MARKETING MANAGEMENT

1) Explain about various legal issues involved in marketing

Data Collection and the Invasion of Privacy

Data collection is often considered the first, and most significant, stage of
marketing. Extensive data allows businesses to choose the most optimal
marketing techniques for their consumer base. In fact, companies such as
Google and Facebook primarily rely on tracking a user’s web history to generate
returns.

Distribution of Data

Delivery channels such as telemarketing, door to door sales and unsolicited emails
are some of the most controversial areas of marketing.

Sometimes the law in different countries specifies time frames in which telemarketing
and door to door sales are allowed. For instance, a sales person may only approach
you between 9 am to 6 pm on weekdays and 9am to 5 pm on Saturdays. Further,
“do not knock” stickers a “do not call” register must be obeyed by marketers. While
these protections are in place, legal and ethical issues arise because the majority of
consumers are either unaware of such protections or cannot bothered to report petty
offences. As a result, marketers often get away with illegal and unethical behaviour.

Misleading Claims

Misleading claims in advertising may involve claims about the quality of the product,
the availability of a service and any exclusions on a good. As examples, marketing
techniques such as pictures of planes for a road transportation company or fine print
that may contradict the overall message of the advertisement misleading and illegal.
Companies such as Harvey Norman and Spec Savers have all been found liable for
misleading claims in the past.

2) Discuss the features of rural marketing

Rural marketing is now a two-way marketing process. There is inflow of

products into rural markets for production or consumption and there is also

outflow of products to urban areas. The urban to rural flow consists of

agricultural inputs, fast-moving consumer goods (FMCG) such as soaps,

detergents, cosmetics, textiles, and so on. The rural to urban flow consists

of agricultural produce such as rice, wheat, sugar, and cotton. There is

also a movement of rural products within rural areas for consumption.
Features of Rural Marketing:
1. Large and scattered population:

According to the 2001 census, 740 million Indians forming 70 per cent of

India’s population live in rural areas. The rate of increase in rural

population is also greater than that of urban population. The rural

population is scattered in over 6 lakhs villages. The rural population is

highly scattered, but holds a big promise for the marketers.

2. Higher purchasing capacity:

Purchasing power of the rural people is on rise. Marketers have realized

the potential of rural markets, and thus are expanding their operations in

rural India. In recent years, rural markets have acquired significance in

countries like China and India, as the overall growth of the economy has

resulted into substantial increase in purchasing power of rural

communities.
3. Market growth:

The rural market is growing steadily over the years. Demand for traditional

products such as bicycles, mopeds and agricultural inputs; branded

products such as toothpaste, tea, soaps and other FMCGs; and consumer

durables such as refrigerators, TV and washing machines has also grown

over the years.

4. Development of infrastructure:

There is development of infrastructure facilities such as construction of

roads and transportation, communication network, rural electrification and

public service projects in rural India, which has increased the scope of

rural marketing.
5. Low standard of living:

The standard of living of rural areas is low and rural consumers have

diverse socio-economic backwardness. This is different in different parts of

the country. A consumer in a village area has a low standard of living

 because of low literacy, low per capita income, social backwardness and

low savings.
6. Traditional outlook:

The rural consumer values old customs and traditions. They do not prefer

changes. Gradually, the rural population is changing its demand pattern,

and there is demand for branded products in villages.

7. Marketing mix:

The urban products cannot be dumped on rural population; separate sets

of products are designed for rural consumers to suit the rural demands.

The marketing mix elements are to be adjusted according to the

requirements of the rural consumers.

3) Explain the importance of channel selection

Channels of distribution for a product the route taken by the title to goods
they are from the producers to the ultimate consumers. It is very important
because product in one place while the consumption scattered in many
place. So there is big gap between producers and the consumers. So
through channels of distribution can only fill the gap. A channel of
distribution connects a link between the producers and the consumers.

The middle man plays an important role in consumer orientation demand.

The middlemen are specialist in concentration equalization and dispersion,
i.e.

collects output of various producers

subdivide the products according to the needs of the consumers.

disperse this assortment to the consumers.

The success of channels of distribution [COD] is completely depending

upon the middlemen as they create time and possession utility. The COD
helps in making products available at right time in the night place and in
the right quality.

Marketing is a comprehensive term, which includes distribution also,

distribution is a function to distribution or sub divided the producer's goods
to various specific markets which incurred to all ultimate consumers.
 4) Explain the importance of direct marketing and relationship marketing

Good direct marketing campaigns focus on promoting a specific product or service,

and call on your customers to act - to receive further information, register their
interest, visit your website, make a booking or a purchase.

Direct marketing gives you the opportunity to promote your products and services
directly to the customers who most need them. A good direct marketing campaign
will:

 help you build relationships with new customers

 test the appeal of your product or service
 tell you which marketing approaches reach your target market
 provide customers with compelling content they can share with potential
customers
 increase sales.

However, direct marketing campaigns require careful planning and a clear

understanding of responsible direct marketing practice. Being aware of the benefits
and challenges of direct marketing will help you use direct marketing effectively.

Relationship marketing implies consideration of not just better relationships with

customer markets, but also the development and enhancement of relationships with
supplier, recruitment, internal, referral and influence markets.

1. Relationships with Suppliers:

As far as relationships with suppliers are concerned, there is clear evidence that

organisations are moving away from a traditionally adversial relationship to one

based on mutual support and cooperation. There is increasing awareness of the

benefits to be gained by working together to meet the needs of the final consumer.

The specific relationship developed between the organisation and its suppliers has

been termed ‘co-makership’. In the relationship, the buyer recognises that fact that

supplies are very much a part of the final products, and that working together with
suppliers can increase the benefits to both parties.
Benefits in this context have been found to include shorter delivery lead times, lower

stock levels, fewer quality problems and faster implementation of design changes.

Strategies aimed at improving relationships with suppliers also form part of what has
been referred to in the service marketing literature as ‘reverse marketing’.

2. Relationships with Recruitment Markets:

Relationship marketing also involves having a closer relationship with those who

supply human resources to the organisation, that is, recruitment markets. Service

organisations need to cultivate long-term relationships with the suppliers of such

employees to ensure that they receive both the right quantity and quality of
employees.

3. Relationships with Internal Markets:

Employees need to feel that they have formed a long-term relationship with the

service provider and have a shared understanding of the mission of the organisation.

Human resource strategies need to focus on internal markets and specifically on

employee retention. The longer employees stay with the company, the more familiar

they become with the business, the more they learn, and the more valuable they can
be.

4. Relationships with Referral Markets:

Specific strategies need to be devised to reward the referral sources that generate

the most business. Although, traditionally, satisfied customers are the key referral

source for service organisations, other sources might include suppliers, other

agencies dealing with the company, for instance, banks, and in some cases even
competitors.

5. Relationships with Influence Markets:

Influence markets can also affect the strength of the relationship the organisation

has with its customers like legislative bodies, political groups, and trade and
consumer associations.
6. Alignment between Marketing, Customer Service and Quality:

A relationship marketing orientation involves a closer alignment between three

crucial areas, marketing, customer service and quality. Measures aimed at improving

customer service levels have often been taken in isolation from quality initiatives. A

true relationship marketing orientation would require all three areas to be linked
together.

5) Explain the process of new product development

The process involves eight key stages:

1. Idea generation – brainstorming and coming up with innovative new ideas.

See generating ideas for new products and services.
2. Idea evaluation - filtering out any ideas not worth taking forward.
See screening new product or service idea.
strong>3. - considering specifications such as technical feasibility, product design
and market potential. See researching new product and service ideas.
4. Strategic analysis - ensuring your ideas fit into your business' strategic plans
and determining the demand, the costs and the profit margin.
5. Product development and testing - creating a prototype product or pilot
service. See concept development and testing.
6. Market testing - modifying the product or service according to customer,
manufacturer and support organisations' feedback. This involves deciding the
best timing and process for piloting your new product or service. See how to test
the market.
7. Commercialisation – determining the pricing for your product or service and
finalising marketing plans. See pricing your proposed service or product.
8. Product launch – a detailed launch plan can help ensure smooth introduction
to market.

6) Describe the steps in product life cycle

 The five stages of the PLC are:

1. Product development
2. Market introduction
3. Growth
4. Maturity
5. Decline

The table below shows common characteristics of each stage.

Common Characteristics

1. investment is made
0. Product 2. sales have not begun
development stage
3. new product ideas are generated, operationalized, and tested

1. costs are very high

2. slow sales volumes to start
3. little or no competition
1. Market introduction
stage 4. demand has to be created
5. customers have to be prompted to try the product
6. makes little money at this stage

1. costs reduced due to economies of scale

2. Growth stage 2. sales volume increases significantly
3. profitability begins to rise
 4. public awareness increases
5. competition begins to increase with a few new players in establish
6. increased competition leads to price decreases

1. costs are lowered as a result of increasing production volumes an

2. sales volume peaks and market saturation is reached
3. new competitors enter the market
3. Maturity stage 4. prices tend to drop due to the proliferation of competing products
5. brand differentiation and feature diversification is emphasized to m
share
6. profits decline

1. costs increase due to some loss of economies of scale

2. sales volume declines
4. Decline stage
3. prices and profitability diminish
4. profit becomes more a challenge of production/distribution efficien

7) Explain the importance of positing of a product

1. To Make Entire Organisation Market-oriented:

Product positioning is a part of the broader marketing philosophy. It concerns with

identifying superior aspects of product and matching them with consumers more

effectively than competitions. This philosophy makes the entire organisation market
oriented.

2. To Cope with Market Changes:

Once the product is positioned successfully doesn’t mean the task of manager is

over. He has to constantly watch the market. As per new developments in the market

place, new competitive advantages should be identified, discovered or developed to

suit the changing expectations of the market. It makes the manager active, alert and
dynamic.

3. To Meet Expectation of Buyers:

Generally, the advantages to be communicated are decided on the basis of

expectations of the target buyers. So, product positioning can help realize
consumers’ expectations.

4. To Promote Consumer Goodwill and Loyalty:

Systematic product positioning reinforces the company’s name, its product and

brand. It popularizes the brand. The company can create goodwill and can win
customer loyalty.

5. To Design Promotional Strategy:

More meaningful promotional programme can be designed. Based on what

advantages are to be communicated, appropriate means are selected to promote the

product.

6. To Win Attention and Interest of Consumers:

Product positioning signifies those advantages that are significant to consumers.

When such benefits are promoted through suitable means of advertising, it definitely
catches the interest and attention of consumers.

7. To Attract Different Types of Consumers:

Consumers differ in terms of their expectations from the product. Some want

durability; some want unique features; some want novelty; some wants safety; some

want low price; and so on. A company, by promoting different types of competitive
advantages, can attract different types of buyers.

8. To Face Competition:

This is the fundamental use of product positioning. Company can respond strongly to
the competitors. It can improve its competitive strength.

9. To Introduce New Product Successfully:

Product positioning can assist a company in introducing a new product in the market.

It can position new and superior advantages of the product and can penetrate the
market easily.

10. To Communicate New and Varied Feature Added Later on:

When a company changes qualities and/or features of the existing products, such

improvements can be positioned against products offered by the competitors.

Product positioning improves competitive strength of a company. Normally,

consumers consider product advantages before they buy it. So, product positioning

proves superiority of company’s offers over competitors. It may also help consumers
in choosing the right product.

8) Describe the basis and process of marketing segmentation

Market Segmentation is a process of dividing the market of potential

customers into different groups and segments on the basis of certain
characteristics. The member of these groups share similar characteristics and
usually have one or more than one aspect common among them.There are
many reasons as to why market segmentation is done. One of the major
reasons marketers segment market is because they can create
custom marketing mix for each segment and cater them accordingly

Basis of Market Segmentation

Segmenting is dividing a group into subgroups according to some set ‘basis’. These
bases range from age, gender, etc. to psychographic factors like attitude, interest,
values, etc.

Gender

Gender is one of the most simple yet important basis of market segmentation. The
interests, needs and wants of males and females differ at many levels. Thus,
marketers focus on different marketing and communication strategies for both. This
type of segmentation is usually seen in the case of cosmetics, clothing, and jewellery
industry, etc.
 Age group

Segmenting market according to the age group of the audience is a great strategy
for personalized marketing. Most of the products in the market are not universal to
be used by all the age groups. Hence, by segmenting the market according to the
target age group, marketers create better marketing and communication strategies
and get better conversion rates.

Income

Income decides the purchasing power of the target audience. It is also one of the key
factors to decide whether to market the product as a need, want or a luxury.
Marketers usually segment the market into three different groups considering their
income. These are

 High Income Group

 Mid Income Group
 Low Income Group
This division also varies according to the product, its use, and the area the business
is operating in.

Place

The place where the target audience lives affects the buying decision the most. A
person living on mountains will have less or no demand for ice cream than the
person living in a desert.
Occupation

Occupation, just like income, influences the purchase decision of the audience. A
need of an entrepreneur might be a luxury for a government sector employee. There
are even many products which cater to an audience engaged in a specific
occupation.
Usage

Product usage also acts as a segmenting basis. A user can be labelled as heavy,
medium or light user of a product. The audience can also be segmented on the basis
of their awareness of the product.

Lifestyle

Other than physical factors, marketers also segment the market on the basis of
lifestyle. Lifestyle includes subsets like marital status, interests, hobbies, religion,
values, and other psychographic factors which affect the decision making of an
individual.

Geographic Segmentation

Geographic segmentation divides the market on the basis of geography. This type of
market segmentation is important for the marketers as people belonging to different
regions may have different requirements. For example, water might be scarce in
some regions which inflates the demand for bottled water but, at the same time, it
might be in abundance in other regions where the demand for the same is very less.
 People belonging to different regions may have different reasons to use the same
product as well. Geographic segmentation helps marketer draft personalized
marketing campaigns for everyone.

Demographic Segmentation

Demographic segmentation divides the market on the basis of demographic

variables like age, gender, marital status, family size, income, religion, race,
occupation, nationality, etc. This is one of the most common segmentation practice
among the marketers. Demographic segmentation is seen almost in every industry
like automobiles, beauty products, mobile phones, apparels, etc and is set on a
premise that the customers’ buying behaviour is hugely influenced by their
demographics.

Behavioral Segmentation

The market is also segmented based on audience’s behaviour, usage, preference,

choices and decision making. The segments are usually divided based on their
knowledge of the product and usage of the product. It is believed that the knowledge
of the product and its use affects the buying decision of an individual. The audience
can be segmented into –

 Those who know about the product,

 Those who don’t know about the product,
 Ex-users,
 Potential users,
 Current Users,
 First time users, etc.
People can be labelled as brand loyal, brand-neutral, or competitor loyal. They can
also be labelled according to their usage. For example, a sports person may prefer
an energy drink as elementary (heavy user) and a not so sporty person may buy it
just because he likes the taste (light/medium user).
Psychographic Segmentation

Psychographic Segmentation divides the audience on the basis of their personality,

lifestyle and attitude. This segmentation process works on a premise that consumer
buying behaviour can be influenced by his personality and lifestyle. Personality is the
combination of characteristics that form an individual’s distinctive character and
includes habits, traits, attitude, temperament, etc. Lifestyle is how a person lives his
life.

Personality and lifestyle influence the buying decision and habits of a person to a
great extent. A person having a lavish lifestyle may consider having an air
conditioner in every room as a need, whereas a person living in the same city but
having a conservative lifestyle may consider it as a luxury.

9) Discuss the features of market forecasting

Peculiarities, characteristics or features of forecasting are as follows:-

 Forecasting in concerned with future events.

 It shows the probability of happening of future events.
 It analysis past and present data.
 It uses statistical tools and techiques.
 It uses personal observations.

10) Explain the various of industrial markets

Industrial marketing, also known as business-to-business (B2B) marketing, is a

branch of communications and sales that specializes in providing goods and
services to other businesses, rather than to individual customers
 11) Write a note on consumerism

It is a social phenomenon that empowers the buyers and consumers. Its

effects are visible in the laws, regulations and also the marketing
practices.
It keeps a check on the companies and ensures that the consumers get
quality products which are safe for them at the correct price. It also
ensures that the consumers are provided with the correct information
about the products. Also Consumerism forces the companies to operate
and produce goods and services according to the consumer’s needs. It
plays a very important role in every stage of marketing starting from new
product design to communication through advertisements.

12) Write the features of retailing

1. Marketing orientation: Retailing is a dynamic industry. It keeps growing by

moving retail operations into new markets. Markets are ever changing and
characterized by risk and threat. Retail marketing therefore, requires different types
of decisions to be made in the complexity of the situations.
2. Multi-channel retailing: Retailers act as a connecting link between the
producers/ wholesalers and customers. Their scale of operations is tilted more to
serve sophisticated consumers. Recently, the impact of e-retailing has received
considerable attention.
The success model for most retail sectors is multi-channel retailing.

a. In the extended channel of retail distribution, manufacturer, wholesaler and

retailer provide a chain of facilitating services in order to sell the right product to
the final customers.
b. In the limited channel, a retailer works directly with the producer.
c. In the direct channel, the product is sold direct by using direct mailing, Internet
services, telephone sales, etc. However, the traditional supply channel for retail
products is — raw materials, manufacturer, wholesaler, retailer.
3. Innovative methods of thinking and planning: Successful retailing requires
innovative methods of thinking and planning. New ideas are generated to take
advantage of opportunities or to improve existing methods of marketing. Retailers
make clear propositions of their retail offer.
4. Right environment: A retailer has to create the right environment, offer additional
advantages and value or loyalty schemes in order to ensure that the customer is
offered a comprehensive package of benefits.
5. Unique characteristics of a retailer:
i. The retailer’s interface with the customer is service-based.
ii. Retailers sell small quantities of items on a frequent basis.
iii. Customers feel comfortable as the retailers provide convenience in terms of
location of the shop, types of payment and different credit facilities for
purchasing, range of merchandise and after-sales support, etc.
iv. Retailers offer — selection an assortment of merchandise related to the target
market in order to provide choice.
v. Retailers trade with general public (whereas wholesalers may district the
general public from purchasing from their warehouses).
vi. Retailers normally charge higher unit prices than a wholesaler.
vii. A retailer’s pricing policy is simpler than that of the wholesaler.

13) Write a note on personal selling

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

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

A good example of personal selling is found in department stores on the perfume

and cosmetic counters. A customer can get advice on how to apply the product and
can try different products. Products with relatively high prices, or with complex
features, are often sold using personal selling. Great examples include cars, office
equipment (e.g. photocopiers) and many products that are sold by businesses to
other industrial customers.

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

follows:
Point-of-sale merchandising can be said to be a specialist form of personal selling.
POS merchandising involves face-to-face contact between sales representatives of
producers and the retail trade. A merchandiser will visit a range of suitable retail
premises in his/her area and encourage the retailer to stock products from a range.
The visit also provides the opportunity for the merchandiser to check on stock levels
and to check whether the product is being displayed optimally.

14) What is the nature of marketing

 15) Write a note on marketing environment

Marketing activities are influenced by several factors inside and outside a business

firm. These factors or forces influencing marketing decision-making are collectively

called marketing environment. It comprises all those forces which have an impact on

market and marketing efforts of the enterprise. According to Philip Kotler, marketing

environment refers to “external factors and forces that affect the company’s ability to

develop and maintain successful transactions and relationships with its target
customers”.

The marketing programme of a firm is influenced and shaped by a firm’s inwardly

need to begin its business planning by looking outwardly at what its customers

require, rather than inwardly at what it would prefer to produce. The firm must be

aware of what is going on in its marketing environment and appreciate how change
in its environment can lead to changing patterns of demand for its products.

It also needs to assess marketing opportunities and threats present in the

surroundings. An environment can be defined as everything which surrounds and

impinges on a system. Systems of many kinds have environments with which they
interact. Marketing can be seen as a system which must respond to environmental
change.

The marketing environment is made up of:

1. Micro-environment and

2. Macro-environment.

We discuss them in detail:

1. Micro-environment:

The micro-environment of the company consists of various forces in its immediate

environment that affect its ability to operate effectively in its chosen markets.

This includes the following:

(a) The company

(b) Company’s Suppliers

(c) Marketing Intermediaries

(d) Customers

(e) Competitors

(f) Public

Macro Environment:

The macro-environment consists of broader forces that not only affect the company
and the industry, but also other factors in the micro-environment.

The components of a macro-environment are:

(a) Demographic Environment
(b) Economic Environment

(c) Physical Environment

(d) Technological Environment

(e) Political Environment

(f) Legal Environment

(g) Social and Cultural Environment

16) What is meant by market selection

Market Selection is the process of deciding which markets to invest in and pursuing.
One of the major criteria to be kept in mind while doing a market selection is the
growth potential of the market i.e. what is the potential for a company’s revenue to
grow by investing in a particular market.

Another thing to be kept in mind for market selection are the marketing objectives i.e.
the goal of entering a particular market, say increase in revenue by 5%. It is also
important to determine parameters other than growth potential like market size for
market selection.

Market selection process can be done in the following steps:

1. Determine the objectives or goals of market selection
2. Determine the parameters to be used for market selection
3. Do a preliminary screening of the market
4. Do a detailed investigation of this screening and short list the best fit
5. Evaluate the shortlisted markets and select one or two

The parameters for market selection can either be firm related, i.e. dependent highly
on your company say your business strategy and objectives, market related i.e. the
given market environment, say the demand, supply, competition, distribution
channels available etc.. or some general environmental factors that play a key role in
selecting a market for example the economic policy of the country, business
regulations, currency stability, ethnic and political factors, infrastructure, bureaucracy
etc.
 17) What is meant by target market

Definition: Target market is the end consumer to which the company wants to sell
its end products too. Target marketing involves breaking down the entire market into
various segments and planning marketing strategies accordingly for each segment to
increase the market share.

Description: In simple words, not all products can be consumed by all customers
and each product has a different set of consumers who want to purchase the
product. In order to attract a particular segment of the market, the company at times,
modifies the product accordingly. Creating the target market involves conceptualizing
the product, understanding the need of the product in a market, studying its target
audience etc. Target marketing would revolve around deploying marketing
techniques for a particular segment of markets which could be key to attract new
customers, expand business opportunities across geographies and expand
distribution network to widen the reach.

There are various steps involved in defining the target market. The first is to
understand the problem of a customer whom you are addressing. Once it is done,
the customers can be identified who are interested in that product. For example, you
make water purifiers – so you address the problem of contaminated water quality.
We know that farm houses do not have a regular water connection and the water
they get from underground is hard. So, there is a wide opportunity for water-purifier
makers to enter into this segment and tap the market. The next step is to understand
your customer according to the region, income level, etc. Always think about the
market, know your competition and the pricing of the product. It will help you in
creating a benchmark.

There are two important features, which the company should always consider before
it decides to capture a separate market segment. First is the attractiveness of the
segment, which means that it has less competition, high margin business etc. The
second is that it falls in line with the company’s objective, vision etc.

18) Write a note on marketing mix

Definition: The marketing mix refers to the set of actions, or tactics, that a company
uses to promote its brand or product in the market. The 4Ps make up a typical
marketing mix - Price, Product, Promotion and Place. However, nowadays, the
marketing mix increasingly includes several other Ps like Packaging, Positioning,
People and even Politics as vital mix elements.

Description: What are the 4Ps of marketing?

Price: refers to the value that is put for a product. It depends on costs of production,
segment targeted, ability of the market to pay, supply - demand and a host of other
direct and indirect factors. There can be several types of pricing strategies, each tied
in with an overall business plan. Pricing can also be used a demarcation, to
differentiate and enhance the image of a product.

Product: refers to the item actually being sold. The product must deliver a minimum
level of performance; otherwise even the best work on the other elements of the
marketing mix won't do any good.

Place: refers to the point of sale. In every industry, catching the eye of the consumer
and making it easy for her to buy it is the main aim of a good distribution or 'place'
strategy. Retailers pay a premium for the right location. In fact, the mantra of a
successful retail business is 'location, location, location'.

Promotion: this refers to all the activities undertaken to make the product or service
known to the user and trade. This can include advertising, word of mouth, press
reports, incentives, commissions and awards to the trade. It can also include
consumer schemes, direct marketing, contests and prizes.

What is the importance of the marketing mix?

All the elements of the marketing mix influence each other. They make up the
business plan for a company and handled right, can give it great success. But
handled wrong and the business could take years to recover. The marketing mix
needs a lot of understanding, market research and consultation with several people,
from users to trade to manufacturing and several others.

19) How is branding helpful for pricing decision

It’s a curious thing, what pricing does to the brain. Have you ever bought something
because it was ‘on sale’ even though you didn’t need or even really want it, but it
seemed too good a deal to miss? We all subconsciously associate price with many
emotions when it comes to buying products and services.

Due to this subconscious influence that pricing and payment strategies have on the
consumer’s brain, however, marketers find themselves faced with a moral dilemma.
To what extent is it ok to use this influence to generate more revenue before it
becomes detrimental to the brand’s image?

Here are some pricing strategies that are often used and how they can impact brand
reputation:

Price Comparison
“10% cheaper than other supermarkets, or your money back!” is just one variation of
a price comparison campaign run on many occasions by the big name
supermarkets. It is one of the most commonly used strategies when trying to gain a
greater market share or position the brand as a market leader.

Another common use of price comparison is when reducing the price of an item.
When items go on sale, brands often list the ‘RRP’ on the ticket, followed by the
reduced price. If multiple reductions have been made, these prices may also be
listed to increase the perceived ‘value’ of the deal.

In industries where services are on offer rather than products, price comparisons are
often drawn using pricing bands or tiers. For example, software solutions commonly
offer a basic solution with minimal features (often free or very low priced) and a top
tier option with every possible feature (often too many for the average customer’s
needs) priced quite highly. They then slip a middle ‘best value’ package in with the
main features that the average user needs for a reasonable-looking price. This is
called ‘anchor pricing’ and is often very successful when selling services.

Unbundling

This is the art of pricing items as independent rather than as a package.

The most common place we currently see this in action is on budget airlines such as
RyanAir. Ever seen a ridiculously cheap flight and been sucked in by the price, only
to find it doesn’t include baggage allowance and other necessities? Soon that price
creeps up and the flight isn’t the best deal after all.

Budget airlines don’t hide this in their branding; people know they are going for a
cheap, no frills flight and may have to pay extra for additional comforts.

However, more prestigious airlines wouldn’t be able to use this pricing strategy as
they are chosen by people for their quality of service and offerings. You wouldn’t
expect to fly Etihad and have to pay for your standard luggage allowance would you?

Therefore, pricing strategies like these, however transparent, should be used

carefully depending on the brand. The way you price can impact the perceived status
of the brand, especially if you are trying to target a luxury market.

Dynamic Pricing

Increased pricing during busier buying/usage periods is a great way to boost

revenue, but dynamic pricing also has its flaws.

It makes sense that at a period where the product is more in demand, you can
charge more for it and boost profits. And yes, people will often pay it. However, it
doesn’t project the best image of the brand in terms of trust. It makes the purchase
more about the customer’s money than the customer’s needs and doesn’t promote
trust.
Flat Pricing

Flat pricing is the opposite idea of dynamic pricing. Whereas dynamic pricing means
the price drops significantly during slower periods and increases during busy times
(take Uber’s pricing model for example), flat pricing means the rate stays at a middle
ground price all the time.

Although with dynamic pricing, you could argue if customers are savvy they can
catch a cheap deal, flat pricing gives them more peace of mind. Keeping the rate flat
at all times means customers can trust that price and trust the brand. It is simple and
transparent; often a recipe for customer loyalty.

When it comes to pricing, the right strategy will depend on your industry, your target
customer’s buying behaviours and your brand message. It makes sense that if your
target customers are looking for low budget options, the price strategy that allows
you to keep the base price low is the best option. However, for more high end
brands, it’s less about price and more about quality/experience, therefore different
pricing methods will need to be used and potentially some revenue may need to be
sacrificed to sustain the brand’s reputation

20) Explain the role of product differentiation in market segmentation

In order for a business to be effective and have an edge against its competitors, it
must have a clear idea of what customers to target and where, what the business will
offer them and how it will sell the product. This marketing strategy consists of several
exercises that must be done before a company can bring a product to market. Used
hand-in-hand, market segmentation and product differentiation strategies -- key
components of a marketing strategy -- offer a tremendous advantage to a business
and can yield positive revenue results.

Understanding Market Segmentation

Market segmentation is a great source of competitive advantage, effectively zeroing
in on a target market. Businesses group potential customers based on similarities
that they share with respect to relevant dimensions, such as customer needs,
channel preferences, product features or customer profitability. Market segmentation
allows businesses to take a segment of consumers and group them based on
similarities they all share with respect to the attributes that define a marketing
strategy.

Defining the Target Market

A business can use market segmentation to its advantage by knowing the basis to
segment customers, such as targeting potential customers with the greatest profit
potential. The potential customers that fit this demographic for a business become a
market segment. A business can have more than one market segment for a product,
and each market segment is part of the overall marketing strategy. These targeted
segments can lead to significantly improved marketing effectiveness.

Understanding Product Differentiation

Product differentiation is the strategy of highlighting a product’s features and
attributes so as to distinguish it from competitors and from other product offerings.
There are many ways that a product can differentiate itself, such as innovation,
marketing and distribution. The overall goal of a product differentiation strategy is to
make a product more attractive to a particular target segment. Focusing on the
inherit differences of a product should lead potential customers to consider it unique
and therefore valuable. A business communicates these differences through its
advertising, which is the selling proposition.

21) What is the importance of consumer behaviour in predicting the market

1. Modern Philosophy:

It concerns with modern marketing philosophy – identify consumers’ needs and

satisfy them more effectively than competitors. It makes marketing consumer-

oriented. It is the key to succeed.

2. Achievement of Goals:

The key to a company’s survival, profitability, and growth in a highly competitive

marketing environment is its ability to identify and satisfy unfulfilled consumer needs

better and sooner than the competitors. Thus, consumer behaviour helps in
achieving marketing goals.

3. Useful for Dealers and Salesmen:

The study of consumer behaviour is not useful for the company alone. Knowledge of

consumer behaviour is equally useful for middlemen and salesmen to perform their

tasks effectively in meeting consumers needs and wants successfully. Consumer

behaviour, thus, improves performance of the entire distribution system.

4. More Relevant Marketing Programme:

Marketing programme, consisting of product, price, promotion, and distribution

decisions, can be prepared more objectively. The programme can be more relevant
if it is based on the study of consumer behaviour. Meaningful marketing programme
is instrumental in realizing marketing goals.

5. Adjusting Marketing Programme over Time:

Consumer behaviour studies the consumer response pattern on a continuous basis.

So, a marketer can easily come to know the changes taking place in the market.

Based on the current market trend, the marketer can make necessary changes in
marketing programme to adjust with the market.

6. Predicting Market Trend:

Consumer behaviour can also aid in projecting the future market trends. Marketer

finds enough time to prepare for exploiting the emerging opportunities, and/or facing
challenges and threats.

7. Consumer Differentiation:

Market exhibits considerable differentiations. Each segment needs and wants

different products. For every segment, a separate marketing programme is needed.

Knowledge of consumer differentiation is a key to fit marking offers with different

groups of buyers. Consumer behaviour study supplies the details about consumer
differentiations.

8. Creation and Retention of Consumers:

Marketers who base their offerings on a recognition of consumer needs find a ready

market for their products. Company finds it easy to sell its products. In the same

way, the company, due to continuous study of consumer behaviour and attempts to

meet changing expectations of the buyers, can retain its consumers for a long
period.

9. Competition:

Consumer behaviour study assists in facing competition, too. Based on consumers’

expectations, more competitive advantages can be offered. It is useful in improving

competitive strengths of the company.
10. Developing New Products:

New product is developed in respect of needs and wants of the target market. In

order to develop the best-fit product, a marketer must know adequately about the

market. Thus, the study of consumer behaviour is the base for developing a new
product successfully.

11. Dynamic Nature of Market:

Consumer behaviour focuses on dynamic nature of the market. It helps the manager

to be dynamic, alert, and active in satisfying consumers better and sooner than

competitors. Consumer behaviour is indispensable to watch movements of the

markets.

12. Effective Use of Productive Resources:

The study of consumer behaviour assists the manager to make the organisational

efforts consumer-oriented. It ensures an exact use of resources for achieving

maximum efficiency. Each unit of resources can contribute maximum to objectives.

It is to be mentioned that the study of consumer behaviour is not only important for

the current sales, but also helps in capturing the future market. Consumer behaviour

assumes: Take care of consumer needs, the consumers, in return, will take care of

your needs. Most of problems can be reasonably solved by the study of consumer

behaviour. Modern marketing practice is almost impossible without the study of

consumer behaviour.

22) Explain the different types of buying motives

Product Buying Motives:

Product buying motives refer to those influences and reasons, which prompt (i.e.

induce) a buyer to choose a particular product in preference to other products. They

include the physical attraction of the product (i.e. the design, shape, dimension, size,
colour, package, performance, price etc. of the product) or the psychological

attraction of the product (i.e. the enhancement of the social prestige or status of the

purchaser through its possession), desire to remove or reduce the danger or

damage to life or body of the possessor, etc. In short, they refer to all those

characteristics of a product, which induce a buyer to buy it in preference to other

products.

B. Rational Product Buying Motives:

When a buyer decides to buy a certain thing after careful consideration (i.e. after

thinking over the matter consciously and logically), s/he is said to have been

influenced by rational product buying motives. Rational product buying motives

include the following:

1. Safety or 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 they want to safeguard their cash, jewelries etc., against theft. Similarly,

vitamin tablets, tonics, medicines, etc., are bought by the people because of this
motive, i.e. they want to safeguard their health and protect themselves against
diseases.

2. Economy:

Economy, i.e. saving in operating costs, is one of the important rational buying

motives. For instance, Hero Honda bikes are preferred by the people because of the
economy or saving in the operating cost, i.e. petrol costs.

3. Relatively low price:

Relatively low price is one of the rational buying motives. Most of the buyers

compare the prices of competing products and buy things, which are relatively
cheaper.

4. Suitability:

Suitability of the products for the needs is one of the rational buying motives.

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 a small dining
table that is suitable, i.e. that fits in well in the small dining room.

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. Utility of the product is one of the important rational

buying motives. People, often, purchase things that have utility, i.e. that can be put to
varied uses.

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. For instance,

buyers of wooden furniture go in for teak or rosewood table, though they are costlier,
as they are more durable than ordinary wooden furniture.
7. Convenience of the product:

The convenience of the product (i.e. the convenience the product offers to the

buyers) is one of the important rational product buying motives. Many products are

bought by the people because they are more convenient to them. For instance,

automatic watches, gas stoves, etc., are bought by the people because of the
convenience provided by them.

Patronage Buying Motives:

Patronage buying motives refer to those considerations or reasons, which prompt a

buyer to buy the product wanted by him from a particular shop in preference to other

shops. In other words, they are those considerations or reasons, which make a

buyer, patronise a particular shop in preference to other shops while buying a

product.

Patronage buying motives also may be sub-divided into two groups viz. a) Emotional
patronage buying motives and b) Rational patronage buying motives.

A. Emotional Patronage Buying Motives:

When a buyer patronises a shop (i.e. purchases the things required by him from a

particular shop) without applying his mind or without reasoning, he is said to have
been influenced by emotional patronage buying motives.

Emotional patronage buying motives include the following:

1. Appearance of the shop:

Appearance of the shop is one of the important emotional patronage buying motives.

Some people make their purchases from a particular shop because of good or
attractive appearance of the shop,

2. Display of goods in the shop:

Attractive display of goods in the shop also makes the buyers patronise a particular
shop.

3. Recommendation of others:

Recommendation of others also constitutes one of the important emotional

patronage buying motives. Some people purchase their requirements from a

particular shop because that shop has been recommended to them by others, i.e., by
their friends and relatives.

4. Imitation:

Imitation also is one of the emotional patronage buying motives influencing the

purchases of buyers. Some people make their purchases from a particular shop just
because other people 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-star hotel.

6. Habit:

Habit is also one of the important emotional patronage buying motives. Some people

make their purchases from a particular shop for the simple reason that they have
been habitually making their purchases from that shop.

B. Rational Patronage Buying Motives:

When a buyer patronises a shop after careful consideration (i.e. after much logical

reasoning and careful thinking) he is said to have been influenced by rational

patronage buying motives. Rational patronage buying motives include the following:

1. Convenience:

Convenient location 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 near-by shop, as it is convenient to them to make their
purchases.

Similarly, convenient working hours of the shop also influence the purchases of good

many buyers. For instance, if a shop works for a longer period of time every day and

even on Sundays, it will be very convenient to the buyers. As such, many buyers
may make their purchases from such a shop.

2. Low price charged by the shop:

Price charged by the shop also influences the buyers to patronise a particular shop.

If the price charged by a shop for a particular product is relatively cheaper, naturally,
many people will make their purchases from that shop.

3. Credit facilities offered:

The credit facilities offered by a store also influence the buying of some people from

a particular shop. 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. Services offered:

The various sales and after-sale services, such as acceptance of orders through

phone, home delivery of goods, repair service, etc., offered by a shop also induce

the buyers to buy their requirements from that shop. Rational buyers are, often,
influenced by the various services or facilities offered by the shop.

5. Efficiency of salesmen:

The efficiency of the salesmen employed by a shop also influences the people in

patronising a particular shop. If the employees are efficient and are capable of

helping the buyers in making their purchases, people naturally would flock to such a
shop.

6. Wide choice:
Wide choice of goods offered by a shop is one of the rational considerations making

the buyers patronise a particular shop. People generally prefer to make their
purchases from a shop, which offers wide choice (i.e. wide varieties of goods).

7. Treatment:

The treatment meted out by a shop to the customers is one of the rational

considerations influencing the buyers to patronise a particular shop. Usually, people

would like to purchase their requirements from a shop where they get courteous
treatment.

8. Reputation of the shop:

Reputation of the shop for honest dealings is also one of the rational patronage

buying motives. Usually, people would like to make their purchases from a store
having reputation for fair dealings.

23) Explain briefly the various marketing functions

1. Gathering and Analysing Market Information:

Gathering and analyzing market information is an important function of marketing.

Under it, an effort is made to understand the consumer thoroughly in the following
ways:

(a) What do the consumers want?

(b) In what quantity?

(c) At what price?

(d) When do they want (it)?

(e) What kind of advertisement do they like?

(f) Where do they want (it)?

What kind of distribution system do they like? All the relevant information about the

consumer is collected and analysed. On the basis of this analysis an effort is made
to find out as to which product has the best opportunities in the market.

2. Marketing Planning:

In order to achieve the objectives of an organisation with regard to its marketing, the

marketeer chalks out his marketing plan. For example, a company has a 25% market
share of a particular product.

The company wants to raise it to 40%. In order to achieve this objective the marketer
has to prepare a plan in respect of the level of production and promotion efforts. It

will also be decided as to who will do what, when and how. To do this is known as
marketing planning.

3. Product Designing and Development:

Product designing plays an important role in product selling. The company whose

product is better and attractively designed sells more than the product of a company
whose design happens to be weak and unattractive.

In this way, it can be said that the possession of a special design affords a company

to a competitive advantage. It is important to remember that it is not sufficient to

prepare a design in respect of a product, but it is more important to develop it
continuously.

4. Standardisation and Grading:

Standardisation refers to determining of standard regarding size, quality, design,

weight, colour, raw material to be used, etc., in respect of a particular product. By

doing so, it is ascertained that the given product will have some peculiarities.
This way, sale is made possible on the basis of samples. Mostly, it is the practice

that the traders look at the samples and place purchase order for a large quantity of

the product concerned. The basis of it is that goods supplied conform to the same
standard as shown in the sample.

5. Packaging and Labelling:

Packaging aims at avoiding breakage, damage, destruction, etc., of the goods during

transit and storage. Packaging facilitates handling, lifting, conveying of the goods.

Many a time, customers demand goods in different quantities. It necessitates special

packaging. Packing material includes bottles, canister, plastic bags, tin or wooden
boxes, jute bags etc.

Label is a slip which is found on the product itself or on the package providing all the

information regarding the product and its producer. This can either be in the form of
a cover or a seal.

6. Branding:

Every producer/seller wants that his product should have special identity in the

market. In order to realise his wish he has to give a name to his product which has to
be distinct from other competitors.

Giving of distinct name to one’s product is called branding. Thus, the objective of

branding is to show that the products of a given company are different from that of
the competitors, so that it has its own identity.

7. Customer Support Service:

Customer is the king of market. Therefore, it is one of the chief functions of marketer

to offer every possible help to the customers. A marketer offers primarily the
following services to the customers:

(i) After-sales-services
(ii) Handling customers’ complaints

(iii) Technical services

(iv) Credit facilities

(v) Maintenance services

Helping the customer in this way offers him satisfaction and in today’s competitive

age customer’s satisfaction happens to be the top-most priority. This encourages a

customer’s attachment to a particular product and he starts buying that product time
and again.

8. Pricing of Products:

It is the most important function of a marketing manager to fix price of a product. The

price of a product is affected by its cost, rate of profit, price of competing product,

policy of the government, etc. The price of a product should be fixed in a manner that

it should not appear to be too high and at the same time it should earn enough profit
for the organisation.

9. Promotion:

Promotion means informing the consumers about the products of the company and

encouraging them to buy these products. There are four methods of promotion: (i)

Advertising, (ii) Personal selling, (iii) Sales promotion and (iv) Publicity. Every

decision taken by the marketer in this respect affects the sales. These decisions are
taken keeping in view the budget of the company.

10. Physical Distribution:

Under this function of marketing the decision about carrying things from the place of

production to the place of consumption is taken into account. To accomplish this

task, decision about four factors are taken. They are: (i) Transportation, (ii) Inventory,
(iii) Warehousing and (iv) Order Processing. Physical distribution, by taking things, at
the right place and at the right time creates time and place utility.

11. Transportation:

Production, sale and consumption-all the three activities need not be at one place.

Had it been so, transportation of goods for physical distribution would have become

irrelevant. But generally it is not possible. Production is carried out at one place, sale
at another place and consumption at yet another place.

Transport facility is needed for the produced goods to reach the hands of
consumers. So the enterprise must have an easy access to means of transportation.

Mostly we see on the road side’s private vehicles belonging to Pepsi, Coca Cola,

LML, Britannia, etc. These private carriers are the living examples of transportation
function of marketing. Place utility is thus created by transportation activity.

12. Storage or Warehousing:

There is a time-lag between the purchase or production of goods and their sale. It is

very essential to store the goods at a safe place during this time-interval. Godowns

are used for this purpose. Keeping of goods in godowns till the same are sold is
called storage.

For the marketing manager storage is an important function. Any negligence on his
part may damage the entire stock. Time utility is thus created by storage activity.

24) What variables would you use in segmenting a market

Consumer market Business market

Type of Type of
Variables Variables
segmentation segmentation
Region, climate, Location, customer
Geographic population density, Geographic concentration,
and population regional industrial
growth rate growth rate, and
 international
macroeconomic
factors
Age, gender,
ethnicity, Size of the
nationality, organization, its
Demographic Customer type
education, industry and
occupation, position in the value
religion, income, chain
and family status
Values, attitudes,
Buyer Loyalty to suppliers,
Psychographic opinions, interests,
behavior usage patterns, and
activities, and
order size
lifestyles
Usage rate and
patterns, price
Behavioral sensitivity, brand
loyalty, and pursuit
of benefits

25) Explain the process in marketing research

26) What are the objectives of pricing decisions

1. Profits-related Objectives:
Profit has remained a dominant objective of business activities.

Company’s pricing policies and strategies are aimed at following profits-

related objectives:
i. Maximum Current Profit:

One of the objectives of pricing is to maximize current profits. This objective is aimed

at making as much money as possible. Company tries to set its price in a way that

more current profits can be earned. However, company cannot set its price beyond
the limit. But, it concentrates on maximum profits.

ii. Target Return on Investment:

Most companies want to earn reasonable rate of return on investment.

Target return may be:

(1) fixed percentage of sales,

(2) return on investment, or

(3) a fixed rupee amount.

Company sets its pricing policies and strategies in a way that sales revenue

ultimately yields average return on total investment. For example, company decides

to earn 20% return on total investment of 3 crore rupees. It must set price of product
in a way that it can earn 60 lakh rupees.

2. Sales-related Objectives:

The main sales-related objectives of pricing may include:

i. Sales Growth:

Company’s objective is to increase sales volume. It sets its price in such a way that

more and more sales can be achieved. It is assumed that sales growth has direct

positive impact on the profits. So, pricing decisions are taken in way that sales

volume can be raised. Setting price, altering in price, and modifying pricing policies
are targeted to improve sales.

ii. Target Market Share:

A company aims its pricing policies at achieving or maintaining the target market

share. Pricing decisions are taken in such a manner that enables the company to

achieve targeted market share. Market share is a specific volume of sales

determined in light of total sales in an industry. For example, company may try to
achieve 25% market shares in the relevant industry.

iii. Increase in Market Share:

Sometimes, price and pricing are taken as the tool to increase its market share.

When company assumes that its market share is below than expected, it can raise it
by appropriate pricing; pricing is aimed at improving market share.

3. Competition-related Objectives:

Competition is a powerful factor affecting marketing performance. Every company

tries to react to the competitors by appropriate business strategies.
With reference to price, following competition-related objectives may be

priorized:
i. To Face Competition:

Pricing is primarily concerns with facing competition. Today’s market is characterized

by the severe competition. Company sets and modifies its pricing policies so as to

respond the competitors strongly. Many companies use price as a powerful means to
react to level and intensity of competition.

ii. To Keep Competitors Away:

To prevent the entry of competitors can be one of the main objectives of pricing. The

phase ‘prevention is better than cure’ is equally applicable here. If competitors are

kept away, no need to fight with them. To achieve the objective, a company keeps its

price as low as possible to minimize profit attractiveness of products. In some cases,

a company reacts offensively to prevent entry of competitors by selling product even

at a loss.

iii. To Achieve Quality Leadership by Pricing:

Pricing is also aimed at achieving the quality leadership. The quality leadership is the

image in mind of buyers that high price is related to high quality product. In order to

create a positive image that company’s product is standard or superior than offered
by the close competitors; the company designs its pricing policies accordingly.

iv. To Remove Competitors from the Market:

The pricing policies and practices are directed to remove the competitors away from

the market. This can be done by forgoing the current profits – by keeping price as

low as possible – in order to maximize the future profits by charging a high price after

removing competitors from the market. Price competition can remove weak
competitors.

4. Customer-related Objectives:
Customers are in center of every marketing decision.
Company wants to achieve following objectives by the suitable pricing policies

and practices:
i. To Win Confidence of Customers:

Customers are the target to serve. Company sets and practices its pricing policies to

win the confidence of the target market. Company, by appropriate pricing policies,

can establish, maintain or even strengthen the confidence of customers that price

charged for the product is reasonable one. Customers are made feel that they are
not being cheated.

ii. To Satisfy Customers:

To satisfy customers is the prime objective of the entire range of marketing efforts.

And, pricing is no exception. Company sets, adjusts, and readjusts its pricing to

satisfy its target customers. In short, a company should design pricing in such a way
that results into maximum consumer satisfaction.

5. Other Objectives:

Over and above the objectives discussed so far, there are certain objectives that
company wants to achieve by pricing.

They are as under:

i. Market Penetration:

This objective concerns with entering the deep into the market to attract maximum

number of customers. This objective calls for charging the lowest possible price to
win price-sensitive buyers.

ii. Promoting a New Product:

To promote a new product successfully, the company sets low price for its products

in the initial stage to encourage for trial and repeat buying. The sound pricing can
help the company introduce a new product successfully.

iii. Maintaining Image and Reputation in the Market:

Company’s effective pricing policies have positive impact on its image and reputation

in the market. Company, by charging reasonable price, stabilizing price, or keeping

fixed price can create a good image and reputation in the mind of the target
customers.

iv. To Skim the Cream from the Market:

This objective concerns with skimming maximum profit in initial stage of product life

cycle. Because a product is new, offering new and superior advantages, the

company can charge relatively high price. Some segments will buy product even at a
premium price.

v. Price Stability:

Company with stable price is ranked high in the market. Company formulates pricing

policies and strategies to eliminate seasonal and cyclical fluctuations. Stability in

price has a good impression on the buyers. Frequent changes in pricing affect
adversely the prestige of company.

vi. Survival and Growth:

Finally, pricing is aimed at survival and growth of company’s business activities and

operations. It is a fundamental pricing objective. Pricing policies are set in a way that
company’s existence is not threatened.

27) State the steps in advertising process

The following are the steps involved in the process of advertising:

1. Step 1 - Briefing: the advertiser needs to brief about the product or the
service which has to be advertised and doing the SWOT analysis of the
company and the product.
2. Step 2 - Knowing the Objective: one should first know the objective or the
purpose of advertising. i.e. what message is to be delivered to the audience?
3. Step 3 - Research: this step involves finding out the market behavior,
knowing the competitors, what type of advertising they are using, what is the
response of the consumers, availability of the resources needed in the
process, etc.
 4. Step 4 - Target Audience: the next step is to identify the target consumers
most likely to buy the product. The target should be appropriately identified
without any confusion. For e.g. if the product is a health drink for growing kids,
then the target customers will be the parents who are going to buy it and not
the kids who are going to drink it.
5. Step 5 - Media Selection: now that the target audience is identified, one
should select an appropriate media for advertising so that the customers who
are to be informed about the product and are willing to buy are successfully
reached.
6. Step 6 - Setting the Budget: then the advertising budget has to be planned
so that there is no short of funds or excess of funds during the process of
advertising and also there are no losses to the company.
7. Step 7 - Designing and Creating the Ad: first the design that is the outline of
ad on papers is made by the copywriters of the agency, then the actual
creation of ad is done with help of the art directors and the creative personnel
of the agency.
8. Step 8 - Perfection: then the created ad is re-examined and the ad is
redefined to make it perfect to enter the market.
9. Step 9 - Place and Time of Ad: the next step is to decide where and when
the ad will be shown.

The place will be decided according to the target customers where the ad is
most visible clearly to them. The finalization of time on which the ad will be
telecasted or shown on the selected media will be done by the traffic
department of the agency.

10. Step 10 - Execution: finally the advertise is released with perfect creation,
perfect placement and perfect timing in the market.
11. Step 11 - Performance: the last step is to judge the performance of the ad in
terms of the response from the customers, whether they are satisfied with the
ad and the product, did the ad reached all the targeted people, was the
advertise capable enough to compete with the other players, etc. Every point
is studied properly and changes are made, if any.

28) What are the factors that influence the channel selection

 (i) Product:
 (ii) Market:
 (iii) Middlemen:
 (iv) Company:
 (v) Marketing Environment:
 (vi) Competitors:
 (vii) Customer Characteristics:
 (viii) Channel Compensation:

29) What is the need for customer relationship in marketing management

 30) What are the important features of services marketing

1. Perishability:

Service is highly perishable and time element has great significance in service
marketing.

Service if not used in time is lost forever. Service cannot stored.

2. Fluctuating Demand:

Service demand has high degree of fluctuations. The changes in demand can be

seasonal or by weeks, days or even hours. Most of the services have peak demand
in peak hours, normal demand and low demand on off-period time.

3. Intangibility:

Unlike product, service cannot be touched or sensed, tested or felt before they are
availed. A service is an abstract phenomenon.

4. Inseparability:

Personal service cannot be separated from the individual and some personalised
services are created and consumed simultaneously.
For example hair cut is not possible without the presence of an individual. A doctor
can only treat when his patient is present.

5. Heterogeneity:

The features of service by a provider cannot be uniform or standardised. A Doctor

can charge much higher fee to a rich client and take much low from a poor patient.

6. Pricing of Services:

Pricing decision about services are influenced by perishability, fluctuation in demand

and inseparability. Quality of a service cannot be carefully standardised. Pricing of

services is dependent on demand and competition where variable pricing may be

used.

7. Service quality is not statistically measurable:

It is defined in form of reliability, responsiveness, empathy and assurance all of

which are in control of employee’s direction interacting with customers. For service,

customers satisfaction and delight are very important. Employees directly interacting

with customers are to be very special and important. People include internal
marketing, external marketing and interactive marketing.

34) What are the functions of packaging

The various functions of packaging are divided into primary, secondary and tertiary
functions. In contrast with the primary functions, which primarily concern the
technical nature of the packaging, secondary functions relate to communications.
Primary, secondary and tertiary functions are divided into the following sub-functions:

Primary functions
Protective function
Storage function
Loading and transport function

Secondary functions
Sales function
Promotional function
 Service function
Guarantee function

Tertiary functions
Additional function

Protective function

The protective function of packaging essentially involves protecting the contents from
the environment and vice versa. The inward protective function is intended to ensure
full retention of the utility value of the packaged goods. The packaging is thus
intended to protect the goods from loss, damage and theft.

In addition, packaging must also reliably be able to withstand the many different
static and dynamic forces to which it is subjected during transport, handling and
storage operations. The goods frequently also require protection from climatic
conditions, such as temperature, humidity, precipitation and solar radiation, which
may require "inward packaging measures" in addition to any "outward packaging
measures".

The outward protection provided by the packaging must prevent any environmental
degradation by the goods. This requirement is of particular significance in the
transport of hazardous materials, with protection of humans being of primary
importance. The packaging must furthermore as far as possible prevent any
contamination, damage or other negative impact upon the environment and other
goods.

The inward and outward protective function primarily places demands upon the
strength, resistance and leakproof properties of transport packaging.

Storage function

The packaging materials and packaging containers required for producing packages
must be stored in many different locations both before packaging of the goods and
once the package contents have been used. Packaging must thus also fulfill a
storage function.

35) “Internet marketing becomes an inevitable part in the business” - Comment

Whether you like it or not social media has become a huge part of marketing your
business. And if you are willing, it will only prove to be advantageous for your
business. After all, this trend is only likely to grow. For small business, social media
is a great way to engage with present and potential consumers. For starters it is a
great way achieve high traffic, especially if it is well strategised to reach the target
audience.
One of the best advantages for a business is that social media plays a major role in
making more people aware about your business. And it all begins with one post, until
the message spreads and reaches to a greater audience. What’s more unlike out
door campaigns, social media is able to give you immediate feedback and results
whether positive or negative. This proves extremely beneficial for a company that is
new as it gives them to act quickly to evaluate and reevaluate results of implemented
plans. This clearly proves that the communication is not one way traffic. If your
consumer is talking back, it will certainly make your world easier.
For new entrepreneur’s, this is an opportunity they should not lose. Here is an
opportunity for you to pass valuable information of your business or services, proving
to be a truly a beneficial medium for both to communicate. For starters, this is a
fantastic to get a chance to get hold of prospective clients. At the same time, you are
able to know your audiences taste and dislikes. Consumers on the other hand are
able to tell you of their concerns about the product or service, giving them an
opportunity to directly access management. This will make them participate more in
the discussion and also attract people to react if they fill it the other way or they
agree on a certain topic being discussed.
Another major reasons why many are looking to social media is its ability to be quite
affordable. Social media in terms of financial stability of a small business is quite
affordable. In fact, it is mostly freely, if not low cost. And if you are smart, its usage
can prove expansive in terms of expanding your business.
Here is the final reason, why it is time you adapted your business to social media.
The channel has grown dramatically and even more people are getting involved with
social media to grow their businesses.
36) Explain the future challenges of consumerism
37) Discuss about the current trend in wholesale and retailing

In the supply chain network of distribution from manufacturer to retailers, wholesalers

play a major role and occupy the middle position between manufacturers and
convenience store brokers or retailers. This group was never emotionally attached to
the products which it was distributing to retailers or distributors as its services were
limited to caretaker duties. With growing trend of large format retailer stores with
nationwide chains which are setting up their own warehousing and distribution
networks it is increasingly becoming a challenge for wholesalers to retain their
importance in the distribution chain.

With growing number of convenience stores turning into food and beverage
distribution outlets the supply chain networks are becoming more complex to
maintain this demand. While customers are seeking better products at lower prices,
manufacturers’ cooperatives and farmers are demanding better prices for their
products which are squeezing the wholesale distributor from both sides.

The wholesale distribution sector has annual sales figure of $5 trillion which has
fallen by a trillion since 2011 and is expected to grow at a compounded rate of 6
percent in forthcoming years. During next five years the revenue of distributors will
grow by 50 percent while retailers will grow by 40 percent as the national economy
has grown by 30 percent irrespective of the tough economic conditions. Though a
few key industries like tourism and automobile have slowed down due to increase in
gas prices the retail industry has remained steady.

Manufactures are seeking profitable ways to get their products into c-stores and
want to keep distributors to the minimum. In this endeavor they are taking the help of
grocery wholesale distributors and other convenience store distributors which move
the goods directly to the retailers. Customers are also demanding more customized
delivery systems to have better products which reach them at home at a competitive
price. Global competition from low cost products is making it difficult for retailers to
store local made products at low prices if the cost of distribution is high.

Technological challenges

Managing inventory and storage along with regular replenishing of stocks and being
able to have updated information about stocks available in the warehouse is a
challenge most wholesale face in their business. While this can now be managed
with information technology the wholesaler has to identify the right solution which will
be appropriate for his current and future needs. The right software solution should be
able to manage customer orders, track inventory and generate shipping assignments
for trucks that move out to distributors. Wholesalers also have to invest in software
for automating standard tasks like making packing lists for pallets moving out of the
warehousing along with drawing up invoices and comparing them with customer
order lists to avoid mistakes.

Challenge from large retailers

Now that fuel prices have stabilized distributors are safe from one challenge to now
face large retailers like Walmart, Safeway, Costco and others who are bypassing
them to directly take delivery of products from manufactures. They have set up
centralized collection centers wherein manufacturers supply their truckloads of
produce which is repacked and distributed to the retailers’ stores which are spread
across the nation. The distribution of these products from collection centers can be
done either by these retailers themselves or through third party distributors.

Challenges of export/import

The wholesalers take responsibility for export of goods across Japan, Canada,
Mexico, China and locations across Europe which has suffered due to economic
upheavals and natural disasters. The long trucking dispute between US/Mexico also
led to loss of several million as traffic from both sides of the border came to a
standstill during this period.

Emerging trends in wholesale distribution

In spite of these challenges the wholesale distribution sector has been able to
manage industry requirements and adapted itself to requirements of business and
industry. While technologically wholesale distributors are able to improve their
efficiency external challenges are forcing them to adopt new trends to improve
bottom-line and manage growth.

Distribution channels driven by demand

This refers to distribution which is driven by demand as goods move down quickly
through the supply chain due to ready demand. In today’s customer driven markets
the manufacturers do not push goods towards buyers and retailers manage their
inventories based on consumer demand. This helps in allocation of products across
a widespread geographical area as manufactures and wholesalers are now aware of
pockets which have demand for their products. Channel partners comprising of
wholesalers, distributors, brokers and retailers share data about consumer demand
which helps maintain inventory supplies.

Direct interaction with customers

With the assistance of internet, wholesale distributors are able to improve their
business activities as they are able to directly connect with retailers and customers.
The innovative wholesalers are managing supply chains by using internet to interact
with buyers to understand changing trends and using collaborative tools like virtual
trade-shows. Online business environment requires wholesalers to use their website
as promotional tool for lead generation and sharing information.

Now warehouse management systems are sophisticated tools which constantly help
top wholesalers to stay ahead of competitors through effective strategy. The national
association of wholesale distributors works with more than 100 wholesalers to
access and analyze business information which can help managers to make
business decisions which will meet unique challenges and provide long term
solution.

39) Discuss the methods of setting price

1. Pricing at a Premium
With premium pricing, businesses set costs higher than their competitors. Premium
pricing is often most effective in the early days of a product’s life cycle, and ideal for
small businesses that sell unique goods.
Because customers need to perceive products as being worth the higher price tag, a
business must work hard to create a value perception. Along with creating a high-
quality product, owners should ensure their marketing efforts, the product’s
packaging and the store’s décor all combine to support the premium price.

2. Pricing for Market Penetration

Penetration strategies aim to attract buyers by offering lower prices on goods and
services. While many new companies use this technique to draw attention away from
their competition, penetration pricing does tend to result in an initial loss of income
for the business.
Over time, however, the increase in awareness can drive profits and help small
businesses to stand out from the crowd. In the long run, after sufficiently penetrating
a market, companies often wind up raising their prices to better reflect the state of
their position within the market.

3. Economy Pricing
Used by a wide range of businesses including generic food suppliers and discount
retailers, economy pricing aims to attract the most price-conscious of consumers.
With this strategy, businesses minimize the costs associated with marketing and
production in order to keep product prices down. As a result, customers can
purchase the products they need without frills.

While economy pricing is incredibly effective for large companies like Wal-Mart and
Target, the technique can be dangerous for small businesses. Because small
businesses lack the sales volume of larger companies, they may struggle to
generate a sufficient profit when prices are too low. Still, selectively tailoring
discounts to your most loyal customers can be a great way to guarantee their
patronage for years to come.

4. Price Skimming
Designed to help businesses maximize sales on new products and services, price
skimminginvolves setting rates high during the introductory phase. The company
then lowers prices gradually as competitor goods appear on the market.
One of the benefits of price skimming is that it allows businesses to maximize profits
on early adopters before dropping prices to attract more price-sensitive consumers.
Not only does price skimming help a small business recoup its development costs,
but it also creates an illusion of quality and exclusivity when your item is first
introduced to the marketplace.

5. Psychology Pricing
With the economy still limping back to full health, price remains a major concern for
American consumers. Psychology pricing refers to techniques that marketers use to
encourage customers to respond on emotional levels rather than logical ones.
For example, setting the price of a watch at $199 is proven to attract more
consumers than setting it at $200, even though the true difference here is quite
small. One explanation for this trend is that consumers tend to put more attention on
the first number on a price tag than the last. The goal of psychology pricing is to
increase demand by creating an illusion of enhanced value for the consumer.

6. Bundle Pricing
With bundle pricing, small businesses sell multiple products for a lower rate than
consumers would face if they purchased each item individually. Not only is bundling
goods an effective way of moving unsold items that are taking up space in your
facility, but it can also increase the value perception in the eyes of your customers,
since you’re essentially giving them something for free.
Bundle pricing is more effective for companies that sell complimentary products. For
example, a restaurant can take advantage of bundle pricing by including dessert with
every entrée sold on a particular day of the week. Small businesses 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.

Pricing strategies are important, but it’s also important to not lose sight of the price
itself. Here are five things to consider, alongside your strategy, when pricing your
products.

40) Discuss the features of consumer markets

The consumer market pertains to buyers who purchase goods and services for
consumption rather than resale. However, not all consumers are alike in their tastes,
preferences and buying habits due to different characteristics that can distinguish
certain consumers from others. These particular consumer characteristics include
various demographic, psychographic, behaviorialistic and geographic traits.
Marketers usually define these consumer characteristics through market
segmentation, the process of separating and identifying key customer groups.
Demographic Characteristics

Characteristics of consumer markets based on demographics include differences in

gender, age, ethnic background, income, occupation, education, household size,
religion, generation, nationality and even social class. Most of these demographic
categories are further defined by a certain range. For example, companies may
identify the age of their consumers in the 18 to 24, 25 to 34, 35 to 54, 55 to 65, and
65+ age groups. Companies often identify these demographic characteristics
through market research surveys used to discover which demographic groups
comprise the majority of their customer base. Companies can then target their
advertising towards these demographic groups. For example, a new cell phone may
be targeted toward 18 to 24-year-olds with incomes between $25,000 and $50,000.
Psychographic Characteristics

Consumer market characteristics can also be psychographic in nature.

Psychographic characteristics of consumers include interests, activities, opinions,
values and attitudes. Obviously, many magazines are geared toward a consumer's
interest. For example, prenatal magazines target expectant mothers who are
interested in learning more about caring for a baby. Additionally, consumer activities
can include participation in martial arts or basket weaving. Opinions and attitudes
can be both specific or general. A company may better understand consumer
 opinions and attitudes after conducting a focus group, and can use that information
to tailor advertising or marketing campaigns. Consumer values can pertain to how a
group of individuals feels about certain social issues, which can be of interest to
nonprofit or charitable organizations.
Behavioralistic Characteristics

Behavioralistic characteristics can also be garnered through marketing research.

Behavioralistic characteristics of consumer markets include product usage rates,
brand loyalty, user status or how long they have been a customer, and even benefits
that consumers seek. Companies like to know how often their consumers visit their
restaurants, stores or use their products. Company marketing departments usually
try to distinguish between heavy, medium and light users, whom they can then target
with advertising. Marketers like to know which customers are brand loyalists, as
those consumers usually only buy the company's brand.
Geographic Characteristics

Consumer markets also have different geographic characteristics. These geographic

characteristics are often based on market size, region, population density and even
climate, according to the article "Market Segmentation" at netmba.com, a online
business reference site. A small retailer may find opportunities in a small market in
which larger competitors have no interest. Companies that sell beachwear will likely
sell more products in warmer climates. Consumers in different regions of the country
also have different tastes in food and style.

41) Explain the various market measurement techniques

The most common market metrics that companies use are:

 Market size
 Market share
 Market penetration
 Installed base
 Product usage
 Customer attitudes
 Brand awareness
 Advertising awareness
 Brand image
 Customer satisfaction
Companies will use these types of measures in combination with specific studies,
quantitative and qualitative, looking at positioning, new product development,
competitive threats, advertising design, pricing and overall market strategy. In
addition they will often use a range of statistical methods to link these measures
together.

Market size
Market size is the number or value of units sold to a market in a given period
(normally a year). Estimating market size can be difficult. Approaches include
surveying manufacturers (which may lead to problems of overstatement), surveying
the channel/distribution route (which may lead to problems of double counting and
missing parts of the market), or surveys of end-users (most expensive as it requires
a good survey).

By taking market size (units and revenue) and dividing by the number of customers
you can get estimates of basket size - how much each customer in the market is
worth.
Market share
Market share is the number or value of units sold in a given period for a
manufacturer as a percentage of the total market size. It can be defined either as
share of units sold or share of revenue.

If the market size is known a company can infer its own market share based on its
own sales data.

It is possible to estimate share of revenue using published accounts, but some care
has to be taken as manufacturers sale price is far lower than the end-retail price and
different businesses may have different channel costs. It is also unusual for accounts
to have disaggregated figures that would make share analysis possible (see market
intelligence).
Market penetration
Market penetration which is the number of customers you have as a percentage of
the total customers in the market. This can be on the basis of sales in a period (sales
penetration) or installed base. Combining penetration with market share you can
calculate sales per customer. If you have a large customer penetration, but a low
market share, then you are making many low-value sales and one way to increase
share is to increase the value of the sales, rather than chase more customers.
Sales penetration divided by installed penetration gives your level of customer
activity. You can also use this to assess customer loyalty - the percentage of
customers who stick to your brand, and brand repertoire - the number of brands
bought per customer. By considering individual customers you can also look
at share of wallet - how much of total business is coming your way.
If you look at sales per individual (from database sales figures or a research survey),
you often see a pareto effect - 80% of the sales comes from 20% of the customers.
In business to business markets, this can be even more extreme than 80/20.
Installed base (or parc)
The installed base is the number of units that exist in the market including historical
and secondhand purchases. In technology markets, products rarely exist in isolation.
The installed base adds inertia to a market and requires thought about compatibility
and manageability. For example, if UK schools have an installed base of 1 million
computers, but annual sales are only 100,000 the replacement rate is
approximately 10 years (the installed based divided by the market size). In this
circumstance, backwards compatibility may be as important as pure functionality.
Installed bases also affect the timing at which new products and technologies should
be introduced. The take up of video-editing for instance will depend on the pricing of
video cameras, the availability of powerful computers, the ease with which the video-
editing software works. Understanding infrastructure and infrastructure changes can
be crucial as to forecasting the timing with which new products will take off.

In considering installed base, other factors such as level of knowledge, training and
skill may also be important constraining factors in product take up.

Product usage
Product or brand usage measures the frequency and weight of use of a product. A
straightforward method of segmenting a market is to look at weight of purchase,
separating heavy purchasers from light purchasers. By looking for differences
between these two groups it can be possible to find mechanisms to increase usage
across the market as a whole, or to develop specific strategies aimed at the most
valuable customers.
Product usage can also look at time of day, recency and and circumstances of use.
Would you believe sugar can be used in making concrete?

Customer attitudes
Usage and attitudes often go together. This is often particularly important for
advertising research. One effect of changing or improving communication is to affect
attitudes and understanding (it is a moot point as to whether changes in behaviour
leads to changes in attitudes or vice versa).

Most attitudinal research uses banks of attitude statements (like "There should be
more for young people to do in the evening") and asks people to agree or disagree.
Combined with factor and cluster analysis, this can lead to an attitudinal
segmentation of a market. The key to attitudinal research is to find attitudes that
relate to weight of use.
Brand awareness
The percentage of customers in a market able to name your brand. May be
spontaneous or prompted. Popular brands would only be measured spontaneously,
lesser known brands would be measured prompted.

Can be cross-analysed with market penetration to assess depth of brand coverage

and brand reach - the potential for the brand to win new customers. Also used
with Brand Equity to establish the value of the brand.
Advertising awareness
The percentage of customers in a market who claim to have seen your advertising.
May be spontaneous or prompted awareness. There is often a halo effect from the
brand for prompted awareness so it may be higher than reality. Sometimes check
questions are included.

Because of the importance of measuring advertising awareness, advertising may be

designed to use test and control areas. One with advertising, one without in order
that the research really measures changes caused by the advert.
Combining advertising awareness with market sales data you can estimate the "sale
uplift" caused by the advertising and consequently the advertising costper
additional sale.
An additional measure is media impact - where the advertising was seen or which
element of the campaign was seen. It is common for people to misappropriate
advertising - many people think the only ads they remember are on television.
Brand image
Brand image is the associations between a brand and image based statements (eg
"Is a brand for older people"). This is typically a bank of specific statements that the
brand is rated against sometimes in comparison to other brands. The "brand image"
is the pattern of scores across the image bank. Effective advertising normally centres
on trying to move or improve a particular facet of brand image (Skoda is a famous
example).

Strong brands have clear patterns of association. Weaker brands are less clearly
defined. By counting the associations made we can measure Image Strength(the
percentage of all people making an association between a brand and a statement)
and Image Character (the percentage of those making an association making the
association positively). Niche brands may have a strong Image character, but weak
Image Strength.
Brand image can be combined with sales penetration and brand awareness to
attempt to understand what the key brand association are that drive sales.

Customer satisfaction
Customer satisfaction measures well you are delivering the product/service that you
provide. Not normally part of market metrics as it relates purely to your customers.
Some companies do try and measure satisfaction of non-customers relying purely on
brand image, but technically this is a different measure as it is perception, rather
than reality based. Nonetheless, customer satisfaction can be considered
competitively, to see how your service and performance compares to that of your
rivals. Many companies now use Net Promoter (NPS) as an overall measure of
satisfaction.
By comparing satisfaction to brand usage, you can start to investigate customer
loyalty and retention. In practice there are a number of philosophical questions with
regard to how customer satisfaction is carried out and where the results are most
useful

42) Write a note on B2B marketing

Business-to-business marketing (or B2B marketing, as it is commonly known)

involves the sale of one company’s product or service to another company.

B2B marketing techniques rely on the same basic principles as consumer marketing,
but are executed in a unique way. While consumers choose products based not only
on price but on popularity, status, and other emotional triggers, B2B buyers make
decisions on price and profit potential alone.
 Finding new ways to foster relationships through social media is currently a hot topic
in the B2B marketing world. Social media platforms have opened up two way
conversations between businesses. A survey organized by Chadwick Martin Bailey
and iModerate, showed that businesses are more likely to buy from companies they
track through social media.
Tech-savvy B2B companies have continued to find innovative ways to use social
media to their advantage. Cisco Systems, Inc, a leading seller of networking
systems, launched a campaign introducing a new router solely on social media
advertising. The launch was classified as one of the top five in the company's history,
and shaved over $100,000 off normal launch expenses.
B2B marketers generally focus on four large categories:
 Companies that use their products, like construction companies who buy sheets of
steel to use in buildings.
 Government agencies, the single largest target and consumer of B2B marketing.
 Institutions like hospitals and schools.
 Companies that turn around and resell the goods to consumers, like brokers and
wholesalers.
A B2B marketing plan must be focused in delivery and broad in application. This
means that while consumer marketing can advertise very specifically (one mass-
consumed product advertised through print, television commercials and the Internet)
to a wide audience, B2B marketing cannot. Instead, it needs to brand itself very
broadly (through email, corporate image and technical specifications) to a very
specific customer.
Business marketers can develop and decide how to employ their B2B plan by
identifying and understanding the importance of the following topics:
 The product or service: When marketing to consumers, there is an emotional
component involved. Individuals are drawn to products because of how they make
them feel. With B2B customers, the buyers are trained professionals who care about
the quality of products, their cost-saving and/or revenue-producing benefits, and the
service provided by the host company.
 The target market: Many B2B marketers are able to focus on very niche industries
which reflect specialized needs. While this can make marketing a bit more
straightforward, it also requires a high level of knowledge outside of marketing
specialists.
 Pricing: Businesses are usually more concerned with cost, value, and revenue
potential than consumers. However, they can also be more readily convinced to pay
top dollar – as long as B2B marketers do an excellent job of convincing them that the
product, quality and customer service will be worthwhile.
 Promotion: B2B marketers need to be experts not only of marketing and
advertising, but experts within their fields. Once this happens, they will learn the best
ways to market to this field, whether it is through blogs, journals, tradeshows or word
of mouth. B2B marketing very rarely employs traditional media like TV and radio
commercials

43) Explain the various issues in physical distribution

44) Write a note on advertising

Definition: Advertising is a means of communication with the users of a product or

service. Advertisements are messages paid for by those who send them and are
intended to inform or influence people who receive them, as defined by the
Advertising Association of the UK.

Description: Advertising is always present, though people may not be aware of it. In
today's world, advertising uses every possible media to get its message through. It
does this via television, print (newspapers, magazines, journals etc), radio, press,
internet, direct selling, hoardings, mailers, contests, sponsorships, posters, clothes,
events, colours, sounds, visuals and even people (endorsements).

The advertising industry is made of companies that advertise, agencies that create
the advertisements, media that carries the ads, and a host of people like copy
editors, visualizers, brand managers, researchers, creative heads and designers
who take it the last mile to the customer or receiver. A company that needs to
advertise itself and/or its products hires an advertising agency. The company briefs
the agency on the brand, its imagery, the ideals and values behind it, the target
segments and so on. The agencies convert the ideas and concepts to create the
visuals, text, layouts and themes to communicate with the user. After approval from
the client, the ads go on air, as per the bookings done by the agency's media buying
unit.

45) Explain the scope of marketing

Marketing Is a Process. A process is a particular method of doing an activity,

generally involving a series of steps or operations. The classical marketing approach
involves four broad steps: market analysis, market planning, implementation, and
control. Market analysis involves searching for opportunities in the marketplace.
Market planning requires segmentation, target market choice, positioning, and the
design of the marketing mix. Market implementation includes the systems and
processes to go to market with the marketing program. Finally, marketing control
refers to the informal and formal mechanisms that marketing managers can use to
keep the marketing program on course.

It Involves a Mix of Product, Pricing, Promotion, and Distribution. Strong marketing

programs do not involve one action, such as the design of a great product. Rather,
the most successful marketing programs involve mixing the ingredients of marketing
to deliver value to customers. This mixing entails blending the right amounts of the
4P ingredients, at the right time, and in the right sequence.

It Is About Exchange. Marketing is not successful unless two parties exchange

something of value. The buyer may exchange time, money, or services, while
the seller must exchange something of value to the buyer.

It Is Intended to Satisfy Individual and Organizational Needs. The aim of marketing is

to provide a satisfactory outcome for both the firm and the customer. Firms can have
highly satisfied customers if they provide services for free. The key to modern
marketing is simultaneously satisfying the customer, the firm, and its shareholders.

46) What are the ways to promote rural marketing

Let us now understand the different promotion strategies involved in rural
marketing.

Personal Selling
It is a process of face to face interaction between the salesperson and the
prospective customer. Through a proper training and guide, a salesman can be a
valuable medium between the marketer and the prospective customer.

A good salesperson is the one who has thorough knowledge about the product he is
about to sell and tries to strike a common point of link between the product and the
customer needs.

Personal Selling in Rural Region

Most of the marketers think personal selling is not feasible in rural areas because of
various reasons ranging from scattered population to a large number of villages to
be covered.

Though still not a prevalent practice adopted by the national level marketers,
personal selling is widely done by the local manufacturers of utensils, garments,
edible good etc.

For the marketer to adopt personal selling as a tool of promotion in rural area,
following are few of the basic requirements that need to be present in their
salesperson −

 Familiarity with the Rural Area − It is difficult for the salesperson to be

familiar with rural area. As the population of rural region is scattered, it
becomes a lot more important for the salesperson to have sufficient
knowledge about rural area which he is supposed to cover.

 Proficiency in Local Language − Fluency in the local language is another

key skill that must be present in the salesperson. It acts as a major
communication point in converting prospective customer into an actual one.

 Acquaintance with the Rural Folks − It is a common tendency among rural

people that they only pay attention to those people whom they can consider
as a part of their social group. Thus, if the salesperson belongs to the
particular rural district, in that case his job not only becomes easy but also
chances of success in achieving his sales target increase strongly.

 Be Persuasive but not Pushy − A good salesperson is one who is

persuasive but not pushy in nature. Rural people are always skeptical in
 nature about the new product and strongly hesitate to purchase it due to lack
of faith.

Here a salesperson needs to remove the doubts of the prospective customer

and make him believe to purchase the product. But being too pushy in his
approach can ruin the chances of sale of the product.

 Public Relations − Public relations in case of marketing promotions in case

of rural areas are highly important so as to create the formal relationship with
the newly acquired customers. Also, dissemination of information concerning
the rural folk is possible only through effective public relations.

Educating rural people about the importance of administering polio drops to

children, vaccination to mother and child, sanitation, hygiene etc. has become
possible only through the publicity health campaigns.

Sales Promotion
It is a short term tool adopted by the marketer to increase the sales of the particular
product / service in a particular area for a particular period of time.

According to marketers, sales promotion includes those sales activities that

supplement both personal selling and advertising, and coordinating. It also involves
making the advertisements effective, such as displays, shows and exhibitions and
demonstrations.

Types of Sales Promotion

The following are the different types of sales promotion −

Push-up Sales Promotion

It is the technique where marketers persuade third parties i.e. intermediaries like
dealers, retailers etc. to stock the products of the respective company and push
them towards the ultimate customers.

Marketers started providing various incentives, pop material etc. to the

intermediaries which encourage them to sell the products to the customers. To
increase product sales ratio push-up sales promotion is the important part of
promotion efforts taken up by the companies.

In case of rural marketing the companies also follow push-up sales promotion
strategies. The commonly followed push-up sales promotion strategies include −
 Free display materials − Free display materials like banners, sign boards,
neon lights etc. are distributed among dealers to attract and inform the
customers about the products.

 Storage materials − Storage materials like racks, shelves, refrigerators etc.

are distributed among shopkeepers who help in visual merchandising and
also aid in storing the product.

 Demonstrations − Important technique of push-up sales promotion, free

demos at dealers’ shops inform the consumers about the handling of the
product.

 Incentives to dealers − Under the push-up sales promotion special

incentives are provided to dealers on the number of units sold to the ultimate
consumers.

 Lucky draw contest − It is to motivate dealers to stock the company’s

products and promote sales, and lucky draw contest are organized among
dealers.

 Free gifts − It is a common strategy adopted by the companies and free gifts
are often distributed among dealers during festive seasons to increase the
consumer base.

 Pull-up sales promotion − As the name suggests, pull-up sales promotion is

the tool where marketer pulls the customers towards their product through
various promotional strategies and advertising.

 Customers come through schemes like Buy 1-Get 1 Free, discounts,

exchange offers etc. These schemes attract customers towards the product
and the customers end up purchasing the products. In context of rural
marketing, the following pull-up sales promotional strategies can work well −

 Free Distribution of Samples

 Distributing free samples among rural people not only popularize the product
but also gain huge acceptance among them. When the company decides to
enter into new market and launch the new product, in such cases free
distribution of samples is an effective pull-up sales promotional activity.

 As compared to urban consumers, the tendency to try the new product is low
in case of rural consumers because they have lack of faith about the new
products. Free samples encourage trial purchase among consumers.

 With-pack Premiums
  Here, a free product is given either inside the pack or outside the pack. This
attracts the rural customers to purchase the product. This is successful only
when the free product is either complementary or useful to the consumers.
For example, a free toothbrush that comes complementary with toothpaste.

 Price-off Premiums
 This refers to the cut-price technique for a product. This is useful not only in
case of FMCGs but also in case of consumer durables if the discount is
appropriate.

Money Refund Premiums

It refers to the price of the product, which is partially refunded to the consumers on
the repurchase of same product by showing of proof of previous purchase like cash
memo, empty wrapper, poly packs etc.

Exchange Premiums
It is quite similar to the above strategy, under which instead of refund of money a
new product is given to consumers on showing of proof of previous purchase.

Interactive Games
Innovative fun-filled games generate interest among the rural crowd. The winner of
the game can be rewarded with the product of the company which sponsored such
games. Sometimes such games ensure high customer involvement and also
increase the interaction between the marketer and target customers.

Fairs and Exhibitions

Fairs are a part of rural people’s life. For the rural people, they are the source of
entertainment and a good opportunity to launch their products for the marketers in
the rural market. It has mass appeal as several villagers come to fairs.

Customers may be attracted by using the mass media like organizing folk songs
competition, folk dances, magic shows, puppetry shows, street theatre, acrobatic
skills, juggler, etc.

Another important thing is the use of vibrant colors in the company’s stalls. This
pulls the crowd towards buying the product.

Village Haats
Haats are the weekly markets from where rural people buy the items of daily
necessities, garments, farm inputs etc. They are the source for rural people and a
place of social gettogether. The existence of haats can be traced back to ancient
times — the times of Chandragupta Maurya.
Haats provide to the marketers an opportunity to display their products. Consumers
are ready to try the product by overcoming all inhibitions and can get the touch and
feel of the product and this will further generate sales as most of the people come to
the haats with an intention to buy.

Melas
Melas are again the essential element of India’s culture and pull masses. In a trade
mela, one can find variety of products. Melas are held usually in festive seasons like
Dussehra, Diwali, Holi, Eid etc.

During melas, marketers get to interact with a large number of consumers and
encourage for trial purchase. These melas help the marketers target large
audience.

Mandis
Mandis are the place for agricultural produce and inputs. Mandis can be a good
platform for manufacturers of agri-inputs ─ both durables and non-durables.
Durable are tractors, pump sets, threshers etc. Non-durable includes seeds,
fertilizers etc.

Pricing Strategy
In rural India, financing at zero interest can persuade customers to purchase
consumer durables like television, washing machine etc. and increase the sales.

 Increasing the term of payment of loan − Banks which grant loans to rural
consumers for the purchase of expensive consumer durables can increase
the time period for repayment of loan. Because consumers often worry less
about the interest rate of a loan and more about whether they can afford the
monthly payment or not.

 Financing at low interest − This strategy applied by marketers in urban area

is also suitable for the rural counterparts. By this consumer’s will buy high
priced consumer durables under finance schemes and make the payment
usually on monthly basis as ‘EMI’. In this pricing strategy instead of reducing
the price of product, companies charge lesser or zero interest.

 Positioning of the product − Positioning creates favorable image in

consumers’ minds regarding the products and services. Even in case where
the prices of products are kept high by the marketers, positioning the product
as value for money and relating the high price with the quality of product that
can justify the price of the product and also can push-up for sale.
  Flow of income and consumption basket pricing − A farmer has a good
amount of money after harvesting of crops and also goes for the purchase of
consumer durables after harvesting. Pricing is thus, determined not only by
the level of income of the target consumers but also by the surplus income
that a consumer has.

 Psychological pricing — a common pricing strategy − In this pricing

strategy, marketers can play the trick with consumer’s psychology by pricing
the product for Rs.99 or Rs.199 or Rs.999 and so on. In rural India, this
pricing strategy is still being practised as people there are still not much
aware about the tricks that works behind this kind of pricing.

This strategy works mainly for two purposes. Firstly, customer may consider the
product as affordable for him, if he perceives that it is priced within his budget. For
example, a product priced at Rs.999 may fall within budget rather than one which is
priced at Rs.1010. Secondly, customers feel delighted if they get back some rupees
in return.

48) Explain the salient features of customer relationship management

53) What is interpret marketing? What are its merits and demerits

What is Marketing Data?

This is a broad category that includes all the information collected that will be
analyzed. Primary data is information that is collected as part of a new study. Four
general types of primary data are usually collected for marketing interpretation:
1. Using a questionnaire or survey. For example, emailing or calling all people who
have subscribed to or purchased from a website. This can collect data on
preferences and habits based on the questions asked.
2. Experiments or focus groups. These are most commonly used by market
research firms during a formal panel. This can gather data to give insight into what
motivates a person to buy a specific product. If there are different versions of labels
or advertising copy, those can be shown to a focus group for evaluation.
3. Mechanical devices can sometimes be used to measure bodily responses to
stimuli. Again, this is mostly used in the context of a formal panel with a research
company.
4. Quantitative measures assessing the number of hits on a website, how many
seconds the IP address stayed, etc. A survey question on the website can collect
this data as well.
Many companies collect their own quantitative data by recording website hits, length
of stay on the website, numbers of subscriber emails, and number of orders.
Collecting demographic data usually requires a survey or the collection of such data
when a customer creates an account on a website. Data can be compiled and
analyzed in a spreadsheet or database application.

Interpreting the Data

There are two issues with interpreting the data. One, you need to focus on what you
are looking for. Is there a certain age range or gender you are targeting? If you sell
handbags and purses, you will primarily target women, yet you may also want to
figure out how to target married men who buy gifts for wives. Secondly, you need to
understand the science underlying the results. Are the totals based on a mean or an
average? What is the pool from which the data was collected?
Review the data with an objective eye and balance the different metrics again each
other. If you look at duration spent on the website, balance that with the number of
pages within the website that were clicked on. This will give a more complete picture
of whether the website is engaging and operating efficiently (and is generating
meaningful business).
The amount of data collected can be overwhelming if you are unclear about what
metric you are looking to investigate.

54) What is an advertising agency? What are the functions of such agencies

“The work of a tailor is to collect the raw material, find matching threads, cut the cloth
in desired shape, finally stitch the cloth and deliver it to the customer.”

Advertising Agency is just like a tailor. It creates the ads, plans how, when and
where it should be delivered and hands it over to the client. Advertising agencies are
mostly not dependent on any organizations.
These agencies take all the efforts for selling the product of the clients. They have a
group of people expert in their particular fields, thus helping the companies or
organizations to reach their target customer in an easy and simple way.

The first Advertising Agency was William Taylor in 1786 followed by James “Jem”
White in 1800 in London and Reynell & Son in 1812.

Role of Advertising Agencies

1. Creating an advertise on the basis of information gathered about product

2. Doing research on the company and the product and reactions of the
customers.
3. Planning for type of media to be used, when and where to be used, and for
how much time to be used.
4. Taking the feedbacks from the clients as well as the customers and then
deciding the further line of action

All companies can do this work by themselves. They can make ads, print or
advertise them on televisions or other media places; they can manage the accounts
also. Then why do they need advertising agencies? The reasons behind hiring the
advertising agencies by the companies are:

 The agencies are expert in this field. They have a team of different people for
different functions like copywriters, art directors, planners, etc.
 The agencies make optimum use of these people, their experience and their
knowledge.
 They work with an objective and are very professionals.
 Hiring them leads in saving the costs up to some extent.

There are basically 5 types of advertising agencies.

1. Full service Agencies

 Large size agencies.
 Deals with all stages of advertisement.
 Different expert people for different departments.
 Starts work from gathering data and analyzing and ends on payment of
bills to the media people.
2. Interactive Agencies
 Modernized modes of communication are used.
 Uses online advertisements, sending personal messages on mobile
phones, etc.
 The ads produced are very interactive, having very new concepts, and
very innovative.
3. Creative Boutiques
 Very creative and innovative ads.
 No other function is performed other than creating actual ads.
 Small sized agencies with their own copywriters, directors, and creative
people.
4. Media Buying Agencies
 Buys place for advertise and sells it to the advertisers.
 Sells time in which advertisement will be placed.
  Schedules slots at different television channels and radio stations.
 Finally supervises or checks whether the ad has been telecasted at
opted time and place or not.
5. In-House Agencies
 As good as the full service agencies.
 Big organization prefers these type of agencies which are in built and
work only for them.
 These agencies work as per the requirements of the organizations.

There are some specialized agencies which work for some special advertisements.
These types of agencies need people of special knowledge in that field. For
example, advertisements showing social messages, finance advertisements,
medicine related ads, etc.

55) What are the advantages of personal selling

56) Differentiate marketing and selling

57) What do you understand by product mix

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

Width

The width of the mix refers to the number of product lines the company has to
offer.For e.g. If a company produce only soft drinks and juices, this means its mix is
two products wide. Coca-Cola deals in juices, soft drinks, and mineral water and
hence the product mix of Coca-Cola is three products wide.
Length

Length of the product mix refers to the total number of products in the mix. That is, if
a company has 5 product lines and 10 products each under those product lines, the
length of the mix will be 50 [5 x 10].

Depth

The depth of the product mix refers to the total number of products within a product
line. There can be variations in the products of the same product line. For e.g.
Colgate has different variants under the same product line like Colgate advanced,
Colgate active salt, etc.

Consistency

Product mix consistency refers to how closely products are linked to each other.
Less the variation among products more is the consistency. For example, a company
dealing in just dairy products has more consistency than a company dealing in all
types of electronics.

59) Explain the concept of advertising mix and media selection

Advertising media selection is the process of choosing the most efficient media for
an advertising campaign. To evaluate media efficiency, planners consider a range of
factors including: the required coverage and number of exposures in a target
audience; the relative cost of the media advertising and the media environment.
Media planning may also involve buying media space. Media planners require an
intricate understanding of the strengths and weaknesses of each of the main media
options. The media industry is dynamic - new advertising media options are
constantly emerging. Digital and social media are changing the way that consumers
use media and are also influencing how consumers acquire product information.

Media planning and selection are of top significance once the advertising goals and

the organisation have been set. Media planning and selection deals with media
identification, identification of factors governing media and vehicle choices, laying
down criteria for media selection and evaluation of each media against another,
developing media-mix, resources allocation and media scheduling.

Media selection is possible when one knows about the ‘reach’ and ‘impact’ of each

medium and media vehicle. Media planning, therefore, is the study of different

advertising media and media vehicles in depth that facilitates media selection and
development of media-mix that is most suitable for the firm in question.

A ‘medium’ is the carrier of advertising message. It is the means to deliver the

advertising message. Each advertiser is to go in for right massage carrier or a set of

carriers keeping in mind the cost, efficiency and specialties of the medium or media.

Every advertiser has good many media for his selection. Broadly, these can be

classified as indoor, outdoor, direct and display. Each media has sub carriers called
vehicles.

60) What is promotion analysis? Explain the importance of e-marketing, online

marketing and promotion tools

Consumers in today's dynamic economy have high expectations, and their behavior
is unpredictable. It is critical to understand what promotional offers are presently
having the highest impact. Promotional analysis is a technique of evaluating success
or failure of a promotion using past time series data. It can be understood as
discovering a correlation between sales patterns and marketing efforts which
includes promotions offered and advertising. The objective of promotional analysis is
to help a retailer understand the impact of past promotions and hence formulate
future strategies which could be applied and adapted to produce profitable results.

Types of Promotions

"Promotions" in any industry is a vital ingredient of marketing plan to retain best

customers and to attract new ones. The retail market faces increasingly stiff
competition, and is flooded with various promotional offers to drive-in traffic. Hence,
the consumer today is left with a large range of promotions to choose from in almost
all the product categories. To list a few:
1. Quantity/Product concession

1) Buy one get one free

2) Innovative cross-sell and up-sell strategies
3) Free samples to test new product
4) Offering promotions on particular day of a week to drive sales
5) Pseudo personalized promotions targeting particular customer segment
(students/promotions linked to age, height, gender, profession)

2. Price discount

1) Some per cent off per item

2) Fixed amount off per item
3) Discount vouchers

3. Ads

1) On-line/e-mail coupon
2) Mobile coupon

4. Shipping promotions

1) Free delivery of product

2) Money off on delivery item by means of a selected ship mode

These are some of the promotions that may lure customers to purchase a product. In
spite of such attractive offers, there is a high probability that a customer may not
avail or take advantage of every offer that comes their way.

What retailers should know before launching a promotion?

Mere sales are not enough; the effectiveness of a promotion offered should be
measured in order to draw more profit out of the offer given to customers. In order to
do so, customer behavior should be analyzed. Retailers often fail to realize that a
consumer can have their own parameters like age, gender, requirement, income and
preference to evaluate a promotion.

Online marketing or online advertisement is a form of marketing that can be done

only over the internet. Some examples of online marketing are banner ads, keyword
 related ads on search engine result pages (SERPs), dynamic ads, online classified
ads, blogging, email marketing, social media ads etc.

Online marketing is also known as internet marketing or e-marketing.

What are the advantages?

 Marketers can publish promotional content anytime, anywhere. All you need is an
internet enabled computer to promote your business.
 Quite cheaper compared to print/TV ads.
 Marketers can measure the success of online marketing campaign easily using
Google Analytics.
 Brand marketing gurus can engage with a specific segment of audience. For
example- A sports equipments company can target 15-30 age group consumers
using Pay-Per-Click (PPC) campaign.
 Using keyword research tools it’s easier to know what your target customers want
and then you can place the ads on proper search engine result pages. Print media
and television don’t provide such flexibility.

Types of internet/online marketing and their respective methods of utilization

 Display ad- You can post banner ads/dynamic ads on third party websites/blogs to
attract their visitors towards your website and increase business.
 SEM (search engine marketing)- It’s a form of marketing that tries to promote
websites by escalating their visibility on SERPs. It can be done using non paid SEO
techniques and paid contextual advertisement. For instance, you can insert
important keywords in your website to help Google find it quickly and publish articles
on reputed blogs to acquire quality links.
 SMM (social media marketing)- It’s the process of gaining consumers’ attention via
social media websites such as Facebook, Twitter, Google+ etc. For instance, you
can create a fan page and publish regular updates about your company to increase
sales.
 Email marketing- Directly sending a promotional mail to mass audience. For
example, when you launch a new service, you can send a customized mail to all
your loyal and potential customers informing them about the benefits of your service
and pricing details.
 Referral marketing- It’s the process of promoting a product/service to new
consumers through referrals. For instance, if you are launching a new ecommerce
site, give an ad like this in your site “refer 5 of your friends to join our site and get $2
gift coupon for each successful referral.” Since people trust their dear ones’
suggestions, your site will immediately get some positive response.
 Affiliate marketing- It’s a marketing strategy where you must take help from one or
more affiliates and give them rewards for their efforts to bring new customers to your
site.
 Inbound marketing- For inbound marketing, you have to create informative content
and share it freely over internet to convert prospective customers into regular buyers.
For instance, if you run a web design company, share latest web design and
development related news in your blog to establish your expertise and encourage
readers to check the services you offer.
 Video marketing- For video marketing, you need to create engaging videos that will
encourage buyers to visit your site to get more information/purchase option. For
instance, if you have developed a game, you can create a demo video and upload it
on YouTube to create a buzz in the market. You can also upload the video on your
website’s homepage for customer interaction.

Some points that explain the advantages of e-marketing

1- Continuous sales 24 hours / 7 days / 365 days

There is no fixed schedule or time for work, as marketing of products and services is
at any hour throughout the day the week and even the year. This means that we
reach our customers in their spare time and in the middle of their work.

2- Reach customers in distant geographical areas

E-marketing is not based on geographic location and this means that we can
complete a purchase transaction with the customer who lives in a country and a
vendor in another country! So, we have overcome one of the most important
difficulties in e-marketing which is the long distance difficulty.

3- E-marketing means less cost

When investors plan to present a product or a service, they worry about the cost of
building the store besides the expenses of the employees. Through e-marketing;
customers can find cheap products with high quality.

4- Offer the right product to the right customer

E-marketing will help us know the behavior patterns of the customers and therefore
we can offer a particular file of products and services for each group of customers.
This means the increase the purchase rate by offering the right products to the right
buyer.
Read: How to choose right e-marketing strategies for your company.

5- The first purchase means a sustained relationship in the future

When a buyer purchases the first product or service that we offer, it means that the
buyer has started with us a special relationship; we can strengthen it through
appropriate emails.

6- Use of social media

When a customer completes the process of buying a product from your site, he is
probably happy to complete this process, this will lead him to publish your product on
his own Facebook or Twitter and among many groups, pages and friends. This will
be a free advertising of your product or service and this is one of the most important
advantages of e-marketing.

Internet marketing is important because it aligns with the way consumers make
purchasing decisions. Studies by analysts such as Gartner indicate that increasing
numbers of consumers use social media and research on mobile Internet to carry out
preliminary product and price research before making final decisions. Internet
marketing enables you to build relations with customers and prospects through
regular, low-cost personalized communication, reflecting the move away from mass
marketing.
Convenience
Reach

By marketing on the Internet, you can overcome barriers of distance. You can sell
goods in any part of the country without setting up local outlets, widening your target
market. You can also build an export business without opening a network of
distributors in different countries. However, if you want to sell internationally, you
should use localization services to ensure that your products are suitable for local
markets and comply with local business regulations. Localization services include
translation and product modification to reflect local market differences.
Cost

Marketing products on the Internet costs less than marketing them through a
physical retail outlet. You do not have the recurring costs of property rental and
maintenance. You do not have to purchase stock for display in a store. You can
order stock in line with demand, keeping your inventory costs low.
Personalization
Internet marketing enables you to personalize offers to customers by building a
profile of their purchasing history and preferences. By tracking the web pages and
product information that prospects visit, you can make targeted offers that reflect
their interests. The information available from tracking website visits also provides
data for planning cross-selling campaigns so that you can increase the value of sales
by customer.
Relationships

The Internet provides an important platform for building relationships with customers
and increasing customer retention levels. When a customer has purchased a product
from your online store, you can begin the relationship by sending a follow-up email to
confirm the transaction and thank the customer. Emailing customers regularly with
special, personalized offers helps to maintain the relationship. You can also invite
customers to submit product reviews on your website, helping to build a sense of
community.
Social

Internet marketing enables you to take advantage of the growing importance of

social media. An article on the Harvard Business School Executive Education
website highlighted the link between social networking and online revenue growth.
According to the article, a group of consumers that responded most strongly to the
influence of social networks generated increased sales of around 5 percent. You can
take advantage of this type of influence by incorporating social networking tools in
your Internet marketing campaigns.