MBA I SEMESTER

MARKETING MANAGEMENT

SUBJECT CODE: DBBM504

CREDITS: 2

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 MBA (Distance learning)

First Semester

MARKETING MANAGEMENT

Preface

Globalization, assorted variety, re-appropriating, virtual groups, scaling back, and

changing types of work are only a portion of the difficulties confronting

organizations today. Directors must be set up to manage the authoritative issues that

such difficulties offer ascent to. Regardless of whether one is in Human Resources, a

supervisor of a substantial division, or the pioneer of group, one must have the

capacity to continually enhance the authoritative elements in one working

environment. To do this, one have to begin with the person, which implies one

should have the capacity to perceive and work with various individual practices,

frames of mind, and discernments. This course characterizes marketing behavior and

the different terms related with the marketing. It details the marketing mix, consumer

behavior, retail, brands, channels and the other important aspects related with the

marketing.

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Section I

Objectives

The current unit fulfills the below objectives-

1. Introduction to marketing management

2. It details about the Nature, Scope and Importance of Marketing,
3. It details about the Evolution of Marketing; Core marketing concepts; Company
orientation - Production concept, Product concept, selling concept

Introduction

In the era of marketing and showoff, wherever one go you are being advertised to
in some shape. Marketing is with one each second of one's life. From morning to
night we are exposed to a large number of marketing messages each day.
Marketing is something that influences you despite the fact that you may not
really be aware of it.

Definition of Marketing
According to American Marketing Association (2004) - "Marketing is an
organizational function and set of processes for creating, communicating and
delivering value to customers and for managing relationships in a way that
benefits both the organization and the stakeholder."
AMA (1960) - "Marketing is the performance of business activities that direct the
flow of goods and services from producer to consumer or user."

According to Eldridge (1970) - "Marketing is the combination of activities

designed to produce profit through ascertaining, creating, stimulating, and
satisfying the needs and/or wants of a selected segment of the market."

According to Kotler (2000) - "A societal process by which individuals and groups
obtain what they need and want through creating, offering, and freely exchanging
products and services of value with others."

Nature of Marketing

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1. Marketing is an Economic Function

Marketing grasps all the business exercises engaged with getting products and
services, from the hands of makers under to the end customers. The business
steps, through which goods progress on their way to final consumers is the
concern of Marketing Management.

2. Marketing is a Legal Process by which Ownership Transfers

During the process of time, marketing takes the responsibility for exchanges from
merchant to the buyer or from maker to the end client.

3. Marketing is a System of Interacting Business Activities

Marketing is that procedure through which a business undertakes, foundation or

association cooperates with the clients and partners with the goal to procure
benefit, fulfill clients, and oversee the relationship. It is the execution of business
exercises that immediate the stream of merchandise and enterprises from maker to
shopper or client.

4. Marketing is a Managerial capacity

As per administrative or frameworks approach - " Marketing is the blend of

exercises intended to deliver benefit through determining, making, animating, and
fulfilling the necessities or potentially needs of a chose portion of the market."

As indicated by this methodology the accentuation is on how the individual

association forms promoting and build up the key elements of Marketing
exercises.

5. Marketing is a social procedure

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a. Knowing and understanding the buyer's changing requirements and needs;

b. Efficiently and adequately dealing with the free market activity of product
and services;

c. Efficient arrangement of circulation and installment handling frameworks.

6. Marketing is a philosophy based on consumer orientation and satisfaction

7. Marketing had double goals - benefit making and customer fulfillment

Scope of Marketing

1. Investigation of Consumer Wants and Needs

Products are created to fulfill customer needs. Accordingly, it is done to

distinguish the consumer's needs and wants. These necessities and needs persuade
consumers to buy.

2. Investigation of Consumer Behavior

Marketer performs an investigation of buyer conduct. Investigation of purchaser

conduct helps advertiser in the market division and focusing on.

3. Product planning

Product planning and development starts with the generation of product concept
and ends with product development and commercialization. It includes everything
from branding and packaging to product line expansion and contraction.

4. Pricing Policies
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Marketing needs to decide pricing strategies for their product. Deciding the prices
depends upon product to product. It relies upon the dimension of rivalry, Product
life cycle, promoting objectives and goals, and so forth.

5. Distribution

Distribution is an integral part of the marketing. It needs the proper distribution of

the product and services to the end consumer with the least cost and fewer efforts.

6. 6. Promotion
Promotion includes personal selling, sales promotion, and advertising. Right
promotion mix is crucial in the accomplishment of marketing goals.
7. Consumer Satisfaction

The product or service offered must fulfill buyer satisfaction. Buyer fulfillment is
the real goal of advertising.

8. Promoting Control

Promoting review is done to control the marketing exercises

Evolution of Marketing

Marketing has changed throughout the hundreds of years, decades and years. The
generation focused framework efficiently changed into relationship time off today
and over the period; the specializations have raised, for example, deals as opposed
to marketing and publicizing as opposed to retailing. The general advancement of
marketing has offered to ascend to the concept of business improvement.
Marketing has taken the cutting edge shape in the wake of experiencing different
stages since last the finish of the nineteenth century. The Production situated
routine with regards to promoting preceding the twentieth century was a
traditionalist and hidebound by general guidelines and absence of data. Science
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 and innovation improvements and uncommonly the advancement of data
innovation have now changed the manner in which individuals live, the manner in
which individuals work together and the manner in which individuals move and
buy. Following is a short synopsis of the different phases of advancement of
marketing.

• Production Orientation Era: The overall mentality and approach of the generation
introduction time was - "customers support product that is accessible and
profoundly moderate". The mantra for promoting achievement was to "Enhance
creation and appropriation". The standard was "accessibility and reasonableness is
the thing that the client needs". The time was set apart by restricted product
offerings; evaluating framework dependent on the expenses of generation and
dissemination, constrained research, innovative features and the mantra for
marketers was ‘A good product will sell itself’, so does not need promotion.

• Product Orientation Era: The increased competition and variety of choices/options

available to customers changed the marketing approach and now the attitude was
"Consumers will buy products only if the company promotes/ sells these
products". The overarching disposition of this period was that customers support
product that offers the most quality, execution and inventive highlights and the
mantra for advertisers was 'A great product will move', so does not require
promotion.

• Sales Orientation Era: The expanded challenge and assortment of

decisions/choices accessible to clients changed the advertising approach and now
the disposition was "Purchasers will purchase a product just if the organization
advances/moves this product". This time shows ascent of publicizing and the
mantra for advertisers was "Inventive promoting and moving will conquer
customers' opposition and persuade them to purchase".

• Marketing Orientation Era: The move from production to product and from sales
to consumer changed to the Marketing Era which concentrated on the

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 "requirements and needs of the clients" and the mantra of advertisers was " 'The
customer is the best! Discover their need and fill it'. The methodology is moved to
conveying fulfillment superior to anything contenders are.

• Relationship Marketing Orientation Era: This is the cutting edge approach of

promoting. The present advertiser centers on requirements/needs of target markets
and goes for conveying prevalent esteem. The mantra of a fruitful advertiser is
'Long haul associations with clients and different accomplices lead to triumphs

Core marketing concepts

The center marketingconcept is the technique that organizations execute to fulfill

client's needs, increment deals, expand benefit and beat the challenge. There are
five marketing concepts that associations receive and execute. Marketing is a
department of management that tries to design strategies that will build profitable
relationships with target consumers. Be that as it may, what logic is the best for an
organization in setting marketing procedures?

There are five core concepts of marketing under which organization commence
their sales and marketing.

Marketing Concepts

1. The Production Concept,

2. The Product Concept,

3. The Selling Concept,

4. The Marketing Concept,

5. The Societal Marketing Concept.

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 Source- Author own conception-

These concepts are portrayed beneath;

1 Production Concept

The possibility of generation concept – "consumer will support products that are
accessible and exceedingly reasonable". Marketing strategies are focused on
making continuous product improvements. Companies adopting this orientation
run a major risk of focusing too narrowly on their own operations and losing sight
of the real objective. Most times; the production concept can lead to marketing
myopia

2 Product Concept

The product concept holds that the purchasers will support a product that offers
the most in quality, execution, and experience. Here; under this concept,
Marketing procedures are centered on making ceaseless productmodification.
Product quality and enhancement are vital parts of promoting systems, once in a
while the main part. Focusing on just on the organization's product could likewise
prompt marketing myopia

3Selling Concept

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This concept holds the thought "consumers will not buy enough of the firm’s
products unless it undertakes a large-scale selling and promotion effort". Here the
focus of the management lies on creating transactions instead of relations and
creating building long-term, profitable customer relationships.

In sellingconcept the advertiser expects that clients will be persuaded into

purchasing the product will like it, in the event that they don't care for it, they will
conceivably overlook their failure and get it again later. This is generally
extremely poor and expensive supposition.

Ordinarily, the sellingconcept is based upon the unsought products. Unsought

merchandise is those products that purchasers don't regularly consider purchasing,
for example, Insurance or Blood donations.

4. Marketing Concept

The marketing concept holds-"accomplishing hierarchical objectives relies upon

knowing the necessities and needs of target showcases and conveying the concept
fulfillments superior to anything contenders do". Here the focus is on the
customer first.

Under the marketingconcept, a customer-centric approach is adopted and focus is

given on the "sense and reacts" theory. The idea is to locate the correct customer
for the product.

The marketing concept and the sells concepts are two extraordinary concepts and
totally from each other.

5 Societal Marketing concept– ponder upon the thoughts that whether the pure
marketing concept overlooks possible conflicts between consumer short-run
wants and consumer long-run welfare

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The societal marketing concept holds "promoting methodology ought to convey
an incentive to customers in a way that keeps up or enhances both the purchaser's
and society's prosperity".

It calls for sustainable marketing, socially and environmentally responsible

marketing that meets the present needs of consumers and businesses saving or
upgrading the capacity of future ages to address their issues. The Societal
Marketing Concept puts the Human welfare on top before benefits and fulfilling
the needs. So organizations are gradually either completely or incompletely
attempting to execute the societal marketing concept.

6. Holistic Marketing concept

Holistic marketing is an “integrative marketing paradigm that considers the full

scope of a business as opposed to narrowly focusing on the development or
execution of particular marketing activities.”

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“This marketing strategy is developed by thinking about the business as a whole,
its place in the broader economy and society, and in the lives of its customers. It
attempts to develop and maintain multiple perspectives on the company’s
commercial activities”.

1.4 Marketing Environment

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”.

Marketing activities are affected by a few factors inside and outside an

organization. These factors or forces influencing marketing decision-making are
collectively called the marketing environment. It contains each one of those
powers which affect market and marketing endeavors of the venture. 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 system of a firm is affected and shaped by a firm’s silent 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 should know
about what is happening in its marketing condition and acknowledge how a
change in its condition can prompt changing examples of interest for its product.

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

environment. 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.”

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Environmental Analysis brings about identify patterns and occasions, and its
event and effect on the association. These patterns and occasions specifically
affectMarketing activity. The organization needs to know where the earth is
going, what patterns are rising in that, and what ought to be its reaction to the
ecological changes.

An organization has its own internal environment which consists of “its culture,
people, work ethos, etc. This includes the non-marketing departments within the
company. The organization has to deal with the environmental forces within the
company.”

This internal environment of the organization interacts with the external

environment which consists of Macro as well as Micro components like political,
technological, marketing intermediaries, competitors, etc.

This inside condition of the organization interfaces with the outside condition
which comprises of Macro just as Micro segments like political, technical,
marketing mediator, competitor, and so on. The breakup of the micro and the
macro environment is given below-

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Microenvironment-

This environment is Partially under the control of the organizations. It could

further be divided into two – task environment and the internal environment.

The Task environment is made ofsuppliers, Intermediaries, customers, and

competitors. The task environment as factors external to the organizations but is
partially controllable by the organization. The Internal condition portrays to the
Company itself which is likewise somewhat controllable and now and then
portrays to as 7M's of an association – Members/ employees, Make-up/operations,
Management, Money, Machinery, Materials, and Markets.

• Micro condition incorporates factors that are outer to the organization and are
natural by the organization.

To concentrate on the task environment is to neglect the change in the large scale
condition which has its impact on the undertaking condition itself.

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 Internal Environment-

Internal environment consists of the internal machinery of the organization. The

environment is made up of management, man, material and the methods adopted
in the organization.

Macro Environment-

Macro means the large scale and it is outer contact of the organization. The
changes in the macro environment affect the organization as well as the industry
at the same time. It consists of the following factors-

Political environment

Economical

Social

Technical environment

Legal Environment

1. Demographic Environment

"Demographic environment includes- size, density, and growth rate of population,

life expectancy, birth rate, age and sex composition, and so on. All these elements
have a direct influence on the demand for various goods and services." For
example, on the off chance that there are increasingly youngsters in a nation,
similar to India, the interest of products like sports products, educational products,
and officesupplies and so on, would be higher in demand than the interest for
medicines, wheelchairs, and so forth. So also, with the change in demographics
the natives in a nation is developing at a fast rate, it would give more chances to
organizations to grow their business activities on the grounds that the interest of
merchandise and ventures would be high.

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2. Political and Legal Environment

Political soundness is the most extreme essential for the survival and achievement
of a business firm. Political condition comprises of the components, identified
with the service undertakings. It incorporates constitution of the nation, political
strength, remote strategy, military arrangement, etc. The adjustment in these
components can profoundly affect a business firm and posture potential dangers to
the business exercises. Accordingly, administrators must examine the adjustments
in the strategies of the legislature and its effect on the business. Besides, they
ought to know about different standards, applicable to the organization's law,
rivalry law, licensed innovation rights, remote trade, etc.

3. Economic Environment

The economic condition comprises all the monetary powers which impact the
working of a business firm, for example, financial condition, monetary
approaches, and the financial framework. Following are the parts of the monetary
state of a nation:

a. Features of the nation's economy.

b. The general monetary condition, identified with the asset markets like cash,
material, supply and markets and so forth.

c. Buying intensity of the people and its related variables like salary, funds and so
on.

d. Monetary assets of the nation and their accessibility.

e. Distribution of national Income & resources.

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 The adjustment in the pay dimension of individuals, financing costs, charge rates,
the rate of expansion, accessibility of capital, request, and supply of products,
change in government's arrangements, and so on., influence a business firm all
things considered. For instance, when the financing cost on credits goes up, the
interest of solid products backs off. So also, if nation men's pay level goes up,
their acquiring power rises which prompts the expansion popular of products and
ventures. Every one of these components is essential for a business firm since
they impact the interest, cost, and benefit of the business. The monetary
components are to a great extent outside the ability to control a business firm yet
the impacts of such changes are massive. In this manner, it is critical to screen the
financial changes intently so the firm can shield itself from potential dangers and
benefit from circumstances.

4. Socio-Cultural Environment

Socio-social components include human relations and attributes of the society in

which a business firm works. These components incorporate statistic changes in
the populace, social establishments, position structure, instructive structure,
proficiency rate, traditions, frames of mind, qualities, and convictions of the
general public, tastes, inclinations and purchasing propensities for individuals. It
is critical, for a business firm, to pay regard to the traditions, qualities, and
convictions of the general population and present the products & services in like
manner. The socio-social condition is an essential factor, particularly for a
worldwide partnership, (working in numerous nations) as a culture, qualities,
convictions, and traditions contrast from nation to nation.

5. Technological Environment

TechnologicalEnvironment refers to the new techniques, skills; know how to

produce new products & the services. It is a noteworthy part of large scale
environmental factor which has prompted the advancement of the different new
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product s like, PDAs, LED TVs, workstations, tabs, and so on. One essential
factor of technologicaldevelopment is that it enhances the procedure of creation,
transportation, and correspondence. In this way, it is essential, for a business firm,
to embrace the most recent innovation; else it would miss out its piece of the pie
to its rivals.

Environmental Scanning

Environmental scanning is an assessment of external resources to find out the

impacting factors on a business. The main aim is to make out and sound outthe
resources outside the business. Even though these resources are out of control
from the company perspective, it is imperative to take them into consideration in
the decision-making process.

One well-liked method of environmental scanning is SWOT analysis. “Here Each

letter stands for one area to review: Strengths, Weaknesses, Opportunities,
and Threats. The strengths and opportunities are factors within the company, and
the weaknesses and threats come from sources outside the company.”

SWOT Analysis

As per the definition-“ SWOT analysis is a tool for auditing an organization and
its environment. It is the first stage of planning and helps marketers to focus on
key issues. SWOT stands for strengths, weaknesses, opportunities, and threats.
Strengths and weaknesses are internal factors. Opportunities and threats are
external factors. Strength is a positive internal factor. A weakness is a negative
internal factor. An opportunity is a positive external factor. A threat is a negative
external factor.”

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 The organization should try to change the weaknesses into strengths, and the
threats into opportunities. Then finally, SWOT would manage the internal
environment with the external environment. The result should be an increase in
‘value’ for customers – that will also enhance the competitive advantage.

SWOT analysis aims to the increase in the value of the products and services so
that organizations can employ new customers, retain loyal customers, and extend
products and services to customer segments over the long-term.
Simple rules.

 The organization should be realistic about the strengths and weaknesses.

 They should know the difference between the organization today and future.
 It should always be specific.
 The swot should be done in comparison of the Competitors.

Strengths and weaknesses are internal factors.

For example:

Strength

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 Organizations specialist marketing expertise.
 A new, innovative product or service.
 The site of the business.
 Quality process and measures.
 Value Added products and the USP of the Business.
Weakness

 Be deficient of marketing know-how.

 Undifferentiated products or services.
 Location of the organization.
 Poor quality of the products and services.
 Damaged reputation.

Opportunities and threats are external factors.

For example:

Opportunity

 Developing a market such as the Internet.

 Mergers, joint ventures or strategic alliances.
 Moving into new market segments that offer improved profits.
 A new international market.
 A market vacated by an ineffective competitor.
Threat

 A new competitor in your home market.

 Price wars with competitors.
 A competitor has a new, innovative product or service.
 Competitors have superior access to channels of distribution.
 Taxation is introduced on your product or service.

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 Summary

Marketing is the process related to the products and services. It included all the
activities which ensure the delivery of the final products in the hand of the end
consumers. It also encompasses the sales, advertising, distribution, and
environmental assessment.

The marketing era consists of the production, product, sales, relationship building,
and holistic marketing. The concepts of marketing also include the production,
product sales and societal concepts related to the marketing era.

The Marketing environment consists of the micro and macro environment. Mirco
environment is the internal environment of the company and is related to the
internal factors of the organization. Marco, on the contrary, is the external
environment of the organization and the same for the industry. It encompasses the
demographic,political, technological, social environment.

Swot analysis is used to do the environmental analysis. Strengths and the

weakness are the internal part of the company while the opportunity and threat are
related to the external environment of the business.

Key Words- Marketing, Marketing Evolutions, Marketing Concepts, Marketing

Environment, Environment Scanning, SWOT.

Self Assessment questions-

1. Products and services are same? T/F

2. The Concept which paid emphasis on the production done is __
A. Production Concept B. Product Concept C. Sales Concept
D. None of them

3. The Marketing Environment consist of _________

A. Marco Environment B. Micro Environment c. Both of Them

d. None of them

4. Environment scanning is the scanning of the marketing environment? T/F

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5. SWOT stands for________________________________________________

Review Questions-

1. Discuss the concepts of Marketing.

2. What is the marketing environment? Discuss the various environment
3. What is environmental scanning? Why it is important
4. What do you mean by the SWOT analysis? Discuss
5. Why the marketing has become the most essential task of an organization.

. Further Readings

1. C.N.Sontakkshi, Marketing Management, - Kalyani Publisher Kolkata

2. Kotler, P. and Keller, K.L. Marketing Management, 12th ed., Pearson,
2006, ISBN 0-13-
3. Ries, Al; Jack Trout (2000). Positioning: The Battle for Your Mind (20th-
anniversary ed.). McGraw-Hill. ISBN 0-07-135916-8.

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Section II

Objectives-

To detail about the marketing Technique-

To discuss the features, types and basis of the segmentation,

To discuss about the targeting and Positioning

Introduction

Marketing aims to create the value for the customer and the organizations they
also deal in the addressing the customers needs and caters the demands as per the
difference of the customer profiles. The customers belong to different
demographic characteristics. The marketing technique addresses precisely that.
Organizations and firm needs to make this client esteem and accomplish these
productive client connections

Segmentation
As a matter of first importance, the organization needs to know which customer it
will serve. It must divide the market dependent on a specific condition that is
important to the organization. At that point, it needs to choose one or a few market
segments to serve. It is called segmentation and targeting. In the end, the
organization should choose how it will serve the targeted customers. This
involves differentiating itself from other offerings in the market
(differentiation) and aiming at a position in the market and in customers’ minds
(positioning).

Segmentation, Targeting and positioning together involve a three-phase process –

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(1) Determine the demographic difference of the customers

(2) selecting the customer group found most attractive to target.

(3) Implementing the segmentation by optimizing the products/services for that

segment andcommunicating the customers about the choice to distinguish
ourselves that way.

2.1.1 Segmentation

Segmentation includes identifying the various needs of the customers.

For an example In the auto showcase, a few purchasers request speed and
execution, while others are considerably more worried about openness and
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security. As a rule, it remains constant that "You can't be everything to all
individuals," and experience has shown that organizations that represent
considerable authority in addressing the necessities of one gathering of customers
over another will, in general, be progressively gainful.

Levels of Marketing Segment

“The identification of potential customers based on common characteristics and

needs, which distinguish them from other members of a population, is essential to
the development of a strategic marketing plan.” Achieving this objective
empowers marketer to divide the potential clients by attributes that impact
purchasing choices. “It also enables companies to develop product-positioning
strategies to create a positive impression in the minds of probable customers
regarding the company and its brands.” unique techniques are adapted to divide
the substantial market into market sections, every such market is different from
each in terms of products and services it offers and the organization of the same.
Thusly, an organization creates diverse advancement, conveyance, and product
situating techniques that intrigue to each segment

There are different marketing strategies in terms of the segmentation-

1. Mass Marketing Strategy

A private company depends on a mass-marketing process to guide a

singlemarketing message to every potential client in an objective market paying
little notice to the purchaser's particular needs or inclination, which may some
way or another server to fragment the market. “To use a mass-marketing strategy,
a company designs a product to appeal to all members of the target market, rather
than a subset of customers -- the market segment -- most likely to purchase the
product. For example, a business purchases commercial time on a network to
broadcast its advertisement to potential customers”. The mass market uses mass
communication means to advertise their products and services as their reach is
broad and they need no to cater to the individual difference of the customers.

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 2. Segment Marketing Strategy

“A company might also increase sales by first identifying market segments within
a broader target market, each of which consists of potential customers whose
unique wants and needs can be satisfied by a particular product.”

Moreover, the organization builds up different product for each of its segments
which outlines a product 's characteristics, to attract the customers towards that
segments. The organization at that point makes an advertising effort to speak to
every individual segment. Each segment and product separation technique is new
as far as client needs or inclinations. The process to differentiate the segments are
based upon the demographic characteristics of the customers used clients
incorporate age, sexual orientation, geographic location, and the income level.
For instance, an organization may create one clothing line that fulfills the
necessities of female adolescents and another to engage senior ladies.

1. Niche Marketing Strategy

a market segment is diverted by the needs and requirements of potential

customers and not be completely met by the goods and services the
organisa=tions delivers to the segments in general. In such situations, the
companies may create a “niche market and develop highly specialized products or
services to meet the customers’ needs that aren't being met by other offerings”.

For example, a company can develop its motorbikes for the bikers who tracks on
the mountains. It may have a small niche market catering the small amount of the
customers of mountain bikes. It may speculate its bikes as per the needs of the
customers and may charge an extra premium for the same. The business might be
very successful in creating a niche market by marketing only highly specialized
mountain bikes to potential customers within the existing market segment whose
needs aren't met by other companies.

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2. Micro Marketing Strategy

A company adopts a micro-marketing strategy to produce a “narrowly defined

subset of a niche market based on a customer attribute such as zip code or a
location-specific lifestyle characteristic”. In this case, products are focused to
meet a very specific need of probable customers and marketed primarily to that
customer set.

For example, a computer company might sell highly specialized and

individualized computers to customers who configure the systems themselves.

Market Segmentation Variables

To divide the market based on the different segments, the company needs to
organize the customers on different variables, relevant to the company and the
customer both. The variables can be based upon the geographic, demographic,
psychographic or the behavioral. All the segments neither important nor equal to
the companies. For example, bikers and regular customers can be important
segments for the motorbike company but they are important segments for the
restaurants.

These are the base segmenting the markets.

1. Geographic Segmentation:

The simplest way of segmenting the market is segregating the market based on
the Geographic location. It is one of the most indefinable features. People
residing in one region of the nation have different purchasing and consumption
habit that diverge from others living in other regions. For example, the eating
habits of the south Indian differ from the eating habits of the north Indians.
Banking needs of people in rural areas differ from those of urban areas.

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 2. Demographic Segmentation:

Demographic variables such as age, occupation, education, sex, and income are
commonly used for segmenting markets.

(a) Age:
Age could be divided as the Teenage, adulthood, retired

(b) Sex:
The major differentiation is based upon the gender like - Male and female

(c) Occupation:
The occupation or the employment a person have also become a factor to
discuss like- Agriculture, industry, trade, students, service sector, households,
institutions

(i) Industrial sector:

Industry can be divided on the basis of

Large scale industry

Small Scale Industry

Handicrafts and the Kutil Udhyog

(ii) Trade:
It could be divided on the basis of the trade it is in- like

Export-Import, Whole seller, retailer, intermediates and so on.

(iii) Services:
Services have wide ranges like-

Banking

Medical Professional

Educational Professional
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 Information Technology and

Hospitality industry

(iv) Institutions
Educational, Regional etc

(v) Agriculture and cottage industries

(d) Income Level:

The segmentation can be done on the basis of the different income level. It could
be

Weekly, monthly, annual package

In the total amount in hand or the average income on the per member of the
family.

(e) Family Life-cycle:

The segmentation could also be done on the basis of the

Young and single,

young married without children,

Young married with the children under six,

young and married with the children over six,

old married couples with young children,

older married without any children under eighteen, older single, etc.

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 3. Psychographic Segmentation:

Under this method, consumers are divided into market segments based on
their psychological composition, i.e., personality, attitude, and lifestyle. As per
this segmentation, the customers can be divided into the following segments.

According to the Rogers “there are five groups of consumer personalities

according to the way they adopt new products”
(а) Innovators:
These are sophisticatedcustomers eager to try new ideas. They are
extremelyadventurous and willing to presume the risk of an “occasional bad
experience with a new product”.

(b) Early Adopters:

Early adopters are the persons who influenced by the innovator's others and are
the second one to try out the new products after the innovators.

(c) Early Majority:

This group of people is likely to conscious before adopting a new product. Its
members are important in legitimizing an innovation but they are hardly ever
leaders.

(d) Late Majority:

This group is careful and accepts the new ideas after an innovation has received
public confidence.

(e) Laggards:
Laggards are the last adopters they are the experienced-based people. They are
doubtful of change and innovations. The product is already in use or on the
maturity level by the time they adopt a product.

Becoming thoughtful towards the psychographic of consumers allow marketers to

better select potential markets and match the product image with the type of
consumer using it. For example, a woman living the extravagant life is
considered as the customer of premium products, who would not comprise with
the quality on the basis of the prices.
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Psychographic classification may, however, be an oversimplification of consumer
personalities and purchase behavior. So many factors influence consumers that an
early adopter of one product might well be a laggard for some other product and
vice versa.

4. Behaviorist Segmentation:

In this technique, consumers are segmented on the basis of their actual purchase
of the product.

Any of the following variables might be used for this purpose:

(а) Purchase Occasion:
Buyers may be segmentedbased on the time and the occasion of the purchase. For
example, the air fight differentiates their passengers on the basis of the vocational
trip and the routine flyers.

(b) Benefits sought after:

The segmentation is done on the basis of the major benefits seen by the
consumers on their purchase. They could be segmented on the basis of premium,
High quality, low price, good taste, gender preferences are examples of benefits.
Like the segmentation on the basis of economy class and the premium class.

Research studies on benefit segmentation reveal that it is easier to take advantage

of the existing segment, then to create new segments. As no brand can appeal to
all consumers, a marketer who wants to cover the market fully must offer multiple
brands.

The following benefit segments have been identified:

(а) The Status Seeker:
This group comprises buyers who are very much concerned with the prestige of
the brand.

(b) The Swinger:

This group tries to be modern and up-to-date in all of its activities.

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(c) The Conservative:
This group prefers popular brands and large successful companies.

(d) The Rational Man:

This group looks for benefits such as the economy, value, durability, and other
logical factors.

(e) The Inner-Directed Man:

This group is concerned with self-concept, e.g., sense of humor, independence,
honesty, etc.

(f) The Hedonist:

This group is concerned mainly with sensory benefits.

Marketing experts suggest that benefit segmentation has the greatest number of
practical implications than any other method of segmentation.

(c) User Status:

Possible consumers may be divided as habitual users, irregular users, and non-
users. These customers can be targeted by developing the new products and
services or the packaging based on it.

5. Volume Segmentation:

As per gourami 2010 “ Consumers are classified light, medium and heavy users of
a product. In some cases, 80 percent of the product may be sold to only 20 percent
of the group. Marketers can decide product features and advertising strategies by
finding common characteristics among heavy users.”

Here the marketers should keep them in the notice and should try to serve to all
the user groups because they represent different opportunities. As per Goswami
“The non-users may consist of two types of people— those who do not use the
product and those who might use it. Some may change over time from a non-user
to a user. Those who do not use due to ignorance may be provided extensive

33
information. Repetitive advertising may be used to overcome inertia or
psychological resistance. In this way, non-users can gradually be converted into
users.”

34
35
6. Product-space Segmentation:

As per the “buyers are asked to compare the existing brands according to their
perceived similarity and in relation to their ideal brands”. “First, the analyst infers
the latent attributes that consumers are using to perceive the brand. Then buyers
are classified into groups each having a distinct ideal brand in mind. The
distinctive characteristics of each group are ascertained.”

Targeting

It involves breaking a market into segments and then concentrating your

marketing efforts on one or a few key segments consisting of the customers whose
needs and desires most closely match your product or service offerings. It can be
the key to attracting new business, increasing your sales, and making your
business a success.

The beauty of target marketing is that by aiming your marketing efforts at specific
groups of consumers it makes the promotion, pricing, and distribution of your
products and/or services easier and more cost-effective.

It provides a focus to all of your marketing activities.

So if, for instance, a catering business offers catering services in the client’s
home, instead of advertising with a newspaper insert that goes out to everyone,
after identifying the target market for their services, the catering company could
target the desired market with a direct mail campaign, a flyer delivery that went
only to residents in a particular area, or a Facebook ad aimed at customers within
a specific geographic area, increasing the return on investment on their marketing
- and bringing in more customers.

Social media platforms such as Facebook, LinkedIn, Twitter, and Instagram have
sophisticated options to allow businesses to target users based on
market segments. A Bed and Breakfast business could target married Facebook
36
 followers with an ad for a romantic weekend getaway package, for example.
LinkedIn is more B2B oriented - you can target businesses by a variety of criteria
such as the number of employees, industry, geographic location, etc.

Market Positioning

As per the Kotler “It is the process of establishing and defending a valuable
position for products and services relative to the competition. Positioning can
encompass branding, advertising, promotion, pricing, product development, sales,
distribution, and operations.” The following are common types of market
positioning.

1. Customer Need Based

The positioning is done on the basis of identifying the needs of the customer and
keeping the attribute of the products in accordance with it.

2. Customer Perceptions Based

Here the company has to find a way to capture the imagination the target
customer. It is on based upon the perception of the customers. Like the target for
healthy food, organic food, homemade spices.

3. Brand Recognition based

The positioning is done on the basis of Promoting basic visual symbols and
information such that customers recognize the product out of the competitor
product.

4. Pricing

Targeting is done on the basis of the pricing sought by the customers. Pricing is a
primary form of competition. In many markets, the lowest price competitor with a
reasonable level of quality tends to win.

37
5. Quality- Often the only way to avoid intensive price competition is to offer
superior that your target customers strongly prefer.

6. Convenience- Customers gravitate towards products and services that make life
easier. This can include location, usability, and terms. For example, the
convenience of an e-commerce site with extensive product variety, low prices,
easy ordering, and free returns.

7. Customer Service- Being more friendly, diligent and responsive than the
competition.

Difference Between Segmentation, Targeting & positioning

Segmentation

According to Kotler and Armstrong “segmentation is dividing a market into

distinct groups of buyers who have distinct needs, characteristics, or behavior and
who might require separate products or marketing mixes”

“Market Segmentation refers to the process of creation of small groups

(segments) within a large market to bring together consumers who have similar
requirements, needs, and interests. The individuals in a particular segment
respond to similar market fluctuations and require identical products. In simpler
words, market segmentation can also be called as Grouping.”

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Targeting

According to Dr. Philip Kotler “ targeting is the science and art of exploring,
creating, and delivering value to satisfy the needs of a target market at a profit.
Marketing identifies unfulfilled needs and desires. It defines, measures and
quantifies the size of the identified market and the profit potential.Targeting is the
second stage and is done once the markets have been segmented.Organizations
with the help of various marketing plans and schemes target their products
amongst the various segments.”

Nokia offers handsets for almost all the segments. They understand their target
audience well and each of their handsets fulfills the needs and expectations of the
target market.

Tata Motors launched Tata Nano, especially for the lower income group.

Positioning

Positioning is the last stage in the Segmentation Targeting Positioning Cycle.

Kotler and Keller define brand positioning as an “act of designing the company's
offering and image to occupy a distinct place in the mind of the target market.”
The objective of positioning is to locate the brand into the minds of stakeholders;
customers and prospect in particular.

“Once the organization decides on its target market, it strives hard to create an
image of its product in the minds of the consumers. The marketers create a first
impression of the product in the minds of consumers through positioning.
Positioning helps organizations to create a perception of the products in the minds
of the target audience.”

Ray-Ban and Police Sunglasses cater to the premium segment while Vintage or
Fastrack sunglasses target the middle-income group. Ray-Ban sunglasses have no
takers amongst the lower income group.

Summary-

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 5Market segmentation is the way of dividing the markets and the customer in the
homogenous groups. It makes the customer and the marketer to target the product
in the eyes of the target customers. Targeting is paying attention to the selective
group and positioning consist of placing the product in the mind of the consumers
on the basis of different variables.

KeyWords- Segmentation, Targeting, Positioning, Difference between STP

Self Assessment question-

1. Dividing markets in to different strata is known as____________________.

2. Market could be divided on the basis of ____________________________

A. Demographic B. Psychographic c, Behavioral D. All of them

3. Positioning could be done on the basis of__________________

A. Price B. Attribute C Benefits Soughs D All of them

4. One Quality of Target market is –

A. It caters the need of the homogenous groups

B. It contains different customers

c. It is wide

D None of the above

5. Segmentation is the first step in dividing the markets T/F

Answers- 1- Segmentation, 2-D, 3-D, 4-A, 5-T

Review Questions

2. Discuss the Segmentation in detail.

3. What is Targeting? Discuss.
4. What is positioning? How it could it benefit the Marketer.
5. Discuss the difference between STP.
6. How segmentation can benefit the marketer and the consumers.

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Further Readings

1. C.N.Sontakkshi, Marketing Management, - Kalyani Publisher Kolkata

2. Kotler, P. and Keller, K.L. Marketing Management, 12th ed., Pearson,
2006, ISBN 0-13-
3. Ries, Al; Jack Trout (2000). Positioning: The Battle for Your Mind (20th-
anniversary ed.). McGraw-Hill. ISBN 0-07-135916-8.

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Objectives:
Learning objectives of this chapter are:
 Study about the various stages of Product life cycle and the marketing strategies to be
used in each of the stages
 Product classification based on various factors like on the basis of shopping habits,
durability and various others.
 Product line decisions like line stretching, product mix decisions
 Packaging and Labeling, their objectives and types of packaging done for various
products.
 New product development strategies, the process, objectives, significance, sources of the
ideas for new product development and the concept development
 Service marketing, definition, unique characteristics of services, and the marketing mix
(7P’s) of service marketing.

Introduction:
This chapter deals with the theory of product life cycle which was introduced to explain the
expected life cycle of a typical product from design to obsolescence, a period divided into the
phases of product introduction, product growth, maturity, and decline. The goal of managing a
product's life cycle is to maximize its value and profitability at each stage. Life cycle is primarily
associated with marketing theory. Further the concepts of “product classification” and product
line decisions are discussed where former consists of dividing products according to specific
characteristics so that they form a structured portfolio and latter is taking decisions for product
line which are closely related products manufactured by a single company. Packaging and
labeling is also discussed in this chapter as they not only protect and identify the product but also
play a vital role in developing the image and brand within the target market. New product
development discusses about the complete process of bringing a new product to the market.
Lastly, in this chapter we have discussed service marketing which is a broad category of
marketing strategies which is focused on selling anything that is not just a physical product.

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4.1 Product Life Cycle

Lots of products are brought by the consumers. Each and every product in the market has a life
cycle. Products established over a long period of time eventually become less popular, while in
contrast, the demand for new, innovative products increases quite rapidly after their launch. All
products do not have the same life cycle, some have longer life cycle than others.
Most companies develop a deep understandingof the different product life cycle stages since the
products they sell have a limited lifespan, thus majority of them invest heavily in new product
developmentin order to make sure that their businesses continue to grow.

4.1.1 Product Life Cycle Stages

The product life cycle has 4 very clearly defined stages, each having its own characteristics and
each having different meaning for business that are trying to manage the life cycle of their
particular products.
1. Introduction Stage – This stage of the cycle is usually the most expensive stage
for a company when launching a new product. The size of the market for the
product is small, which means sales are low, however gradually they will be
increasing. Also due to competition in the market companies invest a lot of money
in research and development, consumer testing, and the marketing as it is needed

43
 effectively launch the product which makes this stage as the most expensive stage
of the life cycle.
Examples of some products in introduction stage: self-driven vehicles, auto gear
cars, virtual reality experiences, 7D movies
2. Growth Stage – The growth stage is typically characterized by a strong growth in
sales and profits, since the company starts to benefit from economies of scale in
production, the profit margins, as well as the overall amount of profit increases.
However, there is also an increase in competition in this stage so companies have
to concentrate more on establishing market share, maintaining a loyal customer
base through various promotional activities and also look forward to
improvements and adding new features in the current product. The companies
also increase their distribution network to gain more market share.
Examples of some products in growth stage: Ultra HD 4Kcurved televisions, 4G
enabled smartphones
3. Maturity Stage – During the maturity stage, brand awareness is strong, the
product is established in the market, and sales continue to grow but at a declining
rate.The aim for the manufacturer is now to maintain the market share they have
built up in the growth stage. Due to increased competition, marketers offer
various sales promotions and give lucrative deals to retailers to get more shelf
space than the competitor. Extension of product life cycle, product modifications
or improvements, increasing the product mix are some of the ways which might
give companies a competitive advantage.
Examples of some products in maturity stage: HD flat screen televisions, electric
chimneys, Tablet PC’s
4. Decline Stage – Eventually, as the market becomes saturated for a product which
leads to decrease in sales, which is known as the decline stage. At this stage,
consumers generally shift to more innovative and better products. While decline
may be inevitable, the companies have three options in hand in this stage:firstly,
maintain the product, reduce the price and try to find new uses of the product,
secondly, reduce cost of the product by switching to less-expensive production
methods and focusing mainly on the loyal base of customers, and thirdly,
discontinue the product altogether or sell the product to the competitor.

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 Examples of some products in decline stage: digital cameras, typewriters, analog
televisions

Note: It has to be understood that not all products follow all the stages of the PLC. For example,
if the product is not accepted by the customers during the launch of the product (ie. Introduction
stage), the company might discontinue the product before moving to the growth stage.

4.1.2 Explanation of Product Life Cycle with a Case study

For a better understanding of the Product Life Cycle, let us take the case study to study the
product life cycle of Maggi, a brand of instant noodle by Nestle India Ltd. Maggi was launched
in India in the year 1982. The product was launched as Nestle wanted to explore the market of
instant noodles in Indian market which was untapped in the country. Over the years Maggi
launched several products under its brand name.
Introduction Stage:There was high failure rate for Maggi on its launch as it was a brand new
concept for Indian market. With no competitor and it created a new food market (instant noodles)
in Indian packaged food market. Nestle maintained to retain leadership and a huge market share
because of its first mover advantage.
Growth Stage: This stage saw entrance of competitors like Top Ramen in this segment, due to
which sale of Maggi started to decline. In order to increase sales, Nestle brought a change in the
noodles which was a big mistake as consumers did not like the taste. Within a short period of
time, Nestle came back with the old noodles which revived the sales. It also launched many
variants of the noodles, and also introduced new products like soups, etc.
Maturity Stage:More competitors entered the market like Yippy noodles which highlighted on its
feature of being non-sticky unlike Maggi. Many variants launched by the company but not liked
by the consumers. The consumers only preferred the flagship product (ie. Maggi Masala
Noodles). It also tried to introduce healthy products like Maggi Atta Noodles, Maggi Oats but
these variants also failed to attract customers.
Decline Stage:There was excessive lead content found in Maggi noodles due to which the sales
declined and Maggi lost a huge market share. Competitors took advantage and gained the market
share of Maggi and took over the loyal base of customers of Maggi. But soon Maggi came back
with justifying itself to be a safe product and tried to gain back its loyal base of customers.

45
4.1.3PLC & Marketing Strategy

46
4.2 The Classification of Products in Marketing

Product classifications help marketers focus their efforts after a deep understanding of
consumers’ buying behavior. Companies can use the buying habits of consumers to design their
marketing efforts for a clearly defined target audience. Consumer products are often classified as
convenience goods, shopping goods, specialty products or unsought goods. These classifications
are usually named as types of products, but companies need to focus on how the customers buy
these goods which is important as they classify products and develop their marketing campaigns.

47
1. Convenience Goods

The products which customers buy frequently and without much thought or planning are
classified as convenience goods. Soap, laundry detergents and toothpaste are common
examples of convenience goods. Consumers usually make a choice of the brand for these
products once and repeat that choice over and over again. Making convenience goods
available for impulse or emergency purchases is particularly an effective marketing
strategy for the companies. This type of marketing tactic can be found in the placement of
candy near the cash register of your grocery store or placement of scrubs, dusting cloths
near the cash counter for multi brand stores like Big Bazaar for impulse buys. Another
very popular tactic is to place umbrellas, boots or snow shovels near a store exit when
sudden weather changes call for them.
2. Shopping Goods

Buying decisions where detailed considerations of price, quality and value is done for the
products are classified as shopping goods. Customers put in quite an amount of time and
research into picking out a clothing piece, a car or appliances. Successful marketing of
the shopping goods can come from positioning the product as a better buy than the
competitors -- for example, presenting better value with higher quality for the price or
vice versa. Products which are classified as shopping goods rely on heavy advertising and
salespeople are trained to influence the consumer choices.
3. Specialty Products

Goods that lie in the specialty products classification are those that have very strong
brand identities, often leading to strong brand loyalty among consumers. Some examples
are smartphones, laptops, and the mostly high-end brands of cars and clothing. For the
same category of products the difference between shopping and specialty products have
to be understood, like used cars are classified as shopping goods, whereas a brand-new
Mercedes is classified as a specialty good. Buyers for specialty goods spend more time
seeking the product they want than on comparing brands to make a value decision.
Marketing of specialty goods is successful by promoting what the companies have to
offer and where customers can find it.

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 4. Unsought Goods

The products classified as unsought goods are those that consumers don’t put much
thought into and generally don’t have compelling impulse to buy. Consumers generally
buy these products when they need it. Examples include batteries or life insurance.
Consumers buy unsought goods when they have toalmost as an inconvenience rather than
the newest or latest product that they can’t wait to purchase. Marketing unsought goods is
likely to be effective with lots of advertising and salespeople promoting the idea of
unresolved need for the unsought products.

4.2.1 Bases of Product classification

There are different systems of product classificationin different parts of the world. The concept
of “product classification” consists of dividing products according to specific characteristics so
that marketers can form a structured portfolio to design specific marketing campaign for them.
Generally, manufacturers use an informal product classification system but there are also
many standardized methods of product classification devised by various industry organizations.
Some examples of such standardized methods of classification of products are the GS1 Global
Product Classification, the International (Nice) Classification of Goods and Services, North
American Product Classification System, etc. A very well-known system for classification of
products is the Harmonized Commodity Description and Coding System (HS) created by the
World Customs Organizations.

49
Another product classification is based on consumer and business products as shown if figure.
The consumer products are further divided based on preference for shopping habits or durability
and tangibility. The business products are mainly the industrial goods.

4.2.2Classification of products on the basis of shopping habits

Based on the first variable, the shopping habits, the products are classified into convenience
goods, shopping goods and unsought goods.
Every weekend, when a customer goes to the supermarket to buy the necessary items for the next
week, one probably buy detergents, soap, etc. Purchase of this kind of products becomes a habit
for the customer and customer does not think too much before buying are part of the convenience
goods category.Common examples are FMCG products.
Another example would be that before entering a store if it starts to rain or the weather changes
and the customer see some umbrellas when going to the cash machine, the customer tends to buy
one if he or she has come unprepared. This type of buying is also known as impulse buying.
Generally for convenience goods, once customers makes a choice for their preferred brand, then
stay loyal to that brand because it is convenient to keep repeating the choice over time. However,
customers easily switch from one brand to another for this type of products in case of non-
50
availability of a particular brand.Other examples of such convenience purchases include bread,
cold drinks, chewing gum, etc
The shopping goods are another category of products which when compared to convenience
goods, are not bought very frequently. A relevant example can be clothing, electronics, etc. This
category relies heavily on advertising, unique features of the product offered, price and
trained sales people who can influence customer’s choices.
For the unsought goods consumers don’t put much thought into purchasing them and generally
don’t have compelling impulse to buy them. An example in this category would be battery, life
insurance, etc

4.2.3Classification of products on the basis of durability and tangibility

Based on the second variable of durability and tangibility there are non-durable and durable
goods as well as services.
The non-durable category consists of those tangible goods that are low priced and purchased
frequently such as shampoos, deodorants, etc. Compared with these, the durable goods are also
tangible goods but are targeted for many uses therefore,for this category, more efficient personal
selling (ie. explanation of the various uses and features) is required as well as guarantee is to be
provided, resulting in higher margin. Relevant example can be the couches or chairs. The third
category, i.e services, is discussed in detail later in this chapter under service classification.

4.2.4Classification of products based on industrial consumption

The last category of products mentioned as the industrial goods classification are all those goods
which are exclusively used in the industry. This category involves product categories like the
materials (raw materials such as wood, cooper, aluminum) and parts (tiers, computer chips),
capital items such as installations and equipment (cranes, bulldozers), accessory equipment
(hand tools, computers, calculators), process materials (food preservatives), operating supplies
(papers, pencils, oil).

4.3 Product Line Decisions

Due to uncertainty in the market with respect to acceptance of the product by the customers,
companies launch a single product item or product line business. After successful branding and

51
getting a loyal customer base and with an increased availability of resources, companies plan to
expand their product line and/or introduce newer product in line with market opportunities
ordemandor to combat competitors’ moves. For example, like in the example discussed above of
Maggi noodles, Nestle India Limited first launched Maggi noodles. After gaining a substantial
market share, Nestle launched many variants of Maggi noodles like Atta Maggi, Oats Maggi and
also ventured into new product category like Maggi ketchup, Maggi masala, Maggi soup under
the same brand name.

Companies need to make decisions concerned with either adding of new variants in existing
product lines, removing products from the existing product line, or adding of new products or
product category. Another aspect is relate to upgrading of the existing technology either to
reduce the product costs or to improve qualityor line filling.
Product managers are required to closely examine the sales and profits of each item while
making the product line decisions. The findings will help them decide whether to build, maintain,
harvest, or divest different items in a particular product line Decisions.

4.3.1 Line Stretching:

Companies extend product lines over the years for different reasons such as excess
manufacturing capacity, new market opportunities, demand from sales force and resellers for a
richer product line to satisfy customers with varied preferences, and competitive compulsions.
Lengthening of lines raises costs in many areas and decisions have to be taken based on a careful
appraisal by the top management. The top management intervenes when the costs increases
beyond a certain limit and have to take strict decisions.
Downward Line Stretch: Companies sometimes introduce new products with an objective of
communicating an image of excellence and high quality to the customers and being available at
the upper end of the market. Subsequently, the company also stretch downwards due to
continuous attacks by the competitor which is done by introducing a product in the low-priced
category in response to the competitor, or companies may introduce a low-end product to fill up
a vacant slot which if not catered to timely might seem attractive to a new entrant in the market.
Another possibility occurs that market becomes more attractive at low-end due to faster growth
rate. For example, P&G introduced its Ariel Microsystem detergent at the high-end assuring high
quality. Since customer’s response was not encouraging and the company saw more
opportunities at a lower end and introduced cheaper green alternative like Ariel Super Soaker.

52
Even companies like Tanishqoffered its Mia collection to compete at much lower price point than
its high-end jewellery segment.

Downward stretch sometimes poses risks: For example, low-end competitors may attack by
moving into high-end, or companies popular as prestigious brand, the image might get diluted
with the introduction of a low-end model which affect its customer loyalty. Parker pen stretched
downward and introduced ballpoint pen at low-price. This affected the sales as Parker was
perceived as a high-class product. Another risk is that with the introduction of a lower-end item
might cannibalize (ie. eat away sales) the company’s high-end item.

Upward Stretch: In this situation, companies operating at low-end may opt to enter high-end
because of better opportunities as a result of faster market growth, or the need to create an image
of the company which is catering to all segments. For example, Videocon entered the market
with a twin-tub low-end washing machine. Subsequently, after the introduction of IFB automatic
washing machine and entry of other players the market expanded. The average household
income of middle class also showed positive trends. To take advantage of a market growing at
the higher-end, Videocon also introduced an automatic washing machine. MarutiUdyog
introduced its medium-priced models such as Maruti Zen, Maruti Esteem, WagonR, Alto, and
Swift after it had entered the market with its low-end Maruti 800 and Maruti Omni. Gradually it
went on to launch its Nexa showroom serving only the high-priced models for the premium
segment exclusively.

There are certain risks associated with upward line stretching. These may include prospective
customers’ perceptions that the new products in the high-end category may not produce high-
quality products, or competitors already established in the high-end market may retaliate by
introducing items in the low-end of the market. In other words, a dilution of the image already
established might happen. For example, long established footwear company Bata failed in its
attempt when it tried the upward stretch and finally introduced its Power line of economical
sports shoes.

Both-Way Stretch: Companies operating in the medium range of the market may decide to stretch
product line(s) both ways because of opportunities available in different market segments. The
main risk is that it may prompt some customers to trade down. However, companies would

53
always prefer to retain their customers by providing low-end alternatives to them rather than
losing them to products by the competitors in various price range.

4.3.2 Line Filling: A company may decide to lengthen the existing product line decisions(s) by
adding more items in the gaps available. The possible objectives leading to line filling may
include incremental profits, meeting dealers’ demands in response to the complaints that they are
losing sales because of missing items in the lines, excess capacity pressures, and trying to fill up
gaps to keep out competitors. For example, smartphone brands like Oppo, Redmi, Samsung have
models at various price-points right through high-end to low-end. Similarly, IBM, HP Compaq,
Acer, and Sony etc. have introduced laptop PCs at various feature-price points ranging from
high-end to low-end.

Line filling may sometimes lead to cannibalization, apart from confusing customers about the
products’ positioning unless the company succeeds in clearly differentiating each item
meaningfully in customers’ minds.

4.3.3 Product Mix

A product mix is the set of all products and items that a particular seller offers for sale. A
company’s product mix has certain width, length, depth and consistency.

The width of a product mix refers to how many different product lines the company carries. The
length of a product mix refers to the total number of items in a particular product line. The depth
of a product mix refers to how many variants are offered of each product in the line.
The consistency of the product mix refers to how closely related various product lines are for end
use, production requirements, distribution channels, or some other way. For example, a FMCG
company offers hair care, dental care, personal care products which is the width of the product
mix. In hair care products, company offers shampoo, conditioner, oil which is the product length.
The variants of the shampoo like dandruff free shampoo, shampoo for oily hair, shampoo for
long hair etc is the depth of the product mix.

Product line decisions: In offering a product line, companies normally develop a basic platform
and module that can be added to meet different customer requirements.

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Product line length: A product line is too short if profits can be increased by adding items; the
line is too long if profits can be increased by dropping items.

4.4 Packaging and Labeling

Packaging is an important aspect as it helps in giving an identity to the customer in marketing.
Example, the Parachute hair oil can be easily identified with its blue colored packaging.
Packaging is defined as the “science, art, and technology of enclosing or protecting products for
distribution, storage, sale, and use”. Packaging can also be described as a coordinated system of
preparing goods for transport, warehousing, logistics, sale, and end use. Packaging contains,
protects, preserves, transports, informs, and sells.
Package labeling is “any written, electronic, or graphic communications on the package or on a
separate but associated label”.

Packaging and package labeling has several objectives-

 Physical protection – The objects enclosed in the package may require protection from
many things, among others, like mechanical shock, vibration, electrostatic discharge,
compression, temperature, etc. It the packaging is not able to protect the product then the
efforts put in packaging will become futile.
 Barrier protection – A barrier from oxygen, water vapor, dust, etc., is often required.
Permeation is a critical factor when designing the packaging of a product. Some packages
contain Oxygen absorbers to help extend the shelf life of a product. Modified
atmospheres or controlled atmospheres are also maintained in some food packages. The
primary concern is to keep the contents clean, fresh, sterile and safe for the intended shelf
life of the product.
 Containmentor agglomeration – Small objects are typically grouped together in one
package for reasons of efficiency and it also reduces the cost of packaging for the
company. For example, a single box of 1000 pencils requires less physical handling and
is easier to pack and manage than 1000 single pencils. Liquids, powders, and granular
materials need containment.
 Information transmission – Packages and labels communicate methods of use, recycling,
or dispose of the package or product. With pharmaceuticals, food, medical, and chemical
products, some essential information are required by governments like the date of
manufacturing, expiry date, ingredients. Some packages and labels also are used for track

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 and trace purposes, company information, and contact information to give feedback or
suggestion or report any kind of issue with the product.
 Marketing – The packaging and labels are used by marketers to encourage potential
buyers to purchase the product as attractive packaging can easily attract the customeers.
Package graphic design and physical design have been important and constantly evolving
phenomenon since it effectively affects the sale of the product. Marketing
communications and graphic design are applied to the surface of the package and (in
many cases) the point of sale display.
 Security – Packaging plays an important role in reducing the security risks of shipment.
Since the customers have become more informed and knowledgeable, packages
nowadays are made with improved tamper resistance to deter tampering and also have
tamper-evident features to help indicate tampering. Packages can also be engineered to
help reduce the risks of package pilferage. Packages include authentication seals and use
security printing to help indicate that the package and contents are not counterfeit like ISI
marks on electronic devices. Packages also include various anti-theft devices, such as
RFID tags, or electronic article surveillance tags that can be activated or detected by
devices at exit points and require specialized tools to deactivate. Using packaging in this
way is a means of loss prevention.
 Convenience – Packages can have features that add convenience in distribution, handling,
stacking, display, sale, opening, reclosing, use, dispensing, reuse, recycling, and ease of
disposal.
 Portion control – Single serving or single dosage packaging has a precise amount of
contents to control usage. Bulk commodities (such as salt) are divided into packages that
are a more suitable size for individual households. It is also aids the control of inventory,
for example selling sealed one-liter-bottles of milk, rather than having people bring their
own bottles to fill themselves. For products like medicines, proper calibrations of
measuring aids are provided with the product to help in its usage.

4.4.1 Packaging type

Packaging may be looked upon as being of several different types. For example a transport
package or distribution package can be the shipping container used to ship, store, and handle the
product or inner packages. Some identify a consumer package as one which is directed toward a
consumer or household.

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Packaging may be described according to the type of product that is being packaged: medical
device packaging, bulk chemical packaging, over-the-counter drug packaging, retail food
packaging, military materiel packaging, pharmaceutical packaging, FMCG product packaging,
electric items like smartphones, etc.
It is convenient to categorize packages by layer or function: "primary", "secondary" and
“tertiary”
Primary packaging is the material that first envelops the product and holds it. This
usually is the smallest unit of distribution or use (generally for the consumer usage) and
is the package which is in direct contact with the contents.
Secondary packaging is outside the primary packaging, perhaps used to group primary
packages together. Example, small carton box of Cadburys’ chocolate containing smaller
sized chocolates (approximately 50 chocolates in one small carton box).
Tertiary packaging is used for bulk handling, warehouse storage and transport shipping.
The most common form is a Palletized unit load that packs tightly into containers.
These broad categories can be somewhat arbitrary. For example, depending on the use, a shrink
wrap can be primary packaging when applied directly to the product, secondary packaging when
combining smaller packages, and tertiary packaging on some distribution packs.
4.5 New Product Development Strategies
OVERVIEW
With advances in technology, globalization and intense competition, the creation of new
products has become a way of life, and companies are coming up with new products on a
regular basis. However, being a developing country, India is yet to face a situation of too
many products chasing a handful of customers. Moreover, the huge size of the Indian market
and the continuing economic development has opened up new avenues for launching new
products. Further we will discuss new product development process in detail.

4.5.1 New Products Launches

An analysis of new products development in the recent past shows that these products have
been either resulted due to technological development in the west or improvement over the
existing products in the context of their, style, substance or packing. In the recent past, new
product launches in India have shown that these launches can be broadly classified into three
categories.

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Marketing Innovations
Companies have been improving on existing products and have launched these as new
products in the market. For instance, maggi noodles,parachute hair oil in open mouthed
containers and pan parag etc. are slightly alternated version of existing or old products. In
this case, consumers did not have to change their consumption habits drastically to
accommodate the new products.

Product Improvement
The launch of 200cc two-wheelers, radical types, instamatic cameras are basically slight
innovations on the technology / design of existing products, although the products category
already exists in its primitive form. Such new products are generally targeted for a new class
of buyers. The success of these ventures depends upon the ability of the marketers to
convince the consumer about the improvement in the performance over traditional brands or
similar new products of the compeitors. For example, in the 100cc two wheelers vehicle
market, TVS Suzuki was the entrant and it had captured a sizeablemarket. Subsequently,
Hero Honda became the market leader in this category of motorcycle by virtue of better
performance and marketing techniques.

Technological Innovations
The Indian market experienced a rapid induction of products like personal computers,
photocopiers and color television. Generally these products might require some kind of
assembling of improved kits. Adaptation of such products requires substantial change in the
consumption pattern, yet these products have succeeded in view of their significant utility to
the user. Such venture require an initial awareness building and persuasion by explaining the
uses to install the product. Initial resistance to adapt to new technologies leads to delay in the
effective implementation of the technology, for example introduction of computers for
banking purposes saw resistance by the middle-aged and upper-aged group people. However,
a look at the track record of such new product shows that early entrants have reaped the
benefits of leadership generally by getting the first mover advantage. Subsequent entrants
have faced difficulty in establishing themselves.

4.5.2 The Technology / Market Matrix

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Another way to look at new products is through one of strategic planning’s most useful
analytical devices – an array of future options or alternative such as that shown in figure 1.1,
A firm has roughly four way to gain new business – see quadrants A, B, C and D in the figure
1.1

The easiest strategy is quadrant A – selling more of the product line to current customers.
This involves product improvement, smarter marketing and increasing marketshares. New
product management plays a minor role and the activity is often called market development,
not product development since there is more focus on increasing the customer base for
existing products by making or not making a few improvements on the product line.

Quadrant B and C involves capitalizing on the firm’s current strengths. If the strengths is
franchising with a particular customer group, quadrant B’s strategy is to develop more
productsand sell to them. Products may or may not have to be unique because the franchise
will help sell them to the customers.

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 Technological Newness

Present Or
New Product Growth Opportunities Improved New Technologies
Technologies

Market Newness Current Market A improved B Line Extension

products

New Markets C new use and D Diversification

market extensions

Figure 1.1

Quadrant C says the firm’s strength is technology – something the firm specializes in or does
especially well. Example are Coca-Cola’s bottling system, Hewlett Packard’s electronics
capabilities. Such firms try to develop new products by exploiting their technology and
putting their resources to new products.
Quadrant D, commonly called diversification, involves leaving both the firm’s customer base
and its technology base. This high-risk strategy should be used only under special
circumstances like cut-throat competition, new opportunities in the market. The new products
may come by acquisition rather than through internal product development.

4.5.3 Overview of New Product Development Process

New product development consists of the new ideas, their evaluation in terms of sales
potentials and profitability, production facilities, resource availability, designs, production
testing, demand of the product in the market and marketing of the products. The main task of
the product planning is to identify specific customer needs, expectations and changing
consumer behavior and purchase pattern and align company’s capabilities with the changing
market demands. In each of these stages, the management must decide upon:(a) whether to
move on to the next stage of product development, (b) to abandon the product, or (c) to seek
additional information.

4.5.4 Routes of New Product Development

1. Transfer of Technology

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 New Products have often been launched, based on new technology, acquired either from
the parent company or with foreign collaboration. Launch of the personal computer, LED
television is a move in this direction.

2. Diversification
Sometimes companies enter into new lines of business and cater to altogether new
markets for the first time. DCM’S entry into the LCV market fits into this category.
Similarly, ITC’s decision to enter into hotels, paperboards, edible oil, and tissue paper is
an example of the diversification techniques adopted by the companies.

4.5.5 Significance of New Product Development

Whatever may be nature of operation of a concern or in other words whatever strategy is
adopted by the company, product planning and development is necessary for survival and
growth in the long run. Every product has a life cycle and it may become obsolete after the
completion of its life cycle. Therefore, it is essential to develop new products, or new uses of
the same product and alter or improve the existing ones to meet the requirements and
changing requirement of customers. Tata Tea, Pan Parag, etc. fall under this type of new
product launches.One of the most common problems – planning problems relates to the
addition of new products to the existing product line. Addition of new products involves
generation of new product ideas, appraisal of various possibilities, economic analysis,
product development, product testing, test marketing and developing markets. However,
there is high risk involved in adding of new products to existing product line. Another
important problem of product planning is modification or elimination of existing products
when demand decreases. The need for continuous improvement of the product is more
because society’s needs are always changing and improved products must be introduced to
fulfill them. All products have certain deficiencies, as they are the result of great many
compromises. The perfect product can never be made as trends changes at a very rapid pace,
so a product that seems to be perfect today would become obsolete few years later, for
example walkmans. Research makes possible the reduction of these deficiencies and brings
about improved products.

4.5.6 New Product Development Process

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The developers must be conscious of the probabilistic nature of their endeavors that they put
into developing a new product. New product development endeavors are complex, strongly
dependent on diversified human resources and significantly affected by factors and events
beyond the developers control. Thus, the belief that the implementation of a mechanical
methodology can assure success is an illusion and at times a delusion.
The New Product Development process is often referred to as “The Stage-Gate innovation
process”, developed by Dr. Robert G. Cooper as a result of comprehensive research on reasons of
products success and failures.
When teams collaborate in developing new innovations, having the following eight ingredients
mixed into team’s new product development, it will ensure that it’s overall marketability will
happen relatively quick, and accurately – making everyone productive.
Step 1: Generation of Idea
Doing basic internal and external SWOT analysis, as well as understanding the current marketing
trends, one can distance themselves from the competition by generating ideologies which take
affordability, ROI, and widespread distribution costs into account.
Lean, mean and scalable are the key points to keep in mind. During the New Product
Development process, keep the system nimble and use flexible discretion over which activities
are executed. You may want to develop multiple versions of your road map scaled to suit
different types and risk levels of projects.
Step 2: Screening the Idea
This step simply suggests whether one should go with a particular idea or not.Specific criteria
should be set for ideas that should be continued or dropped. Stick to the agreed upon criteria so
poor projects can be sent back to the idea-hopper early on.
Because product development costs are being cut in areas “prescreening product ideas” means
taking competitors’ new innovations into account, how much market share they’re acquiring,
what benefits end consumers could expect etc.
Step 3: Testing the Concept
It is to be clearly understood that concept testing is done after idea screening and it is different
from test marketing which is done after product development.
Aside from patent research, design due diligence, and other legalities involved with new product
development; knowing where the marketing messages will work best is often the biggest part of
testing the concept. Will the consumer understand, need, or want the product or service or not?
Step 4: Business Analytics

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During the New Product Development process, build a system of metrics to monitor progress.
Include input metrics, such as average time in each stage, as well as output metrics that measure
the value of launched products, percentage of new product sales and other figures that provide
valuable feedback. It is important for an organization to be in agreement for these criteria and
metrics.
Even if an idea doesn’t turn into product, keep it in the hopper because it can prove to be a
valuable asset for future products and a basis for learning and growth.
Step 5: Beta / Marketability Tests
Arranging private tests groups, launching beta versions, and then forming test panels after the
product or products have been tested will provide you with valuable information allowing last
minute improvement suggestions. Not to mention it helps to generate a small amount of buzz.
WordPress is becoming synonymous with beta testing, and it’s effective; Thousands of
programmers contribute code, millions test it, and finally even more download the completed
end-product.
Step 6: Technical Aspect + Product Development
Provided the technical aspects can be perfected without alterations to post-beta products, heading
towards a smooth step 7 is imminent. According to Akrani, in this step, “The production
department will make plans to produce the product. The marketing department will make plans
to distribute the product. The finance department will provide the finance for introducing the new
product”.
As an example; In manufacturing, the process before sending technical specs to machinery
involves printing MSDS sheets, a requirement for retaining an ISO 9001 certification (the
organizational structure, procedures, processes and resources needed to implement quality
management.)
In internet jargon, honing the technicalities after beta testing involves final database preparations,
estimation of server resources, and planning automated logistics. Be sure to have your
technicalities in line when moving forward.
Step 7: Commercialization
At this stage, your new product developments would have gone mainstream, consumers would
be purchasing good or service, and technical support is consistently monitoring progress.
Keeping the distribution pipelines loaded with products is an integral part of this process too, as
one prefers not to give physical (or perpetual) shelf space to competition. Refreshing

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advertisements during this stage will keep your product’s name firmly planted into the minds of
those in the contemplation stages of purchase.
Step 8: Post Launch Review and Perfect Pricing
The process efficiency reviewed and look for areas of improvements wherever necessary and
possible. Most new products are introduced with introductory pricing, in which final prices are
nailed down after consumers have ‘gotten in’. In this final stage, you’ll gauge overall value
relevant to COGS (cost of goods sold), making sure internal costs aren’t overshadowing new
product profits. The companies continuously differentiate consumer needs as the products age,
forecast profits and improvement in delivery process whether physical, or digital, products are
being perpetuated.

4.5.7 Sources of New Product Ideas

Customers: Customers are sometimes able to discuss their requirements and offer ideasthat
will meet problems.
Competitors: Systematic comparison or bench marking with the competition may offergood
source of new product ideas.
Distributors: Suggestions from distributors and their problems in handling presentproducts
often thrown up new ideas.
Creative techniques: Brainstorming, focused interviews and technological forecastingenable
one to find out the latent capabilities of innovations.
External world: The external world, especially the use of their technology, offers agood
source of ideas for implementation in the home market.
Research and development: Create new product ideas through R&D.

From initial generation of ideas to full commercialization and well into the mature age of a
product, the developers should strive to control what is in their power to control and to
monitor what is beyond their control. No single facet of new product development canassure
success. Few facets are so detrimental that they are cannot be at least alleviated. Because of
the probabilistic nature of new product development, planning and assessments must
consider long-term repercussions.

Organizational Structure and Staffing

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Given a clear strategy it is necessary to build the organizational capability to meet the
challenge. At times this is simply appointing a committee. Other times it is creating an
entirely new team and physically separating it from the ongoing organization. Selecting the
right persons for such a team is difficult.

Concept Creation and Development

Once the enabling conditions of strategy and organization are identified, actual ideation can
begin. First, the team must focus on one area of interest or activity – specifically, a product
category, a group of team may study floppy discs and try to improve them. Another team may
try to find better ways to solve the problems of teachers. Or they may work to develop
improved gold balls or golf balls or golf clubs. They may focus on their design capability and
find new applications. Or they may focus on combinations of two or more of these areas.

CONCEPT DEVELOPMENT
Concept development involves asking question such as the following:
Need: Do customers have a strong perceived need for the benefit offered?
Trust: Do they believe that the new product has the benefits that is has claimed?
Communicability: Do customers easily understand the key benefits or the usability of the product
being offered?
Usage: Does it offer easy adoption?
Perceived Value: Do Customers see it as offering value at the price being considered? After
the working area is defined, concept generation begins, often at a hecticpace. Ideas flow fast
and in most cases rejection is equality fast. The team looks for the few fast and inmost cases
rejection is equally fast. The team looks for the few concepts the warrant concepts
development – the evolving of an original ideation attempt into a specific statement of need,
form and technology that can be evaluated.

Concept Evaluation
Often considered the heart of the new products process, the Evaluation State is long,
involved, and difficult. Evaluation actually begins when the strategist evaluates
theorganization’s abilities. And it continues long after a product is marketed since a product
often needs revision to remain competitive. Concept testing and other prescreening marketing
research prepare the team for the actual screening evaluation. This evaluation is a full,

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detailed analysis of the proposal. If the concept passes screening, technical development
begins. The technical work produces prototypes, which can then be evaluated and if all goes
well, the finished product can be prepared for use testing. Next, the team joins the new
product to its marketing plan for a test of them combined – called market testing. All of the
above data combine to permit a full financial analysis near the end of development.

Commercialization
Management’s decision that the new item is worth marketing either in a test market situation
or in a full – scale launch – is called the point of commercialization. Pilot processes are then
converted to full-scale manufacturing. Final design specifications are written. Marketing
strategy is finalized, including actual brand, packaging, service commitment etc. The team
gradually moves the company from tentative exploration of a concept into production and
marketing of a new product.

Review and Evaluation

After launch the entire project must be reviewed to see how successful the team was, those
problems they faced and what they can learn to facilitate the next project.

4.5.8 Analysis of New Product Launches In India

Empirical data suggests that in highly competitive markets such as in the US, the success rate
of new launches, depending on the strictness of definition of success, varies from a low of
two per cent to a high of 10 per cent. Markets in India are not as competitive as in the West
and therefore, the success rate of new launches is likely to be healthier. A study by Abraham
Koshy, revealed the following facts

On an overall basis, out of all the new launches, 53 per cent were successes and the
remaining 47 per cent were failures. This implies that, cater is paribus, even at an optimistic
level, new launches are likely to have a probability of success of around 50 per cent. In
reality, this proportion may even at an optimistic level, new launches in the country today,
given the level competitiveness in the market and professionalism of companies, is likely to
be less than 30 per cent! This is worse than even the odds when aunbiased coin tosses; no
company can invest huge resources for new launches if the probability of success is so

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unfavorable. The message from this insight is clear when the chances of survival are so low,
the only way to beat the odds is through a systematic and professional approach to managing
new launches. Otherwise it is 50 – 50.
The mortality rates of new brands indeed tend to the high; only about 36 per cent of new
products launched in the market with new brand names survived, the remaining 64 per cent
were failures. This is indeed more unfavorable than the overall situation presented in the
preceding paragraph it means that if you do not have a strong brand to leverage and
therefore, there is a need to build brand awareness and create brand preferences afresh, then
you should be even more thorough in your new launch efforts.

Life extensions and brand extensions were significantly more successful than the launch of
new brands. Thus, 71 per cent of new launches that were line extensions and 63 per cent of
brand extensions were successful in the market place. From one perspective, this suggests
that your chances of success in a new launch are far greater if you leverage. From a different
perspective, it also means that a levering strategy will not automatically guarantee you
success; the results show that nearly a third of line extensions as well as brand extensions
were failure. These in other words imply that even if you have strong brands, you need to be
systematic in configuring your offer in tune with market needs. Inappropriate leveraging of
brand names, leveraging weak brands and improper alignment of marketing mix elements are
certified formulae for failures. slated to go to test market within a year. Not surprisingly,
given CNV’s success, P & G is beginning to expand both the size and the scope of its CNV
venture.

Flexible Product Design for New Product Development

Product design is fast emerging as a force in the new ICE – age economy – for Internet
devices, Websites, office equipment and even household gadgets. All these technological
changes are reducing the product life cycle and bringing in more and more design innovation.
The market that has taken most of the beating is an electronic gadget, be it computers pocket
devices or phones. Trendier, more vibrant than the earlier versions, they are getting smaller
too. The shift towards sleek devices has come from the need for physical mobility, something
that is crucial with almost all these gadgets. Studies indicate that the shift has more to do with
analysis on human interaction with the devices. Product designs, today, focus on aspects of
functionality, unlike the time when designs were incorporated to have a product extension in

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the market. The best product example to describe this is the hands- free option that most third
generation cellular phones carry. Whether it is as simple as a pen or as complicated as a
keyboard that can be folded and carried in the pocket, design is changing the way products
are looked at. Another field that is witnessing a lot of design change is pharmaceutical and
medicine and medical equipment. With new technological improvements and design
innovations, one gets to know his or her blood pressure with a guage attached to one’s watch.
The watch gives out danger signals each time the pressure varies beyond the specified
standards. It is amazing how quickly designers are able to conceptualize designs that are then
incorporated into products. With designs playing such an important role in product
differentiation, design specifications will change beyond imagination – soon.

Product design, the painstaking process by which prototypes are developed and specifications
are created and implemented in actual production, is an integral part of any business strategy.
For the process to work effectively, every aspect of each activity related to the product and its
life cycle must be taken into account. These include supplier involvement, customer
involvement, manufacturability, cost, time, management, usability, marketability and
disassembly or recyclability. With such wide-ranging elements coming to play, a well –
thought out design can provide a company with the
Competitive edge needed for achieving greater profits and higher market share.
Organizations are always looking for better ways to design products. Intel, for example, has
emphasized design ethnography, which focuses on understanding the customer and the
culture in which a product is used. The World Wide Web is increasingly used for product
design activities such as finding information on parts and materials, sharing designs among
people, automating design sign-off and linking geographically dispersed designed teams.

4.7Services Marketing - Definition and Characteristics

Introduction

Service industry has increased many folds in recent times. The world economy nowadays is
increasingly characterized as a service economy. This is primarily due to the increasing
importance, awareness of the customers and share of the service sector in the economies of most
developed and developing countries. In fact, the growth of the service sector has long been
considered as indicative of a country’s economic progress.

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Economic history tells us that all developing nations have invariably experienced a shift from
agriculture to industry and then to the service sector as the main stay of the economy.
This shift has also brought about a change in the definition of goods and services themselves. No
longer are goods are considered separate from services. There is no longer a concept of pure
goods and pure services. Rather, services now increasingly represent an integral part of the
product and this interconnectedness of goods and services is represented on a goods-services
continuum.
Definition and characteristics of Services

The American Marketing Association defines services as - “Activities, benefits and satisfactions
which are offered for sale or are provided in connection with the sale of goods.”
The defining characteristics of a service are:
1. Intangibility: Services are intangible and do not have a physical existence. Hence
services cannot be touched, held, tasted or smelt. This is most defining feature of a
service which primarily differentiates it from a product. Also, it poses a unique challenge
to those engaged in service marketing as they need to attach tangible attributes to an
otherwise intangible offering. Also intangibility makes it difficult for service marketers to
justify the quality aspect of the service being provided.
2. Heterogeneity/Variability: Given the very nature of services, each service offering is
unique and cannot be exactly repeated even by the same service provider. While products
can be mass produced and be homogenous the same is not true of services. Example: All
McAlooTikki Burger at McDonald’s will taste the same as it is prepared using the same
methodology. However, the same is not true of the service rendered by the same counter
staff consecutively to two customers.
3. Perishability: Services cannot be stored, saved, returned or resold once they have been
used. Once rendered to a customer the service is completely consumed and cannot be
delivered to another customer. Example: A customer dissatisfied with the services of a
barber cannot return the service of the haircut that was rendered to him. At the most he
may decide not to visit that particular barber in the future. Another example could be the
a movie ticket bought for a particular date gets expired that same day and cannot be used
next day if one was not able to watch the movie on the date of the ticket.
4. Inseparability/Simultaneity of production and consumption: This refers to the fact
that services are generated and consumed within the same time frame. Eg: a doctor
delivers his service to a patient and the services are consumed by a customer
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 simultaneously unlike, say, a takeaway pizza which the customer may consume even after
a few hours of purchase. Moreover, it is very difficult to separate a service from the
service provider. Eg: the doctor is an integral part of the service of a treatment that he is
delivering to his patient.

Unique Characteristics
Some of the important characteristics of services are as follows: 1. Perishability 2. Fluctuating
Demand 3. Intangibility 4. Inseparability 5. Heterogeneity 6. Pricing of Services 7. Service
quality is not statistically measurable.

1. Perishability:

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.

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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.

4.7.1 Marketing strategies for service firms – 7Ps,

The first four elements in the services marketing mix are the same as those in the traditional
marketing mix. However, given the unique nature of services, the implications of these are
slightly different in case of services.
1. Product: In case of services, the ‘product’ is intangible, heterogeneous and perishable.
Moreover, its production and consumption are inseparable. Hence, there is scope for
customizing the offering as per customer requirements and the actual customer encounter
therefore assumes particular significance. However, too much customization would
compromise the standard delivery of the service and adversely affect its quality. Hence
particular care has to be taken in designing the service offering.
2. Pricing: Pricing of services is tougher than pricing of goods. While the latter can be
priced easily by taking into account the raw material costs, in case of services attendant
costs - such as labor and overhead costs - also need to be factored in. Thus a restaurant
not only has to charge for the cost of the food served but also has to calculate a price for
the ambience provided. The final price for the service is then arrived at by including a
mark-up for an adequate profit margin.
3. Place: Since service delivery is concurrent with its production and cannot be stored or
transported, the location of the service product assumes importance. Service providers
have to give special thought to where the service would be provided. Thus, a fine dine
restaurant is better located in a busy, upscale market as against on the outskirts of a city.

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 Similarly, a holiday resort is better situated in the countryside away from the rush and
noise of a city.
4. Promotion: Since a service offering can be easily replicated promotion becomes crucial
in differentiating a service offering in the mind of the consumer. Thus, service providers
offering identical services such as airlines or banks and insurance companies invest
heavily in advertising their services. This is crucial in attracting customers in a segment
where the services providers have nearly identical offerings.

We now look at the 3 new elements of the services marketing mix - people, process and physical
evidence - which are unique to the marketing of services because of its unique characteristics.
5. People: People are a defining factor in a service delivery process, since a service is
inseparable from the person providing it. Thus, a restaurant is known as much for its food
as for the service provided by its staff. The same is true of banks and department stores.
Consequently, customer service training for staff has become a top priority for many
organizations today. There can be incidences when the company providing services loses
out on its customers because of the employee interacting with the customer. So
employees attached with service industry have to be very careful about dealing with the
customer.
6. Process: The process of service delivery is crucial since it ensures that the same standard
of service is repeatedly delivered to the customers. Therefore, most companies have a
service blue print which provides the details of the service delivery process, often going
down to even defining the service script and the greeting phrases to be used by the
service staff.
7. Physical Evidence: Since services are intangible in nature most service providers strive
to incorporate certain tangible elements into their offering to enhance customer
experience. Thus, there are hair salons that have well designed waiting areas often with
magazines and plush sofas for patrons to read and relax while they await their turn.
Similarly, restaurants invest heavily in their interior design and decorations to offer a
tangible and unique experience to their guests.

Summary:
Products follow a life cycle which has four stages-Introduction, Growth, Maturity and Decline.
Not all products follow all the stages of life cycle. Some have longer life cycle than the others.

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The marketers have to follow different marketing strategy for products in different life cycle
stage depending upon which stage of life cycle the product falls into.
The products developed are classified into various forms-convenience, shopping, unsought and
specialty. Convenience are those which are bought on a regular basis, shopping products are
those which require comparison with other brands and thought is given by the customer,
specialty products are those where customer do lot of thinking process before buying the product
and unsought are those which are bought only when there is need by the customer. The products
can also be classified as industrial or consumer goods.
The companies have to work upon the product mix to cater to the demands of the customer or to
sustain it the changing market scenario. The promotion mix strategies also help companies in
marketing their products to the customers.
Also there are various steps involved in new product development process, since that is the most
crucial stage which if not implemented properly, the marketer will not be able to market the
product to the customers.
The service industry is a growing sector in recent times because of the changing life style and
changing behavior of the customers. Services are unique with their special characteristics –
intangibility, heterogeneity, simultaneous production and consumption and variability. With the
increase of service sector, concept of pure goods or pure services is completely changed.

Keywords: Brand, first-mover advantage, marketing strategy, laggards, innovators, durability,

product line, commercialization

Self-assessment Questions:
1. A strategy of product development can be used to extend a product lifecycle.
True / false
2. A differentiation strategy is used to compete in a niche market. True / False
3. Product modification cannot be used to extend the life cycle of a product. True/False
4. The product can be classified only as consumer or industrial good. True / False

Review Questions:
1. Explain all the stages of Product Life cycle with suitable examples.
2. What are steps involved in new product development?
3. Differentiate between products and services with suitable examples.

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 4. “Effective Packaging of a product helps in building the brand image of the product.”
Elaborate on the statement.

Further Reading:
 Kotler, P. & Keller, K. L. (2012). Marketing Management (14th ed.). Pearson.
 Kotler, P., Armstrong, G., Agnihotri, P. Y., &UlHaq, E. (2010). Principles of Marketing - A South
Asian Perspective.(13th ed.). Pearson.
 Ramaswamy, V.S., Namakumari, S. (2009). Marketing Management: Global Perspective-Indian
Context.(4th ed.). Macmillan Publishers India Limited.

UNIT IV

RETAILING – OVERVIEW

Objective

To discuss about the retailing

To discuss about the brand

To discuss about the various features of the brands

Introduction

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The unit tells about the retailing and the branding process. It details about the retail channel,
types of retail and the function they perform. The unit also tells about the brands and their
importance.

In the intricate universe of today, the customer is above all else and retailers are quicker on buyer
fulfillment. Thinking about the bustling ways of life of the present purchasers, the retailers
additionally give benefits separated from items.

4.1 Retailing possesses an essential place in the financial matters of any nation. It is the last
phase of appropriation of item or administration. It adds to nation's GDP as well as engages an
extensive number of individuals by giving business.

Retail Management begins with understanding the term 'Retail'.

What is Retail?

"Retailing incorporates all exercises engaged with pitching products or administrations to the last
buyers for individual, non-business use."

- Phillip Kotler

Any association that pitches the items for utilization to the clients for their own, family, or family
unit use is in the control of retailing.

Elements of a Retailor

Retailor gives the products that client needs, in an ideal shape, at a required time and place.

• A retailor does not move crude material. He moves completed products or

administrations in the frame that client needs.

• A retailer purchases a wide scope of items from various wholesalers and offers the best
items under one rooftop. Consequently, the retailor plays out the capacity of both purchasing and
moving.

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• A retailor keeps the items or administrations inside simple reach of the client by making
them accessible at suitable area.

Retail in Marketing Channels

With industrialization and globalization, the separation between the producer and the purchaser
has expanded. Commonly an item is made in one nation and sold in another. The dimensions of
mediators associated with the showcasing channel relies on the dimension of administration the
purchaser wants.

Type An and B: Retailers. For instance, Pantaloons, Walmart.

Type C: Service Providers. For instance, Eureka Forbes.

Grouping of Retailing Formats

The retailing configurations can be ordered into following sorts as appeared in the graph:

Possession Based Retailing

Give us a chance to see these retailers in detail:

• Independent Retailers: They claim and run a solitary shop, and decide their arrangements
freely. Their relatives can help in business and the responsibility for unit can be passed from one
age to straightaway. The greatest favorable position is they can assemble individual affinity with
customers very effectively.

For instance, independent basic need shops, flower specialists, stationery shops, book shops, and
so forth.

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• Chain Stores: When various outlets are under normal possession it is known as a chain of
stores. Chain stores offer and keep comparative stock. They are spread over urban communities
and districts. The preferred standpoint is, the stores can keep chosen stock as indicated by the
buyers' inclinations in a specific territory.

For instance, Westside Stores, Shopper's Stop, and so on.

• Franchises: These are stores that run business under a built up brand name or a specific
organization by an understanding among franchiser and a franchisee. They can be of two kinds:

o Business design. For instance, Pizza Hut.

o Product organize. For instance, Ice cream parlors of Amul.

• Consumers Co-Operative Stores: These are organizations claimed and kept running by
purchasers with the point of giving fundamentals at sensible expense when contrasted with
market rates. They must be contemporary with the present business and political arrangements to
keep the business solid.

For instance, Sahakar Bhandar from India, Puget Consumers Food Co-Operative from north US,
Dublin Food Co-Operative from Ireland.

Stock Based Retailing

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Give us a chance to see these in detail:

• Convenience Stores: They are little stores commonly situated close private premises, and
are kept open till late night or 24x7. These stores offer fundamental things, for example,
sustenance, eggs, drain, toiletries, and basic supplies. They target customers who need to make
speedy and simple buys.

For instance, mother and-pop stores, stores situated close petroleum siphons, 7-Eleven from US,
and so on.

• Supermarkets: These are huge stores with high volume and low overall revenue. They
target mass buyer and their moving zone ranges from 8000 sq.ft. to 10,000 sq.ft. They offer new
just as protected nourishment things, toiletries, foodstuffs and essential family things. Here, in
any event 70% moving space is saved for sustenance and basic supply items.

For instance, Food Bazar and Tesco.

• Hypermarkets: These are one-quit shopping retail locations with something like 3000
sq.ft. moving space, out of which 35% space is committed towards non-basic supply items. They
target shoppers over extensive territory, and frequently share space with eateries and
coffeehouses. The hypermarket can spread over the space of 80,000 sq.ft. to 250,000 sq.ft. They
offer exercise gear, cycles, CD/DVDs, Books, Electronics hardware, and so on.

For instance, Big Bazar from India, Walmart from US.

• Specialty Stores: These retail locations offer a specific sort of stock, for example, home
outfitting, residential electronic apparatuses, PCs and related items, and so forth. They
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additionally offer abnormal state administration and item data to shoppers. They possess
something like 8000 sq.ft. moving space.

For instance, Gautier Furniture and Croma from India, High and Mighty from UK.

• Departmental Stores: It is a staggered, multi-item retail location spread crosswise over

normal size of 20,000 sq.ft. to 50,000 sq.ft. It offers pitching space in the scope of 10% to 70%
for sustenance, attire, and family unit things.

For instance, The Bombay Store, Ebony, Meena Bazar from India, Marks and Spencer from UK.

• Factory Outlets: These are retail locations which move things that are created in
abundance amount at limited cost. These outlets are situated in the nearness of assembling units
or in relationship with other processing plant outlets.

For instance, Nike, Bombay Dyeing processing plant outlets.

• Catalogue Showrooms: These retail outlets keep indexes of the items for the shoppers to
allude. The shopper needs to choose the item, compose its productcode and handover it to the
agent who at that point figures out how to give the chose item from the organization's
distribution center.

For instance, Argos from UK. India's retail Hyper City has held hands with Argos to give an
inventory of more than 4000 best quality items in the classes of PCs, home outfitting, hardware,
cookware, wellness, and so forth.

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Non-Store Based (Direct) Retailing

It is the type of retailing where the retailer is in direct contact with the buyer at the working
environment or at home. The customer winds up mindful of the item by means of email or
telephone call from the retailer, or through a promotion on the TV, or Internet. The merchant has
a get-together to associate with individuals. At that point presents and exhibits the items, their
utility, and advantages. Purchasing and moving occurs at a similar place. The shopper itself is a
merchant.

For instance, Amway and Herbalife staggered showcasing.

Non-Store based retailing incorporates non-individual contact based retailing, for example,

• Mail Orders/Postal Orders/E-Shopping: The buyer can allude an item inventory on web
and place arrange for acquiring the item through email/post.

• Telemarketing: The items are publicized on the TV. The value, guarantee, merchandise
exchanges, purchasing plans, contact number and so on are depicted toward the finish of the Ad.
The shoppers can put request by calling the retailer's number.

The retailer at that point conveys the item at the shopper's doorstep. For instance, Asian Skyshop.

• Automated Vending/Kiosks: It is most advantageous to the customers and offers as often

as possible acquired things nonstop, for example, drinks, confections, chips, papers, and so on.

The achievement of non-store based retailing gigantically lies in opportune conveyance of

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fitting item.

Administration Based Retailing

These retailers give different administrations to the end shopper. The administrations incorporate
keeping money, vehicle rentals, power, and cooking gas holder conveyance.

The accomplishment of administration based retailer lies in administration quality,

customization, separation and convenience of administration, mechanical upgradation, and
shopper arranged estimating.

Item Retailing versus Service Retailing

Item Retailing Service Retailing

Quality and cost are prime factors in Timeliness and nature of individuals engaged with

The accomplishment of item retailing. benefit retailing are pivotal factors in the

victory.

Product retailer and consumer Service supplier and client relationship is

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relationship is set up just if the established directly from begin.

buyer much of the time visits the outlet.

Items can be put away in outlet whileServices are impalpable consequently can't be put away

retailing. while retailing.

Item retailing can be standardized. Service retailing can't be institutionalized as it

exceptionally relies on the human elements

included.

In item retailing, the responsibility for administration retailing, there is no exchange of

acquired item can be transferred ownership. The customer can just access the

from proprietor to co

Development of Retail

In spite of the fact that the bargain framework is considered as the most seasoned type of
retailing, the customary types of retailing, for example, neighborhood stores, principle road

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stores fairs still exist in the laid-back towns around the globe. Amid post-war a very long time in
the US and Europe, little retailers changed their shops into expansive sorted out stores, markets,
and shopping centers.

Retail development principally occurred in three phases:

• Conventional

• Established

• Emerging

2. RETAIL SECTORS

"We have discovered that in the event that we furnish individuals with an event and a reason to
shop, they will come."

- Kishore Biyani (CEO Future gathering)

The present retail showcase is fulfilling differing necessities of its purchasers. The purchaser's
needs go from as essential as nourishment and sustenance administrations to as lavish as
adornments things. In this part, we break down unmistakable retail divisions around the globe,
their structure, and the key players in that segment.

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The retail divisions are noticeably separated into Food, Clothing and Textiles, Consumer
Durables, Footwear, Jewelry, Books-Music-Gift Articles, and Fuel.

Sustenance

It includes sustenance and basic need, and nourishment administrations. The buyers purchase
bundled sustenance, prepared to-eat nourishment, and benefit nourishment administrations at
working environments. Visiting an eatery is no more an extravagance in the present occupied
life. The retail nourishment industry is developing quickly with the pace of ways of life around
the globe.

Scratch Players: Food and Grocery retail: Food Bazar by Pantaloons, More by Aditya Birla,
Haldiram's (India), Tesco (UK), Walmart (US), Carrefour (France).

In nourishment benefits retail: KFC, McDonalds, Pizza Hut, Barista, Café Coffee Day.

Dress and Textile

Like nourishment, attire is one of the essential needs of people. The material business
incorporates assembling of textures, for example, regular strands, engineered filaments, looms,
and different mixes. Dress is mostly observed as prepared to-wear array, for example, shirts, T-
shirts, pants, pants, women wear, kids wear, child garments and hosiery articles of clothing, for
example, socks, gloves, and inward wear.

Key Players: Arrow by Arvind Mills, Park Avenue by Raymond, Century Textiles (India), Lee,
Wrangler, Nautica, and Kipling, all by VF Corp (US), Bonito Deco Inc. (Taiwan).

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Customer Durables

The customer durables are relied upon to have long life after buy and are not obtained every now
and again. It includes retailing autos, cruisers, and home machines.

Key Players: Vijay Sales, Croma by Tata, Maruti-Suzuki (India), Honda Motors (US), Samsung
Electronics (Korea).

Footwear

Footwear is classified by the buyer's sexual orientation, crude material of item, and configuration
as appeared in the graph.

Key Players: Bata, Liberty Footwear, Metro Shoes Ltd. (India), Reebok International Ltd. (UK)

Gems

Two noteworthy portions in this retail part are valuable metal adornments and gemstones. Out of
the valuable metals, Indian adornments showcase frames 80% of gold gems, 15% of gemstone
studded gems, and 5% of other metal gems.

Provincial celebrations, extraordinary days, and traditions drive the interest in this retail area.

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Key Players: Tanishq by Tata, Gili by Gitanjali Group.

Books-Music-Gift Articles

This incorporates grouped books, motion picture or sound CDs, blessing articles, and gifts. These
retail shops are regularly found close local locations, vacationer places, and authentic landmarks.
Celebrations and festivities are principle driving elements available to be purchased in this
segment. These things are not exceptionally as often as possible acquired and buyer's enthusiastic
factor is connected to the items than its advantage.

Key players: Landmark book shop by Tata venture (India), Paperchase (UK).

Fuel

The most astounding five fuel devouring nations on the planet are the US, China, Japan, India,
and Russia. This retail includes exercises, for example, generation, refining, and dispersion. Fuel
organizations tie up with different retailers, for example, drug stores, nourishment and
sustenance benefit, blessing article retails to go into oil siphon accommodation business.

Key Players: Bharat Petroleum Corporation Ltd., Hindustan Petroleum Corporation Ltd., Oil and
Natural Gas Commission Ltd. (India), Siemens Oil and Gas Co. (US), Caltex Australia
Petroleum Pty Ltd. (Australia).

3. Seeing RETAIL CONSUMER

"Regardless of whether it is stocks or socks, I like purchasing quality stock when it is

discounted."

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- Warren Buffet (American business tycoon)

Seeing retail purchaser manages understanding their purchasing conduct in retail locations.
Understanding the purchaser is vital to realize who purchases what, when, and how. It is
additionally imperative to realize how to assess buyer's reaction to deals advancement. It is
extremely crucial to comprehend the shopper in the retail division for the survival and success of
the business.

Purchaser versus Customer

A purchaser is a client of an item or an administration though a client is a purchaser of the item

or administration. The client chooses what to purchase and executes the arrangement of buying
by paying and benefiting the item or administration. The customer utilizes the item or
administration for oneself.

For instance, the client of a pet sustenance isn't the customer of the equivalent. Additionally, if a
mother in a store is purchasing Nestlé Milo for her little child then she is a client and her child is
a buyer.

Distinguishing a Customer

It is now and then hard to comprehend who is really a leader while obtaining when a client enters
the shop going with another person. Along these lines everybody who enters the shop is
considered as a client. All things considered, it is important to distinguish structure and starting
point of the clients.

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• Composition of Customers: It incorporates clients of different sexual orientation, age,
monetary and instructive status, religion, nationality, and occupation.

• Origin of Customer: From where the client comes to shop, how much the client goes to
achieve the shop, and which kind of zone the client lives in.

• Objective of Customer: Shopping or Buying? Shopping is visiting the shops with the
expectation of searching for new items and could conceivably essentially incorporate purchasing.
Purchasing implies really acquiring an item. What does the client's non-verbal communication
portray?

Client's Buying Behavior Patterns

The necessities, tastes, and inclinations of the buyer for whom the items are acquired drives the
purchasing conduct of the client. The example of client's purchasing conduct can be sorted as:

Place of Purchase

Clients separate their place of procurement. Regardless of whether every one of the items they
need are accessible at a shop, they want to visit different shops and think about them as far as
costs. At the point when the clients have a decision of which shop to purchase from, their
devotion does not stay changeless to a solitary shop.

Investigation of client's place of procurement is essential for determination of area, keeping

suitable stock, and choosing a merchant in closeness.

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Item Purchased

It relates to what things and what number of units of things the client buys. The client buys an
item relying on the accompanying:

• Availability/Shortage of item

• Requirement/Choice of item

• Perishability of item

• Storage necessities

• Purchasing intensity of oneself

This class is critical for makers, merchants, and retailers. State, cleansers, toothbrushes, potatoes,
and apples are obtained by an expansive gathering of clients independent of their
socioeconomics however live lobsters, French grapes, avocadoes, heated beans, or meat are
acquired by just few clients with solid territorial division.

Essentially, the clients once in a while buy a solitary potato or a banana, similar to multiple
watermelons at once.

Time and Frequency of Purchase

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Retailers need to keep their working time tuned with client's accessibility. The season of
procurement is impacted by:

• Weather

• Season

• Location of client

The recurrence of procurement essentially relies upon the accompanying variables:

• Type of product

• Degree of need included

• Lifestyle of clients

• Festivals and traditions

• Influence of the individual going with the client.

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For instance, Indian family man from middle of the road salary gathering would buy a vehicle
not multiple occasions in his lifetime though an equivalent class client from US may get it all the
more as often as possible. A tennis player would purchase required stuff more every now and
again than an understudy learning tennis at a school.

Strategy for Purchase

It is the manner in which a client buys. It includes factors, for example,

• Is the client obtaining alone or is joined by somebody?

• How does the client pay: with money or by credit?

• What is the method of movement for the client?

Reaction to Sales Promotion Methods

The more the client visits a retail shop, the more (s)he is presented to the business advancement
techniques. The utilization of offers special gadgets expands the quantity of shop guests turned-
incautious purchasers.

The limited time techniques include:

• Displays: Consumer items are bundled and showed with style while in plain view. Shape,
size, shading, and beautification make claim.
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• Demonstrations: Consumers are affected by giving ceaselessly test item or by appearing
at utilize the item and its advantages.

• Special valuing: Unit's exceptional cost under some plan or amid happy season, coupons,
challenges, prizes, and so forth.

• Sales talks: It is verbal or printed ad directed by the sales rep in the shop.

A urban client, because of quick paced life would choose simple to-cook or prepared to-eat
sustenance over crude nourishment material when contrasted with rustic partner who returns
from laid way of life and independence in sustenance things developed on homestead.

It is discovered that the couples purchase a greater number of things in a solitary exchange than a
man or a lady shopping alone. Clients commit time for dissecting elective items or
administrations. Clients buy required and short-lived items rapidly yet with regards to putting
resources into shopper durables, (s)he attempts to accumulate more data about the item.

4.Components Influencing Retail Consumer

Understanding customer conduct is basic for a retail business so as to make and create successful
advertising methodologies and utilize four Ps of showcasing blend (Product, Price, Place, and
Promotion) to produce high income over the long haul.

Here are a few elements which straightforwardly impact buyer purchasing conduct:

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Economic situations/Recession

In a well-performing market, clients wouldn't fret spending on solace and extravagances.

Interestingly, amid a financial emergency they will in general organize their prerequisites from
fundamental needs to extravagances, in a specific order and spotlight just on what is significant
to endure.

Social Background

Each youngster (an eventual client) gains an identity, perspective, and frame of mind while
growing up by getting the hang of, watching, and shaping conclusions, likes, and abhorrences
from its encompassing. Purchasing conduct varies in individuals relying upon the different
societies they are raised in and distinctive socioeconomics they originate from.

Economic wellbeing

Economic wellbeing is only a place of the client in the general public. By and large, individuals
shape gatherings while collaborating with one another for the fulfillment of their social needs.

These gatherings effectsly affect the purchasing conduct. At the point when clients purchase with
relatives or companions, the odds are more that their decision is adjusted or one-sided under
friend weight to try something new. Ruling individuals in the family can modify the decision or
basic leadership of a compliant client.

Pay Levels

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Shoppers with high pay has high sense of pride and expects everything best with regards to
purchasing items or benefiting administrations. Buyers of this class don't by and large reconsider
on expense on the off chance that he is purchasing a decent quality item.

Then again, low-pay bunch purchasers would incline toward a minimal effort substitute of a
similar item. For instance, an expert gaining good looking pay bundle would not waver to
purchase an iPhone6 but rather a cab driver in India would purchase a minimal effort portable.

Individual Elements

Here is the manner by which the individual components change purchasing conduct:

Sex: Men and ladies contrast in their viewpoint, goal, and propensities while choosing what to
purchase and really getting it. Scientists at Wharton's Jay H. Pastry specialist Retail Initiative and
the Verde Group, considered people on shopping and found that men purchase, while ladies shop.
Ladies have an enthusiastic connection to shopping and for men it is a mission. Henceforth, men
shop quick and ladies remain in the shop for a more drawn out time. Men settle on quicker
choices, ladies like to search for better arrangements regardless of whether they have chosen
purchasing a specific item.

Shrewd retail administrators set their showcasing strategies with the end goal that the four Ps are
engaging both the sexual orientations.

• Age: People having a place with various ages or phases of life cycles settle on various
buy choices.

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• Occupation: The word related status changes the prerequisite of the items or
administrations. For instance, an individual filling in as a little scale agriculturist may not require
a costly electronic device but rather an IT expert would require it.

• Lifestyle: Customers of various ways of life pick distinctive items inside a similar
culture.

• Nature: Customers with high close to home mindfulness, certainty, versatility, and
predominance are excessively fussy and require some serious energy while choosing an item
however are fast in settling on a purchasing choice.

Mental Elements

Mental elements are a noteworthy impact in client's purchasing conduct. Some of them are:

• Motivation: Customers frequently settle on buy choices by specific thought processes, for
example, characteristic power of craving, thirst, need of security, to give some examples.

• Perception: Customers frame distinctive discernments about different items or

administrations of a similar class in the wake of utilizing it. Consequently view of client prompts
one-sided purchasing choices.

• Learning: Customers find out about new items or administration

Section 2: Inside Retail Management

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5. RETAIL MARKET SEGMENTATION and STRATEGIES

"Market division is the normal consequence of immense contrasts among individuals."

- Donald Norman (Director, The Design Lab)

Market division gives an unmistakable comprehension of the retail clients' prerequisites. With
the reasonable comprehension of market division, the retail administrators and advertising work
force can create techniques to contact the clients with explicit necessities and inclinations.

What is a Market Segmentation?

It is a procedure by which the clients are isolated into recognizable gatherings dependent on their
item or administration prerequisites. Market division is helpful for the advertising power of the
retail association to make a custom showcasing blend for explicit gatherings.

For instance, Venus is in the matter of retailing natural vegetables. She would want to contribute
her cash for promoting to contact working and wellbeing cognizant individuals who have month
to month salary of more than state, $10,000.

Market division can likewise be directed dependent on client's sexual orientation, age, religion,
nationality, culture, calling, and inclinations.

Kinds of Retail Markets

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There are two kinds of retails: Organized Retail and Unorganized Retail.

Sorted out Retail

Sorted out Retailing is a huge retail chain of shops keep running with modern innovation,
bookkeeping straightforwardness, inventory network the executives, and dispersion frameworks.

Chaotic Retail

Chaotic Retailing is only a little retail business led by a proprietor or a guardian of the shop with
no innovative and bookkeeping helps.

The accompanying table features the focuses that separate sorted out retail from sloppy retail:

Parameter Organized Retail Unorganized Retail

Size of Operations Large Small

Extent of Operations Nationwide, Worldwide Local

Employees Professional, talented, and trained Unprofessional

Number of Stores Chain of different stores Maximum 2-3 outlets of the

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same proprietor inside a city or

crosswise over close-by urban communities

Mood of Store Pleasant, attractive Lack of good feel

Scope of Products Wide scope of items across Only a scope of neighborhood

the nations products

Shopping experience Excellent, paramount, engaging Average

Bargaining Not conceivable. Pricing doesn't Possible. Pricing varies

rely upon relationship according to personal

affinity

Wellspring of merchandise Directly from Mostly from distributer

maker/maker

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Convenience of Very high. Client can walk Very less

picking products around and pick the item

Examples Walmart, HyperCity, Big Bazar Standalone shops

What is Retail Strategy?

It is an arrangement planned by a retail association on how the business means to offer its items
and administrations to the clients. There can be different procedures, for example, stock
methodology, claim mark system, advancement technique, to give some examples.

A retail procedure incorporates recognizable proof of the accompanying:

• The retailer's objective market.

• Retail design the retailer works out to fulfill the objective market's needs.

• Sustainable upper hand.

Procedures for Effective Market Segmentation

For successful market division, the accompanying two procedures are utilized by the advertising
power of the association:
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Fixation (Niche) Strategy

Under this system, an association centers following expansive offer of just a single or not many
segment(s). This methodology gives a differential favorable position over contending
associations which are not exclusively focusing on one fragment.

For instance, Toyota utilizes this system by offering different models under half and half vehicles
showcase.

Multi-portion Strategy

Under this system, an association concentrates its showcasing endeavors on at least two
unmistakable market fragments.

For instance, Johnson and Johnson offers human services items in the scope of infant care,
healthy skin, nutritionals, and vision care items divided for the clients everything being equal.

Techniques for Market Penetration

Market infiltration procedures incorporate the accompanying:

Value Penetration

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It is setting the cost of the item or administration lesser than that of the contender's item or
administration. Because of diminished cost, volume may build which can keep up a better than
average dimension of benefit.

Forceful Promotion

Expanding item or administration advancement on TV, print media, radio channels, messages,
pulls the clients and drives them to view and profit the item or administration. By offering limits,
different purchasing plans alongside the additional advantages can be valuable in high market
infiltration.

High Product Distribution

By dispersing the item or administration up to the dimension of immersion helps infiltration of

market betterly. For instance, Coca Cola has an extremely high appropriation and is accessible
wherever from little shops to hypermarkets.

Development Strategies

On the off chance that a retail association conducts SWOT Analysis (Strength, Weakness,
Opportunity, Threat) before thinking about development procedures, it is useful for dissecting the
association's present system and arranging the development technique.

Ansoff's Matrix

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An American arranging master named Igor Ansoff built up a key arranging apparatus that
presents four elective development methodologies. On one measurement there are items and on
the other is markets.

This grid gives techniques to showcase development. Here is the succession of these systems:

• Market Penetration: Company centers around moving the current items or administrations
in the current market for higher piece of the overall industry.

• Market Development: Company centers around pitching existing items or administrations

to new markets or market sections.

• Product Development: Company deals with advancements in existing items or growing

new items for the current market.

• Diversification: Company takes a shot at growing new items or administrations for new
markets.

6. RETAIL BUSINESS LOCATION

"Silicon valley is an attitude; not an area."

- Reid Hoffman (Co-Founder, LinkedIn)

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Prior to visiting a shopping center or a shop, the principal question that emerges in customers'
brain is, "How far do I need to walk/drive?"

In crowded urban areas, for example, Mumbai, Delhi, Tokyo, and Shanghai to give some
examples, customers confront surge hour congested driving conditions or sticks as a result of
street structure. In such cases, to get to a retail outlet to obtain everyday requirements turns out to
be extremely troublesome. It is critical for the shoppers to have retail locations close where they
remain.

Significance of Location in Retail Business

Retail location area is likewise a critical factor for the promoting group to consider while setting
retail showcasing technique. Here are a few reasons:

• Business area is an exceptional factor which the contenders can't impersonate.

Consequently, it can give a solid upper hand.

• Selection of retail store is a long haul choice.

• It requires long haul capital speculation.

• Good area is the key component for drawing in clients to the outlet.

• A very much found store makes supply and circulation less demanding.

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• Locations can change clients' purchasing propensities.

Exchange Area: Types of Business Locations

An exchange territory is a region where the retailer pulls in clients. It is likewise called
catchment region. There are three essential kinds of exchange zones:

Single Sites

These are without single standing shops/outlets, which are confined from different retailers. They
are situated on streets or close different retailers or strip malls. They are essentially utilized for
nourishment and non-sustenance retailing, or as accommodation shops. For instance, stands,
mother and-pop stores (like kirana stores in India).

Favorable circumstances: Less inhabitance cost, far from rivalry, less task limitations.

Burdens: No person on foot traffic, low perceivability.

Impromptu Shopping Areas

These are retail stores that have advanced after some time and have numerous outlets in
nearness. They are additionally partitioned as:

• Central business locale, for example, conventional "downtown" zones in urban

areas/towns.
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• Secondary business locale in bigger urban areas and primary road or high road areas.

• Neighborhood locale.

• Locations along a road or motorway (Strip areas).

Points of interest: High person on foot traffic amid business hours, high inhabitant traffic,
adjacent transport center point.

Impediments: High security required, risk of shoplifting, Poor stopping offices.

Arranged Shopping Areas

These are retail stores that are compositionally all around wanted to give various outlets ideally
under a topic. These destinations have vast, key retail mark stores (likewise called "stay stores")
and a couple of little stores to include decent variety and hoist clients' advantage. There are
different kinds of arranged malls, for example, neighborhood or strip/network focuses, shopping
centers, way of life focuses, strength focuses, outlet focuses.

Favorable circumstances: High perceivability, high client traffic, incredible stopping offices.

Hindrances: High security required, surprising expense of inhabitance.

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Elements Determining Retail Locations

The showcasing group must investigate retail store concerning the accompanying issues:

• Size of Catchment Area: Primary (with

Ventures to Choose the Right Retail Location

A retail organization needs to pursue the given strides for picking the correct area:

Stage 1 - Analyze the market as far as industry, item, and contenders - How old is the
organization around here? What number of comparable organizations are there in this area? What
the new area should give: new items or new market? How far is the contender's area from the
organization's planned area?

Stage 2 – Understand the Demographics – Literacy of clients in the forthcoming area, age
gatherings, calling, salary gatherings, ways of life, religion.

Stage 3 – Evaluate the Market Potential – Density of populace in the imminent area, expectation
of rivalry affect, estimation of item request, information of laws and controls in tasks.

Stage 4 - Identify Alternative Locations – Is there some other potential area? What is its expense
of inhabitance? Which elements can be endangered if there is a superior area around?

Stage 5 – Finalize the best and most reasonable Location for the retail outlet.

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Estimating the Success of Location

When the retail outlet is opened at the chose area, it is critical to monitor how plausible was the
decision of the area. To comprehend this, the retail organization does two kinds of area
appraisals:

Full scale Location Evaluation

It is directed at a national dimension when the organization needs to begin a retail business
universally. Under this evaluation, the accompanying advances are done:

• Detailed outside review of the market by investigating areas as full scale condition, for
example, political, social, monetary, and specialized.

• Most critical components are recorded, for example, client's dimension of spending, level
of rivalry, Personal Disposable Income (PDI), accessibility of areas, and so forth., and least
satisfactory dimension for each factor is characterized and the nations are positioned.

• The same variables recorded above are considered for nearby areas inside the chose
nations to locate a dependable area.

Smaller scale Location Evaluation

At this dimension of assessment, the area is surveyed against four factors to be specific:

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• Population: Desirable number of appropriate clients who will shop.

• Infrastructure: how much the store is available to the potential clients.

• Store Outlet: Identifying the dimension of contending stores (those which the decline
engaging quality of an area) just as reciprocal stores (which increment allure of an area).

• Cost: Costs of advancement and activity. High startup and progressing costs influence the
execution of retail business.

7. STOCK MANAGEMENT

"Publicizing pushes individuals toward products; marketing pushes merchandise toward

individuals."

- Morris Hite (American Advertising Expert)

In the savage challenge of retail, it is extremely pivotal to draw in new clients and to keep the
current clients glad by offering them great administration. Promoting helps in accomplishing
definitely something other than deals can accomplish.

Promoting is basic for a retail business. The retail administrators must utilize their abilities and
devices to streamline the marketing procedure as smooth as could be allowed.

What is Merchandising?
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Marketing is the grouping of different exercises performed by the retailer, for example,
arranging, purchasing, and offering of items to the clients for their utilization. It is an
indispensable piece of taking care of store activities and online business of retailing.

Promoting presents the items in retail condition to impact the client's purchasing choice.

Kinds of Merchandise

There are two fundamental kinds of stock:

Staple Merchandise Fashion Merchandise

It has unsurprising demand It has erratic interest

History of past deals is available Limited past deals history is accessible

It gives moderately exact forecasts It is hard to gauge deals

Elements Influencing Merchandising

The accompanying variables impact retail promoting:

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Size of the Retail Operations

This incorporates issues, for example, how vast is the retail business? What is the statistic extent
of business: neighborhood, national, or worldwide? What is the extent of activities: immediate,
online with multilingual choice, TV, telephonic? How extensive is the storage room? What is the
day by day number of clients the business is required to serve?

Shopping Options

The present clients have different shopping stations, for example, in-store, by means of
electronic media, for example, Internet, TV, or phone, index reference, to give some examples.
Each alternative requests distinctive arrangements of marketing undertakings and specialists.

Division of Portfolios

Contingent upon the extent of retail business, there are workforces for taking care of each phase
of marketing from arranging, purchasing, and moving the item or administration. The little
retailers may utilize a few people to execute all obligations of promoting.

Elements of a Merchandising Manager

A promoting supervisor is normally capable to:

• Lead the promoting group.

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• Ensure the promoting procedure is smooth and convenient.

• Coordinate and speak with providers.

• Participate in planning, defining and meeting deals objectives.

• Train the workers in the group.

Stock Planning

Stock arranging is a key procedure so as to expand benefits. This incorporates long haul
arranging of defining deals objectives, edge objectives, and stocks.

• Step 1 - Define stock approach. Get a 10,000 foot perspective of existing and potential
clients, retail location picture, stock quality and client benefit levels, showcasing approach, lastly
wanted deals and benefits.

• Step 2 – Collect verifiable data. Accumulate information about any convey forward stock,
complete stock buys and deals figures.

• Step 3 – Identify Components of Planning.

o Customers – Loyal clients, their purchasing conduct and spending power.

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o Departments – What offices are there in the retail business, their sub-classes?

o Vendors – Who conveyed the correct item on time? Who gave limits?

Merchant's general execution with the business.

o Current Trends – Finding pattern data from sources including exchange distributions, stock
providers, rivalry, different stores situated in remote terrains, and from claim involvement.

o Advertising – Pairing purchasing and publicizing exercises together, thought regarding

last fruitful advancements, spending assignment for Ads.

• Step 4 – Create a long haul plan. Break down verifiable data, anticipate gauge of offers,
and make a long haul plan, say for a half year.

Stock Buying

This action incorporates the accompanying:

• Step 1 - Collect Information: Gather data on purchaser request, current patterns, and
market necessities. It very well may be gotten inside from representatives, input/grievance boxes,
request slips, or remotely by merchants, providers, contenders, or by means of the Internet.

• Step 2 - Determine Merchandise Sources: Know who all can fulfill the

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request: sellers, providers, and makers. Think about them based on costs, auspiciousness,
ensure/guarantee contributions, installment terms, and execution and choosing the best plausible
resource(s).

• Step 3 - Evaluate the Merchandise Items: By experiencing test items, or the total parcel of
items, survey the items for quality.

• Step 4 - Negotiate the Prices: Realize a decent arrangement of procurement by arranging

costs for mass buy.

• Step 5 - Finalize the Purchase: Finalizing the item costs and purchasing the stock by
executing purchasing exchange.

• Step 6 - Handle and Store the Merchandise: Deciding on how the seller will convey the
items, looking at item pressing, obtaining the item, and stocking a piece of items in the storage
facility.

• Step 7 - Record the Buying Figures: Recording subtleties of exchanges, number of unit
bits of items as per item classifications and sub-classes, and separate unit costs in the stock
administration arrangement of the retail business.

Merchant Relations

Cheerful association with the seller can be an incredible resource for the business. A solid
affinity with merchants can prompt:

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• Purchasing items when required and paying the merchant for it later as per credit terms.

• Getting the most recent new items in the market at markdown costs or before different
retailers can move them.

• Having an incredible administration of conveyance, convenience of conveyance,

returning defective items with trade, and so on.

Stock Performance

The accompanying techniques are usually rehearsed to examine stock execution:

ABC Analysis

It is a procedure of stock characterization in which the all out stock is grouped into three
classifications:

• A – Extremely Important Items: Very significant stock control on request booking,

security, incite investigation, utilization design, stock parity, refill requests.

• B – Moderately Important Items: Average consideration is paid to them.

• C – Less vital Items: Inventory control is totally tranquil.

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This methodology of isolation offers significance to every thing in the stock. For instance, the
telescope retailing organization may have little piece of the pie however each telescope is a
costly thing in its stock. Along these lines, an organization can choose its speculation approach
specifically things.

Move Through Analysis

In this technique, the real deals and conjecture deals are contrasted and the thing that matters is
broke down with decide if to apply markdown or to put a new demand for extra stock to fulfill
current interest.

This technique is exceptionally useful in assessing style stock

Stock Management

Stock director, classification chief, and other staff handle the stock. It incorporates the
accompanying errands:

• Receiving items from the merchant.

• Recording internal passage of the items.

• Checking the items against quality standards laid by the retail organization and for
subtleties, for example, hues, sizes, and styles. If there should be an occurrence of vast stores,
this errand is robotized to a huge degree.

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• Separating and reporting the broken or harmed items for returning.

• Displaying the items fittingly to pick up clients' consideration. Substantial items are kept
at the lower level. Most gotten to items are kept at the eye-level and the less gotten to items are
kept at abnormal state of racks. On-the-fly-obtained items, for example, chocolates, confections,
and so on are set close installment counters.

Here are a few formulae utilized for stock control:

Stock Turnover Rate = Net Sales/Average Retail Value of Inventory

It is communicated in number of times and demonstrates how regularly the stock is sold and
supplanted amid a given timeframe.

Cost of Goods Sold/Average Value of Inventory at Cost

At the point when both of these proportion decays, there is a probability that stock is over the
top.

% Inventory Carrying Cost = (Inventory Carrying Cost/Net Sales) * 100

This measure has picked up significance because of ascend in stock conveying cost as a result of
high loan costs. This counteracts blockage of working capital.

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Net Margin Return on Inventory (GMROI) = Gross Margin/Average Value of Inventory

The GMROI thinks about the edge on deals on the first cost estimation of stock to yield an
arrival on stock venture.

Receipt Management

Overseeing receipt is only deciding the way in which the retailer will get the installment for the
sold items. The fundamental methods of receipt are:

• Cash

• Credit card

• Debit card

• Gift card

Huge stores have the office of paying by the modes recorded above yet little retailers by and
large incline toward tolerating money. The retailer pays card charges relying on the volume of
exchanges with the providers, makers, or makers.

The staff in charge of tolerating installment needs to unmistakably comprehend the method for
tolerating installment via cards and gathering the sum from the bank.

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Production network Management and Logistics

Production network Management (SCM) is the administration of materials, data, and accounts
while they move from producer to distributer to retailer to customer. It includes the exercises of
planning and incorporating these streams inside and out of a retail business.

Most supply chains work in coordinated effort if the providers and retail organizations are
managing each other for quite a while. Retailers rely on production network individuals as it
were. In the event that the retailers build up a solid association with inventory network
individuals, it very well may be gainful for providers to make consistent strategies, which are
hard to emulate.

Client Service

The best administration of a retail business chooses the client benefit arrangement. The whole
retail location staff is prepared for client benefit. Every business in the retail location guarantees
that the administration begins with grin and the communicating client is agreeable and has a
charming shopping knowledge.

The instantaneousness and pleasantness of the retail location staff, their insight about the item
and dialect, capacity to conquer difficulties, and speed at the charging counter; everything is
noted by the client. These viewpoints assemble a lot of client's discernment about the store.

Many retail locations train staff individuals to deal with the money counter. They have
additionally presented an idea of express charging where clients purchasing under 10 items can
charge quicker without remaining in the customary installment line.

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Amid celebrations and markdown periods, the pattern of shopping increments.

Client Conversion Ratio = (Number of Transactions/Customer Traffic) * 100

The outcome is the retailer's capacity to transform a potential client into a purchaser. It is
likewise called "stroll to purchase proportion". Low outcomes imply that limited time exercises
are not being changed over into deals and the general deals endeavors should be surveyed anew.

Review OF BRANDING

"An item is something made in the manufacturing plant; a brand is something the client
purchases. An item can be replicated or imitated by a contender; a brand is interesting. An item
can be obsolete; a fruitful brand is ageless."

– Stephen King (WPP Group, London)

Today, the ware commercial center is overwhelmed with different brands. The prerequisite of the
merchant's image to emerge among other parallel brands is essential. Henceforth, there is a
savage challenge among the venders to make their items or administrations emerge in the market,
in this way winning new shoppers and holding the current ones. On occasion, it even prompts
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redirecting the customers following different brands to the vender's image. To stay focused in the
commercial center, solid brand the executives is required.

Brand Management starts with understanding the term 'mark'.

What is a Brand?

Brand might be characterized from the brand proprietor's point of view or the customer's
viewpoint.

There are different famous meanings of a brand:

• "A name, term, structure, image, or whatever other component that distinguishes one
vender's great or administration as unmistakable from those of different merchants. The lawful
term for brand is trademark. A brand may recognize one thing, a group of things, or all things of
that vender. Whenever utilized for the firm all in all, the favored term is exchange name." -
American Marketing Association

• "A sort of item fabricated by a specific organization under a specific name." - Oxford
English word reference

• "A name, term, sign, image, plan, or a mix of these used to recognize the merchandise or
administrations of one dealer or gathering of merchants and to separate them from those of
competitors."– An item arranged definition

• "The guarantee of the groups of properties that somebody purchases and give fulfillment

. . ." – A buyer situated definition

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The principal reason for marking is separation. A brand is a methods for separating the dealer's
item from other contending items.

2 . Brand Management

Brand has the accompanying qualities:

Substantial qualities: Price, physical item, bundling, and so on.

Immaterial qualities: Customer's involvement with the brand, mark position, and brand picture.

Targets of a Brand

Here are some vital targets of a brand:

• To set up a character for the item or a gathering of items.

• To ensure the item or administration lawfully for its one of a kind highlights.

• To obtain put for the item in purchasers' psyches for high and predictable quality.

• To induce the buyer to purchase the item by promising to serve their necessities
exceptionally.

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• To make and send the message of solid dependable business among shoppers.

What is Brand Management?

Brand the board is a specialty of making a brand and looking after it. It is only building up a
guarantee to the shopper, emerging that guarantee, and keeping up the equivalent for an item, a
gathering of items, or administrations.

Brand the executives deals with the unmistakable and impalpable attributes of a brand. An
equipped Brand Management incorporates building brand personality, propelling the brand, and
keeping up the brand position in the market. Brand the board constructs and keeps up the
corporate picture of a business.

3.History of Branding

The idea of marking exists since roughly hundred years.

Brand Essence

It is a solitary most convincing thing about a brand that separates it from the contending brands.
The brand embodiment fills in as a measurement to assess the dealer's promoting systems. The
most critical brand embodiments emerge from customers' needs. Brand quintessence can be
portrayed in only a couple of words.

For instance, Volvo: Safe travel. Disney: Fun family diversion.

There are seven contributing components of brand pith:

• Authenticity: If the brand makes a guarantee and neglects to keep, at that point it is
rejected. The purchasers anticipate that the dealers should be certified and honest.

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• Consistency: The embodiment of a brand is lost in the event that it isn't steady in giving
what it guaranteed to the customer. Likewise, a brand should utilize its logo reliably after some
time.

• Durability: The brand embodiment stays same after some time. Regardless of whether
bundling and logos change, the substance does not change.

• Experience: It is the purchasers involvement with the brand.

• Uniqueness: It is the means by which distinctive a brand is from its rivals.

• Relevance: It is the pertinence of a brand to the shopper.

• Single mindedness: It is adhering to just a single thing about the brand which keeps the
brand centered.

4.Components of a Brand

There are eight basic components of a brand as given beneath:

• Brand Name: This is the thing that the general population get the opportunity to see all
over. It must be as basic and critical as could reasonably be expected, important, simple to
articulate, and exceptional.

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• Logo: This can be anything from a bit of content to the dynamic structures. It might be
completely irrelevant to the corporate exercises. It must be significant to the item or benefit,
notable, and alluring.

• Tone: This is the way the merchant speaks with the shopper. It very well may be
proficient, benevolent, or formal. It constructs customer's discernment about the brand.

• Jingle: It must be lovely to hear and murmur, pertinent to the item, simple to recall, and
straightforward over a substantial age gathering to interface purchaser with the brand.

• Slogan: It abridges by and large offer. It ought to be short, simple to recollect, and
infectious. For instance, KFC's motto is "Finger Lickin' Good" and Britannia's is "Eat Healthy,
Think Better".

• Packaging: It should be snappy and promoting, attracting individuals to see the item
inside. Likewise, it should be smaller, yet appealing.

• Universal Resource Locator (URL): It shapes the area name on the web. A vender can
enroll every forthcoming variety of brand name URLs or can purchase the current URL of a
business.

• Characters/Mascots: It is an extraordinary image, either still, energized, or genuine

element, for example, a creature or a human character. For instance, Vodafone's Zoozoo
characters are played in its different commercials by people wearing unique white body suits.

Summary-

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The retailing is the process of providing the bulk in the desired quantity, at the ease of the
consumers. Retails help them to provide the desired products in the desired quantity. Brands
provide a identity to the products and creates a differentiation from the other products.

Key words-

Retail, retailing, Brands, Types of retails, Function of retails , Logo, Image

Self assessment

1. Client separate their place of procurement. T/F

2. The class is critical for merchants and retailers . T/F
3. Time and frequency of purchase is essential parameter in retail. T/F
4. A sort of item fabricated by a specific organisation under a specific name is called......
5. An equipped brand management incorporates building brand personality. T/F
6. The embodiment of brand is lost in event that it is’nt steady in giving guaranteed to the
customer T/F

Review Questions

1. Write a short note on history of retaining.

2. What are the prime areas & concerns regarding retail sector.
3. What is the difference between purchaser verses customer?

Further Reading

 Aaker, D and Joachimsthaler, E (2000) Brand leadership, The Free Press

 Assael, H. (1992) Consumer Behaviour and Marketing Action, 4th Edition, USA: PWS-
Kent

 Hoyer, W.D. and MacInnis, D.J. (2001) Consumer Behaviour, 2nd Edition, USA:
Houghton Mifflin Company

 Baker, M. (2000) Marketing Management and Strategy, 3rd edition, Macmillan Business.

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 Blythe, J. (2001) Essentials of Marketing, 2nd edition, Prentice Hall

 Booms, B.H. and Bitner, M.J. (1981), Marketing strategies and organisation structures for
service firms, in Marketing of Services, J. Donnelly and W.R. George (eds), American
Marketing Association

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Unit V:

Objectives:

Learning objectives from this chapter are:

 Pricing strategies
 Pricing methods

Introduction:

This chapter deals with pricing which is a significant factor for financial growth of any company.
Organizations develop numerous pricing strategies to market their products in order to attract the
consumers. Pricing strategy in marketing is the search of identifying the best price for a product.
Also discussed are numerous pricing techniques which are utilized in business field such as cost-
based pricing, which is based on the costs incurred to develop the product, and competitive
pricing, which involves basing prices on those charged by competitors

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5.1 Pricing Strategies

The only time when price setting is not a problem is when you are a “price-taker” and have to set
prices at the going rate, or else sell nothing at all. This normally only occurs under near-perfect
market conditions, where products are almost identical. More usually, pricing decisions are
among the most difficult that a business has to make since there a lot of issues which can come
up when deciding on the pricing of the various products and services.

In considering these decisions it is important to distinguish between pricing strategy and tactics.
Strategy is concerned with setting prices for the first time, either for a new product or for an
existing product in a new market; tactics are about changing prices according to changing market
conditions. Changes can be either self-initiated (to improve profitability or as a means of
promotion) or in response to outside change (i.e. in costs or the prices of a competitor).
Pricing strategy should be an integral part of the market- positioning decision, which in turn
depends, to a great extent, on your overall business development strategy and marketing plans.
Companies usually do not set a single price, but rather a pricing structure that reflects variations
in geographical demand’ and costs, market-segment requirements, purchase timing, order levels,
delivery frequency, guarantees, service contracts, and other factors As a result of discounts,
allowances, and promotional support, a company rarely realizes the same profit from each unit of
a product that it sells. Here we will examine several price-adaptation strategies: geographical
pricing, price discounts and allowances, promotional pricing, discriminatory pricing, and
product-mix pricing.

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5.1 Types of pricing Strategy

1. Geographical pricing (Cash. Counter trade. Barter)

Geographical pricing involves the company in deciding how to price its products to
different customers in different geographical regions since buying behavior is different
for customers in different regions. For example, should the company charge higher prices
to distant customers to cover the higher shipping costs or a lower price to win additional
business? Another issue is how to get paid. This issue is critical when buyers lack
sufficient hard currency to pay for their purchases. Many buyers want to offer other items
in payment, a practice known as counter trade.
Barter – The direct exchange of goods, with no money and no third party involved. This
is most primitive form that was followed for trade.
Compensation deal – The seller receives some percentage of the payment in cash and the
rest in products. A British aircraft manufacturer sold planes to Brazil for 70 percent cash
and the rest in coffee.
Buyback arrangement – The seller sells a plant, equipment, or technology to another
country and agrees to accept as partial payment products manufactured with the supplied
equipment. A US. Chemical company built a plant for an Indian company and accepted
partial payment in cash and the remainder in chemicals manufactured at the plant.
Offset – The seller receives full payment in cash but agrees to spend a substantial amount
of the money in that country within a stated time period. For example, PepsiCo sells its
cola syrup to Russia for rubles and agrees to buy Russian vodka at a certain rate for sale
in the United States.
2. Price discounts and allowances

The idea of offering discounts by the companies can be a useful tactic in response to
aggressive competition by a competitor. However, discounting can be dangerous unless
carefully controlled and conceived as part of your overall marketing strategy.
Discounting is common in many industries – in some it is so endemic as to render normal
price lists practically meaningless. Discounting can sometimes lead to dilution of the
image of the company, especially if it is a premium brand.
This is not to say that there is anything particularly wrong with price discounting
provided that you are getting something specific that you want in return. The trouble is
that, all too often, companies get themselves embroiled in a complex structure of cash,
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quantity and other discounts, whilst getting absolutely nothing in return except a lower
profit margin. Let us look briefly at the main types of discounts common today
Cash and settlement discounts – These are intended to bring payments in faster. However,
since such discounts need to be at least 25% per month to have any real effect, this means
paying your customer an annual rate of interest of 30% just to get in money which is due
to you anyway. What is more, customers frequently take all the discounts on offer and
still do not pay promptly, so that you lose both ways. Much better, we believe, is either to
eliminate these discounts altogether and introduce an efficient credit control system, or
change your terms of business so that you can impose a surcharge on overdue accounts
instead. Whilst you may lose some business by doing this, these will probably be the
worst payers anyway. If some customers will not pay you for months you are probably
better off trying to win others who will.
Quantity discounts – The trouble with these is that, when formalized on a published price
list, they become an established part of your pricing structure and as a result their impact
can be lost. If you are not very careful, although it may have helped the company win the
business to start with, in the long run the only effect it has is to spoil the profit margin. As
a general rule, only publish the very minimum of quantity discounts – your very largest
customers will probably try to negotiate something extra anyway. Also keep quantity
discounts small, so that you hold something in reserve for when your customers do
something extra for you, such as offering you sole supply, or as part of a special
promotion.
Promotional discounts – These are the best kind of discounts because they enable you to
retain the power to be flexible. There may be times when you want to give an
extra boost to sales – to shift an old product before launching an updated one for
example. At times like these special offers or promotional discounts or end of season sale
especially for apparels can be useful. But try to think of unusual offers – a larger pack
size for the same price or five items for the price of four can often stimulate more interest
than a straight percentage discount. They also make sure that the end user gets at least
some of the benefit, which doesn’t always happen with other types of discounts. Two
other points to remember are
Make sure you retain control over your special promotions, with a specific objective, a
beginning and an end point. Be sure to terminate them once they have outlived their
usefulness.

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 Ensure that your offers are linked to sales and not simply to orders. Otherwise you may
find that orders to you are up for a while, only to be followed by a barren period whilst
your customer supplies the end user from his accumulated stocks.
Clearly the role of discounts will vary from one type of business to another and not all of
the comments above will apply to you. In part your ability to minimize discounts, or
eliminate them altogether, will depend on the non-price benefits of your product. But,
whatever business you are in, you should always ask yourself what your discounts are
supposed to achieve, whether they are effective, and how long they are expected to last.
In general, keep standard discounts low to retain maximum flexibility and ensure that
they are consistent with your overall marketing and pricing strategy.
3. Promotional Pricing strategies

Companies can use several pricing techniques to stimulate early purchase:

Loss-leader pricing – Supermarkets and department stores often drop the price on well
Known brands to stimulate additional store traffic. This pays if the revenue on the additional
sales compensates for the lower margins on the) boss-leader items. Manufacturers of loss-
leader brands typically object because this practice can dilute the brand image and bring
complaints from retailers who charge the list price. Manufacturers have tried to restrain
intermediaries from loss leader pricing through lobbying for retail-price -maintenance laws,
but these laws have been revoked.
Special-event pricing – Sellers will establish special prices in certain seasons to draw in more
customers
Cash rebates – Auto companies and other consumer-goods companies offer cash rebates to
encourage purchase of the manufacturers’ products within a specified time period. Rebates
can help clear inventories without cutting the stated list price.
Low-interest financing – Instead of cutting its price, the company can offer customers low-
interest financing. Automakers have even announced no-interest financing to attract the
customers.
4. Penetration Pricing
A penetration pricing strategy is intended to grab market share by entering the market
with a low price relative to the competition to attract buyers. The main purpose is that the
business will be able to raise awareness and get people to try the product. This technique
is a simple strategy for implementation because there are no sophisticated calculations
and it leads to price peace.
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 There is a difference between native and sophisticated going-rate pricing. Native means
that the price is at the same level as that of competitors without taking into consideration
costs and demand. Sophisticated going-rate pricing sets the price in a defined section in
which the company consider certain degree conditions of demand and costs.
Penetration pricing needs thorough planning as it can result in fast diffusion and
adoption. This strategy develops cost controls and cost reduction pressure from the
beginning which results in good efficiency. Other benefits of this strategy is that it can
produce high stock turnover through the distribution channel. Buy major limitation is that
it establishes long term price expectations for the product and image to the brand and
company. This makes difficult to increase price. Price penetration is suitable in conditions
where product demand is high price elastic, substantial economies of scales are available,
product is suitable for mass market.

5. Premium Pricing
Premium pricing strategy sets a price higher than the competitors. This strategy can be
successfully used when there is something exclusive about the product or when the
product has first mover advantage and the business has a dissimilar competitive
advantage. Premium pricing can be suitable for companies which are new to the market
and maximize revenue at initial stages of the product life cycle.

6. Skim Pricing
Skim pricing is a procedure that companies adopt in launching new product. It is to find
the best price point for a product, usually exceptional items with unidentified consumer
demand. The price skimming strategy comprises of the company setting the primary
product price high to rapidly cover embedded costs and then begin to gradually reduce
the price to being the product to large market. The main objective of this strategy is to
maximize potential profits until the optimum price is reached. The major benefits of this
strategy are high profit margin, cost recovery, dealer's profit and quality image. Price
skimming method has limitations such as there is continual competitive pressure and cost
inefficiency.

5.2 Pricing Methods

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There are numerous pricing techniques which are utilized in business field such as cost-based
pricing, which is based on the costs incurred to develop the product, and competitive pricing,
which involves basing prices on those charged by competitors.
Cost-Based Pricing is most elementary pricing methods. The company adds a certain return to
the unit costs. A cost-based pricing approach may create hidden profits. Target-return pricing
establishes the price according to a target-return on investment. Because the demand volume
cannot be determined with absolute correctness, companies must recognize when they are at
break-even, which is when the companies make no profit or loss.
Value-Based Pricing differentiates itself from the methods of how a customer sees the value of a
product or service. This approach focuses on the value seen by the customer instead of the cost
incurred by the seller. Because the perceived value can vary over time, adjustments to and re-
evaluations of the perceived value should be intermittently conducted. Value pricing inspires the
customer to see that the price charged for the product or service is lower than the perceived
quality. Value pricing can be high-low pricing, in which the store uses normal prices but offers
regular promotions for the products.

Difference between Cost based and value based pricing

Summary:
Price is a significant element in the marketing mix. In marketing, price has its own place which
determines a customer’s payment to acquire a product. Pricing strategy is beneficial in terms of
diverse purchasing behavior of various customers. Also, high degree of demand and uncertainty

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create more revenue. On the other hand, rigidity of production boosts the organization to play
with prices. The effectiveness and relevance of different pricing strategies such as penetration
strategy and price differentiation strategy can be determined by its outcome in terms of sales and
customer satisfaction. Organizations can apply any of the strategies to achieve their pricing
objective.
Effective pricing strategy according to the product being offered and the already established
image of the company, helps in maintaining the customer base and the image of the company.

Keywords: price discounts, promotional discounts, sales promotion, price-taker, perfect market

Self-assessment questions:
1. Value pricing means offering consumers brand name goods and services at regular prices.
True / False
2. Both revenues and costs need to be taken into account in selecting pricing strategies.
True/False
3. Penetration pricing is usually a safe option in new markets. True/False
4. A reduction in price in order to increase business is called a price leader. True/False

Review Questions:

1. What are the different pricing strategy?

2. How pricing strategy can help in the growth or decline of the company image?
3. Describe the various discount schemes with suitable example.

Further Reading:

 C.N.Sontakkshi, Marketing Management, - Kalyani Publisher Kolkata

 Kotler, P. and Keller, K.L. Marketing Management, 12th ed., Pearson, 2006, ISBN 0-13-
 Ries, Al; Jack Trout (2000). Positioning: The Battle for Your Mind (20th-anniversary
ed.). McGraw-Hill. ISBN 0-07-135916-8.
 Zikmund, W.G., D’ Amico, M. (1999).Marketing. (6th ed.). Ohio: South-Western College
Publishing.

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Unit VI
Objectives
Learning objectives from this chapter are:
 Promotion Mix: Factors determining promotion mix
 Promotional Tools – basics of Advertisement, Sales Promotion, Public Relations &
Publicity and Personal Selling

Introduction
In this chapter promotion mix is discussed which refers to the blend of several promotional tools
used by the business to create, maintain and increase the demand for goods and services.The
Promotion Mix is the integration of Advertising, Personal Selling, Sales Promotion, Public
Relations and Direct Marketing.

6.1 Promotion Mix

The promotion mix is the blend of various promotional activities such as advertising, personal
selling, sales promotion, public relations, direct marketing used by businesses in order to create,
maintain and increase the demand for a certain product and increasing the customer base for he
company. The management should consider the following factors in determining the promotion
mix, these are:
6.1.1.Nature of Product
Different promotional tools are required for the different types of product. Such as, for the
industrial products viz. machinery, equipment or land personal selling is more appropriate as a
great deal of pre-sale and after-sale services is required for selling and installing such products.
On the other hand, publicity and advertising are more suitable for the consumer goods, especially
the convenience goods.
Use of a particular tool of promotion mix depends upon the type of goods to be marketed. More
of personal selling is required for industrial products. The presence of designers or celebrities
inside the store is required for the highly image- oriented products like fashion garment. For
goods where not much difference is there in characteristics and performance, more sales
promotion is required.
6.1.2Nature of Market

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Promotion mix is greatly influenced by the number and location of the customers. Personal
selling is more likely to be effective in case the group of potential customers are small and are
concentrated in a particular locality, then the blend of advertising, personal selling, and the sales
promotion is required to sell the product.
The blend of advertising, personal selling, and the sales promotion is required to sell the product
if the customer base is large and widespread. Managerial decisions of the promotion mix are also
influenced by the type of customers. The nature of promotion for the urban, educated and
institutional consumers would be different as compared to the rural, illiterate and household
customers since people who are less educated have to be made people aware about the product
and its uses.
6.1.3 Type of Buyer
Buyers may be of different types and promotion mix must have to be devised accordingly. Ads
published in specialized trade publications and personal selling are more important in the case of
organizational or business buyers, whereas, consumers are more influenced by glossy
advertisements endorsed by some celebrities.
6.1.4 Types of Distribution
For intensive distribution of goods, more advertising is done and also the sales promotion is
taken.The promotion mix would vary for goods sold through selective distribution, and for
exclusive distribution like Rado watch, high- quality furniture, it requires more of personal
selling.
6.1.5. Stage of Product’s Life
The product moves along its life cycle and the promotion mix also changes with the life
cycle.During the introduction stage, the main objective of the promotion is to generate the
primary demand by emphasizing the product’s features, utility, etc. so, the blend of advertising
and publicity is required. Till the product reaches its maturity stage the advertising and personal
selling is required for maintaining the demand of the customers and to sustain the product in the
market.
The expenses on other promotional activities are cut, and more emphasis is concentrated on sales
promotion with the intent to push up the declining sales during the decline stage.
6.1.6 Availability of Funds

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The promotion mix is also decided by the marketing budget. The blend of promotional tools can
have to be decided according to the funds available for the promotion of the product.
Management must choose the promotional tool wisely in the case the funds are limited.
6.1.7Nature of Technique
Each component of the promotional mix has unique characteristics which significantly
influences the purpose of promotion. Such as, the advertising is an impersonal mode of
communication by which one can reach a large group of consumers. Its expression could be
extensively amplified with the use of attractive colors and catchy sound (music, jingles) that
helps in developing the long lasting brand image of the business company in the minds of the
customer.
The Personal selling involves face to face interaction which helps to develop cordial and
personal relations with the customers. Likewise, the sales promotion is short-term incentives
provided to the customers with the intent to increase sales for a shorter period of time.

6.1.8 Promotional Strategy

The promotion mix mostly depends on the organization’s promotional strategy, whether it
accepts the push strategy or a pull strategy.In a push strategy, the manufacturer forces the dealers
to carry the product and promote it to the consumer, i.e. convince the potential consumer to buy
it. To achieve this, personal selling and trade promotion are likely to be more effective
techniques for pushing the product.
In the case of pull strategy, the customers ask the dealers to carry the product, i.e. customers
themselves purchase the product. For this, effective advertising and consumer promotion are
required more for the customers.
6.1.9 Readiness of Buyer
Different promotional tools are necessary at different stages of buyer readiness.Such as, at the
comprehension stage, the blend of advertising and personal selling plays significance whereas
personal selling is more effective at the conviction stage. The blend of sales promotion and
personal selling is likely to be more appropriate at the time of sales closure.
Hence, the advertising and publicity are more appropriate at the early stages of buying decision
process while during the later stages, the sales promotion and personal selling are more effective.

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6.2 Tools of Promotion - Advertising, Sales Promotion, Public Relation & Direct Marketing

The 4 Ps of marketing are product, price, place and promotion. All four of these elements
combine to make a successful marketing strategy. Promotion looks to communicate the
company’s message across to the consumer in an effective and efficient manner. The four main
tools of promotion are advertising, sales promotion, public relation and direct marketing.

6.2.1 Advertising

Advertising is defined as any form of paid communication or promotion for product, service and
idea. Advertisement is not only used by companies but in many cases by museum, government
and charitable organizations. However, the treatment meted out to advertisement defers from an
organization to an organization.
Advertising development involves a decision across five Ms Mission, Money, Message, Media
and Measurement.
Mission looks at setting objectives for advertising. The objectives could be to inform, persuade,
remind or reinforce. Objective has to follow the marketing strategy set by the company.
Money or budget decision for advertising should look at stage of product life cycle, market share
and consumer base, competition, advertising frequency and product substitutability.
Message’s development further is divided into four steps, message generation, message
evaluation and selection, message execution, and social responsibility review.
Once the message is decided the next step is finalizing the media for delivering the message. The
choice of depends on reach of media, frequency of transmission and potential impact on
customer. Based on this choice of media types are made from newspaper, television, direct mail,
radio, magazine and the internet. After which timing of broadcast of the message is essential as
to grab attention of the target audience.
Checking on the effectiveness of communication is essential to company’s strategy. There are
two types of research communication effect research and sales effect research.
6.2.2 Sales Promotion

Promotion is an incentive tool used to drive up short term sales. Promotion can be launched
directed at consumer or trade. The focus of advertising to create reason for purchase the focus of

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promotion is to create an incentive to buy. Consumer incentives could be samples, coupons, free
trial and demonstration. Trade incentive could be price off, free goods and allowances. Sales
force incentive could be convention, trade shows, competition among sales people.
Sales promotion activity can have many objectives, for example, to grab attention of new
customer, reward the existing customer, and increase consumption of occasional users. Sales
promotion is usually targeted at the fence sitters and brand switchers.
Sales promotional activity for the product is selected looking at the overall marketing objective
of the company. The final selection of the consumer promotional tools needs to consider target
audience, budget, competitive response and each tool’s purpose.
Sales promotion activity should under-go pretest before implementation. Once the activity is
launched it should be controlled as to remain within the budget. Evaluation program is a must
after implementation of the promotional scheme.
6.2.3 Public Relations

Companies cannot survive in isolation they need to have a constant interaction with customers,
employees and different stakeholders. This servicing of relation is done by the public relation
office. The major function of the public relation office is to handle press releases, support
product publicity, create and maintain the corporate image, handle matters with lawmakers,
guide management with respect to public issues.
Companies are looking at ways to converge with functions of marketing and public relation in
marketing public relation. The direct responsibility of marketing public relation (MPR) is to
support corporate and product branding activities.
MPR is an efficient tool in building awareness by generating stories in media. Once the story is
in circulation MPR can establish credibility and create a sense of enigma among sales people as
well as dealers to boost enthusiasm. MPR is much more cost effective tool than other
promotional activities.
6.2.4 Direct Marketing

The communication establishes through a direct channel without using any intermediaries is
referred to as direct marketing. Direct marketing can be used to deliver message or service.
Direct marketing has shown tremendous growth in recent years. The internet has played major
part in this growth story. Direct marketing saves time, makes an experience personal and

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pleasant. Direct marketing reduces cost for companies. Face to face selling, direct mail, catalog
marketing, telemarketing, TV and kiosks are media for direct marketing.
Advertisement, Promotional activity, Public relation and direct marketing play an essential role
in helping companies reaches their marketing goals.

Summary:
Consumers are exposed to thousands of marketing communication messages every day.
Organizations compete heavily for the attention and custom of the consumer through their
advertising. Marketing communication attempts to provide information to the consumer about
the organization’s products and service offerings. The various methods of communicating with
the consumer need to be in agreement to deliver a holistic and effective message that will satisfy
both organizational and consumer needs. The objective of the message is to persuade the
audience to purchase the product or service. Therefore, the consumer needs to be receptive to the
message and to be able to interpret it in such a way that the intent to purchase is established. For
this to be effective, marketers have to be able to develop messages that will reach and convince
the designated target market. Various promotional tools are at the disposal of the marketer to
reach the targeted consumer. Integration of all the elements of promotion mix is necessary to
meet the information requirements of all target customers. This simply means that the promotion
mix is not designed to satisfy only the prospective buyer or only the regular buyer. Some
elements of the mix may be aimed at the target customer who is unaware of the product, while
others may be aimed at potential customers who are fully aware of the product and are likely to
purchase it.

Keywords: promotional mix, distribution channel, buyer, media

Self-assessment questions:
1. Personal selling and advertising are both forms of sales promotion. True / False
2. Customer value mapping estimates are based on the differentiated benefits that a
customer receives from a product. True / False
3. Sales management is part of the firm's promotional mix. True / False

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Review questions:
1. Advertisement and Sales Promotions are inevitable in marketing’ -
evaluate with example.
2. Choose any product category and develop a sales promotion campaign.
3. Discuss various forms of promotional activities.

Further Reading:
 C.N.Sontakkshi, Marketing Management, - Kalyani Publisher Kolkata
 Kotler, P. and Keller, K.L. Marketing Management, 12th ed., Pearson, 2006, ISBN 0-13-
 Etzel, Michael J, Walker, Bruce J, Stanton William J and Pandit, Ajay (2009). Marketing
(14th edition). Tata McGraw Hill.

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Section VII

MARKETING CHANNELS

Learning Objectives After perusing this module, you ought to have the capacity to:  Discuss
how pooled assets, aggregate objectives, associated frameworks, and adaptability identify with
fruitful advertising channels.  Defend the relationship between an advertising association's
statement of purpose and the market(s) that it serves.  Define a promoting channel, and clarify
how advertising channels make trade utility.  Trace the development of promoting channels
from a generation to a relationship introduction.  Define channel go-betweens and clarify how
they make client esteem.  Describe how the meaning of advertising channels identifies with the
Channel Relationship Model (CRM). 1.1 The Elements of Successful Marketing Channels For
promoting diverts to prevail in a focused commercial center, autonomous advertising
associations must pool singular assets to accomplish aggregate objectives through an associated
framework. Moreover, this associated framework must be sufficiently adaptable to suit changes
in nature. By consolidating their qualities, associations plan to make worldwide progress which
they would be not able accomplish independently. How about we investigate the four key
components of accomplishment in channels.

Module 1/Where Mission Meets Market

1.1.1 Pooled Resources A showcasing channel works as a group, sharing assets and dangers to
move items and assets from their purpose of inception to their purpose of conclusive utilization.
Think about how the US lager industry works, for instance. The US has a three-level lager
conveyance framework, which comprises of brewers, wholesalers and retailers. More than 3000
lager merchants, with over 130 000 workers, deal with the multibillion-dollar business of

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conveying blend to retailers.1 From Anaheim (California) to Zanesville (Ohio), these discount
wholesalers ensure that lager streams from brewers to an assortment of retail outlets running
from neighborhood bars to nearby accommodation stores. In the US, the essential framework is
that brewers must pitch to merchants, wholesalers pitch to retail outlets and just retail outlets can
pitch lager to shoppers. In this way, for a purchaser to swallow a lager, a strict 'give and take'
needs to unfurl between distilleries, discount merchants, and retailers. Lager wholesalers
accomplish more than pool assets for retailers. It isn't abnormal to see wholesalers going about as
field agents, chatting with clients, rectifying up instances of brew on retail floors, and cleaning
draft-lager lines. In addition to the fact that distributors provide retailers with marketing and
limited time help, they assemble showcase data for the distilleries' promoting staffs.2 1.1.2
Collective Goals A feeling of shared reason joins associations inside advertising channels,
especially when the associations sense an opportunity to win a basic challenge for piece of the
overall industry. While now and again these associations are short in length, they now and again
keep going for a considerable length of time. The reason shared by individuals from an
association is reflected in the association's statement of purpose. A statement of purpose is an
association's key contract – an open announcement of why it exists. A statement of purpose
broadcasts: (1) an association's objectives, (2) the methodology to be utilized in quest for those
objectives, and (3) how the association plans to fulfill the necessities of its inward and outside
clients. The statement of purpose of FedEx in 2013 was: 'FedEx Corporation will deliver
predominant money related returns for its shareowners by giving high esteem included
coordinations, transportation and related business benefits through centered working
organizations. Client necessities will be met in the most elevated quality way proper to each
market section served. FedEx will endeavor to grow commonly compensating associations with
its workers, accomplices and suppliers...' Three basic promoting standards are inalienable inside
FedEx's main goal. To begin with, FedEx's main goal depicts who the firm means to serve:
anybody having transportation, conveyance and related business benefit needs. The mission at
that point clarifies how the firm means to serve its market: by growing commonly compensating
associations with its workers, accomplices and providers. At long last, the announcement
uncovers the criteria that FedEx must meet or surpass to set up an upper hand: by offering clients
a great service.3

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1.1.3 Connected System Organizations can't exist without business sectors. All business rivalry
rises inside promoting channels, and the achievement or disappointment of all individual venture
is eventually chosen there.4 Channel individuals control the streams of merchandise and
enterprises in the commercial center. How much channel individuals manage these streams has
never been more noteworthy than it is today, as delineated in Time Out 1.1. The impact of
promoting channels is probably going to develop each year into the not so distant. Time Out 1.1
______________________________________________ Working Together through Marketing
Channels US organizations are bringing planes, vehicles, and even family unit machines to
showcase faster and less lavishly. The way to this transformation? Makers have chosen to incline
toward their providers – players inside their showcasing channels – to encourage designer and
bankroll their new activities. This is extremely an augmentation of changes that started during
the 1980s, when makers initially started to assault their high work costs by moving creation to
providers, who had lower work costs. Presently makers are shaving costs further by cultivating
out a considerable lot of the errands related with new item advancement to providers. Truth be
told, numerous makers are never again 'makers', but instead orchestrators who blend their
providers' work. In the mean time, makers' providers, who for quite a long time did minimal
more than hammer out parts as economically as could be expected under the circumstances, are
staffing their own innovative work offices in light of these changing business sector needs.
McDonnell-Douglas Corp. cut 60 percent of its expense of building up another 100-situate
traveler plane by having providers give start-up tooling costs and by sub-contracting get together
of the plane. Chrysler misused its parts providers' capacity to plan everything from vehicle seats
to drive shafts. Whirlpool concocted its first range without procuring a solitary designer. Rather,
plan work was finished by Eaton Corp., a provider that officially made gas valves for other
machine producers. Where this will end is a long way from clear. However, one thing is sure:
This adjustment in the job of showcasing channels and channel organizations will clearly expand
the universal aggressiveness of American organizations well into what's to come. Question 
Despite this sparkling report, would you be able to imagine any issues that may rise up out of
these closer channel part affiliations?

developed in Colombia, one of the world's biggest makers of premium-review espressos. At the
point when Mother Nature manhandles Colombia's espresso trim with tropical rainfalls or ice,
costs soar on New York's Coffee, Sugar and Cocoa Exchange. Then again, espresso costs dive

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when expression of a decent yield spreads over the exchanging floor. Thusly, these value changes
without a doubt influence the conduct of the organizations that buy green espresso beans to dish
and exchange to wholesalers. At last, the achievement or disappointment of Colombia's espresso
trim influences the value you pay for simmered beans at your neighborhood supermarket or
espresso house.5 1.1.4 Flexibility Marketing channels must be adaptable frameworks so as to be
effective. Wroe Alderson, a noticeable advertising scholar of the twentieth century, portrayed
showcasing

The Production Era and Distributive Practices The roots of promoting as a zone of study are
inseparably attached to distributive practices. The soonest promoting courses, truth be told, were
basically conveyance courses. Course titles like 'Distributive and Regulative Industries of US
Distribution of Agricultural Products' and 'Systems of Trade and Commerce' proliferated at
Schools of Commerce amid the mid 1900s. These courses tended to the manners by which
showcasing channels generated mediators who, thusly, encouraged progressively effective
developments of merchandise and enterprises from makers to users.12 As American profitability
and urbanization expanded as time passes of the twentieth century, the interest for an assortment
of creation assets to be utilized as assembling inputs normally stuck to this same pattern. Quickly
becoming urban focuses requested bigger and more assorted packs of merchandise than had
recently been accessible. By 1929, retailing represented about $50 billion of US trade.13
Modern-looking business sector directs developed because of the requirement for more
financially savvy methods for moving merchandise and crude resources.14 One depiction of
showcasing channels taken from this time expressed, 'Transportation and capacity are … worried
about those exercises which are essential for the development of products through space and the
bringing of merchandise through time.'15 Increasingly, encouraging gadgets were expected to
transport, gather, and reship merchandise. Consequently, the starting points of the cutting edge
promoting channel can't be isolated from absolutely distributive practices. 1.3.2 The Institutional
Period and Selling Orientation The Gross National Product of the US developed at an uncommon
rate amid the 1940s and this mechanical extension added to the rise of sizeable stock reserves.
The expense of dealing with these inventories developed quickly as well.16 Production methods
and advertising channel forms each turned out to be progressively complex amid this period.
Issues relating to conveyance essentially spun around cost regulation, controlling stock, and
overseeing resources. Advertisers were moving from a creation to a business introduction. The

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frame of mind that 'a great item will move itself' retreated as advertisers experienced the need to
extend deals and publicizing consumptions to persuade singular customers and associations to
purchase their particular brands.17 The exemplary showcasing blend, or Four Ps typology –
item, value, advancement, and place – developed as a controlling promoting standard. Issues
identifying with dispersion were consigned to the place domain.18 The possibility that
connections among purchasers and merchants could be overseen did not yet exist as a theme of
study. Numerous new kinds of channel middle people surfaced amid this period. For instance,
mechanical wholesalers developed in the channel of dissemination for most modern items and
buyer durables. Also, by the late 1950s, deals by vendor wholesalers came to $100 billion.19
Producers were consistently looking for better approaches to grow their market inclusion and
distributive structures. A few monster retailers had developed at this point, and little retailers
were progressively formalizing and practicing their activities to address the issues of an
increasingly refined marketplace.20

1.3.3 The Marketing Concept In 1951, Robert Keith, VP of advertising at Pillsbury, acquainted
an original showcasing guideline with the business world: the promoting idea. As per the
advertising idea, the client is the core of all showcasing blend choices. In that capacity,
associations should just make what they can advertise as opposed to endeavoring to showcase
what they have made. The advertising idea is instinctively engaging in light of the fact that its
attention is on the client. In this sense, in any case, the advertising idea paints an uneven way to
deal with accommodating a company's main goal with the business sectors it serves since it
positions advertisers as receptive trade accomplices – adjusting channels of circulation to meet
market needs.21 A couple of the manners in which that Coke is applying the promoting idea
through its showcasing directs are depicted in Time Out 1.2. Time Out 1.2
______________________________________________ Coca-Cola Bottler Assures Customer
Satisfaction through Its Intermediaries Coca-Cola Bottling Company United, Inc. is one of the

147
biggest free bottlers of Coca-Cola items in the United States. Headquartered in A birmingham,
Alabama, United's area covers some portion of Alabama, Mississippi, Georgia, South Carolina,
and Tennessee. The organization supplies Coca-Cola items to a wide range of middle people
including markets, drugstores, mass merchandisers, comfort/oil stores, eateries, and candy
machines. It is additionally present at exceptional occasions, for example, the Master's Golf
Tournament and nearby occasions, for example, area fairs. Its clients' fulfillment relies upon
quality conveyance. Joined guarantees that quality by keeping up customary conveyance
calendars, expeditious and precise invoicing, and legitimate support of its clients' stock. Question
 Often, the streams of apparently basic items are not basic by any means. Why?

1.3.4 Relationship Marketing Era The advertising idea demonstrated a consistent forerunner to
the Total Quality Management (TQM) theory embraced by the late W. Edwards Deming. TQM
recommends an exceptionally intelligent methodology in which clients end up dynamic
accomplices with makers, wholesalers, or retailers (channel individuals) to tackle commercial
center issues. The TQM logic started an outlook among chiefs that a company's association with
its clients encourages piece of the overall industry gain and client maintenance. This outlook
created close by a period in promoting hypothesis and practice known as relationship advertising.
The relationship advertising time is described by a basic move from a client voice to a client
discourse. Instead of simply responding to client started input, the channel part proactively starts
and keeps up a participative trade with its clients. The idea of investment construes a high level
of participation and coordination among clients and their providers.

Wal-Mart Kmart

Applebee's Outback Steaks

Unique Events Master's Golf

Coke machines

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Coca-Cola Bottling Company United, Inc. Eastern Region – Bottling

Texaco, BP

Kroger, Bi-Lo, Winn Dixie, and so on.

Mass merchandisers

Cold beverage

Coca-Cola USA

Accommodation/Oil stores

Grocery stores

Purchasers

connections among clients and their providers have changed showcasing directs in two different
ways:  Close connections stress a long haul, win-win trade relationship dependent on common
trust among clients and their suppliers.22  They strengthen the relationship measurement of
trade that is at the core of promoting. The movement through these four phases – from a
generation to a relationship approach in advertising channels – has been cultivated by the
advancing commitments channel middle people have made toward the production of client
esteem.

1.4 Channel Intermediaries: The Customer Value Mediators The relationship viewpoint presented
above is a long ways from the conventional perspective of business sectors as physical spots
where individuals assembled to participate in exchange. A look at old Rome's economy will
enable you to comprehend the movement of promoting channels from a conveyance to a
relationship introduction: 'toward one side of the bustling procedure of trade were sellers
peddling through the field; … day by day markets and periodical fairs; retailers wheeling and
dealing with clients … somewhat higher in the business chain of importance were shops that

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fabricated their very own stock … At or close ports were wholesalers who sold … products as of
late acquired from abroad.'23 This entry demonstrates how a coherent channel structure
developed exceptionally right off the bat ever of business sectors. A set up channel structure is
obviously reflected inside the composed conduct arrangement of sellers, barkers, dealer
wholesalers, and businesspeople who coordinated the stream of products and enterprises in
Rome. Each market player depicted above played out a job satisfied by elements currently
known as channel delegates. Channel mediators are people or associations who intervene trade
utility seeing someone including at least two accomplices. Middle people create shape, place,
time, as well as possession esteems by uniting purchasers and venders. While the names of the
players have changed, the capacities performed by channel mediators remain basically the
equivalent. Go-betweens have dependably assisted channels with cramming it: make utility by
adding to Contactual proficiency, encouraging Routinisation, rearranging Assortment, and
Minimizing vulnerability inside promoting channels. 1.4.1 Contactual Efficiency Channels
comprise of sets of advertising connections that rise up out of the trade procedure.

Items and Services Flows before, channel the executives only centered around the exercises
important to gain merchandise and services.32 However, the exercises related with the other two
phases of trade among makers and expending associations in promoting channels – utilization
and mien – ought not be disregarded.

Securing Acquisition includes the demonstrations by which channel elements get items and
administrations. Proficient contract-obtaining (PCP) associations are a rising power in
advertising channels. These associations furnish their clients with expanded obtaining power by
interfacing them to built up systems highlighting, in a few ventures, a huge number of providers.
Groups of PCP experts spare customers time and cash by wiping out exorbitant subtleties related
with request handling and value shopping. Accordingly, their customers can regularly free up
capital and work assets which they would then be able to divert to progressively beneficial
operations.33 Marketing

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directs are additionally changing in light of the expanding number of partnerships that have
developed between acquiring firms and their providers. These partnerships are getting to be well
known as devices for cutting out aggressive advantages.34 In promoting channels, the
demonstration of utilization includes the use of asset inputs (merchandise and enterprises) in the
generation of asset yields. Utilization in advertising channels is ordinarily assessed as an element
of materials the executives. That is, utilization exercises identify with how materials and data
spill out of the purpose of creation to the last client. Progressively in advertising channels, items
and administrations are being expended in new and distinctive ways. A training known as re-
appropriating lies behind a large number of these changes. Re-appropriating happens when
organizations employ outside suppliers to help them in any of an assortment of business
rehearses. The utilization of re-appropriating has developed as makers and providers confront the
need to supplant obsolete advancements while keeping up consumer loyalty. Associations who
utilize redistributing gain refreshed mechanical connects to clients without a huge forthright
investment.35

Air sooner or later, all elements who have taken an interest in divert connections must take part
in the demonstration of mien. Mien alludes to all practices or exercises related with channel
individuals' endeavors to segregate themselves from unmistakable and immaterial goods.36
Many firms have created associations with masters who comprehend natural directions, unsafe
waste treatment, and physical plant wellbeing. These reactions have been incited by what is
either a real worry for the earth or a consistent worry for what may happen to firms who seem
unconcerned with nature. When reusing items, customers wind up accepted makers, providing
makers with presorted materials that reemerge generation frameworks as contributions to the
formation of new items. This procedure has turned out to be known as invert coordinations. Have
you at any point taken aluminum jars to a reusing focus? Thusly, you partook in one of the many
promoting channels for reused products.

1.6 The CRM: Compass Points This course book takes you on a voyage through advertising
channels standards and practices from a relationship showcasing viewpoint. Every one of the

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significant thoughts and subjects analyzed in whatever remains of this book is grounded either
straightforwardly or in a roundabout way in the Channel Relationship Model (CRM). The CRM
is shown in Exhibit 1.2. The CRM catches four classes of trade connections in advertising
channels:  The connection between a channel part and its outer condition is appeared in the
CRM and is tended to in Part 2 of the course book. Section 2 examines how different
macroenvironmental powers, for example, financial, mechanical, political, legitimate, moral, and
sociocultural elements influence channel individuals' objective arranged exercises.

 The connection between a channel part and its interior condition is appeared in the model and
is tended to in Part 3. In Part 3, we fundamentally survey the setting (air) in which social and
monetary cooperations between channel individuals occur. Section 3 additionally considers the
social issues and issues which plague the relationship procedure: coordination, strife, and
participation.  In Part 4, the connection between channel frameworks is talked about. Section 4
additionally talks about vertical reconciliation in advertising channels, and the job of diversifying
in the worldwide commercial center.  Finally, long haul connections between channel
individuals and their direct frameworks are appeared in Part 5 of the CRM. Section 5 portrays
how vital banding together can cultivate prevalent framework execution. Before we continue, in
any case, we have to build up a structure for this exchange by thinking about the individual
channel part and the commercial center in which it works. We will do this in the rest of Part 1.
Channel individuals must be prepared to fight in a wildly aggressive commercial center. In
Module 2, we will examine how channel individuals take a stab at an upper hand in a dynamic
commercial center. 1.7 Key Terms securing trade utility channel delegate showcasing channel
utilization statement of purpose contactual productivity re-appropriating demeanor routinisation
dyadic relationship

Learning Summary Marketing channels have generally been seen as an extension among makers
and clients. Be that as it may, this point of view neglects to catch the perplexing system of
connections that encourage showcasing streams: the development of merchandise,

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administration, data, etc between channel individuals. Advertising and dissemination were
inseparably interwoven toward the start of the twentieth century. As the creation period of
promoting rose, the interest for go betweens expanded. In a verifiable sense, these go betweens
contributed considerably to the development of merchandise and individuals from provincial
region to new industrialized urban focuses. By the 1940s, when the moving period in showcasing
started, new kind of brokers – presently known as middle people – had surfaced in the
commercial center. Huge retailers extended further, while littler retailers for the most part
subsided into unserved or underserved advertise specialties. The offering period rather rapidly
offered route to the showcasing idea time. The undeniably across the board acknowledgment of
the significance of the advertising idea amid the last 50% of this century has been paralleled by a
developing conduct push in showcasing channels.

Since the center of advertising is the trade procedure, promoting channels can be seen as trade
facilitators. This enables showcasing channels to be characterized as a variety of trade
connections that make client esteem in the securing, utilization, or mien of products and
enterprises. Trade connections, and in this manner advertising channels themselves, rise up out of
market needs as a method for all the more effectively serving business sector needs. Trade utility
is the whole all things considered and benefits perceived by the trade parties. Utility can include
shape, place, ownership, and time measurements. This widened meaning of advertising channels
offers a few favorable circumstances: (1) it enables promoting channels to be examined as
conduct frameworks, (2) it expands the extent of the capacities performed inside showcasing
channels to incorporate those included with utilization and air, and (3) it delineates the exchange
off of expenses and advantages that definitely happen in return connections. A feeling of shared
reason associates associations and people in the commercial center. This is additionally valid for
showcasing channels. Consequently, the action known as channel the executives can be seen as
the time when an association's main goal and the market(s) it serves meet up. An association's
central goal is its vital sanction that portrays the manners in which the firm will seize advertise
openings while fulfilling the necessities of inner and outside clients. A statement of purpose
additionally portrays who the firm expects to serve, how it plans to serve them, and what means

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will be utilized to set up upper hands in the market(s) of premium. Toward this end, the
abrogating mission of channel mediators is to fill in as go betweens. In any case, this job ought to
be extensively characterized – for any association or person who intervenes trade is a broker.
Channel mediators serve four key capacities: to advance contactual productivity and
routinisation, to give variety, and to limit vulnerability. A contemporary relationship-arranged
way to deal with the investigation of advertising diverts is embraced in this book. A Channel
Relationship Model (CRM) fills in as a system for displaying the material tended to all through
the content. Three central associations are appeared in the CRM. The first happens inside the
promoting association. The second creates between advertising associations. The last cooperation
unfurls between promoting associations and their surroundings. Through the CRM, the job of
channel situations, channel atmospheres, and association forms in encouraging business
connections is researched. The CRM point of view will at last empower you to all the more
likely see how trade accomplices can accomplish their key points through connecting in
advertising channels and dynamic commercial centers.

Short-Answer and Essay Questions

1.1 List the four components required for a fruitful promoting channel.

1.2 During which time did the great showcasing blend, or Four Ps typology – item, value,
advancement, and place – develop as a directing advertising guideline?

3. Describe in short about marketing concepts.

4. Write down in short about channel intermediaries.

Objective questions

1. Connected system organisation can’t exit without Business section. T/F

2. As per the advertising idea. Client is the core of all showcasing blend choice. T/F
3. The idea of investment constructs a high level of participation and coordination among
clients and their products. T/F

References

1. NBWA (2013), ‘America’s Beer Distributors: Fueling Jobs, Generating Economic

Growth & Delivering Value to Local Communities’, Center for Applied Business &

154
 Economic Research, Alfred Lerner College of Business & Economics, University of
Delaware, [pdf] available at: http://nbwa.org/sites/default/files/NBWA-EconomicReport-
2013.pdf [Accessed 30 August 2013]. 2. Charlier, Marj (1995), ‘Beer Brouhaha: Existing
Distributors Are Being Squeezed By Brewers, Retailers; Biggest Discounters, Chains
Seek Ways to Eliminate “Middlemen” Wholesalers Trend Worries Little Guys’, The Wall
Street Journal, (22 November), A1. 3. FedEx (2013), ‘Mission, Strategy, Values’,
[online] available at: http://about.van.fedex.com/mission-strategy-values [Accessed 30
August 2013].
Module 1 / Where Mission Meets Market
Marketing Channels Edinburgh Business School 1/27
4. Bowersox, Donald J. and M. Bixby Cooper (1992), Strategic Marketing Channel
Management, New York: McGraw-Hill. 5. Adapted from McGee, Suzanne (1995),
‘Commodities: Colombian Price Floor Rumors Lift Coffee Prices’, The Wall Street
Journal, (9 February), C14 and McGee, Suzanne (1995), ‘Commodities: Coffee Prices
Plunge to Lowest Levels Since June’, The Wall Street Journal, C14. Montville, Leigh
(1992), ‘Different Strokes’, Sports Illustrated, (22 July), 108–110. 6. Alderson, Wroe
(1957), Marketing Behavior and Executive Action, Burr Ridge, IL: Richard D. Irwin. 7.
Lewis, Edwin E. (1968), Marketing Channels: Structure and Strategy, Perspectives in
Marketing Series, Robert D. Buzzell and Frank M. Bass, eds, New York: McGraw–Hill.

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Section VIII

1. INTRODUCTION TO CONSUMERISM

Industrialism is the sorted out type of endeavors from various people, gatherings, governments
and different related associations which shields the shopper from uncalled for practices and to
protect their rights. The development of commercialization has prompted numerous associations
enhancing their administrations to the client.

What is Consumerism?

Shopper is viewed as the ruler in current promoting. In a market economy, the idea of customer
is given the most noteworthy need, and each exertion is made to energize buyer fulfillment.

Nonetheless, there may be cases where customers are commonly overlooked and some of the
time they are being abused also. Along these lines, customers meet up for ensuring their
individual advantages. It is a quiet and vote based development for self-insurance against their
misuse. Customer development is additionally alluded as commercialization.

Shopper Behavior & highlights of Consumerism

Featured here are a portion of the striking highlights of industrialism:

• Protection of Rights: Consumerism helps in building business networks and organizations

to shield their rights from unreasonable practices.

• Prevention of Malpractices: Consumerism averts unreasonable practices inside the

business network, for example, storing, debasement, dark promoting, profiteering, and so forth.

• Unity among Consumers: Consumerism goes for making learning and amicability among
buyers and to take gather measures on issues like shopper laws, supply of data about advertising
acts of neglect, deceiving and prohibitive exchange rehearses.

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• Enforcing Consumer Rights: Consumerism goes for applying the four fundamental
privileges of purchasers which are Right to Safety, Right to be Informed, Right to Choose, and
Right to Redress. Promoting and innovation are the two main impetuses of industrialism:

• The first main impetus of industrialism is promoting. Here, it is associated with the
thoughts and musings through which the item is made and the customer purchases .

Buyer Behavior

 Through promoting, we get the essential data about the item we need to purchase.

• Technology is updating quick. It is important to check the earth once a day as the earth is
dynamic in nature. Item ought to be made utilizing new innovation to fulfill the customers. Old
and obsolete innovation won't help item makers to continue their business over the long haul.

Buyer conduct covers an expansive assortment of shoppers dependent on decent variety in age,
sex, culture, taste, inclination, instructive dimension, pay level, and so on. Customer conduct can
be characterized as "the choice procedure and physical movement occupied with assessing,
gaining,

utilizing or discarding merchandise and enterprises."

With the majority of the decent variety to the overflow of products and ventures offered to us,
and the opportunity of decisions, one may theorize how singular advertisers really contact us
with their exceedingly unequivocal showcasing messages. Understanding shopper conduct
causes in recognizing whom to target, how to target, when to contact them, and what message is
to be given to them to achieve the intended interest group to purchase the item.

The accompanying delineation demonstrates the determinants of customer conduct.

The investigation of Consumer Behavior helps in seeing how people settle on choices to invest
their accessible assets like energy, cash, and exertion while obtaining products and ventures. It is
a subject that clarifies the fundamental inquiries that an ordinary purchaser faces: what to
purchase, for what reason to purchase, when to purchase, where to purchase from, how
frequently to purchase, and how they use it.

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Purchaser Behavior

Purchaser conduct is an unpredictable and multidimensional process that mirrors the totality of
buyer choices as for obtaining, utilization, and transfer of merchandise and ventures.

Measurements of Consumer Behavior

Purchaser conduct is multidimensional in nature and it is impacted by the accompanying

subjects:

• Psychology is an order that bargains with the investigation of brain and conduct. It helps
in understanding people and gatherings by building up general standards and investigating
explicit cases. Brain research assumes an essential job in seeing how customers carry on while
making a buy.

• Sociology is the investigation of gatherings. At the point when people shape gatherings,
their activities are some of the time moderately not the same as the activities of those people
when they are working exclusively.

• Social Psychology is a mix of human science and brain science. It clarifies how an
individual works in a gathering. Gathering elements assume an imperative job in acquiring
choices. Sentiments of companions, reference gatherings, their families and conclusion pioneers
impact people in their conduct.

• Cultural Anthropology is the investigation of individuals in the public eye. It investigates

the improvement of focal convictions, qualities and traditions that people acquire from their
folks, which impact their obtaining designs.

What is Consumerism?

Customer is viewed as the lord in present day promoting. In a market economy, the idea of
customer is given the most elevated need, and each exertion is made to empower purchaser
fulfillment.

In any case, there may be occurrences where purchasers are commonly disregarded and now and
then they are being misused also. In this way, shoppers meet up for securing their individual

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advantages. It is a serene and vote based development for self-security against their misuse.
Customer development is additionally alluded as industrialism.

2. Customer Behavior Highlights of Consumerism

Featured here are a portion of the outstanding highlights of commercialization:

• Protection of Rights: Consumerism helps in building business networks and foundations

to shield their rights from uncalled for practices.

• Prevention of Malpractices: Consumerism counteracts unreasonable practices inside the

business network, for example, storing, contaminated, dark advertising, profiteering, and so on.

• Unity among Consumers: Consumerism goes for making learning and concordance
among purchasers and to take gather measures on issues like customer laws, supply of data about
advertising misbehaviors, deceiving and prohibitive exchange rehearses.

• Enforcing Consumer Rights: Consumerism goes for applying the four essential privileges
of shoppers which are Right to Safety, Right to be Informed, Right to Choose, and Right to
Redress.

Publicizing and innovation are the two main thrusts of commercialization:

• The first main thrust of industrialism is promoting. Here, it is associated with the
thoughts and musings through which the item is made and the shopper purchases the

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Through publicizing, we get the vital data about the item we need to purchase.

• Technology is overhauling quick. It is important to check the earth once a day as the earth
is dynamic in nature. Item ought to be produced utilizing new innovation to fulfill the shoppers.
Old and obsolete innovation won't help item producers to support their business over the long
haul.

3.Customer Behavior Demand Analysis

The Demand Curve

The amount of a specific decent or benefit that a customer or gathering of buyers need to buy at a
given cost is named as interest. It is the purchaser's capacity or eagerness to purchase a particular
item.

As appeared in the figure, the interest bend is descending inclining which implies the buyers will
purchase more when the cost diminishes and similar customers will purchase less when the cost
increments.

It isn't just value, the interest for a decent or an administration is likewise affected by different
factors, for example, the cost of substitute merchandise and correlative products.

Shopper Behavior

Determinants of Demand

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The key determinants that influence the interest work are as per the following:

• Income: An ascent in purchaser's salary will in general increment the interest bend (move
the interest bend to one side). A fall will in general decline the interest for ordinary merchandise.

• Consumer Preferences: Favorable change prompts an expansion sought after, ominous

change prompts a decline popular.

• Number of Buyers: More the quantity of purchasers, more will be the interest. Less
purchasers lead to a decline sought after.

• Substitute Goods (merchandise that can be utilized to supplant one another): The cost of
substitutes and interest for the other great are specifically related. Model: If the cost of espresso
rises, the interest for tea will likewise rise.

• Complementary Goods (products that can be utilized together): The costs of correlative
products and their interest are contrarily related. Precedent: if the cost of printer builds, the
interest for PC sheets will diminish.

Request Function

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The interest work identifies with the cost and amount. It demonstrates what number of units of a
cooperative attitude be acquired at various costs. At more expensive rates, less amount will be
bought.

The graphical portrayal of the interest work has a negative (- ve) slant. The market request work
is determined by totaling up the majority of the individual interest capacities.

4. Phases of Purchasing Process

A shopper experiences the accompanying stages previously settling on a buy choice:

Stage 1: Needs/Requirements

It is the main phase of the purchasing procedure where the purchaser perceives an issue or a
prerequisite that should be satisfied. The necessities can be created either by inner upgrades or
outer boosts. In this stage, the advertiser should consider and comprehend the customers to
discover what sorts of necessities emerge, what achieved them, and how they drove the buyer
towards a specific item.

Stage 2: Information Search

In this stage, the customer looks for more data. The purchaser may have sharp consideration or
may go into dynamic data seek. The buyer can acquire data from any of the few sources. This
incorporate individual sources (family, companions, neighbors, and associates), mechanical
sources (promoting, salesmen, merchants, bundling), open sources (broad communications,
shopper rating and association), and experiential sources (taking care of, analyzing, utilizing the
item). The general impact of these data sources shifts with the item and the purchaser.

Stage 3: Evaluation of Alternatives

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In this stage, the buyer utilizes data to assess elective brands from various choices. How
customers approach assessing buy options relies upon the individual buyer and the particular
purchasing circumstance. Now and again, purchasers utilize intelligent reasoning, while in
different cases, customers do next to zero assessing; rather they purchase on desire and depend
on instinct. Once in a while buyers settle on purchasing choices all alone; now and again they
rely upon companions, relatives, shopper aides, or deals people.

Stage 4: Purchase Decision

In this stage, the customer really purchases the item. By and large, a customer will purchase the
most loved brand, yet there can be two elements, i.e., buy expectations and buy choice. The
primary factor is the frame of mind of others and the second is unexpected situational factors.
The customer may frame a buy aim dependent on components, for example, regular salary,
common cost, and normal item benefits.

Stage 5: Post-Purchase Behavior

In this stage, the shoppers make further strides after buy dependent on their fulfillment and
disappointment. The fulfillment and disappointment rely upon the connection between
customer's desires and the item's execution. On the off chance that an item is shy of desires, the
shopper is frustrated. Then again, in the event that it lives up to their desires, the buyer is
fulfilled. What's more, on the off chance that it surpasses their desires, the buyer is pleased.

The bigger the hole between the purchasers' desires and the item's execution, the more
noteworthy will be the buyer's disappointment. This recommends the dealer should make item

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asserts that steadfastly speak to the item's execution with the goal that the purchasers are
fulfilled.

Shopper fulfillment is vital on the grounds that the organization's business originate from two
fundamental gatherings, i.e., new clients and held clients. It normally costs more to pull in new
clients than to hold existing clients and the most ideal approach to hold them is to get them
happy with the item.

5. Customer Behavior ─ Developing Marketing Concepts

Showcasing ideas center around discovering right items for the clients as opposed to discovering
right clients for the items. It depends on four columns – target showcase, client necessities,
joined market, and productivity. Advertising ideas begin with an all around characterized market,
center around client needs, co - ordinate all the between related exercises that will influence
clients, and increment the benefits by bringing increasingly fulfilled clients.

Market idea centers around accomplishing authoritative objective by making an organization that
is more powerful and effective than contenders by making, conveying, and imparting client
incentive to its chose target markets.

Generation Concept

As per generation idea, buyers like to purchase those items that are broadly accessible and cheap.
Officials of creation arranged organizations for the most part focus on accomplishing high
generation proficiency, ease, and mass conveyance for viable outcomes. Shoppers are intrigued

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more with regards to item accessibility and low costs. This sort of business introduction is
powerful in creating nations.

Precedent: Local versatile organizations in creating nations give mobile phones at a lot less
expensive expense than the marked organizations and because of this, individuals in these
nations want to buy PDAs from them.

Item Concept

As per item idea of business, customers support those items that give them better quality,
execution and creative highlights. Directors in item arranged associations basically center around
making better items and enhancing them time than time. In item idea, it is viewed as that the
customers know about the nature of the items and they have a capacity to assess great quality and
execution.

Moving Concept

As per the moving idea, shoppers, whenever left without anyone else, will for the most part not
purchase enough. An association should in this way incorporate a forceful offering and limited
time exertion to get an aggressive edge in the market. As indicated by this idea, the organization
establishes viable offering and advancement apparatuses so as to energize all the more
purchasing.

The motivation behind showcasing is to pitch more things to more individuals, all the more
routinely, so as to make more benefit.

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Client Concept

As per the client idea, organizations center around individual clients. They give singular offers,
benefits, and set up direct channels of correspondence with them. These organizations gather
data on every client's past exchanges, socioeconomics, media and supply inclinations. They have
faith in productive development by catching an expansive offer of every client's consumption by
building high client unwaveringness and client lifetime esteem.

6. Consumer Behavior ─ Marketing Strategies

Promoting systems and strategies are ordinarily founded on express and certain convictions
about purchaser conduct. Choices dependent on express suspicions and sound hypothesis and
research are bound to be fruitful than the choices dependent on understood instinct.

Information of shopper conduct can be an imperative upper hand while planning showcasing
systems. It can enormously lessen the chances of awful choices and market disappointments. The
standards of purchaser conduct are valuable in numerous zones of promoting, some of which are
recorded beneath:

Breaking down Market Opportunity

Purchaser conduct helps in recognizing the unfulfilled needs and needs of customers. This
requires filtering the patterns and conditions working in the market zone, client's ways of life,
pay levels and developing impacts.

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Choosing Target Market

The checking and assessing of market openings helps in recognizing diverse purchaser sections
with various and uncommon needs and needs. Distinguishing these gatherings, figuring out how
to settle on purchasing choices empowers the advertiser to plan items or administrations
according to the prerequisites.

Model: Consumer examines demonstrate that many existing and potential cleanser clients did not
have any desire to purchase cleanser packs estimated at Rs at least 60. They would prefer to
incline toward a low value parcel/sachet containing adequate amount for a couple of washes.
This brought about organizations presenting cleanser sachets at a negligible value which has
given amazing returns and the trap satisfied superbly well.

Showcasing Mix Decisions

When the unfulfilled needs and needs are distinguished, the advertiser needs to decide the exact
blend of four P's, i.e., Product, Price, Place, and Promotion.

Item

An advertiser needs to plan items or administrations that would fulfill the unsatisfied needs or
needs of buyers. Choices taken for the item are identified with size, shape, and highlights. The
advertiser likewise needs to choose about bundling, essential parts of administration, guarantees,
conditions, and embellishments.

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Model: Nestle initially presented Maggi noodles in masala and capsicum flavors. Consequently,
remembering buyer inclinations in different districts, the organization presented Garlic, Sambar,
Atta Maggi, Soupy noodles, and different flavors.

Cost

The second imperative segment of showcasing blend is cost. Advertisers must choose what cost
to be charged for an item or administration, to remain focused in an extreme market. These
choices impact the stream of profits to the organization.

Place

The following choice is identified with the appropriation channel, i.e., where and how to offer
the items and administrations at the last stage. The accompanying choices are taken with respect
to the appropriation blend:

• Are the items to be sold through all the retail outlets or just through the chose ones?

• Should the advertiser utilize just the current outlets that move the contending brands? Or
then again, would it be a good idea for them to enjoy new world class outlets moving just the
advertiser's brands?

• Is the area of the retail outlets critical from the clients' perspective?

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• Should the organization consider coordinate advertising and moving?

Advancement

Advancement manages building an association with the shoppers through the channels of
advertising correspondence. A portion of the famous advancement systems incorporate
publicizing, individual moving, deals advancement, attention, and direct showcasing and
moving.

The advertiser needs to choose which strategy would be most reasonable to viably achieve the
purchasers. Would it be a good idea for it to publicize alone or would it be advisable for it to be
joined with deals advancement strategies? The organization needs to know its objective
purchasers, their area, their taste and inclinations, which media do they approach, ways of life,
and so on.

7. Consumer Behavior ─ Market Segmentation

Market division relies upon two dimensions – the vital dimension and the strategic dimension. At
a key dimension, it has an immediate connection with the choices on situating. At a strategic
dimension, it relates with the choice of which customer bunches are to be focused on. We will
talk about here the parameters dependent on which a market can be divided.

Geographic Segmentation

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Imminent clients are in nearby, state, territorial or national commercial center fragment. In the
event that a firm is moving an item, for example, a homestead gear, the geographic area will
remain a central point in sectioning the objective markets on the grounds that their clients are
situated in explicit rustic territories.

If there should arise an occurrence of retail locations, geographic area of the store is a standout
amongst the most essential contemplations. Here, urban zones are favored.

Division of clients dependent on geographic components are:

• Region: Segmentation by landmass/nation/state/region/city.

• Size: Segmentation based on size of a urban region according to the populace estimate.

• Population Density: Segmentation based on populace thickness, for example, urban/sub-

urban/rustic and so forth.

Statistic Segmentation

Market division should be possible dependent on statistic factors, for example, Age. For instance,
Rico watches have portioned their item portfolio as indicated by various age gatherings of
individuals.

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Psychographic Segmentation

Psychographic Segmentation centers around gathering clients as per their way of life and
obtaining brain research. Numerous organizations offer items dependent on the frames of mind,
convictions and feelings, thoughts, and impression of the objective market. Psychographic
division incorporates factors, for example, Activities, Interests, Opinions, Attitudes, and Values.

Behavioralistic Segmentation

Markets can be fragmented based on purchaser conduct. It is on the grounds that the purchasing
conduct of customers vary dependent on the geographic, statistic and psychographic factors.
Advertisers frequently find commonsense advantages in utilizing purchasing conduct as a
different division premise notwithstanding factors like geographic, socioeconomics, and
psychographics.

8. Consumer Behavior ─ Market Positioning

Market Positioning methods choosing an advertising blend that is most reasonable for an
objective market fragment. The accompanying outline demonstrates an item situating guide.

Item Positioning Map

The situation of an item is the entirety of those traits typically perceived by the shoppers – its
position, quality, amount, the kind of individuals, qualities, shortcomings, dangers, and so forth.

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"An item's position is the way potential shoppers see the item", and it is communicated relative
to the situation of the contenders.

Situating is a platform for the brand. It encourages the brand to overcome the brain of the
objective customer gatherings. The situation of a brand must be tirelessly protected, kept up, and
oversaw.

Precedent: Watches like "Estimate" are situated as extravagance brands, in this manner they are
very costly and treated as a materialistic trifle. In the event that Guess decreases its costs, it loses
its genuine picture and potential clients.

Unit 2 – Role of Research

9. Issue Recognition

Business chiefs should be talented, have skill in issue acknowledgment and arrangement
strategies to be the best help in directing their organization towards more noteworthy
achievement.

In issue acknowledgment, the purchaser perceives an issue or need or need. The purchaser
perceives a distinction between his or her genuine state and some ideal state.

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The need can be produced by interior upgrades when one of the individual's ordinary needs -
hunger, thirst, sex, and so on ascends to an abnormal state adequate to wind up a drive. A need
can likewise be created by outer improvements.

At this stage, the advertiser ought to assess the shopper's point of view by considering the
essential inquiries like:

• What sorts of requirements or issues or endeavors emerge.

• What realized them and

• How it drove the purchaser towards the specific item.

Maslow's Hierarchy of Needs

American Psychologist Abraham Harold Maslow trusts that, needs are orchestrated in a chain of
command shape. Simply after a human has accomplished the necessities at a specific stage, does
he move to the following one. The pyramid graph demonstrating the Maslow needs chain of
command.

Phases of Maslow's Hierarchy of Needs

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As indicated by Maslow's hypothesis, when an individual goes up the dimensions of the chain of
importance has satisfied the necessities and needs in the pecking order, one may at last
accomplish self-realization. Maslow at last presumed that, self-realization was not a customary
result of fulfilling the other human needs. Human needs as recognized by Maslow are:

• At the base of the chain of command level are the "Fundamental needs or Physiological
needs" of an individual: nourishment, water, shield, rest, sex and so forth.

• The next dimension is "Wellbeing Needs: Security, Order, security and Stability". These
two stages are vital for the physical survival of the individual.

• The third dimension of need is "Love and Belonging", which are mental requirements;
when people have dealt with themselves physically, they are prepared to impart themselves to
other people, for example, with family, companions and relatives.

• The fourth dimension is accomplished when people feel great with what they have
accomplished. This is the "Regard" level, the should be skilled and perceived, for example,
position, status and dimension of accomplishment.

11. Buyer Behavior ─ Research Process

Buyer inquire about plays an essential angle, particularly when an organization chooses to
dispatch another item into the market. Organizations lead statistical surveying to all the more
likely comprehend the buyers, their necessities and their fulfillment level.

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In the wake of directing different reviews and center gatherings, organizations investigate the
customer information and after that make proposals dependent on the outcomes.

The accompanying representation clarifies the buyer inquire about process:

Creating Research Objectives

The initial phase in the customer look into process is building up the exploration goals which
includes characterizing the reasons and destinations to guarantee a suitable structure. An
announcement of target characterizes the sort and dimension of data required.

Gather Secondary Data

There are two particular wellsprings of auxiliary information – inside and outside. Continuously
look for inner sources first. Most go directly to Google without considering the way that
information may exist inside the association itself. This can here and there be in the 'heads' of the
work force.

Outer Sources

Outer sources are various. Buyer Generated Media (CGM), particularly, has developed in
significance as an information source. The key is to abstain from investing excessively energy
following 'obscured rear ways'. This is the place the time and cost can raise strongly.

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• Directories

• Country data

• Published advertising research reports

• News sources

• CGM (Newsgroups, web journals, gatherings)

• Internet – single web indexes, and various web crawlers

Essential Research

Essential research is fundamentally the first research. Here you yourself gather the data through
different apparatuses accessible. In essential research, you don't will in general rely upon any
outsiders. You may lead meets or overviews, watch, or even straightforwardly go to the article
for gathering data.

Quantitative Research

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A quantitative research examine is contained research plan, the information accumulation
techniques, instruments to be utilized, and the example structure.

Following are the three essential plans or methodologies utilized for quantitative structure:

• Observational Research: In this strategy for observational research, the general

population or clients are watched adequately when they buy a specific item. It causes the analyst
to pick up inside and out comprehension of the connection between the general population and
items by watching them while obtaining and utilizing the item.

• Experimentation: Experimentation is a kind of research where just certain factors are

controlled while others are maintained consistent in control to support the adjustment in the
steady factor

• Surveys: An overview is a technique for research in which a questioner cooperates with

respondents to acquire actualities, suppositions and demeanors.

Following are the different study strategies which are commonly utilized:

• Personal talk with study

• Telephone study

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• Mail studies

• Online studies

• Quantitative research information accumulation instruments

Information Collection Instruments for Quantitative Research Data

Poll and Attitude Scale: For quantitative research the essential information accumulation
instrument is a survey and the most continuous one is frame of mind scale which is utilized to
catch evaluative information.

Following are the vital strategies for information accumulation in the subjective structure
systems which are utilized in the underlying phases of research.

• In-Depth Interview: Depth meet is led long and in a non-organized way where the
questioner is exceedingly prepared and limits his very own investment in the dialog once the
general subject is examined.

• Focus Group: Focus amass includes numerous respondents who collaborate with the
examiner in a gathering dialog and spotlights on a specific item.

Projective Techniques

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Projective methods are best used to comprehend the thought processes of individuals when they
are unknowingly judicious.

The expert by and large breaks down and reports his discoveries dependent on the reactions got
in subjective research though in quantitative investigation, the analysts manages the total
research, examinations the open finished inquiries, characterizes the reactions and deliberately
classify them.

12. Purchaser Behavior ─ Decision Making

A comprehension of purchaser conduct is essential for the long haul achievement and survival of
a firm. Customer basic leadership is seen as the structure of the promoting idea, an imperative
introduction in showcasing the board.

The advertiser ought to most likely decide needs and needs of the objective portion and give item
and administration contributions more successfully and proficiently than contenders.

Sorts of Consumer Decision Making

Coming up next are the kinds of basic leadership strategies which can be utilized to investigate
purchaser conduct:

Broad Problem Solving

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In broad basic leadership, the shoppers have no settled or set criteria for assessing an item in a
specific class. Here the purchasers have not limited the quantity of brands from which they might
want to consider thus their basic leadership endeavors can be delegated broad critical thinking. In
this specific arrangement of critical thinking stage, the customer needs a great deal of data to set
a criteria based on explicit brands could be judged.

Constrained Problem Solving

In constrained critical thinking, the shoppers have effectively set the fundamental criteria or
standard for assessing the items. Be that as it may, they have not completely set the set up
inclinations and they look for extra data to separate among different items or brands.

Routinized Response Behavior

Here, in routinized reaction conduct, buyers have involvement with the item and they have set
the criteria for which they will in general assess the brands they are thinking about. In a few
circumstances, they might need to gather a little measure of extra data, while in others they may
basically survey what they know about. In broad critical thinking, buyer looks for more data to
settle on a decision, in restricted critical thinking shoppers have the essential thought or the
criteria set for assessment, while in routinized reaction conduct customers require just minimal
extra data.

Perspectives of Consumer Decision Making

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An Economic View

Customers have for the most part been accepted to settle on levelheaded choices. The financial
perspective of shopper basic leadership is being reprimanded by specialists in light of the fact
that a customer is expected to groups the accompanying characteristics to carry on reasonably:

• Firstly, they should know about every one of the options present in the market

• Secondly, they should most likely proficiently rank the items according to their
advantages.

• Lastly, they should likewise realize the best elective that suits them according to their
prerequisites.

In the realm of impeccable challenge, purchasers infrequently have all the data to make the
purported 'flawless choice.'

A Passive View

Latent view is absolutely inverse to the monetary view. Here, it is accepted that shoppers are
imprudent and unreasonable while making a buy. The fundamental confinement of this view is
that shoppers likewise look for data about the options accessible and settle on objective or
insightful choices and buy the items or administrations that gives the best fulfillment.

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A Cognitive View

The intellectual model causes people to concentrate on the procedures through which they can
get data about chose brands. In the system of psychological view, the purchaser very effectively
scans for such items or administrations that can satisfy every one of their prerequisites.

An Emotional View

Customers are related with profound sentiments or feelings, for example, fear, love, trust and so
forth.

These feelings are probably going to be profoundly including.

13. Customer Behavior ─ Pre-Purchase and

Post-Purchase Behavior

Customer basic leadership includes a consistent stream of associations between ecological

variables and conduct activities.

The procedure of purchaser basic leadership includes pre-buy data and post-buy results.

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Pre-Purchase Behavior

At the point when a purchaser understands the necessities, he goes for a data look. He does
likewise, with the goal that he can settle on the correct choice. He accumulates the data about the
accompanying:

• Product Brands

• Products Variations

• Product Quality

• Product Alternatives.

The customer can assemble data about an item relying upon his age, sex, training and item's
value, hazard and acknowledgment.

Sorts of Search Activities

The data seek movement can be grouped into different kinds, for example, the accompanying:

Explicit

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Explicit sort of exercises are straightforwardly identified with the issue. These sorts of
necessities require quick help.

Continuous

Customers go on with their examination for a specific timeframe in the event that they choose or
on the off chance that they need to purchase a specific item. Continuous exercises fundamentally
demonstrate the work in advancement.

Accidental

Presently, anything that we watch by chance or just inadvertently or normally goes under
accidental research. Such data can be seen in our day by day schedule lives.

Following are the data sources accessible:

The data sources are of two kinds which are recorded under

• Internal Sources: Internal sources incorporates the buyer himself. Here he himself
reviews the data that is put away in his

Short and long answer type.

1. What is consumerism?
2. Highlight the various aspects of customer behaviour.
3. Write a short note on demand analysis.
4. Illaborate about developing marketing concepts.

Objective type.

1. Internal sources incorporates buyer himself. True/false

2. An understanding of purchase conduct is essential for the long haul. T/F
3. Marketing positioning is choosing an advertising blend that is more reasonable for
objective market fragment. T/F

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 Reference.

 Asiegbu, I., Powei, D. and Iruka, C.

Consumer Attitude: Some Reflections on Its Concept, Trilogy, Relationship with Consumer
Behavior, and Marketing Implications

2012 - European Journal of Business and Management

In-text: (Asiegbu, Powei and Iruka, 2012)

Your Bibliography: Asiegbu, I., Powei, D. and Iruka, C. (2012). Consumer Attitude: Some
Reflections on Its Concept, Trilogy, Relationship with Consumer Behavior, and Marketing
Implications. European Journal of Business and Management, 4(13), pp.38-41.

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