
[Link] Marketing Organization:
1. Is there high levelintegration and controlof the major marketing functions?
SCORE:
()No ()Somewhat ()Yes
2. does marketing management work well with management in research, manufacturing,
purchasing, physical distribution andfinance?
SCORE:
()No ()Somewhat ()Yes
3. How well organizedis the new product process?
SCORE: ()No ()Somewhat () Yes
C. Adequate Marketing Information:
1. When were the latest marketing research studies of customers, buying influences,
channels undertaken?
SCORE: ()Several years ago () A few years ago ()Recently
2. How well does the management know the sales potential and profitability of different
market segments, customers, territories, products channels andothersizes?
SCORE: ()Not at all () somewhat ()Very well
3. What effort is expended to measure the cost effectiveness of different marketing
expenditures?
SCORE: () Little/no () somewhat () Substantial effort
D. Strategic Orientation:
1. What is the extent of formal marketing planning?
SCORE: () Little/no () Annual plan () Annual and long-range updated
2. What is the quality of the current marketing strategy?
SCORE: () Not clear ()Clear but traditional () Clear innovative andwell reasoned
3. What is the extent of contingencythinking and planning?
SCORE: () Little/no () somewhat () Development of contingency planning.
E. Operational Efficiency:
1. How well is the marketing thinking at the top communicated and implemented down the
line?
SCORE: () Poorly () Fairly ()Successfully
2. Is management doingineffective job with the marketingresources?
SCORE: () No () Somewhat () Yes
3. Does management show a good capacity to react quickly and effectively to on the spot
developments?
SCORE: () No () Somewhat () Yes
TOTAL SCORE:Itranges between00and 30 pointswith the followingrating:
00 to05
[Link] marketingaudit:
Marketingaudit is an in-depth assessment of the marketingfunction.
“Marketing of company’ s or business unit’ s marketing environment, objectives,
strategies and activities with a view to determining problem areas and opportunities and
recommending a plan of action to improve the company’ s marketing performance.”
Professor Philip Kotler
Thus, it is an independent and critical appraisal of the marketing operations of a company so
as to ascertain their effectiveness and suggest the future course of action to improve upon
them.
It is a systematic, critical and unbiased review and appraisal of the basic objectives and the
policies of the marketing function and of the organization, methods, procedures and
personnelemployedtoimplement those policies and to achieve those objectives.
The Basic Features of Marketing Audit:
There are four basic features of marketing audit that emerge from the definitions and
descriptions given above. These are:
[Link] comprehensive:
The phrase ‘marketing audit’ covers all the major activities of a business and business
house; it is not spotlighting on only the trouble points. It covers the thorough and critical
analysis of totalenvironment its objectives, strategies andthe systems and the sub-systems.
A comprehensive marketing audit is more effective in locating the real source of the firm’ s
marketingproblems as nothing is left to chance.
[Link] systematic:
Marketing audit is not haphazard activity. It involves orderly sequence of diagnostic steps
covering the firm’ s marketing environment, internal marketing systems, and the specific
marketingactivities.
Furtherdiagnosis is followed bya corrective action plan involvingboth short-run proposals to
improve the firm’ s overall marketing effectiveness.
3. It is independent:
Marketingaudit is an independent activity in that it can be conducted at least in six alternative
ways as self audit, audit from across, audit from above, company auditing office, company
task-force audit andoutsideraudit.
The experience has proved beyond doubt that best results have been achieved through
outsider audit consultants who have necessary objectivity and independence, broad and
requisite experience andundividedtime anddevotion.
4. It is periodic:
A sound marketing audit is one which is conducted periodically as a weapon to signal the
dangers or the signs of success. It is unfortunate that market audits are ordered only when
sales have dwindled or sales-force morale has fallen or any other such unavoidable problem
has cropped up.
It is wrong because, periodic marketing audit promises benefits for all types of firms namely
those doing very well, those doing so andthose which are in trouble. What is important is the
firm should learn from the adage “precaution is better than cure” that pays.
The Componentsof MarketingAudit:
The marketing audit consists of the detailed examination of six major components of the
company’ s marketing situation. Each component is semi- autonomous in status in case
firm wants less than total marketing audit.
These six major components are made up of sub-components which can be outlined as
under:
[Link] environment audit:
It is divided into two broad groups as macro-environment and task-environment.
‘Macro-environment’ audit is the analysis of forces and trends in the areas of
demography, economy, ecology, technology, politics and culture.
The ‘task-environment’ audit covers the audit of the key components namely, markets,
customers, competitors, distributors, dealers, suppliers, facilitators and marketing firms and
publics.
[Link] marketingstrategy audit:
This audit calls for critical review of the firm’ s marketing mission, objectives and goals and
strategies to appraise how well these are adapted to the present and future marketing
environment.
3. The marketing organizationaudit:
This audit warrants evaluation of the capability of the marketing organization implementing
the necessary strategy for the future marketing environment. It is the review of the formal
structure, functional efficiencyand interface efficiency.
4. The marketing systemsaudit:
It is the in-depth study of subsystems of the system namely, organization for marketing as to
their quality standards. It covers the review of marketing information system, marketing
planningsystem, marketingcontrol system andnew product development system.
5. Marketing productivity audit:
It is the crucial and, therefore, critical examination of profitability of different marketingentities
and cost effectiveness of different heads of marketing expenditure. Thus, it is a matter of
profitability andcost effectiveness analysis.
[Link] marketingfunctionaudit:
This is a functional audit covering each function or marketing mix components namely,
products, price, distribution, sales-force, advertising, sales-promotion and publicity.
Essentialof effective marketing control system
Followingare the requisites of aneffective marketingcontrol system:
[Link] matching standards:
The control system is to provide the standards for measuring the performance in each
branch or functional area of marketing. The norms of performance provided cannot be
identicalfor the operations, functions, levels, departments and the sections.
The results of marketing research department and those of advertising and sales-force or
sales-promotion cannot be measured by the same yard-stick because, they are not
comparable.
The performance of sales department can be measured in terms of sales volume or sales
segment, per salesman and so on, while that of advertising in terms of percentages of sales
value, the extent of consumer attitude change and so on, including brand preference
change.
The standards set must be within the reach of the employees; they are not to be too low for
easy achievement and false happiness ortoohigh fornon-achievement anddisappointment
and frustration. An acceptable standard keeps up the employee’ s morale ready to show
the signs of improved productivity.
[Link] quickdetection of deviations andprompt action:
Effective control system is geared to detect the deviations and reports them to the area
manager quickly. Delay in detection and reporting means control as slackened and rendered
irrelevant so much so that the manager can hardly do anything to save the unit from the
possible ruin.
In order to make the control system to initiate action in time, it should be made to reveal the
points of deviations, pin-down the responsibilities for the failures and prescribe correct and
right doses of remedies to set right the house. That is, each member of the management
team should get data on the latest developments he needs, when he needs it and the most
convenient form for use.
3. Matchwith organization pattern:
In view of the crucial importance of control process, there have been attempts to
appoint controllers at different levels and points by creating controllership function as
a highly specializedfunction.
4. Make it understandable: A controlsystem can be effective only if it is properly understood
andusedby the people in the organization. That is why, each marketing function needs to be
defined so that each member of the marketing group understands, in detail, the areas for
which he is accountable andthe authority he has for improving the performance.
5. Make it flexible:
Though flexibility has its role in each undertakingas a system, its significance is much more in
case of marketing organization. The marketing world is the most dynamic and a company
can substantial y improve both sales efforts and its profit margins through a flexible control
system.
[Link] it economical:
The control system developed, above all, must be economical so that the company
designing and installing it can afford. Design and installation of the system required careful
planning as it involves heavy costs. For a larger company, more complex type of computer
oriented system provides more information, better tailored to the specifications and to the
specific asks for which it would be used. The planning, installing and operating costs have
pay-off forthe benefits received.
Introductionto Importanceof Data Analyticsin MarketingStrategies-
Today's customer experience has changed exponential y with the availability of so many
digital tools. The same person searching for a product or service can end up at the same
website that someone else was also searching in an entirely different way. Since customers
have multiple avenues in which to locate a product or service, it can be challenging to know
what the best methods are for your business to ensure that yours ranks high enough.
Data analytics provides the opportunity for companies and marketing teams to gain more
insight to help make their business more relevant and establish themselves within saturated
markets. Standing out is the biggest goal for your brand to attract your customers. Instead of
a more broad outreach, with analytics, you can leverage more precise information to target
your brandstrategies andthe user experience.
When the essential aspects of your marketing are available, it creates an established
roadmap for growth and boosts sales development. You can easily scale your products or
services to further meet your audience's needs. Understanding what trends are about to
happen and being able to jump on them almost as soon as they occur is vital to your
marketingstrategy.
When you create an effective marketing strategy for your brand, data analytics must be at
the forefront of your efforts. There are several ways to interpret data and outline the
importance of data analytics for your business andhow it aids your reach.
Typesof data
Marketing teams should work to focus on three types of data: Customer, Financial, and
Operational. The types of dataare broken down as such:
 Customer Data - The customer data allows marketers to evaluate their target
demographic. It goes beyond names, email addresses, and previous purchases to
things like behavior and what theylike on social media and other communities.
 Financial Data - You can operate more efficiently by gathering data about your
financials, including sales and marketing statistics, margins, accurate pricing, and
costs for your advertisements regarding specific launches and targeted
campaigns.
 Operational Data - Daily operations can also be serviced with the use of data

analytics. For example, processes regarding logistics, shipping, and other systems
can help your business determine where they can work to improve procedures and
reduce time to get your product orservice to the consumer more directly.
Our brand’ s marketing efforts should intertwine all of these data types within the analytics,
but it helps to understand your business objectives and align with your missions and values.
The formulation of strategies should work together to bring your goals to fruition using
analytics.
The Importance of Marketing Analytics
Product Intelligence
Product intelligence involves taking a deep dive into the brand’ s products as well as
analyzing how those products stack up within the market. Typically done by speaking to
consumers, polling target audiences or engaging them with surveys, organizations can better
understand the differentiators and competitive advantages of their products. From there,
teams can better align products to the unique consumer interests and problems that help
drive conversions.
Customer Trendsand Preferences
Analytics can tell a lot about your consumers. What messaging / creative resonates with
them? Which products are they buying and which have they researched in the past? Which
ads are leading to conversions andwhich are ignored?
Product Development Trends
Analytics can also offerinsight into the types of product features consumers want. Marketing
teams can pass this information on to product development for future iterations.
Customer Support
Analytics also helps uncover areas of the buyer’ s journey that could be simplified or
improved. Where are your clients struggling? Are there ways you can simplify your product
or make the check-out process easier?
Messaging andMedia
Data analysis can determine where marketers choose to display messages for particular
consumers. This has become especial y important due to the sheer number of channels. In
 addition to traditional marketing channels such as print, television and broadcast, marketers
must also know which digital channels and social media networks consumers prefer.
Analytics answers these key questions:
 What media should you be buying?
 Which are drivingthe most sales?
 What message is resonatingwith your audience?
Competition
How do your marketing efforts compare with the competition? How can you close that gap if
there is one? Are there opportunities your competitors are capitalizing on that you may have
missed?

Customer Relationship Marketing

A Definitionof Customer Relationship Marketing
Customer relationship marketing (CRM) is a technique based on client relationships and
customer loyalty. Using customer data and feedback, companies utilizing this marketing
strategy develop long-term relationships with customers and develop laser-focused brand
awareness. Customer relationship marketing varies greatly from the traditional transactional
marketingapproach that focuses on increasing individualsale numbers.
Companies that prioritize customer relationships, on the other hand, strive to create strong
customer connections, which may be emotional, to their brand to promote customer loyalty
and increase customer lifetime value. They benefit from word-of-mouth promotion and
develop brandambassadors.
Customer Relationship Marketing Strategies
Customer relationship marketing builds upon customer experience management and puts
improving customer interactions to foster brand loyalty at the core of marketingactivities and
efforts. There are several ways that companies go about customer relationship marketing,
including providing excellent customer service at all times, getting to know individual
customers to anticipate their needs, and offering loyalty program perks and rewards for
repeat customers.
Companies typically turn to the internet and social media to pursue customer relationship
marketing initiatives, which means that small businesses also can benefit from it by inviting
customers to visit their websites, read and comment on blog posts, and communicate via
socialmedia platforms like Twitter and Instagram.
The goal of customer relationship marketing is to build trust with and engage customers to
build brand loyalty and reduce customer churn. One of the best strategies for building
relationships with customers is focusing on emotion. Brands who excelin CRM use nostalgia
in their campaigns because it is one of the most powerful connections consumers can have
to a brand, according to BDA CEO Jay Deutsch. That’ s why branded merchandising is
becomingpart of some of the most successfulmarketingcampaigns.
Other strategies in customer relationship marketing include:
 Show customers you value them with every interaction– Consider spontaneously
recognizing them anddelightingthem in unexpectedways
 Listen to customers and respond– Use social media monitoring tools to reply to
comments and complaints and address customers’ concerns
 Giv e customersfree information– Identify topic s and interests customers have and

then create content to address them and give customers free access to it, such as
informationalvideos on products they recently purchased ornewsletters that highlight
individualcustomers andshare their stories
 Expanded loyalty rewards– Any company can offer perks and rewards, but you
needto expandbeyond the typical reward programand give people stuff theylove or
recognize them in unexpectedways
 Communic ate frequently – A relationship is nothing without communic ation, so

make sure you communicate with customers often via socialmedia, email, messages,
etc. (just be sure the communication provides value to customers and does not
become intrusive ortoo frequent).
 Benefits of Customer Relationship Marketing
When companies implement customer relationship marketing, they make good use of their
customer data and identify customers that wil be of more value to the company itself. With
customer relationship marketing campaigns, companies save time and money by focusing
on customers that wil not be as costly in terms of maintaining relationships with them; they
also make better decisions about which customers have underdeveloped potential.
Another advantage of utilizing customer relationship marketing is that it increases customer
satisfaction and communication levels. Customers who have strong relationships with
companies interact with them more frequently, which makes it easier to learn more
about relationships with existingcustomers rather than spending to attract new customers.
Other benefits of using a customer relationship marketing strategyinclude:
 Delivering a consistent customer experience – By becoming customer-centric and
focusing on customer relationships, companies align their touch points and work
across the organization to meet customer needs, improve satisfaction, and deliver an
exceptional experience
 Gathering customer feedback – Building strong relationships with customers
requires communication, and companies put more stock in gathering feedback and
analyzingit tomake better business decisions tobuild strongerrelationships
 Improving customer profitability – Customers that are loyal to brands spend more
with them; in fact, consumers are now putting customer experience ahead of cost
when makingpurchasingdecisions
 Creating customer advocates– The happier your customers are, the better the
chances they wil spread the word about you to others; when you build a strong
relationship with them and deliver a consistent experience, they have better reviews
to share.

What Is Digital Marketing?

The term digital marketing refers to the use of digital channels to market products and
services in order to reach consumers. This type of marketinginvolves the use of websites,
mobile devices, social media, search engines, and other similar channels. Digital marketing
became popular with the advent of the internet in the 1990s.
Digital marketing involves some of the same principles as traditio nal marketing and is often
considered a new way for companies to approach consumers and understand their
behavior. Companies often combine traditional and digital marketing techniques in their
strategies. But it comes with its own set of challenges, including implicit bias.
How Digital Marketing Works
Marketing refers to activities that a company uses to promote its products and services and
improve its market share. It requires a combination of advertising savvy, sales, and the ability
to deliver goods to end-users if it's going to be successful. Professionals, known as
marketers, take on these tasks either internally (for companies) or externally with marketing
firms.
Corporations traditionally focused on marketing through print, television, and radio. Although
these options stil exist, the internet led to a shift in the way companies reach consumers.
That's where digital marketing came into play. This form of marketing involves the use of
websites, social media, search engines, and apps—anything that incorporates marketing
with customer feedback ora two-way interaction between the company and its customers.
Increased technology and newer trends forced companies to change their marketing
strategies. Email became a popular marketing tool in the early days of digital marketing. That
focus shifted to search engines like Netscape, which allowed businesses to tag and
keyword stuff to get them noticed. The development of sites like Face book made it
possible for companies to track data to cater to consumer trends.
Smartphone’ s and other digital devices now make it easier for companies to market
themselves and their products and services to consumers. Studies show that people prefer
using their phones to go online. So it should come as no surprise that 70% of individuals
make buyingdecisions (usually on their phones) before they actually hit the purchase button
Types of Digital Marketing Channels
As noted above, marketing was traditionally done through print (newspapers and
magazines) and broadcast ads (TV and radio). These are channels that stil exist today.
Digital marketing channels have evolved and continue to do so. The follo wing are eight of
the most common avenues that companies can take to boost their marketing efforts. Keep
in mindthat some companies may use multiple channels in their efforts.
Website Marketing
A website is the centerpiece of all digital marketing activities. It is a very powerfulchannelon
its own, but it’ s also the medium needed to execute a variety of online marketing
campaigns. A website should represent a brand, product, and service in a clear and
memorable way. It should be fast, mobile-friendly, and easy to use.
Pay-Per-ClickAdvertising
Pay-per-click advertising enables marketers to reach Internet users on a number of digital
platforms through paid ads. Marketers can set up PPC campaigns on Google, Bing, LinkedIn,
Twitter, Pinterest, or Face book and show their ads to people searching for terms related to
the products or services.
These campaigns can segment users based on their demographic characteristics (such as
by age or gender), or even target their particular interests or location. The most popular
platforms are Google Ads and Face book Ads.
Content Marketing
The goal of content marketing is to reach potential customers through the use of content.
Content is usually published on a website and then promoted through social media, email
marketing, search engine optimization, or even pay-per-click campaigns. The tools of
content marketing include blogs, eBooks, online courses, info graphics, podcasts, and
webinars.
Email Marketing
Email marketing is stil one of the most effective digital marketing channels. Many people
confuse email marketing with spam email messages, but that’ s not what email marketingis
all about. This type of marketing allows companies to get in touch with potential customers
andanyone interestedin their brands.
Many digital marketers use all other digitalmarketing channels to add leads to their email lists
and then, through email marketing, they create customer acquisition funnels to turn those
leads into customers.
Social Media Marketing
The primary goal of a social media marketingcampaign is brand awareness andestablishing
social trust. As you go deeper into social media marketing, you can use it to get leads or
even as a direct marketing or sales channel. Promoted posts and tweets are two examples
of social media marketing.
Affiliate Marketing
Affiliate marketingis one of the oldest forms of marketing, and the internet has brought new
life to this old standby. With affiliate marketing, influencers promote other people’ s
products and get a commission every time a sale is made or a lead is introduced. Many
well-known companies like Amazon have affiliate programs that pay out mil ions of dollars
per month to websites that sell their products.
Video Marketing
YouTube is one of the most popular search engines in the world. A lot of users are turning
toYouTube before makinga buyingdecision, to learn something, read a review, or just relax.
There are several video marketing platforms, including Face book Videos, Instagram, and
even TikTok to use to run a video marketing campaign. Companies find the most success
with video by integrating it with SEO, content marketing, and broader social media marketing
campaigns.
SMS Messaging
Companies and nonprofit organizations also use SMS or text messages to send information
about their latest promotions or give opportunities to wil ing customers. Political candidates
running for office also use SMS message campaigns to spread positive information about
their own platforms. As technology has advanced, many text-to-give campaigns also allow
customers to directly pay or give via a simple text message
Key Performance Indicators(KPIs) in Digital Marketing
The following are some of the most common KPIs that marketers can use to help
companies achieve their goals:
 Blog Artic les: Marketers can use this KPI to figure out how many times a company
publishes blog posts each month.
 Clic k through Rates: Companies can use this KPI to figure out how many clicks take
place for email distributions. This includes the number of people that open an email
andclick on a link to complete a sale.
  Conversion Rate: This measure focuses on call-to-action promotional programs.
These programs ask consumers to follow through with certain actions, such as
buying a product or service before the end of a promotional period. Companies can
determine the conversion rate by dividing successful engagements by the total
numberof requests made.
 Traffic on Socia l Media : This tracks how many people interact with corporate social
media profiles. This includes likes, follows, views, shares, and/or other measurable
actions.
 Website Traffic :Marketers can use this metric to track how many people visit a
company's website. Corporate management can use this information to understand
whetherthe site's design and structure contribute to sales.
Digital Marketing Challenges
Digital marketing poses special challenges for its purveyors. Digital channels
proliferate rapidly, and digital marketers have to keep up with how these channels
work, how they're used by receivers, and how to use these channels to effectively
market their products or services.
It's becoming more difficult to capture receivers' attention because receivers are
increasingly inundated with competing ads. Digital marketers also find it challenging
to analyze the vast troves of data they capture and then exploit this information in
new marketingefforts.
The challenge of capturing and using data effectively highlights that digital marketing
requires an approach to marketing based on a deep understanding of consumer
behavior. For example, it may require a company to analyze new forms of consumer
behavior, such as using website heat maps to learn more about the customer
journey.
SustainableMarketing
Sustainable marketing can involve the promotion of products that are designed as
environmentally or social y conscious – better for the planet and society as a [Link] can
also mean conveying corporate or brand valuesand commitments tosustainability.
Like sustainability itself, sustainable marketing can mean different things. Sustainability has
become a priority formore and more brands, which is reflected in their marketing campaigns.
Benefits of sustainable marketing include:
1. Attracting customers, especial y mil ennial and the up-and-coming Gen Z consumer.
Gen Z prefers sustainable brands and is wil ing to spend more on sustainable
products, studies show.
2. Attracting and retaining employees. Younger workers want to work for companies
that share their concern for climate change andsocialjustice.
3. Improving brand reputation.
Examplesof sustainable marketing
Brands large and small alike practice sustainability-focused marketing. Here are some
examples:
Procter and Gamble’ s Tide detergent Cold Caller Campaign uses humorandcelebrities to
promote the environmental — and money-saving — benefits of washing clothes in cold
water.
Other examples include:
 Levi Strauss&Company ‘s “Buy Better, Wear Longer” campaign also encourages
consumers to reuse and recycle as it raises awareness of the environmental impact of
apparelproduction.
 LEGOhas committed to making its bricks from more sustainable materials by 2030,
and as part of its Build the Change program launched “Building Instructions for a Better
World” last fall, which more than 6,000 children helped develop.
 UK company OVO Energy ‘s “Power your life differently” campaign encouraged
consumers to embrace renewable energy.
What Is Green Marketing?
Green marketing refers to the practice of developing and advertising products based on
their real orperceived environmentalsustainability.
Green marketingis the process of usingandpromoting environmentally sustainable products
andservices. Additionally, it refers toa wide range ofsustainable strategies andpractices.
1. Create environmentally sustainable products.
2. Come upwith environment-friendly packaging ideas using recycledsubstances.
3. Minimization of greenhouse gas emissions while the products are manufactured.
4. Implement environmentally sustainable business strategies

Examples of green marketing include advertising the reduced emissions associated with a
product’ s manufacturing process, or the use of post-consumer recycled materials for a
product's packaging. Some companies also may market themselves as being
environmentally-conscious companies by donating a portion of their sales proceeds to
environment.
Green marketing is one component of a broader movement toward social y and
environmentally conscious business practices. Increasingly, consumers have come to
expect companies to demonstrate their commitment to improving their operations alongside
various environmental, social, and governance (ESG) criteria. To that end, many companies
wil distribute social impact statements on an ongoing basis, in which they periodically
self-report their progress toward these [Link], such as tree planting.
Example of GreenMarketing
Starbucks
Starbucks is often citedas a leader in green marketingpractices. The company has invested
heavily in various social and environmental initiatives in recent years. For example, in a 2018
report, Starbucks reported that it had committed over $140 mil ion to the development
of renewable energy sources.2 The company purchases enough renewable energy to
power all of its company-operated stores throughout North America and the United
Kingdom.
Unilever
Another example of a company that uses green marketing is Unilever, which has
implemented several eco-friendly practices. Unilever utilizes recycled materials. Almost
75% of the production waste is sent to recycling centers. They have a target to emit zero
waste across the globe by the year 2039. Additionally, they have shown interest in reducing
the levels of GHG emissions.
KeyGreenMarketingStrategies
Here are four green marketing strategies and techniques that marketers use to create a
sustainable brand that helps our planet:
[Link] designing:
Using eco-friendly stickers on product packages is not enough. Paying attention to all of the
details in different business sectors is necessary. For example, marketers and business
owners should check in with the material supplier and the workers to use resources
efficiently.
[Link]:
Be ready to experience a lot of changes if you want to create a sustainable business model.
Green marketing is reacting to heavy pollution and harsh climate changes. Being social y
responsible can show customers that a company truly cares about the current state of our
planet.
[Link] packagingsystem:
In 2022, most of the world’ s pollution wil be caused due to over-usage of plastic materials.
According to arecent study, almost 8.5 bil ion tonnes of plastic materials have been
produced since the 1950s, among which only 9% were recycled. Consumers are becoming
more conscious of the environmental impacts andavoidingplastic materials.
[Link]:
Environmentally sustainable products have a massive value in the market these days. It is
such because of the more costs involved in creating a sustainable business model.
Therefore, marketers must provide every little detail about the production process and other
specifics to prove to customers the high price is justified. Remember that the bigger the
brand mission is, the greater the chances of your business getting noticed for its
inventiveness
Major Greenmarketing ideas
[Link]-friendly productsandfeature them exclusively:
[Link]:
4. Utilizingemail service totargetcustomers
5. Optimizesupply and deliverysystem:
 Rural Marketing

Introduction:
The emergence of rural markets as highly untapped potential emphasizes the need to
explore them. Marketers over the past few decades, with innovative approaches, have
attempted to understand and tap ruralmarkets.
The rural population has shown a trend of moving to a state of gradual urbanization in
terms of exposure, habits, lifestyles, and lastly, consumption patterns of goods and
services. So, there are dangers on concentrating more on the rural customers. Reducing
the product features in order to lower prices is a dangerous game to play. Rural buyers
like to follow the urban pattern of living.
Conceptof RuralMarketing:
The concept of Rural Marketing in India Economy has always played an influential role in the
lives of people. In India, leaving out a few metropolitan cities, all the districts and industrial
townships are connected with rural markets. The rural market in India generates bigger
revenues in the country as the rural regions comprise of the maximum consumers in this
country. The rural market in Indian economy generates almost more than half of the
country’ s income. Rural marketing in Indian economy can be classified under two broad
categories.
These are:
I. The market for consumergoods that comprise of both durable andnon-durable goods
i . The market for agricultural inputs that include fertilizers, pesticides, seeds, andso on
The concept of rural marketing in India is often been found to forms ambiguity in the mind of
people who think rural marketing is all about agricultural marketing. However, rural marketing
determines the carrying out of business activities bringing in the flow of goods from urban
sectors to the rural regions of the country as well as the marketing of various products
manufacturedby the non-agricultural workers from ruralto urban areas.
Conceptually, rural marketing is not significantly different to urban marketing. Marketing
manager has to perform the same tasks, but differently in rural marketing. It can be said that
marketingis not different, but markets (buyers andusers).
In rural marketing, a firm has to undergo marketing efforts to satisfy rural segments, which
notably differ from urban segments in some aspects. At the same time, we must note that
increasing literacy rate, improved sources of income, awareness due to improved and
increased means of communication and transportation, high rate of mobility within and
between countries due to liberalization and globalization, and many other such reasons,
some customers are likely to be identical.
Definitions:
‘Rural marketing’ is similar to simply ‘marketing.’ Rural marketing differs only in terms
of buyers. Here, target market consists of customers living in rural areas. Thus, rural
marketing is an application of marketing fundamentals (concepts, principles, processes,
theories, etc.)to ruralmarket
Rural marketing concerns with planning and implementing marketing program(often
referred as marketing strategies or simply 4P’ s) for rural markets to achieve marketing
goals.
Rural marketing is a process of developing, pricing, promoting, and distributing rural
specific goods and services leading to desired exchange with rural customers to satisfy
their needs andwants, and also to achieve organizational objectives.
An or a. Rural Population – Consists of more than 720 mil ion people and forms a huge
market for organizations.
b. Rural Economy – Contributes significantly in the country’ s GDP. Rural India has a large
number of households who are aware about the brandedproducts andwil ing to buy them.
c. Relation between Rural and Urban Economy – Refers to economic connectivity between
ruralandurban areas.
Organization followsrural marketingforthe followingreasons:
Featuresof Rural Marketing
Large, Diverse andScatteredMarket:
MajorIncome of Rural Consumers is from Agriculture:
Low Standardof Living:
Traditional Outlook:
Infrastructure Facilities:
Market Growth:
Diverse Socio-Economic Background
Literacyin Rural Area
PurchasingCapacity:
Scope of rural marketing
1. Agriculturalconsultancy
2. Banking, micro finance and Loan facilities
3. Health care
4. Telecom Services
5. Automobile Services
6. T.V. Channels Services
7. Event management
8. Beauty Parlors
Problems in Rural Marketing
1. Wide and ScatteredMarket:
2. Problem of Designing Products:
3. Barter System
4. Lack of physicalcommunication Facilities
 5. Diverse languages
6. Low Levelof Literacy
7. SeasonalandIrregularDemands
8. Economic and social Backwardness
9. Uncertain and Unpredictable Market:
10. Low Living Standards:
11. High Inventory Costs
12. Inadequate MarketingSupport
 Other Problems
 a. Lack of vision in retailers
 b. Ancient andobsolete business techniques
 c. Raw andimmature consumers
 . Difficultyin segmentingmarkets
 e. Inadequate bank andcredit facilities
 f. Problems in organizing marketing channels
 g. Limitedaccessibility of media
 h. Branding, packaging, and labeling problems
 I. Pricing problems
 j. Low turnover, etc.
Introductionto Global Marketing
What is global marketing? Definition, meaning and examples
Global marketing involves planning, producing, placing, and promoting a business’
products orservices in the worldwide market.
There is significantly more too global marketing than simply selling goods and services
internationally. It is the process of conceptualizing and subsequently conveying a final
product or service globally. The company aims to reach the international marketing
community.
Global marketing is a specialized skil . If marketing professionals do their job properly, they
can catapult their company to the next level.
Several different strategies are possible. Which one to implement depends on the
company’ s target area? For example, the menu of a fast food restaurant wil depend on
whether it is in Europe, Asia, Africa, etc.
For companies that produce and sell products and services that have universal demand,
global marketing is crucial. Food, smart phones, and cars, for example, have universal
demand. In otherwords, people all overthe world want and buy them.
In the past, global marketing was mainly the domain of multinational corporations. Since the
emergence of the Internet and e-commerce, even small firms can reach customers across
the world.
For example, if you are a small company that makes software, apps, etc., today the world is
your oyster.
If your company is in Canada, for example, you can sell to people in the USA, Latin America,
Europe, Asia, etc.
Advantagesand Disadvantages of Global Marketing
The advantages of global marketing.
1. You can reacha wider audience. If your company grows constantly, you can findout
that there are few consumers in the country to increase your revenue. This is the time
to start product promotion abroad. Global marketing allows you to sell more products,
attract more customers and enlarge yourmarket share in different countries.
2. Your brand influence wil [Link] a well-known brand's reputation gives
you a powerful competitive advantage in local markets of different countries.
Moreover, by adopting your advertisements to the peculiarities of each culture, you
 can make the audience more loyal to your company. Brands with a strong reputation,
like Coca-Cola or Nike, can influence not only consumers' purchases but their
worldview andlifestyle.
3. You can reduce costs on product development. Working with the global market
means attaining the economy of scale that helps you avoid overspending, particularly
on shipping raw materials. Also, you can locate your plants or factories in the
countries with loyal taxation policies to save company's money. Global marketing
allows businesses to sell worldwide and reduce spending on raw materials by
standardizing.
4. Your company can get much more feedback. This fact wil influence the speed of
your growth directly. Knowledge of your brand’ s weaknesses and problems in
markets of different countries means the possibility to improve them much faster.
Global marketing can help you gain feedback worldwide in a few clicks, especial y by
using social media advertising andemail marketing.
5. Local crises wil not influence your company so [Link] you are focused on the
market of a certain country, its economic or legislative problems may mean the end
for your business. However, diversifying risks wil help you make this influence not so
crucial. Sometimes, conflicts with political organizations or competitors do not let
companies succeed in the local arena. Working with global markets allows businesses
to avoid these problems or reduce their influence.
Disadvantages ofglobalmarketing.
1. It can be difficult to overcome cultural [Link] your promotion strategy to
the global market means satisfying audiences with different cultural backgrounds. For
example, McDonald’ s had to change their standard recipe and replace beef with
vegetarian cutlets in all their burgers in India because of the national values. If you
want to succeed in a foreign market, it is essential to deeply understand people's
cultures and privileged consumer behavior types. Some companies may not be so
flexible, and it wil be a roadblock totheir product's promotion in the global market.
2. Your company should adapt to the legislation of foreign [Link] can be costly
and risky to start working without understanding the laws and taxations of the new
markets. Sometimes businesses need lawyers’ help to make their start abroad
 smoother and avoid fines. This process may be time-consuming, but it is necessary
before launching the promotionalcampaign.
3. It may be difficult to avoid overspending on buying raw [Link] you start
working with foreign markets without proper research, the inventory costs can
increase significantly. Firstly, it may be challenging to findthe balance between supply
and demandbecause the results of your promotional campaigns wil not be the same
as in your country. Secondly, if you start working with local suppliers, finding the
cheapest resources in the arearequires time tosave yourcosts.
3 strategiesto promote your products worldwide successfully.
Global MarketingStrategies
While starting work with global markets, business owners face many difficulties with product
development and promotion. In this section, we explain the difference between two
approaches to global marketingand provide three widespread strategies to achieve success
in the internationalmarket.
Firstly, let’ s take a look at the approaches to doing business while working abroad. These
twotypes dependon how centralized product development is.
 International approachinvolves product import and export. Usually, a company's
offices and plants are located in a home country while its products are sold
worldwide. It allows businesses to have centralized management and make changes
in their products faster.
 Multinational approachmeans that the company's offices and plants are located in a
few countries you work with. In such a way, businesses diversify risks and adapt their
products to different markets. Marketing strategy, pricing policy, and product line may
vary too.
Three main strategiesof global marketing..
1. Standardization. This strategy means that the product line, marketing, pricing, and
other elements are standardized in different countries. Top managers make the most
important decisions in the main office and there is little independence in localmarkets.
This strategy allows companies to save costs on raw materials by standardizing the
 production process. Also, there are fewer investments needed to develop a product
marketing strategy because it is the same in all markets. The most well-known
examples of companies with this strategy are Coca-Cola, McDonald’ s, andApple.
2. Diversification. This strategy gives more freedom to the local offices and is often
based on the multinational approach. It means that the company may have
completely different products all over the world that can be united under the one
brand’ s name and logo. Such a strategy allows businesses to diversify risks and
develop the business in completely new areas. Companies use it when there is a
significant difference between the markets they work with. The most famous
example is Nokia which produced household appliances, mobile phones, paper
products, andmany otherthings at certain times of its existence.
3. Segmentation. This strategy means that the company chooses a certain segment of
the audience to work with and produces only products for this segment in all
countries. Marketing, pricing policy and product line can vary, but there is often a
piece of standardization. It is the most flexible strategy that gives some independence
to international offices but allows incorporating the best company’ s organizational
decisions.
Challengesof a Global marketingstrategy
Compliance issues
Adapting to new markets:
Language barriers

Inco terms and its Types

What Are Inco terms?
To facilitate commerce around the world, the International Chamber of Commerce
(ICC) publishes a set of Inco terms, official y known as international commercial terms.
Globally recognized, Inco terms prevent confusion in foreign trade contracts by clarifying
the obligations of buyers and sellers.
Parties involved in domestic and international trade commonly use them as a kind of
shorthand to help understand one another and the exact terms of their business
arrangements. Some Inco terms apply to any means of transportation, while others apply
strictly to transportation across water.
The International Chamber of Commerce (ICC)developed Inco terms in 1936 andupdates
them periodically to conform to changing trade practices.1 The ICC's mission is to promote
open markets and ensure global economic prosperity through trade. Because it is a
networked business organization that reaches over 45 mil ion companies in 100 countries,
the ICC is seen as having unparalleled expertise in establishing rules to guide international
trade.4 While the adherence to its Inco terms is voluntary, the ICC-established rules are
commonly used by buyers and sellers as a regular part of trade transactions.
Inco terms provide a universal set of rules and guidelines that help facilitate trade. In
essence, they provide a common language traders can use to set the terms fortheir trades.
Buyers and sellers can use Inco terms in a variety of activities necessary to conduct
business. Typical activities that call for the use of Inco terms include fil ing out a purchase
order, labeling a shipment for transport, completing a certificate of origin, or documenting
a free carrier agreement (FCA).
Inco terms Rules for Any Mode of Transport
Some common examples of Inco terms rules for any mode of transportation
include Delivered Duty Paid (DDP), Delivered at Place (DAP), and Ex Works (EXW). The
seven Incoterms forany mode of transport are below:
 EXW: Ex Works
 FCA: Free Carrier
 CPT: Carriage Paid To
 CIP: Carriage and Insurance Paid To

 DAP: Deliveredat Place

 DPU: Delivered at Place Unloaded
 DDP: Delivered Duty Paid.

Inco terms Rules for Sea and Inland Waterway Transport

The ICC has specific Inco terms rules for inland waterway and sea transport such as cost,
insurance, and freight (CIF) and free on board (FOB). The Inco terms for sea and inland
waterway transport are below:
 FAS: Free Alongside Ship
 FOB: Free on Board

 CFR: Cost andFreight

 CIF: Cost, Insurance, and Freight

Free on-board shipment terms indicate the seller delivers the goods on board a designated
vessel named by the buyer. The buyer or seller may assume all the risk and transportation
costs depending on whether the goods are sold under the FOB shipping point or FOB
destination point.
Cost, insurance, and freight (CIF)terms indicate the seller must deliver the goods to a
designated port and load them on a specified vessel, assuming responsibility for paying all
transportation, insurance, and loading costs. After that, the buyer assumes the cost and
risk associated with transporting the cargo from the designated port to its warehouse or
business.
What Do Inco terms Not Cover?
There are specific instances that Inco terms wil not cover. Inco terms do not:
 Address all the conditions of a sale
 Identify the goods beingsold nor list the contract price
 Reference the method nor timing of payment negotiated between the seller or

buyer
 When title, orownership of the goods, passes from the seller to the buyer
 Specif y whic h documents must be provided by the seller to the buyer to facilitate the
customs clearance process at the buyer’ s country
 Address liability for the failure to provide the goods in conformity with the contract of
sale, delayeddelivery, nor dispute resolution mechanisms
Advantages of Inco terms
 Easily understoodterms

 International standardization
  Updated andclarified by an internationalbody (ICC)
Disadvantages of Inco terms
 Differences between buyer andsellerpreferences when choosing terms
 Certain terms expose one party to inflated costs