MM Course Pack MBA 2023-24

PROFILE OF INSTRUCTORS
Dr. Mahtab Alam: He is a BBA Graduate with a Marketing

Specialization and pursued his MBA with a Marketing Specialization. He
has qualified UGC NET and a Doctorate in Management Studies. He has
more than 16 Years of Experience including 1.5 Years of Corporate and
14.5 Years of Teaching experience. He is currently an Assistant Professor
at BVIMR, New Delhi. His subject areas are Marketing, Strategic
Management, Sales, and Distribution.
Dr. Aditi Malhotra: Dr. Aditi has more than 14 years of teaching and
training experience in Marketing and human resource subjects in various
Universities and Management institutes in India. She has always kept
herself abreast of the latest techniques and developments in teacher’s
learning aids by actively participating in national and international seminars
on developing language skills. Her focus has always been to explore various
innovative teaching methodologies and to incorporate them into her
learning lessons to make the lessons more experiential and involving.
Dr. Minakshi Sati: Dr. Minakshi Sati has been working as an Assistant
Professor at Bharati Vidyapeeth(Deemed to be university), Institute of
Management & Research, New Delhi for the last eight years. Her area of
interest in the field of marketing and general management. She has published
many papers in the field of marketing and general management.
2
BVIMR SNAPSHOT
Established in 1992, Bharati Vidyapeeth (Deemed to be University) Institute of Management and

Research (BVIMR), New Delhi focuses on imbibing the said values across various stakeholders
through adequate creation, inclusion, and dissemination of knowledge in management education.
The institute has over the past few years emerged in the lead with a vision of Leadership in
professional education through innovation and excellence. This excellence is sustained by
consistent value enhancement and initiation of value-added academic processes in institution's
academic systems. Based on the fabulous architecture and layout on the lines of Nalanda Vishwa
Vidyalaya, the institute is a scenic marvel of lush green landscape with modern interiors. The
Institute which is ISO 9001:2015 certified is under the ambit of Bharati Vidyapeeth Deemed to be
University (BVDU), Pune as approved by Govt. of India on the recommendation of UGC under
Section 3 of UGC Act vide its letter notification No. F. 9– 16 / 2004 – U3 dated 25th February
2005.
Strategically located in West Delhi on the main Rohtak Road, BVIMR, New Delhi has a splendid
layouton sprawling four acres of the plot with 'state-of-art' facilities with all classrooms, Library
Labs, Auditorium, etc., that are fully air-conditioned. The Institute which has an adjacent Metro
station “Paschim Vihar (East)”, connects the entire Delhi and NCR. We nurture our learners to be
job providers rather than job seekers. This is resorted to by fostering the skill and enhancement of
the knowledge base of our students through various extracurricular, co-curricular, and curricular
activities by our faculty, who keep themselves abreast by various research and FDPs and attend
Seminars/Conferences. The Alumni have a key role here by the inception of the SAARTHI
Mentorship program who update and create a professional environment for a learners-centric
academic ambiance and bridging the industry-academia gap. Our faculty makes distinctive
contributions to Academia through publications, seminars, and conferences apart from quality
education. We also believe in enhancing corporate-level interaction including industrial projects,
undertaken by our students under the continuous guidance of our faculty. These form the core of
our efforts which has resulted in being one of the premier institutes of management. At BVIMR,
we are imparting quality education in management at the Doctorate, PG, and UG levels.
*********
3
COURSEPACK–MBA- II Semester
TABLE OF CONTENTS
S. No Topics Page No.

1. Course Outline & Course Overview 5
2. Course Objective PO & CO 6
3. PO-CO Matrix 7
4. Rationale for Mapping PO and CO 8-11
5. University Syllabus 12
6. Recommended/ Reference Textbooks and Resources 13
7. Evaluation Criteria & Attendance Policy 14
8. Session Plan 15-19
20-48
9. Unit-1 (Basics of marketing)
10. Unit-2 (Segmentation, Marketing & Positioning) 49-77
11. Unit-3 (Marketing Mix) 78-173
12. Unit-4 (Consumer Behavior) 174-187
13. Unit-5 (Marketing Planning & Control) 188-207
14. Unit-6 (Marketing Research) 208-227
15. Case Studies 228-242
16. Multiple Choice Questions 243-254
17. Research Papers 255-268
18. Previous Year Question Papers 269-273
4
Bharati Vidyapeeth (Deemed to be University) Institute of Management and Research
BBA-III Semester, Academic year 2023-2024
Course Outline
Course Title Marketing Management
Course Code 201
No. of Credits 3
Department Management
Course Leader Dr. Mahtab Alam
Faculty Dr. Mahtab Alam, Dr. Aditi Malhotra,
Dr. Minakshi Sati,
Email [email protected],
[email protected]
[email protected]
Phone No. 011-25285808
Course Type Core
Offer in Academic Year 2023-24 (MBA-2nd Sem)
Course Overview
The marketing management course enables a student to understand the fundamentals of

marketing concepts and the role marketing plays in business. This course enables a student
to understand the ‘Marketing mix’ elements and the strategies and principles underlying
modern marketing practices. Students should be able to demonstrate their comprehension
of marketing concepts and knowledge by applying those in their written exams, case studies
discussions, presentations, and projects. The assignments/projects would enable students
to apply the marketing concepts and marketing mix elements practically and illustrate those
through a written report and presentation. The course methodology encourages students to
explore for themselves the role of a marketing manager and the boundaries of marketing.
Classroom activities including lectures, discussions, and case studies will be designed to
encourage students to get involved, absorb, and assimilate inputs. These activities will also
be supplemented by group discussions, cooperative group solving problems, live projects,
and analysis of video cases and debates.
5
Course Objectives
• To understand the core concepts of Marketing and approaches to Marketing.

• To differentiate the Marketing and Selling processes.
• To study the Marketing Environment and understand its influence on Marketing
Decisions.
• To study the concept of Segmentation, Targeting and Positioning.
• To understand Marketing Mix Elements and their utility in marketing.
• To study the concept of Marketing Research and Marketing Information Systems.
Program Outcomes (POs):

On the successful completion of this program, the students will be able to
1. Apply the knowledge of management theories and practices to solve business problems.
2. Foster analytical and critical thinking abilities for data-based decision making.
3. Learn new technologies with ease and be productive at all times.
4. Ability to understand, analyze and communicate global, economic, legal and ethical
aspects of business.
5. Read, write, and contribute to Business literature.
6. Ability to lead themselves and others in the achievement of organizational goals,
contributing effectively to a team environment.
Course Outcomes:
After completing the course successfully, the learner will be able to
1. Gain a solid understanding of key marketing concepts and skills.
2. Identify and demonstrate the dynamic nature of the environment in which marketing
decisions are taken and appreciate the implications for marketing strategy determination
and implementation.
3. Develop the students' skills in applying the analytical perspectives on the concepts of
marketing and the decisions related to segmentation, targeting and positioning,
determining marketing mix etc.
6
4. Develop an understanding of the underlying concepts, strategies and the issues involved
in the exchange of products and services and control the marketing mix variables in order
to achieve organizational goals.
5. Develop strong marketing research plans and persuasively communicate your
recommendations and rationale.
6. Discuss the scope and managerial importance of marketing research and its role in the
development of marketing strategy.
PO-CO Matrix
CO/PO PO1 PO2 PO3 PO4 PO5 PO6
CO 1 3 2 - 1 2 1
CO2 2 3 1 3 1 2
CO3 3 3 2 2 1 3
CO4 3 2 1 - 2 2
CO5 2 2 - - 1 3
CO6 2 3 2 3 2 3
1- Low, 2- Medium, 3- High, if no correlation, put ‘-’
7
Rationale for Mapping Program Outcomes and Course Outcomes:
CO1 & PO1 Application of the knowledge of management theories and practices to solve
Mapped at 3 business problems can be applied by gaining a solid understanding of key
marketing concepts and skills.
CO1 & PO 2 In order to foster analytical and critical thinking abilities for data-based
Mapped at 2 decision-making, a partial understanding of key marketing concepts and skills
is required.
CO1 & PO 3 To learn new technologies with ease and be productive at all times, it is not
Mapped at - necessary to gain a solid understanding of key marketing concepts and skills.
CO1 & PO 4 Gaining a solid understanding of key marketing skills and concepts is very little
Mapped at 1 required to understand, analyze, and communicate global, legal, and ethical
CO1 & PO5 To read, write, and contribute to business literature moderate understanding of
Mapped at 2 key marketing concepts and skills is moderately required.
CO1 & PO6 In order to develop abilities to lead themselves and others in the achievement
Mapped at 1 of organizational goals, and contribute effectively to a team environment, a
very low understanding of key marketing concepts and skills is required.
CO2 & PO1 Identification and demonstration of the dynamic nature of the environment in
Mapped at 2 which marketing decisions are taken and appreciation of the implication for
marketing strategy determination and implementation will partially enable
managers to apply the knowledge of management theories and practices to
solve business problems.
CO2& PO2 Identification and demonstration of the dynamic nature of the environment in
marketing strategy determination and implementation foster analytical and
critical thinking abilities for data-based decision-making in a high manner.
marketing strategy determination and implementation are less correlated to
learn new technologies with ease and be productive at all times.
marketing strategy determination and implementation are highly aligned with
the development of the ability to understand, analyze, and communicate global,
economic, legal, and ethical aspects of the business.
8
CO2& PO5 In order to read, write, and contribute to business literature, it is less required
Mapped at 1 to Identify and demonstrate the dynamic nature of the environment in which
marketing decisions are taken and appreciate the implication for marketing
strategy determination and implementation.
CO2& PO6 To develop abilities to lead themselves and others in the achievement of
Mapped at 2 organizational goals, and contribute effectively to a team environment,
moderately required for Identification and demonstration of the dynamic nature
of the environment in which marketing decisions are taken and appreciation of
the implication for marketing strategy determination and implementation.
CO3 & PO1 Developing the student's skills in applying analytical perspectives on marketing
Mapped at 3 concepts and the decisions related to segmentation, targeting and positioning,
determining marketing mix, etc. can be done by fully applying the knowledge
of management theories and practices to solve business problems.
Mapped at 3 concepts and the decisions related to segmentation, targeting and positioning,
determining marketing mix, etc. completely fostering analytical and critical
thinking abilities for data-based decision-making.
CO3 & PO3 Learning new technologies and critical thinking abilities for data-based
Mapped at 2 decision-making is averagely required for Developing the student's skills in
applying analytical perspectives on marketing concepts and the decisions
related to segmentation, targeting and positioning, determining marketing mix,
etc.
The ability to understand, analyze, and communicate global, economic, legal,

CO3 & PO4 and ethical aspects of the business is moderately required for Developing the
Mapped at 2 student's skills in applying analytical perspectives on marketing concepts and
the decisions related to segmentation, targeting, and positioning, determining
marketing mix, etc.
CO3 & PO5 In order to read, write, and contribute to business literature, there is less
Mapped at 1 requirement for developing the student's skills in applying analytical
perspectives on marketing concepts and the decisions related to segmentation,
targeting and positioning, determining marketing mix, etc.
Mapped at 3 concepts and the decisions related to segmentation, targeting, and positioning,
determining marketing mix, etc. can contribute greatly to the development of
the ability to lead themselves and others in the achievement of organizational
goals, contributing effectively to a team environment.
CO4 & PO1 Developing an understanding of the underlying concepts, strategies, and
Mapped at 3 issues involved in the exchange of products and services and controlling the
marketing mix variables in order to achieve organizational goals is fully
9
indispensable for the application of management theories and practices to
solve business problems.
CO4 & PO2 Developing an understanding of the underlying concepts, strategies, and issues
Mapped at 2 involved in the exchange of products and services and controlling the marketing
mix variables in orderto achieve organizational goals is moderately possible by
fostering analytical and critical thinking abilities for data-based decision-
making.
CO4 & PO3 Learning new technologies and critical thinking abilities for data-based
Mapped at 1 decision-making is less required for Developing an understanding of the
underlying concepts, strategies, and issues involved in the exchange of products
and services and controlling the marketing mix variables in orderto achieve
organizational goals.
CO4 & PO4 The ability to understand, analyze, and communicate global, economic, legal,
Mapped at - and ethical aspects of the business is not required for Developing the student's
skills in applying analytical perspectives on marketing concepts and the
decisions related to segmentation, targeting, and positioning, determining
marketing mix, etc.
CO4 & PO5 In order to read, write, and contribute to business literature, there is a partial
Mapped at 2 requirement for developing the student's skills in applying analytical
perspectives on marketing concepts and the decisions related to segmentation,
targeting and positioning, determining marketing mix, etc.
CO4& PO6 Developing the student's skills in applying analytical perspectives on marketing
Mapped at 2 concepts and the decisions related to segmentation, targeting, and positioning,
determining marketing mix, etc. can contribute averagely to the development
of the ability to lead themselves and others in the achievement of organizational
goals, contributing effectively to a team environment.
CO5 & PO1 The development of strong marketing research plans and persuasively
Mapped at 2 communicating recommendations and rationale can be done moderately by
applying management theories and practices to solve business problems.
CO5 & PO2 The development of strong marketing research plans and persuasively
Mapped at 2 communicating recommendations and rationale moderately foster analytical
and critical thinking abilities for data-based decision-making.
CO5 & PO3 Developing strong marketing research plans and persuasively communicating
Mapped at - your recommendations and rationale are not aligned with learning new
technologies with ease and be productive at all times.
Mapped at - your recommendations and rationale are not mapped with the ability to
10
understand, analyze, and communicate global, economic, legal, and ethical
Mapped at 1 your recommendations and rationale are having less impact on reading, writing,
and contribution to business literature.
Mapped at 3 your recommendations and rationale greatly develops the ability to lead
themselves and others in the achievement of organizational goals, contributing
effectively to a team environment.
CO6 & PO1 Discussing the scope and managerial importance of marketing research and its
Mapped at 2 role in the development of marketing strategy is partially supported by the
application of knowledge of management theories and practices to solve
business problems.
CO6 & PO2 Discuss the scope and managerial importance of marketing research and its role
Mapped at 3 in the development of marketing strategy contributes heavily to fostering
analytical and critical thinking abilities for data-based decision-making.
CO6 & PO3 Discuss the scope and managerial importance of marketing research and its role
Mapped at 2 in the development of marketing strategy moderately enabling learning new
technologies with ease and be productive at all times.
Mapped at 3 role in the development of marketing strategy is fully supported in developing
the ability to understand, analyze, and communicate global, economic, legal,
and ethical aspects of business.
Mapped at 2 role in the development of marketing strategy enables partially to read, write,
and contribute to business literature.
CO6& PO6 Discussing the scope and managerial importance of marketing research and its
Mapped at 3 role in the development of marketing strategy completely develops the ability
to lead themselves and others in the achievement of organizational goals,
contributing effectively to a team environment.
11
University Syllabus (CBCS – Revised Syllabus w.e.f.-Year 2022 –2023)
Unit Sub-Unit Sessions
Unit-I Introduction: Meaning and definition of Marketing, Core concepts of 6
Marketing -Need, Want, Demand, Value, Exchange, Customer
satisfaction & Customer delight, Difference between Marketing and
Selling, Business orientations towards marketplace: Production,
Product, Selling,
Marketing, Societal Marketing. Marketing environment - Micro and
Macro marketing environment
Unit-II Segmentation, Targeting and Positioning: Meaning, need and 10
importance, bases for Consumer market segmentation and industrial
market segmentation, evaluation of identified segments and selection
and evaluation of target market. Targeting strategies: Levels of market
segmentation: segment marketing, niche marketing, local marketing
and individual marketing. Positioning and Differentiation: meaning,
concept, product, service, people and image differentiation, ways to
position the product.
Unit III Marketing Mix: Concept, Seven P‟s of marketing mix: Product – 15
meaning, levels of product, product mix- product line – decisions: line
stretching, filling, pruning, width, length, depth. Product life cycle
(PLC) – Concept, stages in PLC, characteristics, and strategies for each
stage of PLC. New product development process, Brand – Concept,
Brand Creation. Price – meaning, objectives of pricing, pricing
approaches- cost based, competition based, and market based, pricing
strategies- skimming pricing, penetrative pricing, psychological or odd
pricing, perceived value pricing, loss leader pricing etc. Place-
Importance of distribution in marketing of products or services, Types
of intermediaries, levels of channels, Channel Management Decisions-
factors considered for selection and motivation of dealers and retailers,
channel conflict- concept, types of channel conflict, ways to resolve
channel conflicts. Promotion- Elements of promotion mix: meaning of
advertising, sales promotion, personal selling, public relations,
publicity, direct marketing, and event sponsorship
Unit IV Consumer Behaviour: Meaning and definition, importance of studying 4
consumer behavior in the field of marketing, different buying roles,
Consumer buying decision making process steps.
Unit V Marketing Planning and Control: Marketing Planning Process – Steps, 6
nature, and contents of a marketing plan. Need of marketing control,
Annual plan control, productivity control,
Efficiency control and strategic control- marketing audit.
Unit VI Marketing Research: Need and Importance of Marketing Research, 4
Marketing Research Process, Types of Marketing Research. Marketing
Information System- overview
12
Reference Books:
Name of the Publisher
S. No Title of the Book Year Edition
Author Company
1. Marketing 2019, Sixth McGraw Hill
Dr. Rajan Saxena
National Management edition Publications
Marketing
2. V.S. Ramaswami Management- 2017, Fifth McGraw Hill
National and S. Namakumari Indian Context edition Publications
*Global Perspective
3. Marketing 2009, Second Excel Books
Dr. Tapan Panda
National Management Edition India
Philip Kotler, Garry 2020,
4. Principles of Pearson
Armstrong, Prafulla Eighteenth
International Marketing Education
Agnihotri edition
2018,
5. Philip Kotler, Kavin Marketing Pearson
Seventeenth
International Lane Keller Management Education India
edition
Michael J. Etzel, 2005,
6. Marketing McGraw Hill
Bruce J. Walker, fourteenth
International Higher Education
William J. Stanton edition-revised
Online Resources:
Online Resources No. Website Address
1 https://managementhelp.org
2 https://bookboon.com/en/marketing-and-law-ebooks
MOOCs:
Resources Website Address
No.
1. https://alison.com/course/introduction-to-marketing-management-revised
2. https://alison.com/course/understanding-your-audience-market-segmentation
3. https://alison.com/course/marketing-management-analysing-competitors-and-
customers-revised
4. https://swayam.gov.in/nd1_noc19_mg48/preview
13
Evaluation Criteria:
Assessment
S. No Description Weightage
Method
It will be based on conceptual questions, situation-
End Term specific application-oriented questions, and short
Examination/ case studies, End term exam will cover both pre-
1
University mid-term and post-mid-term course coverage. 50%
Examination Course readings are an integral component of
learning in this course.
specific application-oriented questions, and short
case studies. Course readings are an integral
First Internal
2 component of learning in this course. At least one of 15%
Examination
the questions will be based on these readings which
will not be specified to the students. It will cover the
3 Units.
specific application-oriented questions, and short
case studies. Course readings are an integral
Second Internal
3 component of learning in this course. At least one of 15%
Examination
the questions will be based on these readings which
will not be specified to the students. It will cover the
remaining 2 or 3 Units.
CES Students shall be Evaluated 2 times through any of
(Continuous the CES activities which includes Class test, Case
4 10%
Evaluation Studies, Quiz on Moodle, Presentations, etc. Both
System) CES is of weightage of 5 marks each.
Class Students will be awarded marks for active and
5 participation constructive participation in class. Students need to 10%
and Attendance fulfill the criteria of 75% attendance overall
Attendance Policy:
85% or above 10 Marks
Below 85% Prorata Basis

Attendance Marks=Attendance% divided by 10
14
Session Plan/Lesson plan :
Requirements:
S. No Topics to be discussed Learning Outcomes
Readings/ Assignments / Cases
Unit-1 Basics of Marketing
To enable students
PO, CO, Subject Intro
1 BVDU BBA Syllabus 2022 CBCS understand PO, CO
& Suggested Readings
and Course details
Philip Kotler,Gary Armstrong, Prafulla
Agnihotri, Pearson Education 2020 edition
Definition, Meaning &
2 https://www.researchgate.net/p LO1
Basics of Marketing
ublication/281908555_The_bas
ics_of_marketing_strategy
Core Concepts of Philip Kotler,Gary Armstrong, Prafulla
Marketing, Evolution Agnihotri, Pearson Education 2020 edition
3 of Marketing, Features https://www.researchgate.net/p LO1
& Functions & Scope ublication/301975454_The_Co
of Marketing re_Concept_of_Marketing_Ma nagement
Importance and Diff
Between Selling & Philip Kotler,Gary Armstrong, Prafulla
Marketing, Role of Agnihotri, Pearson Education 2020 edition
4 LO1
Marketing Manager & https://www.uschamber.com/c
Marketing o/grow/sales/sales-vs- marketing
Environment Concept
Features & Importance
5 of Marketing LO2
Environment
Micro & Macor factors Philip Kotler,Gary Armstrong, Prafulla
of Marketing Agnihotri, Pearson Education 2020 edition
6 LO2
Environment https://www.uschamber.com/c
Revision Unit 1 o/grow/sales/sales-vs- marketing
Unit-2 Segmentation, Targeting & Positioning
Concept of
7 Segmentation & Levels LO3
https://www.uschamber.com/c
of Segmentation
o/grow/sales/sales-vs- marketing
8 Basis of Segmentation LO3
15
Procedure of Agnihotri, Pearson Education 2020 edition
9 LO3
Segmentation https://core.ac.uk/download/pd
f/234624114.pdf
Industrial Market Philip Kotler,Gary Armstrong, Prafulla
10 LO3
Segmentation Agnihotri, Pearson
Market Targeting & its
Process
ublication/319085560_Market_
Segmentation_Targeting_and_ Positioning
Targetting Strategies &
12 Market Positioning LO3
Concept
https://www.researchgate.net/p
Types of Images &
ublication/343060845_Image_
13 Positioning Errors of LO3
Differentiation_for_Competitiv
Positioning
e_Advantage_in_the_Private_
Tertiary_Education_Institution
s_in_Botswana
Strategies of Philip Kotler,Gary Armstrong, Prafulla
14 LO3
Positioning Agnihotri, Pearson Education 2020 edition
Re-Positioning & Philip Kotler,Gary Armstrong, Prafulla
15 LO3
Differentiation. Agnihotri, Pearson Education 2020 edition
16 Revision Unit 2 LO3
Unit-3 Marketing Mix
Marketing Mix,
17 Product Layers & LO4
Features
Classification of
Products & Product
Mix, Product Line
ublication/278306107_Whole-
Decision
Product_Concept
Product Diffusion
19 Curve & Product Life LO4
Cycle
16
New Product Agnihotri, Pearson Education 2020 edition
Development Stages https://www.researchgate.net/p
20 LO4
Branding Concept and ublication/344411993_A_Com
Brand Creation parative_study_of_product_life
_cycle_and_its_marketing_app lications
Pricing. Objectives &
21 Factors affecting LO4
Pricing
Pricing Strategies,
22 Pricing determination LO4
methods
Place (Distribution
23 Channel) Functions & LO4
Importance
Conventional & Non-
24 Conventional types of LO4
distribution channel
Distribution channel
strategies & types of
25 Intermediaries & LO4
Channel Management
& Channel Conflict
Promotion Mix, 5 Ms
26 of Advertisement, LO4
Objectives & functions
Kinds of
advertisements & Philip Kotler,Gary Armstrong, Prafulla
27 LO4
Modes of Agnihotri, Pearson Education 2020 edition
advertisement
Sales Promotion,
Objectives ,
Advantages & Philip Kotler,Gary Armstrong, Prafulla
28 LO4
Disadvantages & Types Agnihotri, Pearson Education 2020 edition
of Sales promotion
techniques
Personal Selling
29 &Objectives & Process LO4
of Personal Selling
Publicity & Public
Relation, Direct Philip Kotler,Gary Armstrong, Prafulla
30 LO4
Marketing & Agnihotri, Pearson Education 2020 edition
Sponsorship
17
Unit-4 Consumer Behaviour

Consumer Behaviour: Principles of Marketing by, Philip Kotler,
Meaning and Gary Armstrong & Prafulla Agnihotri
32 LO1 & 6
definition, https://journals.sagepub.com/d
oi/pdf/10.1177/215824401664 5638
Importance of studying Principles of Marketing by, Philip Kotler,
33 consumer behavior in Gary Armstrong & Prafulla Agnihotri LO1 & 6
the field of marketing,
Principles of Marketing by, Philip Kotler,
Gary Armstrong & Prafulla Agnihotri
34 Different buying roles, LO1 & 6
ublication/342876391_Review
_Paper_on_Factors_Influencin
g_Consumer_Behavior
Consumer buying Principles of Marketing by, Philip Kotler,
decision making Gary Armstrong & Prafulla Agnihotri
35 process steps. https://researchleap.com/explai ning- LO1 & 6
Revision Unit 4 consumer-decision- making-process-
critical- literature-review/
Unit-5 Marketing Planning and Control
Marketing Planning, &
features
Marketing planning
ublication/262379904_Marketi
Phases
ng_Information_Systems
Marketing Planning
ublication/222846014_The_ma
37 Process Benefits of LO5
rketing_planning_process_Beh
Marketing Planning
avioral_problems_compared_t
o_analytical_techniques_in_ex
plaining_marketing_plan_credi bility
Marketing Sub-plan
types Philip Kotler,Gary Armstrong, Prafulla
38 LO5
Content of a Marketing Agnihotri, Pearson Education 2020 edition
plan
Need of marketing Philip Kotler,Gary Armstrong, Prafulla
39 LO5
control, Annual plan Agnihotri, Pearson Education 2020 edition
18
control, productivity
control,

Efficiency control and Agnihotri, Pearson Education 2020 edition
40 strategic control- https://www.researchgate.net/p LO5
marketing audit. ublication/327107606_Researc
h_in_Marketing_Strategy

Unit-6 Marketing Research

Research, Marketing Agnihotri, Pearson Education 2020 edition
42 Research, Features & https://www.researchgate.net/p LO6
Needs ublication/273760950_Marketi
ng_research_process_Six_stag es
Importance &
limitations of
43 Marketing Research LO6
and Marketing
Research Process
Types of Marketing
44 research & Marketing LO6
Information System

45 Revision Unit 4 https://www.researchgate.net/p LO6
ublication/262379904_Marketi
ng_Information_Systems
19
Reading Material
Unit-01
Basics of Marketing
20
Basic Terminologies of Marketing
To understand the Gamut of Marketing, we should have clarity of basic terminologies. These
terminologies are fundamental stones of marketing.
Needs: It is a state of felt deprivation. Needs are the feelings of discomfort of a human Being for
physical or mental satisfaction. Physical discomforts are hunger, thirst, etc. which are in other
words known as the human physiological needs for food, clothing, and shelter to survive. Mental
discomfort is a lack of safety, security, and social status such as safety of life and family, security
of wealth and money, and high living standard in society.
Physical needs satisfaction goods: Burger, Pizza & juice, etc.
Mental Needs satisfaction goods: Medical Services, Insurance, Banking, and Luxury cars etc.
Wants: When Human Needs shaped by culture, society, religion, beliefs, custom & Individual
personality factors, it becomes wants. In other words, combination of all aforesaid factors creates
wants of Human Being. Various Results of Human Wants are:
Various Global wants

American Wants: Ham Burger & Hotdog
Italian Wants: Pasta & Pizza
Japanese Wants: Noodles & Soup
Various Indian Wants

South Indian Wants: Dosa Sambar
Bengali Wants: Rice & Fish Cury
Punjabi Wants: Chole Bhathure
21
Demand: When Human Wants are backed by Purchasing power it becomes Demand. In simple
words we can say mere wants to have any product is not demand, it should have support of paying
capacity to purchase the products.
Demand = Wants + Purchasing Power
Value/Customer Value: It means how much a product or service is worth to a customer is a

value or Customer Value. Customers bear the psychological cost, time cost, energy cost, and
monetary cost for product/services value, social value, brand value.
Exchange: The act/ process of obtaining a desired product from someone by offering something
in return.For exchange potential to exist, the following conditions must be fulfilled.
 In marketing, the term "exchange" refers to the process of transferring goods, services, or
value between two parties.
 An exchange occurs when a buyer obtains a product, service, or idea from a seller in return
for something of value, such as money, time, or another product.
 It can be done in monetary transactions or in barter transactions.
Barter Transaction Monetary Transaction
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Customer Satisfaction: Customer satisfaction measures how well a firm is able to meet the
expectations of customers. Customer satisfaction is a key concept in marketing, as a firm cannot
retain its customers unless it has highly satisfied customers. The following are some of the factors
that are necessary for customer satisfaction:
 Quality Product at the right price

 Proper After Sales Service
 Delivering the promised benefits
Customer satisfaction is measured through feedback and surveys. Surveys are specially designed
for past customers to measure their satisfaction level on various parameters. Customer satisfaction
becomes more important in highly competitive industries like FMCG products, where the
customer can change their loyalty quickly.
Customer Delight: Customer delight surprises a customer by exceeding his or her expectations
and thus creating a positive emotional reaction. This emotional reaction leads to word of
mouth. Customer delight directly affects the sales and profitability of a company as it helps to
distinguish the company and its products and services from the competition. In the past customer
satisfaction has been seen as a key performance indicator. Customer satisfaction measures the
extent to which the expectations of a customer are met (compared to expectations being exceeded).
However, it has been discovered that mere customer satisfaction does not create brand loyalty, nor
does it encourage positive word of mouth.
Customer delight can be created by the product itself, by accompanying standard services, and by
interaction with people on the front line. Interaction is the greatest source of opportunities to create
delight as it can be personalized and tailored to the specific needs and wishes of the customer.
During contact with touch points in the company, more than just customer service can be delivered.
The person at the front line can surprise by showing a sincere personal interest in the customer,
offering small attention that might please, or finding a solution specific to particular needs. Those
front-line employees are able to develop a relationship between the customer and the brand.
Elements of creating motivated staff are recruiting the right people, motivating them continuously
and leading them in a clear way.
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Market: The word “Market” originated from Latin noun “Marcatus” which means “a place
where business is conducted”. In other words, it refers to a place where buyer and seller meets to
settle their transaction.
Urban Area Market Shopping Mall & Complex
Rural Area Market Haat & Mandi
Marketing: It is the process of identifying consumers’ needs and wants and making
goods/services, accordingly, providing them to end users and making them satisfied. It starts with
need identification and ends with customer satisfaction.
Marketing Management: The application of all the principles of Management i.e., Planning,
Organizing, Staffing, Directing, and Controlling in the field of Marketing is called Marketing
Management. In marketing management focus is on customer satisfaction because this is the belief
of marketing that the “Customer is King” and we need to treat him as supreme which leads to
providing goods/services to customers of his/her own taste and in his/her own purchasing power.
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Definitions of Marketing
There are various definitions propounded by different authors which emphasize on various
perspectives.
Philip Kotler: "Marketing is the social 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."
Peter Drucker: "The aim of marketing is to know and understand the customer so well the product
or service fits him and sells itself."
American Marketing Association (AMA): "Marketing is the activity, set of institutions, and
processes for creating, communicating, delivering, and exchanging offerings that have value for
customers, clients, partners, and society at large."
Seth Godin: "Marketing is the art of telling a story that resonates with your audience and then
spreads."
Kotler and Armstrong: "Marketing is the process by which companies create value for customers
and build strong customer relationships to capture value from customers in return."
Regis McKenna: "Marketing is everything a company does to get and keep a customer."
E. Jerome McCarthy: "Marketing is the performance of business activities that direct the flow of
goods and services from producer to consumer or user."
Theodore Levitt: "Selling concerns itself with the tricks and techniques of getting people to
exchange their cash for your product. It is not concerned with the values that the exchange is all
about. And it does not, as marketing invariably does, view the entire business process as consisting
of a tightly integrated effort to discover, create, arouse, and satisfy customer needs."
Al Ries and Jack Trout: "Marketing is not a battle of products, it's a battle of perceptions."
Neil Borden: Borden coined the term "marketing mix" and described marketing as "the process
of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and
services to create exchanges that satisfy individual and organizational objectives."
These definitions showcase the diverse perspectives on what marketing entails, ranging from
customer satisfaction, value creation, and relationship building to the strategic aspects of product
promotion and perception management.
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Evolution of Marketing Management
Pre-Industrial Period ( Before 1760s): This era of Marketing was segregated into three
categories which included the initial stages of marketing with human evolution.
(1) Consumption Era: In the beginning phase of human evolution,

human life on earth was dependent on nature and they used to
consume whatever was available in their surrounding by nature
like
➢ Fruits & Vegetables
➢ Flesh & Fish etc.
(2) Agriculture Era: After the Passage of time Human knowledge

increased and they started agriculture to produce Food grains for
their livelihood. At this point in time, goods were produced on a
smaller scale and were primarily consumed by farmers and their
families.
(3) Exchange Era: Early forms of marketing were centered around

basic trade and barter systems, where individuals exchanged
goods and services with other goods and services , it is called the
“Barter System”. This period is known as the Exchange Era.
Industrial Revolution (18th Century)
The “Industrial Revolution” in modern history, the process of change from an agrarian and
handicraft economy to one dominated by industry and machine manufacturing. These
technological changes introduced novel ways of working and living and fundamentally
transformed society. This process began in Britain in the 18th century and from there spread to
other parts of the world. Although used earlier by French writers, the term Industrial
Revolution was first popularized by the English economic historian Arnold Toynbee (1852–83) to
describe Britain’s economic development from 1760 to 1840. Since Toynbee’s time the term has
been more broadly applied as a process of economic transformation than as a period of time in a
particular setting.
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4. Production Era (1860-1920) : The Production Concept is one of the earliest philosophies
of marketing and business. It centers around the idea that consumers will favor products that
are widely available and affordable. In essence, the focus of this concept is on maximizing
production efficiency and distribution while keeping costs low. The production era emphasized
on :
 Mass Production
 Low Costs
 Widespread Availability
 Limited Focus on Consumer Preferences:
 Demand Exceeds Supply
 Marketing Efforts on Efficiency
5. Product Era (1920-1930): The Product Era is a phase in the historical evolution of
marketing where the primary focus of businesses shifted from simple production and
distribution to emphasizing the quality, features, and benefits of their products. It's important
to note that while the Product Era brought attention to product quality and features, it
eventually evolved into other marketing orientations that placed even greater emphasis on
understanding consumer needs, building relationships, and delivering value beyond just the
product itself.
6. Sales Era (1930-1950): The Sales Era in the historical evolution of marketing followed the
Product Era and is characterized by a shift in focus from primarily emphasizing product
attributes to a more aggressive approach of convincing customers to buy products through sales
tactics and promotional efforts. The Sales era emphasized on
 High Sales Pressure
 Transactional Relationships
 Push Marketing
 Assumption of Customer Resistance
7. Marketing Era (1950-1980): This era introduced a profound shift in business philosophy,
emphasizing a customer-centric approach and recognizing the importance of understanding
and meeting customer needs and preferences. Key Characteristics of the Marketing Era were
as follows:
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 Customer-Centric Approach
 Market Research and Analysis
 Segmentation and Targeting
 Value Creation
 Integrated Marketing Mix
The Marketing Era laid the foundation for modern marketing practices, and its core principles
continue to guide businesses in creating customer value, building relationships, and adapting
to the dynamic marketplace.
8. Relationship Marketing Era (1980-1990): The Relationship Marketing Era is a phase in

the evolution of marketing that places a strong emphasis on building and maintaining long-
term relationships with customers. This era emerged as a response to the limitations of
transactional and product-focused approaches, aiming to create deeper connections and
enhance customer loyalty.
Key Characteristics of the Relationship Marketing Era:
 Customer-Centric Focus
 Long-Term Relationships
 Personalization and Customization
 Customer Retention
 Communication and Engagement
 Feedback and Listening
 Loyalty Programs
 Data and Technology
 Community Building
The Relationship Marketing Era builds upon the foundations of the Marketing Era by
acknowledging the long-term value of customer relationships. It aligns with the evolving
preferences of consumers who seek personalized experiences and genuine connections with
the brands they interact with.
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9. Societal Marketing Era (1990 onwards): The Societal Marketing Era represents a phase
in the evolution of marketing that goes beyond customer-centric strategies and considers
broader social and environmental considerations. This era emerged as businesses and
consumers became more conscious of the impact of marketing activities on society as a whole.
Key Characteristics of the Societal Marketing Era:

 Balancing Profit and Societal Well-being
 Social Responsibility
 Ethical Considerations
 Cause Marketing (Social and environmental cause).
 Environmental Sustainability
 Corporate Social Responsibility Activities (CSR).
 Stakeholder Engagement
 Transparency and Accountability
This era reflects the growing recognition that businesses have a responsibility beyond profits
and that they can play a role in driving positive social change. The Societal Marketing Era
aligns with the expectations of consumers who increasingly support brands that demonstrate
social and environmental responsibility.
Marketing Phases (Marketing 1.0 to Marketing 5.0)
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1. Marketing 1.0 (1950s) : Marketing 1.0 refers to the traditional product-centric approach.
It focuses on the features and functionalities of products, if customers will buy based on
product availability and affordability. The main goal is to increase production and
distribution efficiency.
2. Marketing 2.0 (1970s) : Marketing 2.0 is characterized by a shift towards a customer-

centric approach. It recognizes the importance of understanding customer needs and
preferences. Marketers focus on segmenting the market and tailoring marketing strategies
to specific customer groups. This era introduced market research and segmentation
techniques to identify target audiences.
3. Marketing 3.0 (1990s): Marketing 3.0 emphasizes Human-Centric approach. It focused
on the importance of values, emotions, and societal impact. It considers not only the
functional and emotional needs of customers but also their ethical and social concerns.
Marketing efforts in this era aim to create a positive impact on society and build strong
emotional connections with customers.
4. Marketing 4.0 (2010s): Marketing 4.0 reflects the impact of digital technology and the
rise of online platforms and social media. It recognizes the power of digital channels in
influencing customer behavior and shaping brand perception.
5. Marketing 5.0 (2020s): Marketing 5.0 represents the Marketing in Digital World as it
emphasizes the technology for Humanity approach. This is a current and evolving stage of
marketing that goes beyond just product features and customer satisfaction. It enhances
customer experiences and enables personalized interactions. Technologies such as artificial
intelligence, big data analytics, and marketing automation help gather customer insights,
deliver targeted messaging, and optimize marketing strategies.
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Nature/Features of Marketing
1. It is Consumer Oriented.
2. It is the main Functional area of an organization like Finance, Production & Human
resources, etc.
3. It is customer oriented.
4. It is a continuous process.
5. It is a dynamic process.
6. It is an interactive activity.
7. It consists of 7 P’s as main elements.
8. It plays an important role for firms, society & nations.
9. It is applied by both product organizations as well as service organizations.
10. It is a research-centric activity.
11. It has a data-driven approach.
Scope of Marketing/Marketing Offerings
Marketing is typically seen as the task of creating, promoting, and delivering goods and services
to consumers & business houses. Marketing is required in all industries and for all kinds of
products & services. Its scope covers several things which are as follows:
(1) Goods: It is a physical output of combined efforts of all the inputs i.e men, money,
machine, material & methods.
e.g: TV, Car, Laptop etc.
(2) Services: It is the Intangible output of combined efforts of all the inputs to satisfy needs
& wants of customers.
e.g: Medical service, legal service, Entertainment service etc.
(3) Events: Marketing also covers events for its marketing to increase no of audience and
popularity of the event.
e.g: Olympic, World-cup, Award Function etc.
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(4) People: Now a days marketing tools are used for the marketing of people as well for
creating awareness among the public and creating positive image among the target
audience.
e.g: Political leaders, Film Stars etc.
(5) Properties: Properties are the product of Real Estate sector in the form of commercial
complex & residential societies which are supported by marketing to link the consumers &
investors to the Infrastructure developers.
e.g: Shops in Malls, Villas , Apartments & Farm houses etc.
(6) Places: Marketers also covers places to promote & develop tourism Industry by using tools
& techniques of marketing. Marketing focuses on cities, states, regions & nations.
e.g: Incredible India,
(7) Organization: Organizations also uses the Marketing Practices for building favorable
image in the minds of consumers & general public.
e.g: HERO Motocorp, Reliance Group etc.
(8) Information: Marketing of Information is also in the trend because everyone whether
individual or organization require information on day to day basis for several key decisions.
e.g Just dial, Yellow Pages etc.
Importance/Significance of Marketing
In the present scenario, marketing is important for both the parties i.e seller & buyer and it is even
important for the general public which are part of society & Nation.
(1) Importance of Marketing to Customers:
(a) Delivery of standard of living to customers: By providing standardized product of

high quality as per the customer’s need and platform to distribute the product raises the
living standard of the customers.
e.g: Juice & Soft drink by Vending machine, Home Delivery of Products etc.
(b) Customer Awareness: Marketing create awareness among customers by promotion &
advertisement regarding
➢ Product availability.
➢ Product Quality.(Agmark for food products & Hallmark for Jewelry)
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➢ Various Schemes & Discounts.
➢ Customer Grievance Solutions.(Jago Grahak Jago)
(c) Shopping Convenience: Nowadays customer wants everything with minimum time &
effort spending that’s why Marketers has made shopping very convenient by providing
the following facilities.
➢ Teleshopping.
➢ Online Shopping.
➢ Door-to-door selling etc.
(2) Importance of Marketing to Firms:
(a) Helpful in Business Planning & Decision-making: Marketing provides information

through market research regarding the customers, competitors and other environmental
factors which provide the basis for business planning & decision making.
(b) Increment of Profit: Marketing boosts sales which leads to an increase in the profits
of the organization.
(c) Increased marketing share: Marketing also helps to expand the market share by
acquiring more new customers and retaining the existing customers.
(d) Help in communication between firm and Society. Effective marketing involves
consistent and integrated communication across various channels, including
advertising, public relations, social media, and more.
(3) Importance of Marketing to Society:
(a) Employment Opportunities: Marketing provides several employment opportunities

in the sales department, purchase, logistics, advertisement, after-sale service, etc.
(b) Increase in National Income: Through marketing firm generate income and pay tax
to the government which increases national income. This national income is used for
the welfare of society.
(c) Social Interest Campaigns. Marketing conducts various social events which creates
awareness for society and their active participation in social causes. (Eco activities,
Marathon etc.)
Concept/Philosophies/Approaches of Marketing
Marketing philosophies, also known as marketing, concepts or approaches of marketing and

are guiding principles that businesses and marketers follow to formulate their marketing
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strategies and approaches. These concepts reflect different orientations toward customer needs,
value creation, and business goals. Here are the key marketing philosophies:
1. Production Concept: This concept emphasizes maximizing production efficiency and

making products widely available and affordable. The focus is on mass production and
distribution, assuming that customers will prefer accessible and low-cost products.
2. Product Concept: The product concept centers on creating and improving products with
unique features, quality, and performance. Businesses believe that customers will choose
products that offer the most in terms of features and quality.
3. Selling Concept: This philosophy revolves around aggressive sales and promotion efforts
to persuade customers to buy products. It assumes that customers need to be convinced
through marketing and advertising to make purchases.
4. Marketing Concept: The marketing concept emphasizes understanding and satisfying

customer needs and wants. Businesses conduct market research to identify customer
preferences and create products and services that fulfill those needs.
5. Relationship Marketing Concept: Relationship marketing focuses on building and

maintaining long-term relationships with customers. It emphasizes customer loyalty,
engagement, and personalized interactions to foster repeat business.
6. Societal Marketing Concept: This concept expands on the marketing concept by

considering not only customer needs but also the well-being of society and the
environment. It emphasizes ethical and socially responsible marketing practices.
7. Holistic Marketing Concept: Holistic marketing integrates various marketing

components, including relationship marketing, internal marketing, integrated marketing,
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and socially responsible marketing. It seeks to create a comprehensive, unified marketing
approach.
Old Concept Vs New Concept of Marketing
Concept
Old Concept New or Modern Concept

(Product Oriented (Consumer Oriented
Concept) Concept)
1. Old concept or Product-Oriented Concept or Traditional concept

This is the classical concept of marketing which has some features /characteristics:
1 It stresses upon production.

2 It assumes that marketing is only the physical distribution of goods & services from
producer to consumer.
3 It assumes marketing starts after the goods have been produced and it ends after the goods
have been sold.
4 Here ultimate objective of marketing is to maximize profit by maximizing sales.
2. New Concept or Customer Oriented Concept or Modern Concept

This is the modern concept of marketing which has the following features/Characteristics:
1. The customer is the king.

2. Marketing is the entire process of understanding and satisfying the needs and wants of
consumers.
3. It assumes that the objective of earning profit can be achieved only when the needs of
society are satisfied.
4. Here marketing starts at the stage of need identification and ends at customer
satisfaction.
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Functions of Marketing
The functions of marketing management are broadly classified in 4 categories.
1. Functions of Research: It includes the research, innovation, and planning of marketing

mix and strategies in order to increase the market share & profits.
I. Marketing Research: Marketing research is defined as any technique or set of

practices that companies use to collect information to understand their target market
better. Organizations use this data to improve their products, enhance their
effectiveness, and offer a better product to their customers. Marketing research is
used to determine what the customers want, and how they react to products or
features of a product.
II. Product Planning and Development: It is the first function of marketing to plan
a product and develop it so that it may satisfy the expectations of customers. Earlier
this function was performed by the production department with the help of
engineering and technical research development now this function has been
coordinated by the marketing department with the objective of meeting consumer
needs according to their expectation.
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2. Functions of Exchange: This is related to the assembling, buying and selling part of the
marketing.
I. Buying and Assembling: Buying means the acquisition of goods and services by
sellers or industrial users for the purpose of resale. Though ultimate consumers also
purchase goods and services for the satisfaction of their needs, such purchases are
not included in the preview of functions of marketing. Assembling means the
collection of different types of goods and services by mediators for the purpose of
resale.
II. Selling: It is the end task of marketing which concerns with the exchange process.
It is the task around which all the activities of marketing are focused because
marketing is completed unless and until the real sale of goods and services bought
by the sellers or intermediaries has been affected. Selling is a must to generate
income and to increase the market share of a business firm.
3. Functions of Physical Treatment: This is related to the physical treatment of goods and
services from the perspective of marketing. These include
I. Standardization, Grading & Branding: Standardization is an important aspect
of marketing. It helps in maintaining the quality of products and services,
production become uniform, and prices become equal, so the goods are produced
on the basis of definite standards so as to improve the attribute of a product like
quality, size, price, weight, color etc. Grading in marketing refers to the process of
assigning products, services, or offerings to specific categories or levels based on
predetermined criteria. This classification helps consumers understand the quality,
features, and characteristics of the products, facilitating their decision-making
process. Grading is often used to differentiate products within a product line,
indicating variations in quality, features, or benefits, for example, Gold Jewelry can
be graded as 24 Carat, 22 Carat, 20 Carat, etc. Branding: is the process of creating
and establishing a distinct and recognizable identity for a product, service, or
company in the market. Effective branding enhances a product's perceived value,
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builds customer loyalty, and differentiates it from competitors. Brand identity is
collectively created through Brand name, symbol, Logo, Tagline, etc.
II. Packaging & Labelling: Both packaging and labelling play pivotal roles in the
overall marketing strategy of a product, impacting how consumers perceive,
purchase, and interact with the product. Packaging in marketing refers to the
design, creation, and presentation of the external covering or container of a product.
Packaging serves both protection and promotional purposes. It is not only about
enclosing the product but also about communicating with the brand, protecting the
product, and enhancing its visual appeal. Effective packaging can influence
consumer perceptions and purchasing decisions. Packaging can be used as per the
nature of goods such tetra pack for juices, Therma coal packaging for glass items,
trays for eggs, etc. Labelling in marketing involves creating and affixing a label to
a product's packaging. Labels carry important information about the product, such
as its name, brand, contents, features, usage instructions, and more. Labels serve as
a quick reference for consumers to understand the product's key attributes and make
informed decisions.
III. Storage: The Storage function is to make continuity of supply of commodities and
final products to intermediaries and consumers. Storage aims at fulfill the gap
between the time of production and the time of consumption. Storage of services is
not possible it is replaced by capacity building. It also helps in expanding the market
and maintaining the regular supply.
IV. Transportation: Transportation means the flow of products from one point to
another. The main consideration of transportation is the timely and safe movement
of products. Transportation in the case of FMCG products requires continuous
supply chain management. Different transportation modes like Railways,
Roadways, Seaways, Airways, and Pipe ways are used.
4. Functions which facilitate exchange: These functions are ancillary functions that support
exchange functions to be conducted in smooth and effective way. These are Salesmanship,
Advertising, Pricing, and Insurance:
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I. Salesmanship: Salesmanship refers to the skillful art of persuading and convincing
potential customers to make a purchase. It involves a combination of effective
communication, relationship-building, product knowledge, and persuasion
techniques to guide a prospective buyer through the decision-making process and
ultimately close a sale.
II. Advertising: Advertising is a paid form of mass communication that aims to
promote a product, service, idea, or brand to a target audience. It involves creating
and delivering persuasive messages through various media channels to influence
consumer behavior, increase brand awareness, and drive desired actions, such as
making a purchase or adopting a certain viewpoint.
III. Pricing: Pricing in business and marketing refers to the process of determining the
monetary value or cost of a product, service, or offering. It involves setting a price
that aligns with the perceived value of the offering, considers market dynamics,
competitive positioning, and supports the organization's financial objectives.
IV. Insurance: Insurance is a financial arrangement in which an individual or an entity
(insured) pays a premium to an insurance company in exchange for protection
against specified risks or potential losses. In the event of a covered loss or
occurrence, the insurance company provides financial compensation or benefits to
the insured or their beneficiaries.
Difference Between Selling Marketing
Selling: Selling is the process of persuading, convincing, and influencing potential customers to
exchange their money or resources for a product, service, or idea. It involves interpersonal
communication, understanding customer needs, addressing objections, and guiding individuals
through the decision-making process to ultimately make a purchase.
Marketing: Marketing refers to the set of activities and strategies that businesses and
organizations undertake to create, communicate, deliver, and exchange value with customers. It
involves understanding customer needs, creating products or services that fulfill those needs,
promoting them effectively, and building lasting customer relationships to achieve business goals.
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Roles/Function of Marketing Manager
Marketing managers play a crucial role in planning, executing, and overseeing the marketing
strategies and activities of a business. Their responsibilities are diverse and span various aspects
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of marketing and business management. Here are the key roles and responsibilities of a marketing
manager:
1. Strategic Planning: Developing comprehensive marketing strategies aligned with the

overall business goals and objectives.
2. Market Analysis: Conducting research and analysis of market trends, customer behavior,
and competitive landscape to identify opportunities and challenges.
3. Target Audience Identification: Defining and segmenting the target audience based on
demographics, psychographics, and behaviors.
4. Product Development: Collaborating with product teams to develop new offerings or
improve existing ones based on customer needs and market trends.
5. Pricing Strategy: Determining appropriate pricing strategies that balance customer
perceptions of value, cost considerations, and competitive factors.
6. Promotion and Advertising: Overseeing advertising campaigns, promotional efforts, and
communication strategies to effectively reach the target audience.
7. Brand Management: Managing and enhancing the brand's identity, reputation, and
consistency across various touchpoints.
8. Market Positioning: Developing strategies to position the company's products or services
favorably in the minds of consumers.
9. Digital Marketing: Overseeing online marketing efforts, including social media, content
marketing, SEO, and online advertising.
10. Sales Support: Collaborating with the sales team to provide them with the necessary tools,
materials, and information to drive sales.
11. Budget Management: Allocating and managing marketing budgets efficiently to optimize
resources and achieve desired outcomes.
12. Performance Analysis: Monitoring and analyzing the effectiveness of marketing
campaigns and initiatives using relevant metrics and data.
13. Customer Relationship Management (CRM): Ensuring that customer interactions are
well managed and that efforts are made to build lasting relationships.
14. Team Leadership: Managing and guiding marketing teams, setting goals, providing
direction, and fostering collaboration.
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15. Stakeholder Communication: Communicating with various stakeholders, including
senior management, clients, vendors, and partners.
16. Innovation and Adaptation: Staying updated with industry trends, technological
advancements, and consumer behavior changes to adapt marketing strategies accordingly.
17. Market Expansion: Identifying opportunities for business growth in new markets or
customer segments.
18. Ethical Considerations: Ensuring that marketing activities adhere to ethical standards and
legal regulations.
Marketing managers play a critical role in driving a company's growth and success by effectively
promoting its products, building brand awareness, and fostering customer loyalty.
Marketing Environment
Environment: “All the factors and forces that exist in the surrounding are known as
environment”.
Marketing Environment: A marketing environment encompasses all the internal and external
factors that drive and influence an organization's marketing activities. Marketing managers must
stay aware of the marketing environment to maintain success and tackle any threats or
opportunities that may affect their work. A marketing environment is vast and diverse, consisting
of controllable and uncontrollable factors.
Definition of Marketing Environment
According to Philip Koller: “Marketing Environment refer to exter\nal factors and forces that
affect the company’s ability to develop and maintain successful relationship withits target market.”
The Scanning of Marketing environment helps the organization in
Identify opportunities: Understanding your marketing environment helps you notice and take
advantage of market opportunities before losing your edge. For example, say your marketing team
sees an uptick in digital buying over in-shop sales. You may decide to allocate more resources to
your online marketing funnel to drive more sales.
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Identify threats: Studying your marketing environment alerts you to potential threats that may
affect your marketing activities. For example, a market leader could diversify their product
portfolio to compete with your organization. Foreknowledge of this can help you re-strategize your
marketing efforts to maintain and grow your market share.
Manage changes: Paying attention to the marketing environment also helps manage changes and
maintain growth in a dynamic economy. Marketing managers can forecast and determine timely
marketing campaign strategies by monitoring their marketing environment.
Features of a marketing environment
The features of a marketing environment are typically:
 Dynamic: The factors that affect marketing environments constantly change over time.
These could be technological advancements, industry regulations, or even customer tastes.
 Relative: Marketing environments are relative and unique to each organization. A specific
product from your company may sell quicker in the U.S. than in Europe because of
distinctions in the marketing environment.
 Uncertain: Market forces are unpredictable. Even with constant study, you may face
unexpected threats or opportunities in your marketing operations. Adept marketers must
be able to learn, pivot, and strategize quickly to achieve their goals.
 Complex: The many internal and external forces in a marketing environment make it
complex, with various essential moving parts. For example, you must coordinate
your team’s ability and resources with stakeholder expectations, customer satisfaction,
and other ethical, environmental concerns.
 Multifaceted: A single change in the business environment can be viewed differently by
different observers because their perceptions vary. One incident in the market might be
perceived by one firm as threat but another can utilize it as an opportunity.
 Far-reaching Impact: The survival, growth, and profitability of a business enterprise,
depends largely on the environment in which it exists. A small change in the environment
has a far-reaching impact on the organization in different ways.
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Importance of Marketing Environment
 Understanding environmental factors.

 Finding Opportunities
 Avoiding/Minimizing threats
 Market adaptability
 Marketing strategy development
 Helps in becoming the market leader.
 Quality Products/Services
 Brand Building
Limitations of Marketing Environment
• Unforeseen Events
• Frequent Changes
• Direct or Indirect effect on Business
• Required Efforts to monitor regularly
• Complex to Understand
• Dependency on Data
• Time-Consuming activity
• Costly event.
Marketing Environment can be classified in the following ways:

1. Internal and External Marketing Environments
2. Economic and Non-economic Marketing environment.
3. Micro and Maco Marketing Environment.
What is a microenvironment in marketing?- The microenvironment in marketing is closely

linked to your business and directly affects marketing operations. It includes factors like
customers, suppliers, business partners, vendors, and even competitors. Microenvironment factors
are controllable to some extent.
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What is a macro marketing environment?- Your macro marketing environment is made up of
all the factors beyond the control of your organization. An easy way to remember these factors is
by using the PESTEL acronym, which stands for:
P: Political factors
E: Economic factors
S: Social and demographic factors
T: Technological advancement factors
E: Environmental factors
L: Legal and regulatory factors
Micro Environment: No any environmental factor is completely controllable because it is

dynamic and keep changing but even then micro factors are controllable up to some extent which
are:
1.Organisational Internal Environment: Marketers should properly understand the internal
organizational structure which includes hierarchy of organization, functional division,
departmentation and flow of authority & responsibility. Its study is significant to know the
integration & inter-relation of entire organization so that strategies of marketing can be made
accordingly.
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2.Suppliers: It is also very important part of micro factors which constitutes no. of suppliers
attached, availability of suppliers, Quality of suppliers, bargaining power between supplier & firm
etc are to be analyzed properly before strategic decision making.
3. Market Intermediaries/ Middlemen: We should also concern all the terms & conditions
between firm and its intermediaries like
➢ Agents
➢ Wholesaler
➢ Retailers
So that distribution flow and distribution plans should be made appropriately.
4. Customers: As a marketer we have to study the behavior of consumer which includes type of
customers like Individual or Industrial, their needs & wants, factors which influence their buying
motives & affects their purchase decision. The customer’s taste & preference, purchasing power
etc. are to be studied properly to forecast their demand and to match our products with the
customer’s demand.
5. Competitors: Competitors are those who sell products of substitute or similar category and
serve the common market. In order to remove competitive threat and win against cutthroat
competition, marketers need to study the competitive environment which includes competitive
price, product features, promotion & distribution strategies.
Macro Environment: These factors are totally uncontrollable and have a long-term impact
on a company’s position and market share, so its analysis is also very important for a firm’s
success.
These factors are known as PESTEL factors of the marketing macro environment.
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1. Political Environment: Sound marketing decisions can’t be taken without considering
government authorities and their policies. Political factors like
➢ Party in ruling position
➢ power of the opposition party,
➢ Geopolitics
➢ Power Scenario
Should be studied properly before making any important marketing decisions.
2. Economical factors: Economical factors affect the demand pattern of all industry/product so a
marketer should analyze these factor properly
➢ National Income
➢ Per Capita Income
➢ Balance of Payment
➢ Industry trends etc.
3. Socio-Cultural Environment: Marketers should always keep in mind social responsibility
towards people of society by understanding
➢ Society
➢ Culture
➢ Religion
➢ Beliefs & Values
➢ Tradition & customs
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While making marketing plans & strategies.
4. Technological Environment: Technology is changing very rapidly, and it is necessary for

marketers to adapt all the latest & modern technology to remain competitive & effective in the
market. Making innovative products with high quality which will serve the needs of
technologically sophisticated consumers in user friendly way is the key factor for success.
5.Ecological/Natural Environment: The components of eco-system also play important role in

the development of marketing strategies and product development. These factors are
➢ Land
➢ Rainfall
➢ Weather
➢ Water
➢ Temperature etc.
Its impact can be positive if analyzed appropriately and decisions are taken after considering all
the components.
6.Legal factors: Legal factors are external factors which refer to how the law affects the way
businesses operate and customers behave. Product transportation, profit margins, and viability of
certain markets are all examples of things which may be influenced by legal factors. Legal factors
to be considered are as follows:
➢ Consumer law
➢ Discrimination law
➢ Copyright law
➢ Health and Safety law
➢ Employment law
➢ Import/Export law
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Unit-02
Segmentation, Targeting & Positioning
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SEGMENTATION, TARGETING AND POSITIONING
Segmentation is the process of classifying customers into groups that share some common
characteristics.
Targeting involves the process of evaluating each segment's attractiveness and selecting one
or more segments to enter.
Positioning is arranging for a product to occupy a clear, distinctive, and desirable place
relative to competing products in the mind of the consumers.
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Market Segmentation
Introduction
Market is not homogeneous. It is heterogeneous because all customers have different tastes &
preferences, nature, buying habits, purchasing power, religion, culture, society which build up
various needs & wants . In mixed categories of customers, it is not easy to cater all kinds of
customers by similar strategy that’s why it is required to make groups of customers and each
groups consist similar category of customers who can be targeted in a common way. This
phenomena of grouping of similar customers in a segment is called Market Segmentation.
Concept of Market Segmentation
High-growth companies succeed by identifying and meeting the needs of certain kinds of
customer, not all customers, for special kinds of products and service, not all products or all
services. Business academics call this market segmentation. Entrepreneurs call it common sense.
Market segmentation involves dividing a large homogenous market of potential customers into
clearly identifiable segments. Customers are divided based on meeting certain criteria or having
similar characteristics that lead to them having the same product needs. Segments are made up of
customers who will respond similarly to marketing strategies. They share common interests, needs,
wants, and demands.
Most companies don’t have enough resources to target a mass market. Which is why they need to
target the specific market segment that needs their product. They divide the market into similar
and identifiable segments through market segmentation.
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Definitions of Market Segmentation
According to William. J. Stanton: “Market Segmentation consists of taking the total

heterogeneous market for a product & dividing it into several sub-markets or segments, each of
which tends to be homogeneous in full significant aspects.”
According to R.S Davas: “Grouping of buyers or segmenting the market is described as market
segmentation.”
Benefits of Market Segmentation
Market segmentation offers several benefits to businesses by enabling them to tailor their
marketing strategies to specific customer groups. Here are some key benefits of market
segmentation:
1. Better Understanding of Customers: Segmentation helps businesses gain deeper insights

into the distinct needs, preferences, behaviors, and buying habits of different customer
groups.
2. More Effective Targeting: By focusing on specific segments, businesses can create more
relevant and targeted marketing campaigns that resonate with the intended audience.
3. Increased Customer Satisfaction: Tailoring products, services, and messaging to the
unique needs of each segment enhances customer satisfaction by delivering solutions that
match their preferences.
4. Improved Marketing Efficiency: Segmentation allows companies to allocate resources
more efficiently by directing efforts toward the segments most likely to respond positively
to their offerings.
5. Enhanced Product Development: Understanding segment-specific needs can guide
product development, ensuring that products are designed to address the preferences of
different customer groups.
6. Higher Conversion Rates: Targeted marketing messages and offerings increase the
likelihood of converting potential customers into actual buyers.
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7. Reduced Marketing Costs: By targeting specific segments, businesses can avoid wasteful
spending on broad marketing campaigns that may not resonate with all consumers.
8. Effective Communication: Segmentation enables companies to craft messaging that
speaks directly to the concerns and interests of each segment, leading to more impactful
communication.
9. Market Expansion: Businesses can identify new opportunities for growth by identifying
underserved or emerging segments in the market.
10. Competitive Advantage: Tailored offerings and messaging can set a company apart from
competitors, allowing it to establish a stronger brand identity and position.
11. Personalized Customer Experiences: Segmentation enables personalized interactions,
which can lead to stronger customer relationships and brand loyalty.
12. Risk Management: Diversification across different segments can help mitigate risks
associated with overdependence on a single customer group.
13. Innovation Opportunities: Understanding the unique needs of different segments can
drive innovation by prompting businesses to develop new products or services to meet
those needs.
14. Resource Optimization: Companies can allocate their resources, such as time, manpower,
and marketing budget, more efficiently by targeting the segments with the highest potential
for returns.
Levels of Segmentation
1. Segment marketing: A Segment consists of a group of customers having similar

purchasing power, geographical location or buying habits etc. The common factor that
makes them belong to a particular group is called segment marketing.
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Mobile Customers may look for various factors.
2. Niche Marketing: A Niche is a more narrowly defined group which consists few no of
customers but their needs are satisfied with highly focused strategy. This group always
looks for highly qualitative products and is not worried about the price structure.
e.g.- Ferrari & BMW etc.

3. Local/Neighborhood Marketing: Here all Marketing plans & programs are being tailored
according to the needs & wants of local groups like neighborhoods, trading areas, etc.
e.g.-General stores etc.

4. Customization/Individual Marketing: It means segment of one ore we can say one to
one marketing. Here products & services developed as per the requirement of individual
customer.
e.g.- Software development/Designer Dresses
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Basis of Market Segmentation
This segmentation is based on various factors that help businesses understand and target their
audience more effectively. Here are some common bases or criteria for market segmentation.
(1)Customer Based Segmentation: It covers those factors which are related to customer
and segregate the mass into small segments. It includes:
(a)Geographical Location: In this approach, marketers divide the market on the basis of
the geographical location of customers like
➢ Hilly area (Shimla& Mussorie etc)
➢ Sea/Beach area(Mumbai & Banglore etc)
➢ Desert area( Rajasthan)
(b)Demographical Factors: Marketers can also divide the market on the basis of
demographic factors which include.
➢ Age
➢ Gender
➢ Literacy Level
➢ Income
➢ Population etc.
(c)Psychographic Variables: Psychographic variables are also a very significant factor
for segmenting the market because customers of the same age, income, and other similar
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factors react differently regarding new products, innovation, and risk factors that
differentiate each customer. So we can segment the market by grouping all customers
belonging to the common psychographic variable like innovators, Early adaptors, early
majority, late majority, and laggards.
(d) Buyer-Readiness Stages: Another variable for segmenting the market is buyer
readiness or the mental preparedness of customers to buy certain products. At any given
frame of time, all the buyers would be at different stages of readiness such as:
➢ Unaware buyers
➢ Aware but not Interested buyers.
➢ Interested buyers.
(2) Product based Segmentation: These factors are related to the product and its features
which helps marketers to segment the entire market into small groups.
(a) Product use situation: This approach focuses on the factor that various customers may
use the same product in different use situation.
e.g.- Use of Rasna differently
➢ Some use it as a Party drink.
➢ Some use it for unexpected guests.
➢ Some use it as a refreshing drink after a tiring working day.
(b)Benefit Segmentation: Here the marketer identifies that a customer looks for which
attribute while making a purchase decision. Their purchase decision may get influenced by
various factors like
e.g.- In Refrigerator Purchase decisions customers look for
➢ Durability
➢ Electricity Saving (Star rating)
➢ Space for storage
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(c)Quantity consumed: We can segregate the customers on the basis of their
usage/consumption in terms of quantity like
➢ Heavy Users
➢ Moderate Users
➢ Light Users
(3) Competition-based Segmentation: In this point focus is on the loyalty of consumers.

How a competitive brand performs in the market to attract and sustain its customers for the long
term.
(a)Hard Core Loyal: Hardcore loyal customers are those customers who continue to buy
a single Brand over a period of time and do not look for any other alternative or substitute
brand.
e.g.- Newspaper Readers, Cigarette Smokers, etc.
(b)Soft Core Loyal: This segment consists of those customers who are loyal to 2 to 3
brands in a product group and prefer consumption depending upon availability and other
convenience options but restrict their choice to a few limited brands only.
e.g.- soft core loyal of Toothpaste consumer may have the following brands choice.
➢ Colgate Gel
➢ Pepsodent Gel
➢ Closeup Gel
(c)Switchers: These category of customers never remain stick to a single brand. They keep
on changing their brand preferences depending upon situational benefits like
➢ Price off
➢ Quantity Discounts
➢ Free Gift items
➢ Contest
➢ Schemes etc.
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e.g.- Flight ticket customers, Food Restaurant customers, Cinema Theatre customers
etc.
Market Segmentation Procedure/How to Segment the Market
Marketers have to go through some stages while segmenting the market. At these stages all the
functions needed to be performed for effective market segmentation. These stages are:
(1) Survey Stage: This is the first stage where marketers need to collect the data by questionnaire
or any other method of data collection to know about the characteristics of customers which
includes their taste and preference, purchasing power, buying motives, geographical location, etc.
(2)Analysis Stage: After the collection of sufficient data on customers we can identify the factors
which differentiate customer groups. These differentiations reflect groups and subgroups of similar
customers.
(3)Profiling Stage: This is the final stage where we segregate some customers into one and some
into another group on the basis of their differentiating features. In other words, we can say this is
the final segmentation of the group and profiling the group.
Industrial Marketing Segmentation
• It is a system to identify and categorize the diversified potential customers of an industrial

market or B2B market into different groups.
• It aids in making strategic and tactical decisions relating to the sales and marketing of the
industrial products/services in the chosen market segment.
• Industrial segmentation is a marketing strategy that involves dividing a market into
different groups of industrial customers based on factors such as their industry, size,
location, and purchasing power.
e.g.- Automotive Lighting Market Segmentation
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The benefits of industrial segmentation
There are several benefits to using industrial segmentation in marketing efforts. Some of the key
benefits include:
1. Improved targeting: Industrial segmentation allows businesses to identify specific

segments of industrial customers and tailor their marketing efforts to those segments. This
can help to increase the relevance and effectiveness of marketing efforts, and can ultimately
lead to more sales and revenue.
2. Better customer understanding: By segmenting industrial customers based on factors
such as industry, size, and location, businesses can gain a better understanding of the needs
and preferences of these customers. This can help businesses to develop more targeted and
effective marketing strategies, and can also improve customer relationships.
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3. Increased efficiency: Industrial segmentation allows businesses to focus their marketing
efforts on specific segments of industrial customers, rather than trying to reach the entire
market. This can help to reduce marketing costs and increase the efficiency of marketing
efforts.
4. Competitive advantage: By using industrial segmentation to target specific segments of
industrial customers, businesses can differentiate themselves from competitors and gain a
competitive advantage in the market.
The challenges of industrial segmentation
While industrial segmentation can be a useful marketing strategy, there are also some challenges
to be aware of. Some of the key challenges include:
1. Cost and time investment: Implementing industrial segmentation can be costly and time-
consuming, as it often requires collecting and analyzing large amounts of data on industrial
customers. This can be a significant investment for businesses, and it may not always
provide a clear return on that investment.
2. Limited data availability: In some cases, businesses may not have access to sufficient
data on industrial customers to effectively implement industrial segmentation. This can
make it difficult to identify specific segments of industrial customers and tailor marketing
efforts to their needs and preferences.
3. Complexity of industrial markets: Industrial markets can be complex and multi-faceted,
with a wide range of different industries, sizes, and locations. This can make it challenging
to accurately segment industrial customers and develop effective marketing strategies.
4. Customer needs: Industrial customers' needs and preferences can change over time, as
can the market conditions in which they operate. This means that industrial segmentation
strategies need to be regularly reviewed and updated to ensure that they remain relevant
and effective.
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Basis of Industrial Market Segmentation
Industrial market segmentation is the process of categorizing a broad industrial market into distinct
and manageable segments based on shared characteristics and needs. This approach allows
companies to tailor their marketing strategies, products, and services to better meet the specific
requirements of each segment, thereby increasing their chances of success in the market. Industrial
markets are often characterized by complex purchasing decisions, long sales cycles, and a focus
on functionality, efficiency, and cost-effectiveness.
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1. Demographics
Industry What geographical areas should we focus on?
Company Size What size companies should we focus on?
Location Which industries that buy this product should we focus on?
2. Operating Characteristics
Technology What customer technologies should we focus on?
User/nonuser
Should we focus on heavy, medium, or light users or nonusers?
status
Customer Should we focus on customers needing many services or few

capabilities services?
3. Purchasing Approaches
Purchasing Should we focus on companies with highly centralized or

function decentralized purchasing organizations?
Should we focus on companies that are engineering dominated,

Power structure
financially dominated, or marketing dominated?
Should we focus on companies with which we already have

Nature of existing
strong relationships or go after the most desirable companies?
General purchase Should we focus on companies that prefer leasing? Service

policies contracts? Systems purchases? Sealed biding?
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Should we focus on companies that are seeking quality?
Purchasing criteria
Service? Price?
4. Situational Factors
Should we focus on companies that need quick delivery or

Urgency
service?
Specific Should we focus on certain applications of our product rather

application than all applications?
Size of order Should we focus on large or small orders?
5. Personal Characteristics
Buyer-seller
similari Should we focus on companies whose people and values are
similar to ours?
Ty
Attitudes toward
Should we focus on risk-taking or risk-avoiding customers?
risk
Should we focus on companies that show high loyalty to their

Loyalty
suppliers?
Business marketers must first determine which customers they want to serve.
By deciding to operate in segments instead of serving the whole market, companies will be able to
deliver value to consumers at maximum profits. Thus, Goodyear and other tire companies
should decide which industries they want to serve.
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Manufacturers buying tires vary in their needs. Markets of luxury and high-performance cars want
higher-grade tires than makers of economy models. And the tires needed by aircraft manufacturers
must meet much higher safety standards than tires needed by farm tractor manufacturers.
Having chosen a particular industry, a company may go for further segmentation by customer size
or geographic location. The company might establish separate systems for handling larger or
multiple-location customers.
Effective industrial market segmentation requires a deep understanding of the industry, market
research, and the ability to identify meaningful differences between segments. Once the segments
are identified, companies can develop targeted marketing campaigns, product offerings, and sales
strategies that address the unique needs and preferences of each segment, leading to better
customer satisfaction and business success.
Market Targeting
To understand the Targeting process firstly we should know the meaning of term “Target
Market” which is also an important terminology of marketing.
Target Market: It refers to that particular market in terms of customer group which is
selected or identified by marketers to tap it. All marketing plans & strategies are drawn up
according to this target market to generate revenue which will help the firm to increase
market share & profitability.
Once the firm has decided on its market segments then it has to decide how many segments to be
selected for targeting purposes. Market targeting is a process of capturing the target market to
cultivate profits and Targeting Process consist following steps:
(1)Evaluate the Market Segments: In evaluating different market segments the firm must look
at two factors:
➢ Segment overall attractiveness
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➢ Company’s objectives and resources
(2) Selecting the marketing Segments: In targeting Market Selection mainly there are 5 Patterns
where (P1, P2 & P3 are Product 1, Product 2 & Product 3 and M1,
M2 & M3 are Market 1, Market 2 & Market 3 ) which are as
follows:
(a) Single Segment Concentration: Here company has a single
product, and its focus is on the single market. It is applicable
for those sellers which have a small market and limited demand
in the market.
e.g.-Fruit seller in village having single types.
of fruit and selling in one village only.
(b) Selective Specialization: Here companies deal in multiple

products and multiple markets, but they select some specific market
for a specific product.
e.g.- Apple
(c)Product Specialization: Here the firm specializes in

marketing a certain product that sells to several markets.
e.g.- Nokia
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(d)Market Specialization: Here firm concentrate on
serving multiple needs of a particular customer group or
market with focused strategy.
eg: Johnson & Jonhson for babies only
➢ Powder
➢ Soap
➢ Shampoo etc
(e)Full Marketing Coverage: Here firm serve all customer

groups with multiple products focused towards capturing all
markets with variety of products in product portfolio.
e.g
➢ Coca Cola
➢ Kinley
➢ Fanta Thumps up.
The full market coverage approach can be applied in 2 waysTargeting
➢ Differentiated Market: It makes the sametrategy for all markets.
➢ Undifferentiated Market: It means a separate strategy for each segment but
covers all segments.
(3)Additional Consideration: We should consider some more points while targeting market
(a)Ethical choice of market Targeting: It means customer decisions should be taken after
considering what is right and what is wrong for the market or customers. We should be fair
and honest in dealings with customers.
(b)Segment Interrelationship: All segments are interrelated and integrated, that’s why
we should coordinate all segments to minimize the cost of and utilize all available
resources.
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Targeting Strategies
Once the Segment or segments are selected and the targeting process is started, marketers need to
adopt the appropriate strategy as per market and firm suitability. These strategies are:
(1)Undifferentiated /Standardization:- In Undifferentiated strategy same product is offered to

all market segments with common standardized features without keeping any difference even in
the presence of difference among customers. Here
marketers launch the product with same pricing,
distribution & promotion strategies applicable to all
segments.
e.g.- coke & Pepsi
(2) Differentiation:- It is just the opposite of the above strategy, which states that firms
differentiate their products for all segments according to the needs and wants of those segments.
Due to the differences in taste and preference, buying
power, etc. among consumers marketers alter their
product features and other related strategy in all
segments to fulfill the different needs of consumers.
e.g:- Airlines
➢ First Class
➢ Business Class
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➢ Economy Class
(3)Concentrated/Focused:- It is combination of both. Here the core product and its strategies
remain the same, but differentiation is made to take into account specific customer group’s
requirements. Here the basic product is the same but
minor differences are created to offer variety in the
same product line.
e.g:- Maruti
➢ Alto Lxi
➢ Alto Vxi
➢ Alto Zxi
Model Type
L= Lower Model
V= Middle Model
Z= Top Model
Engine Type
xi- Petrol Variant
di- Disesel Variant
Positioning
Positioning means the activity of making a position or image in the minds of customers.
Positioning is the process of portraying a picture of a company’s product and its customer relations
in the minds of customers. It is related to all efforts of the firm to make the perception of customers
towards the firm favorably and positively.
According to Philip Kotler, “Positioning is the act of designing the company’s offering and image
to occupy a distinct place in the target’s mind.”
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Why Positioning?
(1) To create a distinct place of product& service or corporate in the minds of customers.
(2) To provide a competitive edge to a product or an attempt to convey attractiveness of the
product to the target market.
(3) To give the target market reason of buying our product/service and then formulation of all
strategies according to the customer perception.
What is Image?
Image is the picture of an organization and its products & services perceived by target group;
Images are of following types:
Types of Image
(1) Current Image: The way that a company is being seen by customers.
(2) Mirror Image: The way that a company thinks it is being seen by customers.
(3) Wish Image: The way that a company would like to be seen by customers.
Errors in Positioning
There are some common errors of positioning which is committed by firms due to in effective
marketing programmes. These errors are as follows:
(1) Under Positioning: This errors occurs when marketers take little steps for promotion
of product due to which buyers are very less aware about the brand and its product’s
performance & popularity. This error is done by those company’s either do not have
capacity to promote their product or do not have marketing caliber of performing such
roles.
e.g: “ASUS Laptop & Mobile Phones”
(2) Over Positioning: It refers to the error when firm position itself for some specific
group but due to over positioning that particular groups believe that it is not for their class,
it is for some higher class customer group.
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e.g: “Aquaguard introduced Aquasure, People start believing due to over
positionng that it is made for upper class, where as the product wes priced only
at Rs 1600/-“
(3) Confused Positioning: Some time buyers may have confused image of the brand.
This may occur as a result of frequent changes in the positioning statement.
(4) Doubtful Positioning: This error occurs when doubt arises in the minds of buyer
regarding the company’s claims of benefits through the product. Customer have doubt
whether firm can fulfill their promises or not.
e.g: “Hair Gain Oil” & “Weight Loss by medicines”
Positioning Strategies
Positioning strategies refer to the deliberate efforts that companies undertake to create a distinct
and favorable perception of their products, services, or brands in the minds of their target audience.
Effective positioning helps a company stand out in a crowded market, communicates the unique
value it offers, and influences how customers perceive its offerings compared to those of
competitors. Here are some common positioning strategies:
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(1)Attribute Positioning: A company position itself on the basis of an attribute which creates
their separate identity such as size, no. of years of existence atc.
e.g: “Raymonds Since 1925”
(2)Benefit Positioning: Corporate may position itself as a leader in a certain benefit which they
provide to their customers.
e.g: “ Maruti---Service Station”
(3)Use or Application Positioning: Positioning can be done on the basis of use or application of
the product. Corporate position their product as best for some use like café coffee day position
itself for discussion & meeting poin.
e.g: “Café Coffe Day—a lot can happen over a coffee”
(4)User Positioning: When firm position itself and its products as best suited for a particular
user class is called user positioning
e.g: “Johnson & Johnson----for babies”
(5)Competitor Positioning: In this category firm claims to be better in some product or service
than a well-known competitor.
e.g: “Thums up against Pepsi”
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(6)Value Positioning: This strategy focuses on the company’s positioning as offering the best
product at lower price or we can say best valued product.
e.g: “McDonald Burger @ Rs 25 only/”
A successful positioning strategy should be aligned with the company's strengths, values, and
target market preferences. It should also be consistent across all marketing efforts to create a
clear and cohesive brand identity in the minds of consumers.
Re-Positioning: "Re-positioning" typically refers to the process of changing the perception of

a product, brand, or company in the minds of consumers. It involves altering the way a product or
brand is perceived in relation to its competitors or in the overall market. This could be done for
various reasons, such as responding to changes in the market, targeting a new audience, or adapting
to shifts in consumer preferences.
Re-positioning may involve changes in marketing strategies, messaging, branding, pricing, or even
the product itself. It's a strategic move that aims to create a distinct and favorable image in the
minds of consumers.
Here are some common reasons for re-positioning:
• Market Changes: Shifts in the market dynamics, demographics, or trends may prompt a
company to re-position its products to stay relevant.
• Competition: If a company faces increased competition or if new competitors enter the
market, re-positioning can help differentiate the brand and maintain a competitive edge.
• Consumer Preferences: Changes in consumer preferences or values may require a
company to adjust its positioning to align better with what customers want.
• Technological Advances: Advancements in technology can render existing products or
brands outdated. Re-positioning allows a company to showcase innovation and relevance.
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• Expansion or Diversification: When a company expands its product line or enters new
markets, re-positioning may be necessary to fit the new context or appeal to a different
audience.
The process of re-positioning involves a thorough analysis of the current market conditions,
understanding customer perceptions, and developing a strategy to effectively communicate the
new positioning. Successful re-positioning can breathe new life into a brand and open up new
opportunities for growth.
Examples of Re-Positioning
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Differentiation
What is Differentiation?
1. Differentiation is a marketing tool used to distinguish a product/Service from
competitors.
2. This involves highlighting the unique features, benefits, or characteristics that set a
company's offerings apart and make them more attractive to customers.
3. Successful market differentiation can lead to a competitive advantage, increased
customer loyalty, and enhanced brand recognition.
4. It involves creating unique attributes or characteristics that set a product or brand apart,
making it more appealing to customers.
5. Differentiation can give you a way to compete against other firms without getting into a
price war.
How to Differentiate?
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Here are several ways in which differentiation can be achieved:
1. Product Differentiation: Product differentiation is a marketing strategy that involves

creating unique features, characteristics, or benefits in a product to make it stand out from
competitors in the market. The goal is to offer something distinct that addresses customer
needs and preferences, ultimately attracting and retaining customers.
2. Service Differentiation: Service differentiation is a strategy that focuses on creating a
unique and superior customer service experience to distinguish a business from its
competitors. In a market where many products and services are similar, exceptional service
can become a key factor in attracting and retaining customers. service differentiation can
be achieved through customer service excellence, Personalization, Convenience, efficiency
& Speed etc.
3. Channel Differentiation: Channel differentiation refers to the strategic use of various
distribution channels to make a product or service distinct in the market. This involves
creating a unique approach to how products reach customers, and it can be a key element
of a company's overall marketing and business strategy.
4. Relationship Differentiation: Relationship differentiation in business is the process
whereby your company sets itself apart through its reliability, responsiveness, credibility,
and so on.
5. Reputation/Image Differentiation: Reputation or image differentiation involves
strategically managing and shaping the perception of a brand, product, or company in the
eyes of consumers, stakeholders, and the public. It refers to a strategic focus on building
and maintaining distinctive relationships with customers, suppliers, partners, and other
stakeholders. In a business context, fostering unique and strong connections with these
entities can be a source of competitive advantage through Customer Relationship
Management (CRM), Supplier Relationship Management (SRM), Public Relations etc.
6. Price Differentiation: Price differentiation, also known as price discrimination, is a
strategy where a company sets different prices for the same product or service in different
market segments, customer groups, or regions. The goal is to maximize revenue and profit
by charging different prices based on various factors.
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Benefits of Differentiation
Differentiation offers several benefits to businesses that successfully implement and execute this
strategy. Some of the key advantages include:
1. Competitive Advantage: Differentiation helps a company stand out from competitors by

offering unique products, services, or features. This distinctiveness can create a
competitive advantage and make it harder for rivals to replicate or match.
2. Brand Loyalty: Unique and differentiated offerings can foster brand loyalty. When
customers perceive a product or service as distinctive and superior, they are more likely to
remain loyal to the brand, reducing the likelihood of switching to competitors.
3. Premium Pricing: Differentiated products or services often allow companies to command
premium prices. Customers are often willing to pay more for unique features, quality, or a
superior brand experience.
4. Reduced Price Sensitivity: When a product or service is highly differentiated, customers
may become less sensitive to price changes. This can safeguard the business from price
wars and provide more flexibility in setting prices.
5. Increased Market Share: Successful differentiation can attract new customers who are
specifically seeking unique offerings. This can contribute to an increase in market share,
especially if the differentiation strategy addresses the needs and preferences of a broad
customer base.
6. Enhanced Brand Image: A strong and positive brand image is often associated with
differentiation. When a brand consistently delivers unique and high-quality products or
services, it builds a positive reputation in the minds of consumers.
7. Promotes Innovation: Differentiation often involves innovation, whether in product
features, design, or customer experience. Companies that consistently innovate and
differentiate themselves are more likely to be perceived as industry leaders.
Overall, differentiation is a strategic approach that can contribute to long-term success by creating
a strong market position, fostering customer loyalty, and supporting sustainable growth.
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Examples of Differentiation
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Unit-03
Marketing Mix
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Marketing Mix-Meaning
The term “Marketing Mix” was introduced by Professor N.H. Borden of the Harvard
Business School of America. It describes a combination of the four inputs which constitute the
core of a company’s marketing system — the product, the price structure, the distribution system,
and the promotional activities.
Marketing Mix consist core element of business marketing system which develops product and
determine its price and helps in its distribution & promotion to satisfy the customers with the
profit to marketers. It covers both product & service market.
Marketing Mix is a set of marketing tool or tactics, used to promote a product or services in the
market and sell it. It is about positioning a product and deciding it to sell in the right place, at the
right price and right time. The product will then be sold, according to marketing and promotional
strategy. The components of the marketing mix consist of 4Ps Product, Price, Place, and Promotion
in product Industry and 7 Ps Product, Price, Place, Promotion, People, Process and Physical
Evidence in Service Industry.
Marketing Mix-Definition
According to William. J. Stanton: “Marketing mix is the term used to describe the combination
of the four inputs which constitute the core of a company’s marketing system — the product, the
price structure, the promotional activities and the distribution system.”
According to Philip Kotler: “Marketing Mix is the set of controllable variables that the firm can
use to influence the buyer’s response”.
Marketers use the mix framework to:

• Create products and services that solve problems and provide value for ideal target
customers.
• Assign monetary value the products that will influence target customers to purchase.
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• Choose distribution channels through which the business will sell its products to target
customers.
• Market promotional activities that will reach and influence target customers to take action.
Marketing Mix (4Ps & 4Cs)
Another marketing mix model is the 4 Cs of marketing, which takes the 4 elements of the
marketing mix and places them within the buyer’s perspective instead of the seller’s. Below is the
list of the 4 Cs next to their 4 Ps equivalent.
The 4 Cs of marketing are:

Customer needs and wants: Product.
Cost: Price.
Convenience: Place.
Communication: Promotion.
Characteristics/Features/Nature of Marketing Mix:
1. Marketing mix is the crux of marketing process: Marketing mix involves many crucial
decisions relating to each element of the mix. The impact of the mix will be the best when
proper weightage is assigned to each element, and they are integrated so that the combined
effect leads to the best results.
2. Marketing mix has to be reviewed constantly in order to meet the changing
requirements: The marketing manager has to constantly review the mix and conditions of
the market and make necessary changes in the marketing mix according to changes in the
conditions and complexity of the market.
3. Changes in external environment necessitate alterations in the mix: Changes keep on
taking place in the external environment. For many industries, the customer is the most
fluctuating variable of environment. Customers’ tastes and preferences change very fast.
Brand loyalty and purchasing power also change over a period. The marketing manager
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has to carry out market analysis constantly to make necessary changes in the marketing
mix.
4. Changes taking place within the firm also necessitate changes in marketing mix:
Changes within the firm may take place due to technological changes, changes in the
product line or changes in the size and scale of operation. Such changes call for similar
changes in the marketing mix
5. Applicable to business and non-business organization: Marketing mix is applicable not
only to busi-ness organizations but also to non-business organizations, such as clubs and
educational institutions. For instance, an educational institution is expected to provide the
right courses (product), charge the right fees (price), promote the institution and the
courses, and provide the courses at the right place.
6. Helps to achieve organizational goals: An application of an appropriate marketing mix
helps to achieve organizational goals such as profits and market share.
7. Concentrates on customers: A thorough understanding of the customer is common to all
the four elements. The focus point of marketing mix is the customer, and the marketing
mix is expected to provide maximum customer satisfaction.
Elements/Components of Marketing Mix
The process of marketing or distribution of goods requires particular attention of management

because production has no relevance unless products are sold. Marketing mix is the process of
designing and integrating various elements of marketing in such a way to ensure the achieve-ment
of enterprise objectives.
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Kotler explained that there were 7 marketing mix elements consisting of Product, Price, Place,
Promotion, People, Process, and Physical Evidence.
1. Product: According to Kotler & Armstrong (2001: 346) about the meaning of the product
which is everything that can be offered to the market to get attention, bought, used, or
consumed that can satisfy desires or needs. Some things that accompany and complement
the products are as follows.
• Branding: It is an identity, term or character that is attached to a work with the intention
of recognizing or identifying a product or service.
• Packaging: Activities for designing and making containers.
• Product Quality: Product function capabilities in terms of durabilities, accuracy and ease
of operation.
2. Price: Price is the only element of the marketing mix that generates sales revenue, while
the other elements are only elements of cost. There is also a theory from Tjiptono (2005)
about prices which is a monetary measure to calculate the value of a product or service,
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with the aim of obtaining ownership or users rights of goods and services. There are two
general factors that need to be evaluated in ascertaining prices.
• Internal factors of the company are marketing objectives, companies, marketing mix
strategies, production costs.
• The company's external factors are the nature of the market and demand, the presence of
competition, government policies and regulations.
3. Place: Location outline as a marketing activity that seeks to facilitate the delivery of goods
and services from producers to consumers. A good place or location in the marketing
process is an easy place for buyers to reach. According to Lupiyoadi (2001: 62), there are
several types of interactions that affect location, namely consumers come to the seller,
sellers come to consumers, sellers and consumers do not meet directly.
4. Promotion: Promotion is the communication tool that serves to inform and invite/persuade
buyers. Kotler (2000) also explained, promotion is one of the marketing strategy processes
as a way to communicate with the market with the association of promotional mix
composition.
Explained by Kotler and Armstrong (2001: 401), there are five variables in the "Promotional Mix":
• Advertising: A form of exposure and promotion that contains ideas, goods or services that
are not personal by a particular sponsor for profit.
• Personal Selling: Is an effort made personally by the company's sales with the aim to
achieve the target and establish relationships with customers.
• Sales Promotion: Is a short-term incentive to encourage the purchase or sale of a product
or service.
• Public Relation: Is an activity that aims to create a good relationship between the public
and the company or commonly called by building a "Business Image", in order to avoid
negative gossip or issues related to the company, products or services offered.
• Direct Marketing: Direct and special promotions are carried out to a person or group of
consumers that have been targeted by the company in order to obtain a direct response.
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5. People: Kotler (2012) also explained that People are all actors who play an important role
in providing services so that they can influence customer perceptions. The elements in
people are company employees, consumers, distributors, and others. Human resources are
needed for companies as part of the work of a company that can provide services for
consumers. In the world of work that sells services, employees who work in the service
sector affect the weight of the services provided.
6. Process: According to Soewarno (2007: 21), described the process is something demands
change from an event of development something that is done continuously, the process is
also associated according to the company's work system in providing services to consumers
in the provision of food or products. According to Tjiptono (2000: 146) the process is
superior service companies; the work process begins with consumers entering and leaving
the company. The work process involves the speed and accuracy of work. If the process is
done quickly then the consumer will be satisfied.
7. Physical Evidence: Physical Evidence is original evidence that influences consumer

decisions in shopping for a product or service sold by a company. Physical Evidence is an
element in a marketing mix that can change (dynamic). Physical Evidence is also a tangible
or visible part of improving service performance and smoothness. The elements in physical
evidence are real buildings such as buildings, furniture, fixtures, brands, packaging, and
other physical items. Zeithaml, Bitner and Gremler (2006) also explained that Physical
Evidence is an environment where a company provides services or products in a location
where the company can interact directly with consumers.
So, to summarize everything, a marketing mix is a collection of marketing variables, which are
used by companies to pursue desired sales targets. From this opinion, it can be concluded that
marketing is a marketing strategy implemented simultaneously. With the aim of achieving the
desired target. This marketing mix strategy can be an outstanding sales technique for businesses.
It can even be said, marketing mix strategy is an important consideration for consumers when they
want to decide to buy or reject something offered.
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Product Meaning:
A product is the outcome of all inputs after processing in tangible or intangible form which are
ready to sell or consume. The product is developed after studying the need & wants of target market
to make it more successful.
• A Product is a bundle of Satisfaction that a consumer buys.
• Product is the reason of Marketing and the object of Advertisement.
• A Product is something that can be acquired through exchange to satisfy a need or want.
• A product is an item offered for sale.
A product can be a service or an item. It can be physical or in virtual or cyber form. Every
product is made at a cost, and each is sold at a price. The price that can be charged depends on
the market, the quality, the marketing, and the segment that is targeted. Each product has a
useful life after which it needs replacement, and a life cycle after which it has to be reinvented.
In FMCG parlance, a brand can be revamped, re-launched, or extended to make it more
relevant to the segment and times, often keeping the product almost the same.
• Description: A product needs to be relevant: the users must have an immediate use for it.
A product needs to be functionally able to do what it is supposed to, and do it with good
quality.
• A product needs to be communicated: Users and potential users must know why they need
to use it, what benefits they can derive from it, and what it makes difference it does to their
lives. Advertising and 'brand building' best do this.
• A product needs a name: a name that people remember and relate to. A product with a
name becomes a brand. It helps it stand out from the clutter of products and names. A
product should be adaptable: with trends, time and change in segments, the product should
lend itself to adaptation to make it more relevant and maintain its revenue stream.
Definition of Product
According to Philip Kotler: “A product is anything that can be offered to a market for attention,
acquisition, use or consumption. It includes physical objects, services, personalities, place,
organizations, and ideas.”
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According to Jobber, 2004 “ A Product is anything that has the ability to satisfy a customer need.”
According to Rustom. S. Davas “A product may be regarded from the marketing point of view
as a bundle of benefits which are being offered to consumer.”
Layers of Product
The concept of "layers of product" refers to the different levels or dimensions of value that a
product offers to customers. These layers help marketers and businesses understand the various
ways a product satisfies customer needs and provides benefits beyond its core functionality. There
are typically 5 main layers of a product:
1. Core Product: This is the fundamental benefit or service that the customer is buying. It's
the primary reason the customer wants the product. For example, when someone buys a
camera, the core product is the ability to capture and preserve memories.
2. Basic/Generic Product: The basic product includes the features and attributes necessary
for the product to function. Going back to the camera example, the basic product includes
the lens, shutter, and the ability to take photos.
3. Expected Product: This layer includes the features and attributes that customers expect as
a minimum. These are standard features that customers take for granted in a product
category. For a camera, this might include image stabilization, autofocus, and adjustable
settings.
4. Augmented Product: The augmented product goes beyond customer expectations. It
includes additional features, services, or benefits that differentiate the product from
competitors and enhance the customer experience. For a camera, this might involve added
accessories, extended warranty, photography tutorials, or photo editing software.
5. Potential Product: This layer represents the future possibilities and innovations that could
be added to the product. It includes ideas that aren't currently part of the product but could
be developed based on emerging technologies or customer feedback. In the camera
example, this could involve incorporating virtual reality capabilities or integrating AI-
assisted photography features.
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This framework helps businesses consider the various dimensions of value that a product can offer
and how to align those with customer expectations and desires. It also encourages businesses to
continually innovate and explore new possibilities to stay competitive and meet evolving customer
needs.
Product Layers Example : Mobile Handset (Tangible Product)
• Core Level Product: A phone that makes calls, sends texts, and takes pictures.
• Generic Level Products: A smartphone that has a touch screen, app store, and internet
capabilities.
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• Expected Level Products: A smartphone that is sleek, easy to use, and has an excellent
camera.
• Augmented Level Products: A smartphone that has a fingerprint reader, facial
recognition, and augmented reality features.
• Potential Level Products: A smartphone that can be used as a virtual reality headset, a
payment device, and a health tracker.
Product Layers Example : Hotel Room (Intangible Product)
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In order to create a well-rounded product, it is important to understand Kotler’s Five Product
Levels Model. This Model outlines the different levels of product development and can help
businesses create a successful product that meets customer needs.
The Model is a valuable tool for businesses looking to create a successful and profitable product.
By understanding the different levels and what they offer, companies can develop products that
meet customer needs while also providing value.
Product Characteristics/Features
Anything to be called a product has certain characteristics both explicit and implicit. To have a
clear-cut understanding of the product concept, it is but essential to note these characteristics.
These have been very nicely presented by Professor Sturtevant and his associates in their title
Managerial Analysis in Marketing.
Following the brief outline of these features:
A. Explicit Characteristics:
Explicit product characteristics are those the perception of which is reasonably uniform among the
observers. That is, there is a common agreement as to both the existence and the nature of these
attributes.
There are five such attributes:
1. Physical configuration: Most obviously, product is a bundle of physical stuff. It is made up of

certain materials wood, plastic, glass, stone, metal, etc., related in a particular way. Every product
has its own shape, size, density, odour, taste, texture, colour, weight and host of other such physical
attributes.
On the basis of its physical attributes, it has an apparent function or set of functions to perform.
Thus, a claw-hammer is a proficient instrument for driving and pulling nails. It may also function
as a widow’s defense against prowlers.
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2. Associated services: Products are sold with the common understanding that the seller will
render associated services in the case of each product. These are before and after-sale services.
‘Before-sale’ services are its demonstration, credit-facilities available and the ‘after-sale’ services
are its delivery, installation, making available spare-parts, repair services to maintain the operating
condition of the product and warrantees expressed or implied.
3. Package and brand name: It is useful to consider package as the part of product, because it is
sometimes difficult to separate a product into ‘contents and ‘package’. For instance, aerosol
shaving creams, deodorants, cleansers, photograph records because, the jacket depicted the artist
and his friend (female) in the nude, may enjoy a remarkable demand.
Further, brand or brand name is intrinsic to product. A brand stands for a product. You need not
name the product name it by brand. When we say, ‘Dun-Hill’ it does not stand for any eatable or
a drink but a smoking stuff-‘. ‘Colgate’ for paste; ‘Ceat’ for tyres; ‘Savlon’ for after-shave lotion
and so on.
4. Product mix: These points out the relationship to other products sold by the firm or made and
sold by the firm. That is, a given product is the part of a set of products offered for sale by a
particular seller bears and how both the seller and the buyer consider it.
A seller considers the width, depth and consistency of products offered. ‘Width’ refers to how
many different product-lines; ‘depth’ stands for the average number of items within
Similarly, the consumer does not think of a single product in isolation as he knows that the
producer makes other products too.
5. Product-life cycle: At any point time, a product can be located in some stage of its existence.
Through time, the industry sales of a given product follow a characteristic pattern of increasing at
first slowly, then at an increasing rate, then at decreasing rate and finally absolute sales begin to
decline.
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The time required for each of these stages varies widely among the products. The product life cycle
made up of introduction growth maturity and decline has its own implications for the producers
and the consumers.
B. Implicit Characteristics: The explicit product characteristics are seller oriented as they define
the parameters. When one considers the product from the view point of consumer, these are not
explicit.
There are four such features:
1. Product symbolism: Product is the cluster of symbols. Among other things, a product is a
symbol by virtue of its form, size, color and functions. It is and it has significance which varies
according to how much it is associated with individual needs and social interaction.
A product is the sum total of meanings it communicates when others look at it or use it. It may be
a status symbol of economy of performance of achievement and so on.
2. Communication media: Because a product is the cluster of symbols, it is a bundle of

communication also. Of course, what this information is, determined by the consumer’s personal
interpretation of the symbols, and mediated by his culture groups and group influences and
personality.
Every product says something about it, itself. Product is a storyteller of what it is. Why it is used?
At what rate? Made by whom? Where it is available? And so on. A piece of information is there
with a product given or hidden.
3. Product perception: How products are perceived by consumers is not easy itself. Perception is
really critical to a product’s market viability and perceptual process is central to the meanings
consumers attach to a given product.
Perception is the physio-psychological process. Composing a sequence of becoming aware of

some cue in the environment, sending sensed message to brain that does the work of comparing
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cue with stored meanings. For instance, when a cup of tea is placed before you, you have a cue say
of taste odour-color or texture.
The senses send message to your brain to compare the sensed cue with stored ones; comparison
gives you an answer say, it is ‘Brook Bond ‘or ‘Lipton’ or ‘Tata’ and so on. This perception of
consumer will help the producer to develop the relevant product.
A relevant product is a product that is perceived and perceived as intended by its sellers because
it is relevant to the realized or aspired to the behavioral pattern of those people comprising of
market.
4. Product evaluation: Truly speaking, it is impossible to separate the perception of a product

from its evaluation, both conceptually and operationally. Though theoretically separable, they
occur simultaneously.
Along with the perception, evaluation implies the invocation of a set of criteria to determine
expected satisfaction. It comprises the ‘efforts’ involved and ‘rewards’ received by the consumer.
Thus, efforts may be necessary search for the product and price as they affect his pocket; the
evaluation may be of rewards functional, psychological that he gets in return. Here, evaluation
differs from individual to individual and time to time in the case of same individual.
Thus, every product has both explicit and implicit characteristics. The marketing manager is to be
clearer about implicit characteristics than those of explicit because one does not have uniformity
in reactions and answers.
Further, the aim is to have a ‘relevant’ product which is possible to identify and make only if the
marketing manager and his team succeed in catching perfectly as to what is ‘relevant’.
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Product Classification
Products can be classified on different bases. They can also be classified on the bases of utility,
color, technology, durability, buyers etc. Nowadays, especially they are classified on the basis of
• Durability
• Tangibility
• Shopping efforts & Convenience
• Industrial Goods
A. On the Basis of Durability
Based on Durability there are three types of consumer products; namely, Non-Durable
Products, Durable Products, and Services.
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1. Durable Products: The goods that can be used for a long period of time are known as
Durable Products. For example, sewing machines, washing machines, refrigerators, air
conditioners, etc. The durable goods include higher profit margins for the producer and
need greater personal selling efforts and various after-sales service by the organization.
2. Non-durable Products: The goods that can be consumed for a short period of time (one
or few uses only) are known as Non-durable Products. For example, soap, shampoo,
toothpaste, biscuits, etc. These products need heavy advertising and have a lower profit
margin. It is also known as FMCG Products
3. Services: The activities, satisfaction, or benefits offered by an organization for sale are
known as Services. For example, services offered by a CA, teacher, doctor, etc. Services
are intangible in nature, which means that we cannot see, touch, or feel them. They are also
inseparable from their source and cannot be stored because of their perishability. Another
feature of services is that they are highly variable because the quality and experience gained
by a consumer vary with the person providing them.
B. On the Basis of Tangibility
Based on tangibility, the products can be classified as:
1. Tangible Goods: Most goods, whether these are consumer goods or industrial goods
and whether these are durable or non-durable, fall in this category as they have a
physical form that can be touched and seen. Thus, all items like groceries, cars, raw
materials, machinery, etc. fall in the category of tangible goods.
2. Intangible Goods: Intangible goods refer to services provided to the

individual consumers or to the organisational buyers (industrial, commercial, institutional,
government, etc.). Services are essentially intangible activities which
provide want or need satisfaction. Medical treatment, postal, banking and insurance
services, etc., all fall in this category.
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B. On the Basis of Shopping Convenience and efforts
1. Convenience Goods: These are products that consumers purchase often and
habitually, without much thought given. Convenience goods usually are low-cost items
with little differentiation between brands, and therefore customers often pick a brand
one time and then remain with that brand without reconsidering. Examples include
toothpaste, ketchup, soap, and candy.
2. Shopping Goods: In contrast, consumers looking to purchase shopping goods are more
willing to do research and compare different product options. The reason for this is
because shopping goods are higher-priced or more important items within a person’s
life and therefore it is a more economic use of consumers’ time to compare products.
Examples can include extremely large purchases like houses and cars or more modest
items like clothing. Take cars– people are willing to exert significant time and resources
looking online, visiting multiple dealerships, and test-driving different vehicles to find
the best car for the price.
3. Specialty Goods: Specialty goods are products are so unique or have such a loyal
following that consumers will go to extensive lengths to seek them out. Rather than
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comparing brands looking for an attractive value, buyers of specialty goods focus on
seeking out the one specific product they are looking for. Examples include Ferraris,
GoPro cameras, and iPhones.
4. Unsought Goods: The final category of product is unsought goods—products that
consumers either do not know about or would never think of buying. They are often
items that people buy out of a sense of fear or danger, such as life insurance or fire
extinguishers. Another example is batteries; no one ever thinks to buy a battery until
their old ones die and need replacement.
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D. Industrial or Business Products
Industrial goods are basically made for industrial purposes.
1. Materials and Parts: Agricultural products, crude petroleum, and iron ore are examples
of raw materials; produced materials include iron, yarn, cement, and wires; and component
parts include small motors, tyres, and castings.
2. Capital Items: Capital items include installations such as factories and offices, fixed
equipment such as generators, computer systems, and elevators, and auxiliary equipment
such as tools and office equipment.
3. Supplies: Lubricants, coal, paper, pencils, and repair supplies such as paint, nails, and
brooms are among the supplies available.
4. Business Services: Maintenance and repair services, such as computer repair, legal
services, consulting services, and advertising services, are all examples of services.
Product Mix
Product mix refers to the assortment or range of products that a company offers to its customers.
It encompasses all the products and product lines that a company manufactures, distributes, or
sells. A product mix can include both tangible goods and services. The product mix is an important
strategic consideration for businesses as it directly impacts their market positioning, target
audience, and overall business strategy.
Elements/Components of product mix
• Product Item: A product item is the basic nature of the product such as tea, soap, detergent
etc.
• Product Line: A product line is a group of related products that share common
characteristics, target similar customer segments, and fulfill similar needs. For instance,
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Apple's product lines include the iPhone, iPad, MacBook, and various software and
services.
• Product Length: Product length is the total number of products a company offers across
all its product lines. It gives an idea of the overall size and diversity of a company's product
portfolio.
• Product Width: This refers to the number of different product lines a company offers. A
company with a wider product width has more diverse product lines, catering to different
market segments. A narrow product width indicates a focus on a specific niche.
• Product Depth: Product depth refers to the variety of products within a specific product
line. A deeper product line offers a greater number of options or variations within a
particular category. For instance, a smartphone product line might have various models
with different specifications and features.
• Product Mix Consistency: This aspect relates to how closely related or unrelated the
different product lines are. Consistency can help in leveraging synergies and resources
more effectively.
A well-balanced product mix can provide several benefits to a company:
Market Coverage: A diverse product mix allows a company to cater to a broader range of customer
needs and preferences, thereby expanding its market reach.
Risk Management: Relying on a single product can expose a company to significant risks if the
market for that product declines. A diversified product mix reduces this risk by distributing sales
across different products.
Cross-Selling and Upselling: A diverse product mix can facilitate cross-selling and upselling
opportunities. Customers who buy one product might be interested in related products as well.
Competitive Advantage: Offering a comprehensive product mix can give a company a competitive
edge by providing customers with a one-stop solution for their needs.
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Revenue Stability: A balanced product mix can help stabilize revenue streams. If one product line
faces a downturn, others may still perform well.
Brand Identity: A thoughtfully designed product mix can contribute to a company's brand identity
and reputation, showcasing its expertise and commitment to meeting customer needs.
Creating and managing an effective product mix requires careful market analysis, understanding
customer preferences, monitoring industry trends, and adapting to changes over time. It's a
dynamic process that companies often reassess as they grow and evolve in response to the market
and consumer demands.
Product line Decision
Product line decisions involve the strategic choices a company makes regarding the development,
expansion, modification, or discontinuation of its product lines. These decisions are crucial for
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shaping the company's market position, meeting customer needs, and achieving business goals.
Product Line decisions can be of following types.
1. Product Line Stretching: Product line stretching is a strategic decision made by

companies to expand their product offerings beyond their current range. It can be done in
3 ways which are as follows:
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2. Product Line Filling: Product line filling is the addition of further items to the current line
of products that a company is dealing in. E.g., Maruti Suzuki had launched Alto in the
year 2000 which was a product between two other models of Maruti- Maruti 800 and
Maruti Zen. Basically , it was an effort on part of the company to fill the gap that existed
in the market segment by introducing this new model ALTO.
3. Product line Modernization: Product Modernization is an essential strategy in which
product features or product design, or both, are modified to suit the latest current
trends/demand and are re-launched frequently from time to time.
4. Product line Featuring : Product featuring" typically refers to the strategic placement of
specific products within a retail or sales environment to maximize their visibility, appeal,
and sales potential. This practice involves showcasing products in a way that captures the
attention of customers and encourages them to make a purchase. Product featuring can take
various forms, and its goal is to optimize the presentation of products to enhance their
marketability.
5. Product line Pruning : Product line pruning, also known as product line rationalization
or product line simplification, is a strategic process where a company evaluates and
selectively discontinues certain products or product variations within its product lines. This
practice involves removing underperforming or less profitable products in order to
streamline the product portfolio, improve operational efficiency, and focus resources on
the most promising products. Product line pruning can help companies allocate their
resources more effectively and maintain a competitive edge in the market. E.g., Toyota
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Kirloskar phasing out their model Qualis, when it was not adding any value to the
product line as such.
Product Life Cycle
The term product life cycle refers to the length of time from when a product is introduced to
consumers into the market until it's removed from the shelves. This concept is used by management
and by marketing professionals as a factor in deciding when it is appropriate to increase
advertising, reduce prices, expand to new markets, or redesign packaging.
• Products, like people, have life cycles. The product life cycle is classified into four stages:
introduction, growth, maturity, and decline.
• This concept is used by management and by marketing professionals as a factor in deciding
when it is appropriate to increase advertising, reduce prices, expand to new markets, or
redesign packaging.
• The process of strategizing ways to continuously support and maintain a product is
called product life cycle management.
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Product Life Cycle
Stages of Product Life Cycle
1. Introduction: The introduction stage is the first phase of the product life cycle (PLC). It
begins when a new product is introduced to the market and continues until the product
gains a foothold, establishes its identity, and starts to attract customers. This stage is
characterized by relatively low sales, high marketing and promotional expenses, losses or
very low profits and the need to educate consumers about the new product's features and
benefits.
2. Growth: The growth stage is the second phase of the product life cycle (PLC), occurring
after the introduction stage. During this stage, a product experiences rapid growth in sales
and begins to gain wider acceptance among consumers. The growth stage is marked by
increasing market awareness, expanding customer adoption, and rising profitability.
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3. Maturity: The maturity stage is often the most profitable period of time during the
product’s lifecycle. Production and marketing costs typically decline, although competition
will be at its highest. during the Maturity stage, the primary focus for most companies will
be maintaining their market share in the face of a number of different challenges.
4. Decline: The last of the product life cycle stages is the Decline stage, which as you might
expect is often the beginning of the end for a product. When you look at the classic product
life cycle curve, the Decline stage is very clearly demonstrated by the fall in both sales and
profits. Despite the obvious challenges of this decline, there may still be opportunities for
manufacturers to continue by innovations to revive the product otherwise product will be
out of the market.
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Product Diffusion Curve
The product diffusion curve, often referred to as the "Diffusion of Innovations" theory, explains
the process by which new products or innovations are adopted and spread through a population
over time. The curve is typically divided into five stages, representing the different categories of
adopters based on their willingness to embrace new ideas. These stages are:
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1. Innovators: Innovators are the first group and represent the first 2.5% to engage with the
product. Innovators are risk-takers that are willing to try out an unproven offering. They
are usually well-informed and prepared.
2. Early Adopters: Those are the next to follow after innovators and they represent 13.5%
of the consumers. They are usually educated and informed as well.
3. Early Majority: Early majority represents the consumers who await for the product to be
tried and tested before they engage in a purchase. They rely on feedback from those who
have tried it or recommendations from experienced people and tend to avoid risk. This
section represents 34% of consumers.
4. Late Majority: This group represents skeptical consumers that are reluctant to buy a
product unless it has become popular in the market. The late majority represents
approximately 34% of consumers.
5. Laggards: Lastly, laggards are consumers who try to avoid the adoption of a new product.
They will only engage in a new product if no other alternatives can be found in the market.
Laggards represent about 16% of consumers.
New Product Development Stages
The new product development (NPD) process involves several stages that guide the creation,
design, testing, and launch of a new product or innovation. These stages help companies
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systematically move from ideation to market introduction while minimizing risks and maximizing
the chances of success. While specific processes can vary based on the industry and company, the
general stages of new product development include:
IDEA GENERATION
IDEA SCREENING
FEASIBILITY TEST
DETAILED ENGINEERING
PRODUCT DEVELOPMENT
PRODUCT TESTING
COMMERCIALIZATION
Effective new product development involves cross-functional collaboration, market research, risk
assessment, and careful planning throughout each stage to ensure that the product meets customer
needs and achieves business objectives.
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Branding Concept
Branding is a comprehensive concept that encompasses the strategies, activities, and elements a
company uses to create a distinct and memorable identity for its products, services, or overall
business. It goes beyond logos and visual elements; it's about shaping perceptions and building a
relationship with the target audience.
Definition of Brand
“A BRAND is a name, term, sign, symbol, or design, or a combination of them, intended to
identify the goods or services of one seller or group of sellers and to differentiate them from those
of competitors.”
American Marketing Association
Components of Branding
There are various components of Branding which are required to be understood in successful
creating Brand identity and Brand Building. These components are as follows:
1. Brand Name: Brand name is one of the brand elements that helps the customers to identify
and differentiate one product from another. A Brand name consists of words, letters, and
numbers which may be vocalized. E.g. NIKE, ADIDAS, GODREJ etc.
2. Brand Mark: It refers to that part of the brand that appears in the form of symbol, design
or distinctive coloring or lettering which can be recognized by sight.
3. Trade Mark: It is a legal term. It refers to a brand that is registered with the government
under the Trade Marks Act 1999.
4. Brand Color Scheme: Colours can elicit specific emotions and affect us in many different
ways as they have the ability to create specific moods. Colour sets the mood of brand
expression. Emotions are powerful and can drive decision making. Brands want to cultivate
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strong emotional connections with their customers, and this can’t be done with just a logo;
colours are needed to cultivate these emotions.
5. Brand Slogan: Slogans are broader and often serve as a representation of a company's
overall mission, values, or key messaging. They are meant to encapsulate the essence of a
brand or a campaign for a longer term. Slogans often have a long-term perspective and may
remain consistent over time, allowing for brand continuity e.g. Nike Slogan- “Just do it”,
Apple Slogan- “Think Different” etc.
6. Brand Tagline/Punchline: A brand tagline is a memorable, unique, and catchy phrase that
highlights a specific aspect of your company and instantly evokes the image of your brand
in the minds of consumers. Taglines are more specific and focus on succinctly
communicating a product's or brand's unique selling proposition (USP). Taglines are
usually more targeted and typically shorter and may change more frequently, aligning with
specific marketing initiatives, products, or campaigns. e.g. Kitkat Tagline- "Have a
Break, Have a Kit Kat" Pepsi Tagline-“Har Ghoont Mein Swag”
Features of a Strong Brand

1. Relevancy- A strong brand must be relevant. It must meet people’s expectations and
should perform the way they want it to. A good job must be done to persuade consumers
to buy the product; else inspite of your product being unique, people will not buy it.
2. Consistency- A consistent brand signifies what the brand stands for and builds customers
trust in brand. A consistent brand is where the company communicates message in a way
that does not deviate from the core brand proposition.
3. Proper positioning- A strong brand should be positioned so that it makes a place in target
audience mind and they prefer it over other brands.
4. Sustainable- A strong brand makes a business competitive. A sustainable brand drives an
organization towards innovation and success. Example of sustainable brand is Marks and
Spencer’s.
5. Credibility- A strong brand should do what it promises. The way you communicate your
brand to the audience/ customers should be realistic. It should not fail to deliver what it
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promises. Do not exaggerate as customers want to believe in the promises you make to
them.
6. Inspirational- A strong brand should transcend/ inspire the category it is famous for. For
example- Nike transcendent Jersey Polo Shirt.
7. Uniqueness- A strong brand should be different and unique. It should set you apart from
other competitors in market.
8. Appealing- A strong brand should be attractive. Customers should be attracted by the
promise you make and by the value you deliver.
Branding Strategies: Brand strategy is the overarching plan that guides how a brand will be
developed, positioned, and communicated. It involves making decisions about target audiences,
messaging, and the overall direction of the brand.
1. Brand Identity: This is the visual and verbal representation of the brand. It includes
elements such as the logo, color scheme, typography, taglines, and other visual elements
that help identify and differentiate the brand.
2. Brand Image: The brand image is the perception of the brand in the minds of consumers.
It's shaped by the brand's identity, but also by customer experiences, interactions, and
overall impressions.
3. Brand Personality: Brands are often personified to create a relatable image. Brand
personality refers to the human characteristics or traits associated with a brand, helping
consumers connect with it on a more emotional level.
4. Brand Ambassador: It is an individual, often a public figure or influencer, who is hired
by a company to represent and promote its brand, products, or services. Brand ambassadors
play a crucial role in building brand awareness, establishing a positive brand image, and
connecting with the target audience. They are typically chosen for their popularity,
credibility, and ability to resonate with the brand's values and target demographic.
5. Brand Endorsement: It refers to the practice of leveraging the reputation, popularity, or
credibility of a person, celebrity, or influencer to promote and support a brand, product, or
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service. The endorser, often known as the spokesperson, lends their name, image, or
personal brand to enhance the visibility and appeal of the endorsed brand.
6. Brand Extension: Brand extension involves leveraging the strength and recognition of an
existing brand to introduce new products or enter new markets. It capitalizes on the positive
associations’ consumers have with the original brand.
7. Brand Architecture: Brand architecture is the structure and organization of a company's
brands, products, and services within its overall brand portfolio. It outlines how different
brands and sub-brands are related to each other and to the overarching corporate brand.
8. Brand Experience: Brand experience encompasses all the interactions a customer has with
a brand, from the initial awareness to the purchase and post-purchase support. A positive
brand experience contributes to customer satisfaction and loyalty.
9. Brand Loyalty: Brand loyalty is the degree to which customers consistently choose a
particular brand over others. It is often a result of positive experiences, consistent quality,
and emotional connections with the brand.
10. Brand equity: It refers to the value and strength of a brand as perceived by customers and
other stakeholders. It represents the intangible assets and advantages that a brand enjoys
over its competitors. Brand equity is built over time through various factors, including
positive customer experiences, effective marketing strategies, and the overall perception of
the brand in the marketplace.
11. Brand Engagement: It refers to the level of interaction, involvement, and connection that
individuals, whether customers or other stakeholders, have with a brand. It goes beyond
simple awareness and involves building a meaningful relationship between the brand and
its audience. A high level of brand engagement often results in increased brand loyalty,
positive word-of-mouth, and a stronger brand presence. Few strategies related to brand
engagement are Social Media engagement, Interactive Content, Brand events,
Personalization, Storytelling, gamification, customer experience and feedback.
12. Co-Branding: Co-branding is a marketing strategy where two or more brands collaborate
to create a new product, service, or marketing campaign that leverages the strengths of each
brand. The goal of co-branding is to achieve synergies that benefit all parties involved,
including increased brand visibility, expanded market reach, and enhanced value for
consumers
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Functions of Branding
Branding serves various functions within a business, contributing to its overall identity, reputation,
and relationships with customers and stakeholders. Here are the key functions of branding:
1. Differentiation: Establishes a unique identity, making the brand distinguishable in the

market.
2. Identification: Creates a visual and verbal identity that customers associate with the brand.
3. Communication: Acts as a communication tool to connect with target audiences and
convey a consistent message.
4. Trust Building: A strong and consistent brand identity fosters trust and reliability.
5. Customer Loyalty: Establishes an emotional connection, fostering loyalty and repeat
purchases.
6. Value Proposition: Clearly articulates why customers should choose the brand over
competitors.
7. Market Positioning: Helps customers understand where the brand stands in terms of
quality, price, and values.
8. Product Extension: Leverages the existing brand equity to launch new products or services.
9. Legal Protection: Enables legal protection for logos, names, and other brand elements.
10. Community Building: Engages customers and encourages them to be brand advocates.
Branding is a multifaceted and dynamic process that goes beyond visual elements. It involves
creating a holistic brand experience that resonates with customers, builds relationships, and
adds value to the business.
Advantages of Branding
 For Marketers
◦ Product Differentiation
◦ Market Segmentation
◦ Promotion & Advertising
◦ Wide Market
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◦ Customer Loyalty
◦ Protection against imitation
◦ Price Control by labeling
◦ Protection against adulteration
 For Customers
◦ Product Identification
◦ Qualitative Product
◦ Easiness in shopping
◦ Customer satisfaction (psychological)
◦ Status Symbol
◦ Uniform Price
◦ Protective packaging
Limitations of Branding
 Branding Cost is high.
 Not necessarily branded is qualitative.
 Difficult to establish.
 Brand Monopoly
 Brand Loyalty discourage customers for trying new products.
 Customer may get confused due to Brand crowd.
 Brand shows rosy picture.
 Brand ambassador image is associated.
Brand Building
Creating a brand involves establishing a distinctive and memorable identity for a product, service,
or business. It's a strategic process that goes beyond designing a logo or choosing colors; it
encompasses the development of a unique personality, values, and positioning in the market. Here
are the key steps in brand creation:
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1. Identify Audience: Understand the target audience's needs, preferences, and behaviors.
Tailor your brand to resonate with the demographics and psychographics of your intended
customers.
2. Market Analysis: Conduct a thorough analysis of the market, including competitors and
trends. Identify gaps or opportunities that your brand can address.
3. Create a Unique Value Proposition: Clearly articulate what sets your brand apart from
others in terms of value delivery. Define the unique value proposition that will attract
customers and meet their specific needs.
4. Develop a Brand Name & Identity: Choose a brand name that is distinctive, memorable,
and aligns with your brand identity. Ensure it is easy to pronounce and spell. Create a
visually appealing and recognizable logo, color scheme, and typography. These elements
should convey the personality and values of your brand.
5. Create Brand Guidelines & Personality: Establish guidelines that define how your brand
should be represented. These guidelines should cover logo usage, color palettes,
typography, and overall brand tone. Define the human characteristics and traits associated
with your brand. Consider how your brand would behave if it were a person.
6. Create Brand Story: Develop a narrative that communicates the history, mission, and
essence of your brand. A compelling story can create an emotional connection with
customers. It starts with a character — your customer — and a problem. The character
meets a guide who gives them a plan and a call to action to help avoid future failure.
7. Launch Brand & Decide Communication Channel: Plan a strategic launch to introduce
your brand to the market. This may involve a marketing campaign, events, or partnerships.
Identify the channels through which your brand will be communicated. This includes
online platforms, social media, traditional advertising, and more.
8. Engage Audience: Actively engage with your audience through social media, customer
service, and other channels. Build relationships and gather feedback to refine your brand
strategy.
9. Monitor and Adapt: Regularly monitor the performance of your brand in the market. Be
prepared to adapt and refine your brand strategy based on changing circumstances and
feedback.
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Brand creation is an ongoing process. Focus on building brand equity by consistently delivering
on your brand promise and evolving to meet the changing needs of your audience. Remember,
successful brand creation requires a deep understanding of your target audience, a clear brand
strategy, and a commitment to maintaining consistency and relevance over time.
Pricing-Meaning
Pricing is a crucial element of marketing that involves determining the optimal price at which a
product or service will be offered to customers. It plays a significant role in shaping a product's
perceived value, positioning in the market, profitability, and competitiveness. The pricing strategy
a business chooses can have a direct impact on its sales, market share, and overall success.
Pricing is one of the important element of marketing mix which is related to revenue generation.
It is the technique of deciding price.
Price for BUYER: Payment made for value received (Goods/services)
Price for SELLER: Payment received for producing or selling goods/services
Pricing is a process of fixing the value that a manufacturer will receive in the exchange of services
and goods. A pricing method is exercised to adjust the cost of the producer’s offerings suitable to
both the manufacturer and the customer. The pricing depends on the company’s average prices,
and the buyer’s perceived value of an item, as compared to the perceived value of a competitor’s
product.
Pricing-Definition
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According to Prof. William J. Stanton: “Price is the amount of money and/or other items with
utility needed to acquire a product.
According to Prof. Philip Kotler: “Price is the only element in the marketing mix that produces
revenue, the other elements produce cost.”
According to David J. Schwartz: “Price is the exchanged value of the product or service
expressed in terms of money.”
Objectives of Pricing
• Survival- The objective of pricing for any company is to fix a price that is reasonable for
the consumers and also for the producer to survive in the market.
• Targeted Return on Investment (ROI): The certain rate of profit intended by an
organization or company to earn during a certain period is called target return on
investment.
• To increase sales volume: Increasing the sales quantity of any product also may be one of
the objectives of pricing.
• To increase market share: Every company or firm wishes to promote the sale of its
products. The objective of pricing may be to increase sales quantity. This also increases
market share.
• To meet competition: This is the age of market competition. Every business company
needs to face competition for survival/existence. Companies/firms have to fix the price of
their products or services as fixed in the markets. So, the price is fixed with a view to
facing/meeting competition in the market.
• Positioning: Pricing can also be one of the strategies for the positioning of a company.
Pricing and value-based positioning is also very useful in the market.
• Customer Value: Marketers always target to fulfill customer value by setting the right
proportion of benefits offered to the customers and value charged from the customers to
provide the right Customer Value (CV).
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Importance of Pricing
Pricing is a critical element in the field of marketing, and its importance cannot be overstated. Here
are several key reasons why pricing holds such significance:
• Revenue Generation: Pricing directly impacts a company's revenue and profitability. The
price of a product or service determines the amount of money customers are willing to pay,
which in turn contributes to the company's bottom line.
• Profit Maximization: Effective pricing strategies can lead to increased profits by finding
the right balance between costs, customer demand, and market competition. Companies
can optimize their pricing to maximize their profit margins.
• Competitive Advantage: Pricing can provide a competitive edge in the market.
Companies that effectively differentiate themselves based on price can attract price-
sensitive customers and capture market share.
• Perceived Value: The price of a product or service often influences how customers
perceive its value. A higher price may convey premium quality, while a lower price may
indicate affordability. Strategic pricing helps align customer perceptions with the brand's
intended image.
• Market Positioning: Pricing is a powerful tool for positioning a product or service in the
minds of consumers. Premium pricing positions a brand as luxurious and exclusive, while
value pricing positions it as accessible to a wider audience.
• Demand Management: Pricing can influence demand for a product or service. Higher
prices may discourage demand, while lower prices can stimulate it. Dynamic pricing
strategies can be used to manage demand fluctuations and optimize revenue.
• Product Life Cycle Management: Pricing strategies can be adapted at different stages of
a product's life cycle. High initial prices (market skimming) might be used for innovative
products, while lower prices (market penetration) can drive sales during maturity.
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• Economic Conditions: Pricing can be adjusted to respond to changes in economic
conditions, such as inflation, recession, or changes in consumer purchasing power.
Factors affecting Pricing
Pricing decisions are influenced by a combination of internal and external factors that impact a
company's ability to set the right price for its products or services. These factors play a crucial
role in determining the optimal pricing strategy. Here's an overview of both internal and external
factors affecting pricing:
Internal Factors:
• Costs: The most fundamental internal factor is the cost of producing, marketing, and
distributing the product or service. Companies need to ensure that the price covers costs
and allows for a reasonable profit margin.
• Business Objectives: The company's overall business goals and objectives, such as profit
maximization, revenue growth, market share expansion, or brand positioning, can
influence pricing decisions.
• Marketing Mix Strategy: Pricing needs to align with other elements of the marketing
mix, including product features, promotion strategies, and distribution channels. A
premium product, for example, might warrant a higher price.
• Brand Positioning: The brand's image and positioning in the market play a role in
determining the pricing strategy. Premium brands often command higher prices to
maintain their exclusivity and image.
• Product Life Cycle Stage: Pricing may vary throughout the product's life cycle. Initial
pricing for new products might focus on recouping development costs, while later stages
may involve price adjustments to respond to competition or changes in demand.
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• Product Differentiation: Unique features, quality, and value-added services can justify
higher prices. The extent to which the product stands out in the market can impact pricing
decisions.
• Marketing Mix: Marketing mix components also have impact on pricing structure
therefore it should be considered while setting pricing.
External Factors:
• Market Demand: Customer preferences and demand elasticity play a significant role in
determining pricing. Higher demand can often support higher prices, while lower demand
may require lower prices to stimulate sales.
• Competitor Pricing: The pricing strategies of competitors can impact a company's
pricing decisions. Companies may choose to price their products in line with, above, or
below competitors' prices based on their market positioning.
• Economic Conditions: Economic factors such as inflation, recession, and changes in
consumer purchasing power can influence pricing decisions.
• Consumer Perception: How customers perceive the value of a product relative to its
price is a critical factor. Companies must understand how their target audience perceives
value and adjust pricing accordingly.
• Government Regulations: Regulatory factors, such as price controls, anti-price gouging
laws, and taxes, can impact pricing decisions, especially in industries with high
government oversight.
• Supplier Relationships: The cost and availability of raw materials, components, or
services from suppliers can impact a company's cost structure and pricing decisions.
Effective pricing strategies consider the interplay of these internal and external factors to
determine the most appropriate pricing approach for a given product or service.
Methods of Pricice determination
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The Pricing Methods are the ways in which the price of goods and services can be calculated by
considering all the factors such as the product/service, competition, target audience, product’s life
cycle, firm’s vision of expansion, etc. influencing the pricing strategy as a whole.
A. Cost-Oriented Pricing Method: Many firms consider the Cost of Production as a base
for calculating the price of the finished goods. Cost-oriented pricing method covers the
following ways of pricing:
1. Cost Plus Pricing Method: It is one of the simplest pricing method wherein the
manufacturer calculates the cost of production incurred and adds a certain percentage
of profit margin to it to realize the selling price. The margin is the percentage of profit
calculated on total cost i.e. fixed and variable cost.
E.g. If the Cost of Production of product-A is Rs 500 with a margin of 25% on
total cost, the selling price will be calculated as Selling Price= cost of production
+ Cost of Production x Profit Percentage/100
Selling Price=500+500 x 0.25= 625
Thus, a firm earns a profit of Rs 125 (Profit=Selling price- Cost price)
2. Mark up Pricing Method: This pricing method is the variation of cost plus pricing
wherein the percentage of margin is calculated on the selling price. E.g. If the unit
cost of a chocolate is Rs 16 and producer wants to earn the markup of 20% on sales
then markup price will be:
Markup Price= Unit Cost/ 1-desired return on sales
Markup Price= 16/1-0.20 = 20
Thus, the producer will charge Rs 20 for one chocolate and will earn a profit of
Rs 4 per unit.
3. Targeted Price or Rate of Return Pricing method: In this kind of pricing method
the firm sets the price to yield the required Rate of Return on Investment (ROI) from
the sale of goods and services.
4. Break Even Point (BEP) Pricing method: Break-even price is the price at which the
cost to manufacture a product is equal to its sale price. Break-even pricing is often used
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as a competitive strategy to gain market share, but a break-even price strategy can lead
to the perception that a product is of low quality.
B. Market-Oriented Pricing Method: Market-Oriented price is calculated based on

market conditions such as demand, competition, customer perception & other market
situations. Competition-oriented pricing, also known as competitive pricing or market-
oriented pricing, is a pricing strategy where a company sets its prices based on the prices
charged by its competitors. This approach involves analyzing the prices of similar
products or services offered by other companies in the same industry and adjusting your
own prices to be in line with or competitive against those prices. The market-oriented
methods are as follows:
1. Going-Rate Pricing- In this pricing method, the firms consider the competitor’s price
as a base in determining the price of its own offerings. Generally, the prices are more
or less same as that of the competitor and the price war gets over among the firms.
E.g. In Industries such as steel, paper, fertilizer, etc. the price charged is same.
2. Sealed-Bid/Auction Pricing: This kind of method is very common in the case of

Government or industrial purchases, wherein tenders are floated in the market, and
potential suppliers submit their bids in a closed envelope, not disclosing the bid to
anyone.
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3. Perceived-Value Pricing: This method sets the price of a product by considering what
product image a customer carries in his mind and how much customer is willing to pay
for it.In other words, pricing a product on the basis of what the customer is ready to
pay for it, is called as a Perceived-value pricing. The perceived value is made up of
several elements such as buyer’s experience with the product, service support, warranty
quality, channel deliverables, customer support, supplier’s reputation, trustworthiness,
etc.
4. Demand-Based Pricing: Demand-based pricing refers to a pricing method in which

the price of a product is finalized according to its demand. If the demand of a product
is more, an organization prefers to set high prices for products to gain profit; whereas,
if the demand of a product is less, the low prices are charged to attract the customers.
The success of demand-based pricing depends on the ability of marketers to analyze
the demand. This type of pricing can be seen in the hospitality and travel industries.
Pricing Strategies
Pricing strategies in marketing refer to the deliberate approaches and tactics that businesses use to
set the prices of their products or services. These strategies play a crucial role in shaping a
company's market positioning, revenue generation, and overall business success. Here are some
commonly used pricing strategies in marketing:
1. Skimming Pricing: Launching a product at a high price to capture early adopters and
maximize revenue from customers willing to pay a premium for innovation. This Strategy
derives results in the following situations:
• High-Price & High-Quality association.
• Product is Perceived as a Status Symbol.
• Low or Nil Competition.
• Hi-tech Product with breakthrough technology.
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2. Penetration Pricing: Setting a low initial price to quickly gain market share, attract price-
sensitive customers, and discourage competitors. This Strategy derives results in the
following situations:
• Large-size market.
• Loyalty is not high.
• Intensive price competition
• Price-Quality association is weak.
3. Segmented Pricing: Differentiating price across different segments based on
• Differences in customers (Student or General)
• Product form (Cold drink through Vending machine or 5-star Hotel)
• Location (Balcony or first row in theatre)
• Timing (Weekdays or weekend)
4. Geographical Pricing Strategy: Differentiating price across different geographic
locations (Nationwide or global). Geographical pricing, also known as geographic pricing
or regional pricing, refers to the practice of setting different prices for a product or service
based on the geographic location of the customer. This pricing strategy takes into account
factors such as the cost of production, distribution, demand, competition, and local market
conditions in various regions or countries.
Here Pricing is determined in 2 ways:
• Universal Pricing (Same for all geographical locations)
• Differential Pricing (Different Prices for all locations)
5. Promotional Pricing: Promotional pricing is a marketing strategy that involves
temporarily reducing the price of a product or service to stimulate consumer interest, boost
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sales, and attract attention to a brand or offering. This strategy is commonly used to create
a sense of urgency, encourage new purchases, clear out excess inventory, or compete with
rival brands during specific periods e.g. Clearance sales price, buy 1 get 1, cash back
discount etc.
6. Psychological Pricing: Psychological pricing is a pricing strategy that takes advantage of
the psychological perceptions and behaviors of consumers to influence their purchasing
decisions. This strategy involves setting prices in a way that makes them seem more
appealing, reasonable, or attractive to customers, often by using certain price points or
numerical patterns. Psychological pricing plays on the way people perceive prices and can
influence their perception of value, quality, and affordability e.g., 99, 299, 999 etc.
7. Price Bundling: Price bundling is a marketing and pricing strategy where multiple
products or services are combined and sold as a package for a single price, often at a lower
cost than if each item were purchased separately. The goal of price bundling is to increase
customer value, encourage larger purchases, and create an incentive for consumers to buy
more from the same seller e.g., combo meal price, off season discount.
8. Product Line Pricing: Product line pricing is a pricing strategy in which a company sets
different price points for different products within a single product line. A product line
consists of related products that share similarities in terms of features, purposes, or
customer segments. By implementing product line pricing, a company can capture a
broader range of customer preferences and maximize revenue by catering to various
customer segments.
9. Optional Product Pricing: Optional product pricing, also known as optional pricing or
versioning, is a pricing strategy in which a company offers additional features, options, or
variations of a product at an extra cost. This allows customers to customize their purchases
based on their needs or preferences and pay for the additional features they find valuable.
Optional product pricing is commonly used to cater to diverse customer segments and
capture additional revenue from customers willing to pay for enhanced functionality. E.g.,
Car with alloy wheel, Movie tickets with Popcorn etc.
10. Captive Product Pricing: Captive product pricing, also known as captive pricing is a
pricing strategy where a company sells a main product at a relatively low price or even at
a loss, and then profits from the sale of complementary or related products or services that
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are required to fully utilize the main product. The strategy aims to create a scenario where
customers are "captivated" by the initial low price and then compelled to purchase
additional items that generate higher margins for the company. Here's how captive product
pricing works:
• Main Product: The main product is priced attractively to entice customers to make
a purchase. This product often requires additional components, accessories, or
services to function effectively or provide maximum utility.
• Complementary Products/Services: The complementary products or services are
the ones that customers need to enhance the value or utility of the main product.
These complementary items are priced higher than the main product and generate
higher profit margins for the company.
e.g., HP Printers, Gillete Razor
11. Two Part Pricing: Two-part pricing, also known as two-part tariff pricing, is a pricing
strategy that involves charging customers two separate fees: a fixed fee or membership fee
and a variable fee based on the quantity or usage of the product or service. This approach
is often used to capture both an upfront payment for access to a product or service and
additional revenue based on usage. Two-part pricing can be seen as a combination of a
subscription fee and a usage fee. Here's how it works:
• Fixed Fee or Membership Fee: Customers pay a fixed fee upfront to gain access
to a product or service, regardless of their level of usage. This fee covers the right
to use the product or service and is often associated with basic access.
• Variable Fee: In addition to the fixed fee, customers are charged a variable fee
based on the quantity or extent of their usage. This fee is typically charged per unit
consumed or used. The variable fee can be higher for higher levels of usage.
e.g., Gym membership & subscription, club membership and subscription etc.
12. Loss Leader Pricing: Loss leader pricing is a retail pricing strategy where a company
deliberately sets the price of a product or a few products below their cost to attract
customers to the store or to a website. The goal of this strategy is not to generate immediate
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profit from the sale of the loss leader product itself, but rather to entice customers to make
additional purchases of other, higher-margin products while they are in the store.
The concept behind loss leader pricing is to create a "foot in the door" effect, where
customers are drawn in by the attractive price of the loss leader item and then end up buying
other products with higher profit margins. This strategy can be particularly effective in
increasing customer traffic, clearing out excess inventory, and building customer loyalty.
Common examples of loss leader pricing include discounted electronics, doorbuster

deals during holiday sales, and promotions in supermarkets on staple items like milk
or bread.
Place (Distribution channel)-Meaning
This is a movement of Goods or Services between manufacturer or marketer to the end user
or consumer or customer.
• The main parts or elements of distribution channels are Producers/ marketers,

intermediaries, and consumers.
• The main objective is to deliver products or services to the end user at right time in a
right quantity with right quality at right place.
• Intermediaries can improve the efficiency of process by managing all activities of
routes of transactions properly.
• They can help to do research properly and more accurately to analyze market demand
and consumer preferences.
In the marketing mix, place refers to where your product or service will be sold. For tangible
products, this will include physical locations such as your own store, or a retailer where your
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product will be resold. It can also include the other methods where products can be purchased,
like online or over the phone.
A distribution channel represents a chain of businesses or intermediaries through which the

final buyer purchases a good or service. Distribution channels include wholesalers, retailers,
distributors, and the Internet.
A distribution channel is a path by which all goods and services travel to arrive at the intended
consumer. Distribution channels can be short or long and depend on the number of
intermediaries required to deliver a product or service.
Distribution Channels are also referred to as Marketing Channels or Place. A place can be a
location where the product can be purchased by the consumer/customer.
Place (Distribution Channel)- Definition
• According to Cundiff, Still and Govani: “A channel of Distribution or Marketing

Channels are the distribution networks through which producers products flow to the
market.”
• According to William. J. Stanton: “This is a route taken by the title to the goods as they
move from producer to the ultimate consumers or industrial users.”
• According to Philip Kotler “Every Producer seeks to link together the set of marketing
intermediaries that best fulfill the firm’s objectives. This set of marketing intermediaries
are called marketing channel.”
• According to Richard M. CIewett: “The channel has been defined as the pipeline through
which a product flows on its way to consumers. The manufacturer puts his product into
pipeline or marketing channel and various marketing people move it along to the consumer
as the other end of the channel.”
A channel of distribution represents three types of flows.

1. Goods flow downwards from producer to consumers.
2. Cash flows upwards from consumers to producer as payment for goods; and
3. Marketing information flows in both directions.
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Features of Distribution Channel
1. Place Utility – As they help in moving the goods from one place to another.
2. Time Utility – As they bring goods to the consumers when needed.
3. Convenience Value – As they bring goods to the consumers in convenient shape, unit,
size, style, and package.
4. Possession Value – As they make it possible for the consumers to obtain goods with
ownership title.
5. Marketing Tools – As they serve as vehicles for viewing the marketing organization in its
external aspects and for bridging the physical and non-physical gaps which exist in moving
goods from the producers to the consumers.
6. Supply-Demand Linkage – As they bridge the gap between the producers and consumers
by resolving spatial (geographical distance) and temporal (relating to time) discrepancies in
supply and demand.
Role of Distribution Channels
1. Confers distribution efficiency to the manufacturers.

2. Channels supply products in required assortments, (combination of products of different
manufactures) and help in assembling also.
3. Channels provide salesmanship (word of mouth) by being physically close to customers
4. Helps merchandising the products at retail shop by display, selling effort, awareness etc.
5. Helps in implementing price mechanism (setting price level from both sides) making a bridge
between user and manufacturer
6. Physical distribution and financial functions
7. After sale and presale services
8. Help in sub distribution
9. Selling to sub distributors etc.
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10. Helps in stock holding
11. Financing the stock, risk bearing, warehousing, storage of products etc.
Functions of Distribution Channel
1. Information – Gathering and distributing Marketing Research and intelligent information

about factors and forces in the marketing environments needed for planning and aiding
exchange.
2. Promotion – Developing and spreading persuasive communications about an offer.
3. Contact – Finding and communicating with prospective buyers.
4. Matching – Shaping and fitting the offer to the buyers needs including activities such as
manufacturing, grading, assembling and packaging.
5. Negotiation – Reaching an agreement on price and other terms of the offer so that
ownership or possession can be transferred.
6. Physical distribution – Transporting and storing goods.
7. Financing – Acquiring and using funds to cover the costs of the channel work.
8. Risk bearing – Assuming the risks of carrying out the channel work.
Types of Distribution Channel
Channels of distribution, which are also called trade channels are classified into two types-
Conventional (Non-integrated) channels and Non-Conventional (Integrated) channels. These
have further sub-classification.
A. Conventional (Non-integrated): Conventional channels are the channels which are

fragmented and not integrated. The manufacturer and consumer are closely linked to each
other through intermediaries.
The conventional Channel is classified in Direct Level and Indirect Level. Direct level
means distribution without the presence of middlemen. This is done directly by producer
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to consumer. Indirect Level means when middlemen exist between producer and consumer
as zero level, one level, two level, and three level.
1. Direct (Zero Level): A direct channel is one where the manufacturer sells directly to the
consumer. He does not employ any intermediary and therefore it is also known as Zero
level channel. Direct channels are short in size as the manufacturers try to reach the
customers directly. As a result of this there is an immediate transfer of title of the goods to
the consumer. Costly goods like heavy machinery are sold through direct channels.
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2. Indirect Level: Indirect level means when a middleman or intermediary is involved in the
distribution process, it means the organization is using Indirect Channels of Distribution.
The indirect channels of distribution can be classified into three categories; viz., One Level
Channel, Two Level Channel, and Three Level Channel.
I. One Level Channel: One level channel means that there is only one intermediary
involved between the manufacturer and the customer to sell the goods. This
intermediary is known as a retailer. In simple terms, under one level channel, the
organizations supply their products to the retailers who sell them to the customers
directly. For example, goods like clothes, shoes, accessories, etc., are sold by
companies with the help of a retailer.
II. Two Level Channel: A most commonly used channel of distribution that involves
two intermediaries for the sale of products is known as Two Level Channel. The
intermediaries involved are wholesalers and retailers. The producer sells their
products to wholesalers in bulk quantity, who sells them to small retailers, who
ultimately supply the products to the customers. This channel is generally used to
sell convenient goods like soaps, milk, milk products, soft drinks, etc. For example,
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Hindustan Unilever Limited sells its goods like detergent, tea leaves, etc., through
wholesalers and retailers.
III. Three Level Channel: Three level channel means that there are three
intermediaries involved between the manufacturer and the customer for the sale of
products. The three intermediaries involved are Agent Distribution,
Wholesalers, and Retailers. It is usually used when the goods are distributed across
the country and for that different distributors are appointed for different areas. For
example, wholesalers purchase goods from different distributors, like North India
Distributors and then pass the goods to the retailers, who ultimately sell the goods
to customers.
B. Conventional (Non-integrated): Non-Conventional or integrated channels are those

networks that work with full coordination and co-operation rather than in a loose manner.
1. Vertical Marketing System (VMS): It refers to distribution channel in which all
middlemen/intermediaries are linked in unified manner and the distribution is
owned/controlled by any one of the member. e.g., Shoppers Stop, Lifestyle.
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2. Horizontal Marketing System
(HMS): Horizontal channel is one in which two or more companies jointly distribute their
products in the market either themselves or they create an independent unit. This helps in
better gain from the marketing opportunities. Horizontal channels are used because of stiff
competition, constantly changing market, rapid changes in technology, cyclical changes
and such other factors affecting the market. e.g. Mobile and Sim , Car and Insurance etc.
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Importance of Distribution Channel
Distribution channels play a crucial role in the success of a business, as they are responsible for
getting products or services from the manufacturer or producer to the end consumer. Here are some
of the key importance of distribution channels:
1. Market Access: Distribution channels provide access to a wider market. They allow
businesses to reach customers in different geographic locations and demographics,
increasing the potential customer base.
2. Efficiency: Distribution channels help streamline the process of delivering products or
services. They reduce the complexity of distribution by handling tasks such as
warehousing, transportation, and inventory management, which can be cost-effective and
efficient.
3. Customer Convenience: Channels provide convenience to customers by making products
or services readily available. This can include physical stores, online marketplaces, or other
platforms where customers can easily find and purchase what they need.
4. Risk Reduction: Distributing through multiple channels can help spread the risk
associated with market fluctuations, changes in consumer preferences, or disruptions in the
supply chain. Diversification in distribution can mitigate the impact of these uncertainties.
5. Expertise: Channel partners often have specialized knowledge and experience in
marketing and selling specific types of products or services. This expertise can lead to
better sales and customer satisfaction.
6. Market Information: Channel partners can provide valuable market feedback and data,
helping businesses make informed decisions about product improvements, pricing
strategies, and marketing campaigns.
7. Brand Building: Distribution channels can help in brand building and promotion.
Retailers, for example, can display products prominently and provide marketing support,
enhancing brand visibility.
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8. Customer Relationships: Distributors and retailers often have established relationships
with customers. Leveraging these relationships can help in building trust and loyalty among
consumers.
9. Compliance and Regulation: Distribution channels can help ensure that products meet
regulatory and compliance requirements specific to certain markets. This is crucial in
industries like pharmaceuticals and food.
In summary, distribution channels are essential for connecting producers with consumers,
optimizing efficiency, reducing risk, and enhancing a company's overall competitiveness in the
marketplace. The choice of distribution channels should align with a company's strategic goals and
target market to maximize the benefits they offer.
Intermediaries/Middlemen: Intermediaries, also known as middlemen or distribution

intermediaries, are essential entities in the supply chain and distribution process. They help
facilitate the movement of products and services from producers or manufacturers to end
consumers.
Types of Intermediaries:
Intermediaries, also known as middlemen or distribution intermediaries, are essential players in

the supply chain and distribution process. They help facilitate the movement of products and
services from producers or manufacturers to end consumers. There are several types of
intermediaries, each serving a specific function within the distribution channel. Here are some
common types of intermediaries:
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Commission Agent
(No Possesion)
Factor
Mercantile (Possesion)
Middlemen
(No Title but
Remuneration) Auctioneer
Types of
(Bidder)
Middle Broker
men
(Buyer & Seller)
Wholesaler
(Bulk & low price)
Merchant Middlemen
(Title with Profit )
Retailer
(Less bulk high price)
• Mercantile Middlemen: These middlemen are intermediaries who work for the remuneration.
They undertake various marketing functions in the process of distribution of goods without having
ownership rights are called Mercantile middlemen or functional middlemen. These functional
middlemen operate on behalf of owners. They charge commission or brokerage for their services.
These are of the following types:
1. Commission Agent: Commission Agents: They also sell goods on behalf of the sellers.
They only negotiate the sale of goods without taking possession of the goods and make
necessary arrangements for the transfer of title to the goods. The commission agent has to
perform the functions of warehousing, grading, packing, or sampling in addition to
assembling and dispersion. For their services, the commission agents get a certain
percentage of commission on sales.
2. Factor: A middleman who keeps the goods of others and sells them with the approval of
the owner is known as a 'factor'. The goods are normally in his possession or under his
control. With the approval of the owner the factor can sell the goods as agent, or sell in his
own name, or pledge goods in his possession, or can do all such acts as can be done by the
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owner of the goods. After the sale of goods, he receives the payment from the buyer. He
receives commission at a fixed percentage on sales from his principal.
3. Auctioneer: Middlemen appointed as agents to sell goods by auction are known as
auctioneers. They assemble goods from different parties and act on their behalf to sell them
to intending buyers. The date and time of the auction are announced in advance. Goods are
displayed for inspection by interested buyers. Bids are then invited by the auctioneer from
those present at the time of auction. Sometimes a minimum price is fixed for specific items
known as reserve price and bids are not accepted below that reserve price. The goods are
sold to the highest bidder. The auctioneer gets commission from the principal (seller) as a
percentage of the sale price.
4. Broker: They take neither possession nor acquire ownership of the goods, but only serve
to bring the buyers and sellers together. They negotiate purchase and sale of goods on
behalf of other parties. Their task is over as soon as the buyer and the seller come to terms
in respect of the purchase of sale of the goods. When a broker acts on behalf of the buyer,
he is known as the buying agent. If the owner of goods employs a broker for sale of the
goods, the broker is known as a selling agent. The broker works for a certain percentage of
brokerage on the business transacted by him on behalf of his principal.
• Mercantile Middlemen: Merchant middlemen typically refer to intermediaries who buy goods
from producers or manufacturers and then resell those goods to retailers, other businesses, or
consumers. These intermediaries take ownership of the products they handle and are
essentially merchants themselves. They buy products at one price and sell them at a higher
price, making a profit from the markup.
1. Wholesaler: Wholesalers buy goods directly from the manufacturers in bulk and sell them
to retailers in small quantities. They serve as a link between manufacturers and retailers.
He purchases products in bulk, unpacks them, repacks them, and sells them to retailers.
The wholesaler sells only specific items and is unconcerned about the shop’s location,
packaging, or display of the goods. They are more concerned with the quantity of a product
than with its quality. Large capital is required to maintain a large stock and provide credit
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facilities to retailers. Functions like grading of products, packing into smaller lots, storage
and transportation, promotion of goods, collection of market information, etc., are
performed by the wholesaler.
2. Retailer: Retailers buy goods and services in small quantities from the wholesalers and
sell them to customers, who will use them directly rather than resell them. In order to
connect wholesalers and customers, retailers act as a middleman. Due to the retailer’s
business of purchasing goods at lower costs and charging customers a higher price, the
profit margin in the retail industry is high. Rent, electricity, employee wages, and other
costs are all factored into the final price that retailers charge for the product. The area of
operation of retailers is generally limited to a locality.
Factors to be considered while selecting Distribution Channel
Distribution channel selection is a crucial decision and it is to be taken after considering

various factors. Some of the factors to consider while selecting channels of distribution are
as follows: (i) Market (ii) Product (iii) Middlemen (iv) Company
1. Market Consideration
• Consumer or Industrial market
• No. of potential customers
• Size of order
• Buying habits
• Geographical concentration
2. Product Consideration
• Single item value
• Product lines
• Technical nature
• Bulk & weight
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• Perishable or Non-Perishable.
3. Middlemen Consideration
• Availability of middlemen
• Financial strength
• Attitude towards acceptance of new products
• Sales potential
• Cost of Channel
• Competition & legal constraints
4. Company Consideration
• Production Volume
• Financial resources
• Experience & Competency
• Desire of control
• Company’s goodwill & brand name
Distribution Channel Strategy
Developing a distribution channel strategy is essential for businesses to ensure that their products
or services reach the right customers efficiently and effectively. Distribution channel strategy
consist two aspects.
➢ Distribution Channel Intensity
➢ Distribution Channel Design
Distribution Channel Intensity
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Distribution channel intensity refers to the level of market coverage and the number of
intermediaries or distribution outlets used to distribute a product or service. There are three main
levels of distribution channel intensity:
1. Intensive Distribution: Intensive distribution aims to make a product available to as many

customers as possible. This strategy involves placing the product in as many retail outlets
as feasible within a given market.
Intensive distribution is often used for fast-moving consumer goods (FMCG) like snacks,
beverages, and personal care products.
Advantages: Maximizes market coverage, increases product visibility, and can result in
higher sales volume.
Disadvantages: May require significant coordination and logistics management, can dilute
brand image if not managed carefully.
2. Selective Distribution: Selective distribution involves distributing a product through a

limited number of carefully chosen intermediaries or retailers. This strategy is often used
for products that require specific brand positioning or customer support.
Selective distribution is common in industries like electronics, fashion, and cosmetics.
Advantages: Allows for better control over product presentation, ensures a consistent
brand image, and provides a higher level of customer service.
Disadvantages: Limits market reach compared to intensive distribution, potentially
reducing sales volume.
3. Exclusive Distribution: Exclusive distribution restricts the sale of a product to a single

intermediary or a limited number of exclusive distributors within a particular geographic
area.
This strategy is often employed for luxury products, high-end electronics, and specialized
equipment.
Advantages: Maintains strict control over brand image, ensures a high level of customer
service, and creates an aura of exclusivity.
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Disadvantages: Reduces market reach and sales volume, may limit access for some
potential customers.
The choice of distribution channel intensity depends on various factors, including the nature of the
product, target market, competitive environment, and marketing objectives. Companies must
carefully consider these factors to determine the most suitable distribution strategy for their
specific situation. In some cases, a combination of distribution channel intensities may be
employed to reach a broader spectrum of customers while maintaining brand integrity.
Distribution Channel Design

Designing an effective distribution channel is a critical aspect of a business's overall strategy. A
well-thought-out distribution channel design ensures that products or services reach the right
customers efficiently. Here are the key steps to consider when designing a distribution channel:
1. Formulating the distribution channel Objectives: Clearly define your distribution

objectives, such as market coverage, customer service levels, and cost-efficiency. Your
objectives will drive your channel design choices.
2. Identifying Channel Functions: Identifying channel functions is an essential step in
understanding how distribution channels work and how they contribute to the movement
of products or services from producers to consumers. Channel functions represent the
various activities and roles performed by intermediaries within the distribution channel
such as distribution, promotion, financing, and information management.
3. Linking Channel Design to Product Nature: Linking channel design to the nature of the
product is a crucial aspect of creating an effective distribution strategy. Different types of
products have unique characteristics and customer needs, and the choice of distribution
channels should align with these factors. e.g., Industrial Goods-(Direct Marketing),
FMCG Goods (2 or 3 Level Channel)
4. Evaluation of Distribution environment: Evaluating the distribution environment is a

critical step in developing an effective distribution channel strategy. It involves assessing
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the external factors and market conditions that can impact the distribution of the products
or services.
5. Evaluation of competitor’s channel: Evaluating competitors' distribution channels is an
important aspect of market research and can provide valuable insights about competitor’s
distribution channel strategy, intensity, level etc.
6. Matching the channel design to company’s resources: Matching the channel design to
a company's resources is crucial for creating a distribution strategy that is both effective
and sustainable.
7. Evaluating the alternatives & selecting the best: Evaluating distribution channel
alternatives and selecting the best one is a critical decision for any business. The process
involves carefully assessing various options to determine which distribution strategy aligns
best with your goals, resources, and target market.
Distribution Channel Management

Channel management, also known as distribution channel management, is a strategic process that
organizations use to design, develop, and maintain effective channels to distribute their products
or services to customers. Managing channels effectively is critical for reaching target markets,
maximizing sales, and ensuring customer satisfaction.
1. Selecting Channel Members: Selecting the right channel members, such as distributors,
retailers, agents, or wholesalers, is a crucial decision in channel management. The choice
of channel members (Agent, Wholesaler & Retailer) can significantly impact your
distribution strategy's success.
2. Training Channel Members: The selected members of the distribution channel should be
properly trained in product, soft skills, selling skills etc. in order to smoothly manage the
distribution channel.
3. Motivating Channel Members: It is very important to motivate channel members through
financial and non-financial motivation methods members to keep them enthusiastic toward
their responsibilities as channel members.
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4. Evaluating Channel Member: Monitoring and evaluation through (Sales Target,
Customer base, Support in promotional efforts)is also required for better channel
management.
Distribution Channel Conflict

Meaning: Channel conflict refers to any dispute, disagreement or other similar issues that may
occur between two or more channel partners. A channel partnership is a collaboration between a
company that produces or manufactures various products, services or technologies and another
one that markets and sells them. In a channel partnership, the decisions and actions of one partner
affect the other's business metrics, such as profit, sales or market share, which may lead to channel
conflict.
Any company that creates its own products may need a distribution and marketing channel that
exposes the respective products to a wide audience, ensuring sales and profitability. These
channels are often complex and involve additional partners and intermediaries. Any issue between
these partners is a channel conflict.
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1. Vertical Level Conflict: In the vertical level conflict, the channel partner belonging to a
higher level enters into a dispute with the channel member of a lower level or vice-versa.
For instance, channel conflict between dealers and retailers or wholesalers and retailers.
2. Horizontal Level Conflict: The conflict among the channel partners belonging to the same
level, i.e., issues between two or more wholesaler or retailers of different territories, on the
grounds of pricing or manufacturer’s biases, is termed as horizontal level conflict.
3. Multi-channel Level Conflict: When the manufacturer uses multiple channels for selling
the products, it may face multi-channel level conflict where the channel partners involved
in a particular distribution channel encounters an issue with the other channel.
Reasons of Channel Conflicts
There are various reasons for channel conflicts which are as follows:
1. Role Ambiguity: The uncertain act of an intermediary in a multi-channel arrangement may

lead to disturbance in the channel of distribution and cause conflict among the
intermediaries.
2. Incompatible Goals: When the manufacturer and the intermediaries do not share the same
objectives, both work in different directions to meet their ends, this results in channel
conflict.
3. Marketing or Strategic Mis-Alignment: Sometimes, two-channel partners promote the

manufacturer’s product in a different manner, which created two different images of the
same product in the consumers’ mindset, which creates conflicting brand perception.
4. Difference in Market Perception: The manufacturer’s understanding of the potential

market and penetration into a specific region or territory, may vary from the perception of
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the intermediaries, which can create conflict and reduce the intermediary’s interest in
capturing that particular market.
5. Change Resistant: When the channel leader plans to modify the distribution channel, the
intermediaries may or may not accept this change. Thus, it may result in a condition of
discord or non-cooperation.
6. Improper Geographic or Demographic Distribution: If the sales territory has a narrow

consumer base, and the channel leader allows many selling partners, they tend to lose
interest soon because of low profit and limited sales.
7. Channel Power: Differences in size, resources, or market influence may lead to power
imbalances, resulting in conflicts over decision-making authority.
8. Lack of Resources: Limited availability of resources can lead to disputes over how they
are allocated among channel partners, creating conflicts over perceived fairness.
9. Mis Communication: Miscommunication, lack of transparency, or inadequate sharing of

information can lead to mistrust and conflicts among channel partners.
Consequences of Channel Conflict
Now that we know about the causes of such conflicts, we must also understand how dangerous
these may prove to be for an organization.Given below are some of these outcomes:
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1. Price Wars: Due to channel conflict, the partners compete with each other on the grounds
of price, and therefore, the consumer may defer the purchase searching for the best deal.
2. Customer Dissatisfaction: If there exists a channel conflict, then the distributors or
retailers may show much interest in the company’s products and resist to assist the
consumers, which results into their resentment towards the brand.
3. Sales Deterioration: Conflicts can adversely affect the sales of the products due to the
decline in distributors’ interest and an increasing number of consumers shifting to
competitors’ products.
4. Distributors Exit: For the manufacturers, it is essential to retain the distributors or partners
to increase product sales. When there is a channel conflict, the chances of various
distributors leaving the channel increases.
5. Poor Public Relations: The unsatisfied distributors may negatively publicize the brand
and its products as a result of manufacturer’s unhealthy public relations with them.
Channel Conflict Management
It is a universal fact that the conflicts cannot be eliminated, though these can be handled smartly
to reduce its negative impact on business.
Following are some of the ways to manage the channel conflicts:
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1. Mediation, Arbitration and Diplomacy: To resolve a dispute, the manufacturer can adopt
the strategy of intervention where a third person intervenes to create harmony. The other
option is arbitration, where an arbitrator listens to the argument of the parties involved in
a conflict and declares a decision. Or, the parties can resort to diplomacy where the
representatives of both the parties conversate and find a solution.
2. Co-optation: The manufacturer should hire an expert who has already gained experience
in managing the channel conflicts in other organizations, as a member of the grievance
redressal committee or board of directors, for addressing such conflicts.
3. Dealer Councils and Trade Associations: To handle the horizontal or vertical conflicts,
the manufacturer forms a dealer council where the dealers can unanimously put up their
problems and grievances in front of the channel leader. To bring in unity among the channel
partners or intermediaries, they can be added as members in trade association which
safeguards their interest.
4. Superior Goals: Establishing a supreme goal of the organization and aligning it with the
individual goals or objectives of the channel partners, may reduce the channel conflicts.
5. Regular Communication: The channel leader should take regular feedback from the
channel partners through formal and informal meetings to know about market trends and
dynamics. Also, the channel partner’s issues and conflicts can be addressed through
frequent interactions.
6. Legal Procedure: When the conflict is critical and uncontrollable by the channel leader,
the aggrieved party can seek legal action, by filing a lawsuit against the accused party.
7. Fair Pricing: Most of the channel conflicts are a result of the price war, and therefore,
these can be resolved by ensuring that products are equally priced in all the territories and
a fair margin is provided to the channel partners.
Effective distribution channel management requires a proactive and collaborative approach to

create a more harmonious and productive distribution network.
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Promotion-Meaning
Promotions refer to the entire set of activities, which communicate the product, brand or service
to the user. The idea is to make people aware, attract and induce to buy the product, in preference
over others
Promotional activities make a flow of information about products and persuade the customers to
buy the products. Such type of function is also known as the marketing communication. This
makes the potential customers know about the products or services. Effective communication
persuades the customers to buy the products. These types of promotional activities also create
demands as it explains necessity to the customers. So, this can also be defined as the art of creating
demand.
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Promotion-Definition
According to Philip Kotler: "Promotion includes all the activities the company undertakes the
communication and promote its products to the target market."
Objectives of Promotion
Promotion is a crucial element of the marketing mix, and its objectives can vary depending on the
specific goals of a company or marketing campaign. However, the primary objectives of promotion
in marketing typically include:
1. Build Awareness: One of the primary and major objectives of promotion is to build
awareness about the products and services of the firm in the minds of customers. Since the
new companies and products are often unknown to the market. In such a situation, business
firms use the promotion to reach customers and tell the customers who they are and what
they have to offer.
2. Create Interest: Only being aware of the firm’s offerings often does not lead to purchase.
In this reference, another essential goal is to create interest. It aims to move a customer
from an awareness point to a purchase point.
3. Provide Information: While promoting the essential information of the products needs to
be communicated. A good promotional activity communicates information about the
products to the different customers they seek to know. Generally, the product’s information
includes price, place, producer, seller, benefit, uses, ingredients, features, etc.
4. Persuade: Only making being informed about the products the customers might not
influence the products. To influence them, the seller or producer must kindly persuade or
appeal to them to use his products. The seller must be able to assure customers of their
satisfaction. Especially in today’s competitive environment, no customers are influenced
by the products unless they are persuaded to do so.
5. Remind: Once the products are communicated, they may not serve the market for always.
Because of the various competitive products available in the market the consumers may
forget about the previous products. So, the marketer or seller needs to communicate his
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products to the customers to remind them that the product is still available and ready to
serve as they desire. Reminding the product’s main goal is to sustain the product’s
preference in the market and attracting new customers is the secondary promotional goal.
6. Entertain: Because of the high competition and more complex world, most of the potential
customers may not be influenced by plain communication and persuasion. They seek some
sort of entertainment value too. Today, almost all marketers use this promotional objective
by adopting the principle of aesthetics i.e. presenting products or information beautifully
by using music, dance, songs, arts, drama, attractive figures, and so on.
7. Reinforce: One of the major objectives of promotion is to build a strong relationship with
customers. Once a purchase is made, the promotion aims to change that purchase into
loyalty.
Promotion Mix: The Promotion Mix is the integration of Advertising, Personal Selling,
Sales Promotion, Public Relations, and Direct Marketing. The marketers need to view the
following questions in order to have a balanced blend of these promotional tools. The promotion
mix, also known as the marketing communication mix, refers to the set of tools or tactics that
businesses use to communicate and promote their products or services to their target audience.
These promotional tools are chosen and combined strategically to achieve marketing and
communication objectives.
Elements of Promotion Mix: A promotion mix also called a promotional blend, is a

combination of communication tools used by a marketer to communicate with his audiences. There
are basically five major components of the promotion mix that a marketer can employ to
successfully promote his products and services.
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• Advertising: Advertising involves paid, non-personal communication through various
media channels like television, radio, print (newspapers and magazines), online (display
ads, social media ads, search engine marketing), and more. Its primary goal is to reach a
wide audience and create brand awareness or persuade consumers to take specific actions.
• Sales Promotion: Sales promotion includes short-term incentives or offers designed to
encourage immediate sales or actions from consumers. This can include discounts,
coupons, contests, sweepstakes, free samples, loyalty programs, and other promotional
tactics aimed at boosting sales quickly.
• Public Relations (PR): Public relations is the practice of managing a company's image
and reputation through various means, such as media relations, press releases, events,
community engagement, and crisis management. PR aims to build and maintain a positive
public perception of the organization.
• Personal Selling: Personal selling involves one-on-one or direct communication between
a salesperson and a potential customer. This approach is highly interactive and
personalized, allowing salespeople to address individual needs, answer questions, and
close sales. It is often used for complex or high-value products or services.
• Direct Marketing: Direct marketing involves communicating with customers or prospects
directly through various channels like email, direct mail, telemarketing, and digital
marketing. It aims to establish a direct and personal connection with the target audience
and often includes personalized offers and messages.
Advertising-Meaning
Advertising is derived from a Latin word ‘advertere’ which means ‘to turn the attention’. So, all
types of advertisements made using different media try to turn the attention of the reader or listener
towards the product, service or idea being offered in the advertisement. It is an act of persuading
the customer to buy the product or service being offered which will give him satisfaction and profit
to the manufacturer.
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Definition of Advertising
According to American Marketing Association: “Advertising is any paid form of non-personal

presentation and promotion of ideas, goods and services by an identified sponsor”.
According to William J. Stanton: “Advertising consists of all the activities involves in presenting
to a group, a non-personal, oral or visual, openly sponsored message regarding disseminated
through one or more media and is paid for by an identified sponsor”.
Features of Advertising
Advertising is a key component of the marketing mix, and it encompasses various features that
distinguish it as a promotional tool. These features help define the nature and characteristics of
advertising in the business world:
1. Paid Communication: Advertising involves a company or organization paying for space

or time in various media channels to convey a specific message. It is a form of paid
promotion, and the advertiser typically invests financial resources to reach its target
audience.
2. Non-Personal Communication: Advertising is a non-personal form of communication
because it is directed at a mass audience rather than individual recipients. The advertiser
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does not engage in direct, one-on-one interactions with consumers, unlike personal selling
or direct marketing.
3. Mass Reach: One of the primary features of advertising is its ability to reach a large and
diverse audience. It can be used to target specific demographics, geographic areas, or
interests, but its potential to reach a broad spectrum of people sets it apart from personal
selling or other forms of promotion.
4. Controlled Message: Advertisers have significant control over the content and
presentation of their messages. They can craft the message, choose the media channels,
and control the timing and frequency of ads to ensure consistency and alignment with their
marketing objectives.
5. Non-personal Medium: Advertising typically lacks the personal touch and direct human
interaction found in personal selling or some forms of digital marketing. The message is
conveyed through various media, such as print, television, radio, online, and outdoor
advertising.
6. Creative Element: Advertising often relies on creativity to capture the audience's attention
and convey the desired message effectively. It involves elements like visual design,
copywriting, graphics, music, and storytelling to make the message memorable.
7. Branding: Many advertisements focus on building and reinforcing a brand's identity.
Consistent branding elements, such as logos, slogans, and visual styles, are commonly used
to create brand recognition and loyalty.
8. Measurable Impact: Advertisers use various metrics and tools to measure the
effectiveness of their advertising campaigns. Key performance indicators (KPIs) like reach,
frequency, click-through rates, conversion rates, and return on investment (ROI) help
assess the impact of advertising efforts.
9. Multimedia Options: Advertising can be delivered through a wide range of media
channels, including television, radio, print publications, websites, social media, email,
billboards, and more. This diversity allows advertisers to choose the most suitable
platforms for their target audience.
10. Longevity: Advertisements can have a lasting impact and continue to influence consumers
even after the initial exposure. Well-executed and memorable advertising campaigns can
leave a lasting impression on the audience.
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Understanding these features of advertising is essential for businesses to develop effective
advertising strategies that align with their marketing goals and target audience preferences.
Successful advertising campaigns leverage these features to create compelling and impactful
messages that resonate with consumers.
Objectives/Functions of Advertising
Advertising serves various objectives, and businesses use it as a strategic tool to achieve specific
goals within their broader marketing and business strategies. The primary objectives of advertising
include:
1. Creating Awareness: One of the fundamental objectives of advertising is to inform and

create awareness about a product, service, brand, or business. It introduces consumers to
what is being offered and ensures that the target audience knows about it.
2. Building Brand Recognition: Advertising helps in establishing and reinforcing brand
recognition. Consistent branding elements such as logos, slogans, and visual styles can
make a brand more memorable and distinguishable in the market.
3. Increasing Sales and Revenue: Many advertising campaigns are designed to drive sales
and boost revenue. By promoting products or services and encouraging consumers to make
purchases, advertising contributes directly to a company's bottom line.
4. Expanding Market Share: Advertising can help a business gain a larger share of the
market by attracting new customers and persuading existing customers to buy more or
switch from competitors. This objective is particularly important in competitive industries.
5. Educating Consumers: Some products or services require explanation or education to
help consumers understand their features, benefits, or usage. Advertising can serve as a
tool for consumer education, addressing questions and concerns.
6. Creating Desire and Demand: Advertising aims to create a desire for products or services
by highlighting their unique selling points and benefits. Effective advertising can stimulate
demand and desire among consumers.
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7. Influencing Consumer Behavior: Advertisements can influence consumer behavior by
encouraging specific actions, such as making a purchase, signing up for a newsletter,
visiting a website, or participating in a promotional event.
8. Supporting Product Launches: When introducing a new product or service, advertising
plays a crucial role in generating excitement and anticipation among the target audience. It
can build interest and curiosity before the launch.
It's important for businesses to set clear, measurable objectives for their advertising campaigns to
guide their efforts effectively. The specific objectives will vary based on the product or service,
the target audience, the competitive landscape, and the overall marketing strategy.
Advantages of Advertising
1. Increased Brand Awareness: Advertising helps create and reinforce brand recognition,
making the brand more familiar to consumers.
2. Information Dissemination: It allows businesses to inform the target audience about
product features, benefits, pricing, and availability.
3. Sales Generation: Effective advertising can lead to increased sales, boosting revenue and
profitability.
4. Competitive Advantage: It allows businesses to differentiate themselves from
competitors by highlighting unique selling points.
5. Market Expansion: Advertising can help businesses expand their market share by
attracting new customers.
6. Support for Product Launches: Advertising generates anticipation and excitement for
new product launches.
7. Customer Loyalty: It fosters customer loyalty through loyalty programs, repeat exposure,
and customer engagement.
Disadvantages of Advertising:
1. Costly: Effective advertising can be expensive, especially for businesses with limited
budgets.
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2. Cluttered Market: Consumers are bombarded with advertising messages daily, leading to
message overload and reduced attention spans.
3. Skepticism: Many consumers are skeptical of advertising messages and may not trust them
fully.
4. Intrusiveness: Some advertising methods, such as pop-up ads or telemarketing, can be
perceived as intrusive and annoying.
5. Ineffectiveness: Poorly planned or executed advertising campaigns may not yield the
desired results, leading to wasted resources.
6. Ethical Issues: Some advertising practices can be seen as ethically questionable, such as
using deceptive tactics or targeting vulnerable audiences.
7. Regulation: Advertising is subject to regulations and guidelines, which can limit creative
freedom and add legal compliance burdens.
In summary, advertising is a double-edged sword. While it offers numerous advantages in terms

of brand awareness, sales generation, and market expansion, it also presents challenges related to
cost, consumer skepticism, and the potential for negative feedback. To maximize the benefits of
advertising and minimize its drawbacks, businesses need to plan and execute their advertising
campaigns carefully, taking into account their target audience, goals, and available resources.
5 M’s of Advertising
The "5 Ms of Advertising" is a framework used to organize and analyze the key elements that are
essential for the success of an advertising campaign. These elements help advertisers plan, execute,
and evaluate their advertising strategies effectively. The 5 Ms of advertising typically include:
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Media of Advertising
Advertising media refer to the various channels and platforms through which advertisers
communicate their messages to their target audience. The choice of advertising media depends on
the campaign objectives, target audience, budget, and the nature of the product or service being
promoted. Here are some common advertising media:
1. Television Advertising (TV): Television commercials are a powerful medium for

reaching a wide and diverse audience. TV ads can be used to convey complex messages
with sight, sound, and motion. They are often used for mass-market products and brand
awareness campaigns.
2. Radio Advertising: Radio ads are an audio-based medium that allows advertisers to reach
audiences while they listen to music, news, talk shows, and more. They are cost-effective
and can be targeted to specific demographics based on the radio station's format.
3. Print Advertising: Print media includes newspapers and magazines. Print ads are often
used for detailed product information and can be targeted to specific geographic regions or
niche audiences. They have a longer shelf life compared to some other media.
4. Digital Advertising: Digital advertising encompasses a wide range of online channels,
including:
a. Online Display Ads: These are banner and display ads placed on websites and can
be targeted based on user behavior and interests.
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b. Social Media Advertising: Advertisers can run paid ads on platforms like Facebook,
Instagram, Twitter, LinkedIn, and others to reach specific demographics and
engage with users.
5. Outdoor Advertising: Outdoor ads can be seen in various public spaces, including
billboards, transit advertising (on buses, trains, and subway stations), and posters. They
offer high visibility and can reach a broad audience.
6. Direct Mail Advertising: This involves sending physical promotional materials, such as
postcards, brochures, catalogs, and samples, directly to a targeted list of recipients. Direct
mail can be highly personalized and has a tangible impact.
7. Cinema Advertising: Ads shown before movie screenings in theaters. This medium can
reach a captive and engaged audience.
The choice of advertising media should align with the campaign's objectives, target audience,
budget, and creative assets. An effective advertising strategy often combines multiple media
channels to maximize reach and impact.
Types of Advertising
1. Product Advertisement: Product advertisement is a type of advertising that focuses on

promoting specific products or services to potential customers. The primary goal of product
advertising is to generate interest, inform consumers about the product's features and
benefits, and persuade them to make a purchase. This type of advertising can take various
forms and utilize different mediums to reach its target audience effectively and it includes:
◦ Primary/Pioneer Advertisement
◦ Selective Competitive Advertisement
◦ Reminder Advertisement
2. Institutional Advertisement: Institutional advertising, also known as corporate
advertising or image advertising, differs from product advertising in that it focuses on
promoting the overall image, reputation, and values of a company or organization rather
than specific products or services. The primary objective of institutional advertising is to
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build and enhance the company's brand identity, credibility, and goodwill among its target
audience.
3. Comparative Advertisement: Comparative advertising, also known as comparative
marketing or comparative advertising campaign, is a form of advertising where a company
directly compares its products or services to those of a competitor(s) to demonstrate its
advantages or superiority. This type of advertising aims to persuade consumers that the
advertiser's offering is better in some way, such as being of higher quality, more affordable,
or offering additional features.
4. Shortage Advertisement: A "shortage advertisement" is a type of advertisement used by
businesses or organizations to inform the public or their customers about a temporary
shortage or unavailability of a particular product or service. This type of advertisement
typically aims to provide transparency and manage customer expectations during periods
when supply cannot meet demand. Shortage advertisements are save water, petrol etc.
5. Cooperative Advertisement: Cooperative advertising, often referred to as co-op
advertising or co-op marketing, is a form of advertising where two or more parties,
typically a manufacturer or supplier and a retailer or distributor, collaborate to share the
costs and benefits of advertising campaigns. This type of advertising arrangement allows
both parties to leverage their resources and reach a broader audience.
6. Commercial Advertisement: Commercial advertising, often simply referred to as
"commercials," is a prevalent form of advertising that involves the creation and broadcast
of promotional messages through various media channels, primarily television and radio.
Commercial advertising aims to persuade and influence consumers to take specific actions,
such as purchasing a product, using a service, or adopting a particular behavior.
Commercial advertisement includes consumer, industrial, Trade, Profession, and farm
advertisements.
7. Non-Commercial Advertisement: Non-commercial advertisements, also known as public
service announcements (PSAs), are a type of advertising that serves a public interest or
social cause rather than promoting a commercial product or service. These advertisements
are often used to raise awareness, educate, and inspire action on issues that benefit society
as a whole such as HIV awareness by NACO.
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Sales Promotion
Sales promotion is a marketing strategy or tactic that aims to encourage the purchase of a product
or service by providing additional value or incentives to consumers, distributors, or sales teams.
The primary goal of sales promotion is to boost sales, attract new customers, increase brand
loyalty, and achieve short-term marketing objectives.
Features and components of sales promotion
1. Temporary Nature: Sales promotions are typically short-term initiatives designed to

generate immediate results. They often have a specified start and end date to create a sense
of urgency among consumers.
2. Target Audience: Sales promotions can target different audiences, including end
consumers (B2C), distributors, retailers, or sales teams (B2B). The specific audience
depends on the marketing goals.
3. Incentives: Sales promotions offer various incentives to encourage desired actions.
Common incentives include discounts, coupons, rebates, free samples, buy-one-get-one-
free (BOGO) offers, and loyalty rewards.
4. Trade Promotions: Sales promotions can also target intermediaries in the supply chain,
such as retailers and distributors. Trade promotions may include volume discounts,
cooperative advertising agreements, and merchandising support.
5. Consumer Promotions: These promotions are aimed directly at end consumers and often
include price reductions, limited time offers, contests, sweepstakes, and loyalty programs.
6. Point-of-Purchase (POP) Displays: Creating attractive in-store displays or packaging to
capture consumer attention and promote specific products or offers.
Sales promotion is a versatile tool in the marketing mix, and its effectiveness depends on factors
such as the target audience, the nature of the product or service, and the competition within the
market. When used strategically, sales promotions can stimulate sales and contribute to a
company's overall marketing goals.
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Objectives of Sales promotion
Sales promotion is a marketing strategy aimed at achieving various short-term and long-term
objectives. These objectives are designed to boost sales, attract new customers, increase brand
loyalty, and achieve specific marketing goals. There are various objectives of Sales Promotion
which are necessary for effective marketing.
• To Introduce new products.

• To attract new customers.
• To encourage present customer to buy more.
• To help the firm to remain more competitive.
• To increase sales in off season
• To educate customers.
• To stimulate Sales
• To Enhance Brand loyalty.
Sales Promotion (Advantages & Disadvantages)

Advantages Disadvantages
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Types of Sales Promotion
1. Consumer Sales Promotion: These are given to direct consumers for sales
promotion.
 Free Sampling Distribution

 Rebate or Price off offer
 Cash Back Offer
 Discount Coupons
 Packaged Premium (Gift inside packets)
 Container Premium
 Exchange Offer
 Product combination or Free
 Lucky Draw
 Finance Schemes
 Contests
2. Dealer Sales Promotion: These are given to direct to middlemen for sales promotion.
 Buying Allowance Discounts(Deductions in Invoice )

 Buy Back Allowance (Discount on completion of Buying Target in a period)
 Display and Advertising Allowance
 Dealer listed promotion
 Incentives
 Contests
 Free Gifts
 Advertising materials
 Credit Facilities
3. Sales-force Sales Promotion: These are given to direct to sales team for sales
promotion.
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• Incentives
• Bonus
• Prize Contests
• Recognition Contests
• Foreign Delegation in conferences or Trade meets.
• Increments
• Promotions
Major Decisions in Sales Promotion

 Establishing Objectives (Trial Purchase, Large Quantity sale, Branding, Off season
buying)
 Selecting the Tools of Sales Promotion
◦ Consumer Sales Promotion
◦ Dealer Sales Promotion
◦ Salesforce Sales Promotion
 Developing the Programme
◦ Size/Quantity
◦ Duration
◦ Condition
◦ Timings
◦ Budget
 Pretesting the Programme
 Implementing and Controlling the Programme
 Evaluating results
Personal Selling-Definition
“Personal Selling is the process of two way communication between seller and prospective buyer
with the purpose of selling product or service at a profit to seller and benefit to buyer.
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It is an art to persuade probable customers for buying decision”.
Key points:-
➢ Buyer & Seller.
➢ Two-way communication.
➢ Purpose to sell.
➢ Profit to seller & benefit to buyer.
➢ The art of persuading.
Objectives of Personal Selling

 Creation of Demand
 Educating Customers
 Handling Customer objections
 Exploring Hidden words
 Building relationships
 Source of Feedback
 Personal Touch with Professionalism
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Process of Personal Selling
The process of personal selling involves building and maintaining relationships with potential
customers to understand their needs, offer solutions, and ultimately persuade them to make a
purchase. Personal selling is often used in industries where products or services are complex,
customized, or require a high degree of trust between the buyer and the seller.
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Pubicity & Public Relation
• Publicity: Publicity refers to the practice of gaining public attention, visibility, and
awareness for a person, organization, product, event, or idea through various means
of communication. It involves disseminating information or news to the public,
often with the aim of promoting, informing, or creating interest in a particular
subject. Publicity can be achieved through various channels, including media
coverage, press releases, interviews, social media, advertising, and promotional
events.
The primary goal of publicity is to capture the attention of a target audience and
shape public perception in a positive or desired way. It is a strategic communication
tool used by businesses, individuals, non-profit organizations, and government
entities to generate interest, build awareness, and enhance their image or reputation.
Publicity is an essential component of marketing and public relations efforts, as it
can significantly impact how an entity is perceived the public.
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• Public Relation: Public relations (PR) is a strategic communication discipline that
focuses on building and maintaining positive relationships between an organization
or individual and its various stakeholders, including the public, customers,
employees, investors, government agencies, and the media. The primary goal of
public relations is to manage and shape public perception, enhance reputation, and
promote understanding and goodwill.
Tools of Public Relation

 Publications (Reports, Brochures, Articles, Newsletters etc.)
 Events (Seminar, Conferences, exhibition)
 News (Favourable news of product, achievements, future plans etc.)
 Speeches
 Public service Activities (Charity, Community support etc.)
 Identity media ( Visibility of logos on Business cards, stationaery, Building, uniform etc.)
Functions of Public Relation
Direct Marketing-Meaning
 Direct Marketing is a tool of Promotion mix which focuses on direct interaction between
producer and consumer.
 There is no middlemen or reseller between the two.
 The Producer creates a link with the customers directly through door-to-door, advertising,
postal mail, e-mail, telephone etc.
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Definitions of Direct Marketing
According to Philip Kotler: “Direct connections with carefully targeted individual consumers to
both obtain an immediate response and cultivate lasting customer relationships.”
According to Philip Kotler and Gray Armstrong: "Direct marketing is marketing through
various advertising media that interact directly with consumers, generally calling for the
consumers to make a direct response."
Direct Marketing (Advantages & Disadvantages)
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Methods /Tools of Direct Marketing
Direct marketing is a marketing strategy that involves communicating directly with potential
customers to promote products or services, generate sales, and build relationships. Direct
marketing methods are designed to target specific individuals or groups with personalized
messages and offers. Here are some common methods of direct marketing:
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Each of these methods can be effective, depending on the target audience, industry, and marketing
goals. Successful direct marketing campaigns often combine multiple methods and carefully
consider the preferences and behaviors of the intended recipients.
Event Sponsorship
Event sponsorship is a marketing strategy where a business or brand provides financial or in-kind
support to an event in exchange for promotional opportunities and exposure. Sponsoring events
can be an effective way for companies to enhance brand visibility, connect with their target
audience, and achieve marketing objectives. These events which can be sponsored range from in-
person gatherings like conferences, trade shows, product launches, and promotional parties to
virtual events and webinars conducted online. Sponsorship is a marketing strategy in which a
business or organization provides financial support, resources, or products to another entity (such
as an event, individual, team, or organization) in exchange for various benefits, including brand
visibility, promotion, and association with the sponsored entity. Sponsorship is commonly used in
sports, entertainment, cultural events, and various other fields to achieve marketing and business
goals. Here are key elements and considerations in sponsorship:
1. Objectives: Clearly define the objectives of the sponsorship. These may include increasing
brand awareness, enhancing brand image, reaching a specific target audience, generating
leads, or supporting a cause.
2. Target Audience: Identify the audience or demographics of the sponsored entity and
evaluate whether they align with your target market. Sponsorship should resonate with
your ideal customer base.
3. Selection: Choose the right sponsorship opportunity that aligns with your brand values and
objectives. Options may include sports teams, music festivals, charity events, conferences,
or individual athletes.
4. Benefits: Determine what benefits or rights you will receive as a sponsor. These can
include logo placement, naming rights, product exclusivity, speaking opportunities,
hospitality, and access to the sponsored entity's audience.
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5. Negotiation: Negotiate the terms of the sponsorship agreement, including the duration,
financial commitments, deliverables, and any additional terms or conditions.
6. Activation: Develop an activation plan to leverage your sponsorship investment
effectively. This involves creating marketing campaigns, promotions, and strategies to
maximize visibility and engagement.
7. Branding: Ensure that your brand is prominently and consistently featured in all
sponsorship-related materials, including advertising, signage, merchandise, and digital
platforms.
8. Measurement: Establish key performance indicators (KPIs) to measure the success of the
sponsorship. Common KPIs include brand impressions, website traffic, social media
engagement, and sales metrics.
9. Compliance: Comply with legal and ethical standards, including disclosure requirements
and industry regulations related to sponsorship agreements and marketing practices.
10. Relationship Building: Build a strong working relationship with the sponsored entity and
collaborate on marketing initiatives. Maintain open communication and transparency.
11. Assessment: Continuously evaluate the sponsorship's impact on your brand's objectives.
Make adjustments to the strategy based on the results and feedback received.
12. Renewal or Termination: Decide whether to renew the sponsorship agreement at the end
of the contract term or explore new opportunities. Terminating a sponsorship should be
done according to the terms of the contract.
Sponsorship can provide various benefits, including increased brand visibility, credibility, and
access to a targeted audience. However, it requires careful planning, alignment with brand values,
and effective activation to realize its full potential. Successful sponsorships create win-win
partnerships where both the sponsor and the sponsored entity benefit.
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Event Sponsorship Benefits
Event sponsorship offers several benefits for both event organizers and sponsors:
1. Enhanced Brand Visibility and Exposure: Sponsors gain increased brand awareness by
aligning themselves with the event. Their logos, branding, and messaging are prominently
displayed throughout the event, reaching a targeted audience and generating brand
recognition.
2. Access to a Targeted Audience: Sponsors can tap into the event's audience, which is often
composed of individuals or groups with specific interests or demographics. This allows
sponsors to connect directly with their target market and potentially convert attendees into
customers.
3. Networking Opportunities: Events provide a platform for sponsors to engage with
attendees, industry peers, potential clients, and strategic partners. Networking
opportunities may include speaking engagements, exhibition booths, or exclusive VIP
events, enabling sponsors to build relationships and expand their professional networks.
4. Reputation Enhancement: Associating with well-regarded events helps sponsors build
positive brand associations and credibility. By aligning their brand with a reputable event,
sponsors can enhance their image and strengthen their position in the market.
5. Product or Service Promotion: Sponsors have the opportunity to showcase their offerings
directly to a captive audience. This can lead to increased product visibility, generate leads,
and drive sales.
Types of Sponsorship in Events
1. Financial Sponsorship: This is the most common type of event sponsorship, where
sponsors provide monetary support to the event. The funds may cover event production
costs, venue expenses, marketing and promotion, and speaker fees.
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a. Title Sponsorship: The highest level of sponsorship, often providing exclusive
naming rights to the event.
b. Co-Sponsor: To give money to support a person, organization, or activity together
with one or more other people or organizations
c. Category Exclusive: Exclusive sponsorship rights within a specific industry
category.
2. In-Kind Sponsorship: In-kind sponsorship refers to sponsors providing goods or services
instead of financial support. For example, a technology company may offer audio-visual
equipment, or a catering company may provide food and beverages for the event.
3. Media Sponsorship: Media sponsors contribute by promoting the event through their
various media channels, such as radio, television, print, or online platforms. They may offer
advertising space, and interview opportunities, or feature the event in their publications or
broadcasts.
4. Venue Sponsorship: In some cases, sponsors may provide the event venue free of charge
or at a discounted rate. This type of sponsorship helps reduce one of the significant costs
associated with event planning.
5. Technology Sponsorship: A tech company sponsors a conference by providing state-of-
the-art event technology solutions, such as live streaming services or interactive event apps.
6. Food and Beverage Sponsorship: A local restaurant sponsors a community festival by
offering food and beverage services or by setting up a food truck on-site.
7. Speaker Sponsorship: An industry-leading organization sponsors a professional
development workshop by providing renowned speakers or trainers who share their
expertise with the attendees.
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Unit-04
Consumer Behavior
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Introduction of Consumer Behavior
Human behavior encompasses every thought, feeling or action by people. This implies that every
thought, motive, sensation, and decision that is made every day, is classified as human behavior.
Consumer behavior is the study of individuals, groups, or organizations and all the activities
associated with the purchase, use and disposal of goods and services. It is necessary to understand
the difference between Customer and Consumer before understanding Consumer Behavior.
CUSTOMER: Customer is the one who purchases goods/services in exchange of another goods
or money. In Barter system, customer settle their transactions by selling goods/services in
exchange of other goods but in present era, currency is being used for buying and selling of
goods/services. The word customer is being derived from the term ‘custom’ which means
‘practice/habit’ of any individual or entity to purchase goods or services from a seller at regular
interval. It is also known as client or buyer.
CONSUMER: Consumer is the one who finally consumes or uses the product for satisfaction of
need. Consumer buys the product/service for personal consumption and not for reselling.
Consumer can be a customer but it is not necessary that customer should be a consumer because
sometimes customer purchases goods/service for someone else, in that case the one who purchases,
is customer not consumer and the one who consumes the product, is consumer not customer.
Meaning of Consumer Behavior
Consumer behavior refers to the buying behavior of final consumers- individuals and households
who buy goods and services for personal consumption. The term, consumer can refer to individual
consumers as well as organisational consumers, and more specifically, "an end user. Consumer
behavior is concerned with:
➢ Purchase activities: the purchase of goods or services; how consumers acquire products
and services, and all the activities leading up to a purchase decision, including information
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search, evaluating goods and services and payment methods including the purchase
experience.
➢ Consumption activities: concerns the who, where, when and how of consumption and the
usage experience, including the symbolic associations and the way that goods are
distributed within families or consumption units
➢ Disposal activities: concerns the way that consumers dispose of products and packaging;
may also include reselling activities such as eBay and second-hand markets.
Consumer Behavior is also the study of their responses which may be:
 Emotional (or affective) responses: refer to emotions such as feelings or moods,

 Mental (or cognitive) responses: refer to the consumer's thought processes, their
 Behavioural (or conative) responses: refer to the consumer's observable responses in
relation to the purchase and disposal of goods or services.
Definition of Consumer Behavior
1. Schiffman & Kanuk, 2009: “The term consumer behavior refers to the behavior that
consumers display in searching for, purchasing, using, evaluating and disposing of
products and services that they expect will satisfy their needs and the study of consumer
behavior is the study of how individuals make decisions to spend their available resources
– like time, money, effort – on consumption related items.”
2. Blackwell et al., 2005: “Consumer behavior refers to the action and decision processes of
people who purchase goods and services for personal consumption.”
3. American Marketing Association: “Consumer behavior can be defined as "the dynamic
interaction of affect and cognition, behavior, and environmental events by which human
beings conduct the exchange aspects of their lives."
In all the definitions, consumer behavior is described as the act or process of purchasing, using,
evaluating & disposing the product & service for personal consumption.
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Features of Consumer Behavior
Understanding consumer behavior is essential for businesses to effectively meet the needs and
preferences of their target audience. The features of consumer behavior encompass various factors
that influence how consumers make decisions. Here are some key features:
1. Complexity: Consumer behavior is intricate and influenced by multiple factors, including

psychological, social, cultural, and personal elements. The decision-making process can be
complex and involve various considerations.
2. Dynamic Nature: Consumer behavior is dynamic and subject to change over time.
External factors, market trends, and evolving consumer preferences contribute to the
dynamic nature of consumer behavior.
3. Influenced by Various Factors: Consumer behavior is influenced by several factors. The
factors that influence consumers include marketing, personal, psychological, situational,
social, cultural etc.
4. Varies Across Regions: Consumer behavior varies across states, regions and countries.
For example, the behavior of urban consumers is very different from that of rural
consumers. Generally, rural consumers are conservative (traditional) in their buying
behavior.
5. Vital for Marketers: Marketers must have a good knowledge of buyer behavior. They
need to study the various factors that influence the consumer behavior of their target
audience. The knowledge of buyer behavior enables marketers to make suitable marketing
decisions.
6. Result in Spread-effect: Customer behavior has a spread effect. The buying behavior of
one individual may affect the buying behavior of another person.
7. Undergoes a Change: The consumer’s behavior changes over time depending on age,
education, income level changes, etc. For example, kids may prefer colorful dresses, but as
they grow up as teenagers and young adults, they may prefer trendy clothes.
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8. Decision-Making Process: The consumer decision-making process involves several
stages, including problem recognition, information search, evaluation of alternatives,
purchase, and post-purchase evaluation. Marketers need to understand each stage to
influence consumer decisions effectively.
9. Purchase Intentions: Consumer behavior is driven by intentions to purchase a product or
service. Understanding the factors that influence these intentions helps businesses tailor
their marketing strategies.
10. Influence of Technology: Technology plays a significant role in consumer behavior,
affecting how individuals research, shop, and engage with brands. E-commerce, social
media, and digital marketing channels have transformed consumer interactions.
11. Brand Loyalty: Consumer behavior includes the concept of brand loyalty, where
individuals consistently choose a particular brand over others. Building and maintaining
brand loyalty is a key objective for many businesses.
Importance of Consumer Behavior
Consumer behavior is a crucial aspect of marketing and business strategy, influencing how
individuals make decisions and interact with products or services. Understanding consumer
behavior is of utmost importance for several reasons:
1. Market Understanding: Consumer behavior analysis provides insights into market

trends, preferences, and demands. This understanding helps businesses tailor their
products, services, and marketing strategies to meet the needs of their target audience
effectively.
2. Product Development: By comprehending consumer preferences and motivations,
businesses can develop products that align with customer expectations. This reduces the
risk of launching products that may not resonate with the market.
3. Marketing Strategy: Knowledge of consumer behavior guides the development of
marketing strategies. Businesses can create targeted and persuasive messages, select
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appropriate advertising channels, and design promotions that appeal to the specific
preferences and behaviors of their audience.
4. Brand Building: Understanding consumer behavior allows businesses to build strong and
relatable brands. Brands that resonate with consumers on an emotional level and align with
their values are more likely to establish loyalty and trust.
5. Customer Segmentation: Consumer behavior analysis facilitates the segmentation of the
target market. By identifying different consumer segments based on behavior, businesses
can tailor their marketing efforts to address the unique needs and preferences of each
segment.
6. Innovation and Adaptation: Monitoring changes in consumer behavior helps businesses
stay agile and adapt to evolving market trends. This is essential for innovation, staying
ahead of competitors, and ensuring long-term business success.
7. Pricing Strategies: Understanding how consumers perceive value and make decisions
regarding pricing is crucial. Businesses can develop effective pricing strategies that balance
perceived value with affordability, maximizing sales and profitability.
8. Customer Experience: Consumer behavior insights contribute to the enhancement of the
overall customer experience. Businesses can identify pain points, preferences, and
expectations, allowing them to create a positive and seamless experience for their
customers.
9. Personalization: Personalized marketing and product offerings are more successful in
capturing consumer attention. Understanding consumer behavior enables businesses to
tailor their approaches and offerings to the individual preferences of their customers.
10. Forecasting and Planning: Consumer behavior insights contribute to accurate forecasting
and strategic planning. Businesses can anticipate changes in demand, preferences, and
market dynamics, allowing for informed decision-making.
In summary, consumer behavior is a foundational element for businesses to thrive in the market.
It guides strategic decisions across various aspects of marketing, product development, and
customer engagement, ultimately leading to better customer satisfaction and business success.
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Model of Consumer Behavior
The black box model shows the interaction of stimuli, consumer characteristics, and decision
process and consumer responses.
The essence of the model is that it suggests consumers will respond in particular ways to different
stimuli after they have 'processed' those stimuli in their minds. In more detail, the model suggests
that factors external to the consumer will act as a stimulus for behavior, but that the consumer's
personal characteristics and decision-making process will interact with the stimulus before a
particular behavioral response is generated.
It is called the 'black box' model because we still know so little about how the human mind works.
We cannot see what goes on in the mind and we don't really know much about what goes on in
there, so it's like a black box. As far as consumer behavior goes, we know enough to be able
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identify major internal influences and the major steps in the decision-making process which
consumers use, but we don't really know how consumers transform all these data, together with
the stimuli, to generate particular responses.
Buying Roles of Consumer Behavior

In consumer behavior, buying roles refer to the different roles that individuals or groups play in
the process of making a purchasing decision. These roles are influenced by factors such as the
complexity of the purchase, the level of involvement, and the specific characteristics of the product
or service. There are several key buying roles in consumer behavior:
1. Initiator: The initiator is the individual or group that first recognizes a need or desire for
a particular product or service. This role involves identifying the problem or opportunity
that triggers the decision-making process.
2. Influencer: Influencers are individuals or groups that provide information, opinions, or
recommendations about a product or service. They may not make the final decision, but
their input influences the perceptions and choices of others in the decision-making process.
3. Decider: The decider is the person or group with the authority to make the final decision
on the purchase. In some cases, this role may be assumed by the individual who initiated
the decision, while in others, it might be someone with decision-making authority within a
group.
4. Buyer: The buyer is the individual or group responsible for executing the actual purchase.
This role involves negotiating terms, completing transactions, and ensuring that the product
or service is acquired.
5. User: Users are those who will ultimately use or consume the product or service.
Understanding the needs and preferences of users is crucial, as their satisfaction directly
impacts the success of the purchase.
6. Gatekeeper: The gatekeeper controls access to information and influences the flow of
information within the decision-making process. This role is often present in organizational
or group decision-making scenarios where certain individuals control the information
available to others.
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Buying Motives of Consumer Behavior
The buying motive of the customer refers to the underlying reason or motivation that drives them
to make purchases. It can vary from customer to customer and may be influenced by a variety of
factors such as personal needs, desires, emotions, and external influences. Understanding the
buying motive of the customer is vital for businesses as it enables them to customize their
marketing strategies and offerings as per their target audience's needs.
There are 3 categories of buying motives: Emotional, Rational, and Patronage.
1. Emotional Motives: Emotional motives are reasons to purchase based on feelings and
emotions. Emotional motivation is based upon the principle that consumers wish to seek
pleasure and avoid pain. Love, affection, passion, and happiness are emotions that
consumers like because they bring pleasure. But just as powerful are emotions that
consumers want to avoid such as guilt, fear, or anxiety. Good marketers know that emotions
are not easily controlled and have a very strong influence on buying decisions.
2. Rational Motives: Rational motives are all about logic, practicality, and necessity. When
someone has a rational motive for purchasing a product, they are primarily focused on the
functional benefits it provides. These motives stem from the need to solve a problem or
fulfill a specific purpose.
3. Patronage Motives: Patronage motives influences a person to purchase the products of a

specific seller, dealer, or a producer. Patronage motives are based on loyalty and encourage
consumers to purchase from a particular business or to buy a particular brand. Loyalty is
influenced by positive previous experiences or a close identification with the product or
business. Individual consumers develop loyalty for various reasons such as consistently
low prices, high quality, friendly staff, great customer service, or convenient location.
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CONSUMER DECISION MAKING PROCESS
The decision-making of consumer behavior is the step-by-step process through which customers
reach to purchase decisions and experience. This model consists 5 steps which are shown below:
SOURCE: (Professional Academy, 2020)
1. Recognition of Need: Customers feel deprivation initially which can be explained as any need,
problem, pain, or discomfort. At this stage, customers feel that there is some unsatisfied need that
is to be fulfilled.
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2. Information Search: Information search is the next step where customers look for any product
or service which can be used to fulfill their needs. Many times customers are unaware of the
availability of various products which are suitable to them. That’s why, marketers should increase
customer awareness programs.
3. Evaluation of alternatives: Once customer is aware about the product or service which can
satisfy their needs & wants, they start evaluating for alternatives on the basis of price, quality,
brand, availability etc.
4. Purchasing decision: During this phase of decision making, customer turn their final choice
into buying action. Here customers put efforts to utilize their time, money and efforts to buy a
product or service.
5. Post-purchase evaluation: Once the customer has made a purchase, they experience the
product by consuming it and after that they give their positive or negative opinion about a product
or service. Customers’ experience and feedback will decide their re-purchase and referral
decisions.
FACTORS INFLUENCING CONSUMER BEHAVIOR
The study of consumer behavior is an in-depth phenomenon that explains the purchase pattern of
consumers. The consumers buying behavior changes due to the change in various influencing
factors. These influencing factors are categorized into internal influences and external influences.
Internal influences include personal & psychological factors whereas external factors include
cultural & social factors.
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SOURCE: (Patidar, 2014)
1. Personal Factors: These are the factors related to the personal traits of the individual
which include the Age factor, Occupation, Income, lifestyle, and personality of the
individual.
2. Psychological Factors: These factors are also important but difficult to understand as it is
related to the psychology of human being. Psychological factors such as motivation,
perception, learning, belief, and attitude of individuals also have a relation with the thought
process of individuals as a consumer and it has a positive or negative impact on their buyer
behavior.
3. Cultural Factors: Each and every individual has grown up with different cultures,
traditions, customs, religions, social classes which has a direct or indirect effect on their
buying decision and consumer behavior.
4. Social Factors: All humans are social animals that is why, they interact with many people
and make various relationships. These individuals have a sense of belongingness to many
groups such as family, friends, peer groups, political groups, religious groups, etc. The
shared values of all these groups influence their decision-making and consumer behavior.
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Types of Consumer Behavior/ Buying Decision Behavior
The buying decision behavior of a consumer encompasses the various approaches

consumers employ when making purchase decisions. While making a purchase, a
consumer has to take many things into consideration based on what product he is buying.
It is because there is a difference between buying a car and buying a toffee. In simple terms,
it can be seen that if a product is expensive, then the consumer will take more time and
make more effort in making its purchase; however, if a product is cheap or ordinary, then
the consumer will take no or less time and efforts in its purchase.
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1. Complex Buying Behavior: Complex buying behavior occurs when consumers face a
high level of involvement in the purchase decision and encounter significant differences
among available options. Complex buying behavior occurs when an individual buys an
expensive and infrequently purchased product, such as a car, new home, or treadmill.
Consumers are often highly involved with this type of purchase, and they take time to
research the significant differences between various brands. Complex purchases often
involve a deep sense of buyer commitment based on their associated costs.
2. Dissonance-Reducing Buying Behavior: Dissonance-reducing buying behavior occurs

when a consumer is highly involved in the purchase of an item, but they have a hard time
pinpointing the difference between various brands. This type of behavior is commonly
observed when consumers are purchasing expensive, infrequent, or risky products; such as
furniture, curtain material, or sofa covers/upholstery. In this case, the consumers would
purchase easily and readily available products but the “dissonance” occurs when a
consumer is worried they will make the wrong choice and will regret their decision later.
3. Habitual Buying Behavior: Habitual Buying Behavior occurs when consumers face a low
level of involvement in the purchase decision along with little significant brand differences.
Habitual buying behavior happens when consumers purchase something on a regular basis,
but they are not emotionally attached to a brand. The purchase of items such as bread, milk,
eggs, and gasoline are possible examples of habitual buying behavior.
4. Variety Seeking Buying Behavior: Variety-Seeking Buying Behavior occurs when

consumers exhibit a desire for new experiences, change, and novelty in their purchases. It
means that when consumers face a low level of involvement but significant perceived brand
differences, they undertake variety-seeking buying behavior. In such cases, the consumers
switch brands more often. Variety seeking buying behavior happens when individuals
decide to buy a different product not because they were dissatisfied with their initial
purchase, but because they want to try something new for example a consumer chooses a
namkeen brand without doing much evaluation, and then after consuming the product,
evaluates it.
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Unit-05
Marketing Planning
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Planning
Planning is the first and foremost function of management.
Planning precedes all the functions. Marketing planning is the starting point of all marketing and
business activities of an enterprise. Because of the dynamism of the environment, the role of
marketing planning has increased a lot.
Planning is deciding in advance what to do, how to do it, when to do it and who is to do it. Planning
is simply a rational approach to accomplish an objective. It bridges the gap from where we are &
where we want to go. Planning is the first management function to be performed in the process of
management. It governs survival, growth and prosperity of any enterprise in a competitive and
ever changing environment.
Marketing Plan
A marketing plan is a strategic roadmap that businesses use to organize, execute, and track their
marketing strategy over a given period. Marketing plans can include different marketing strategies
for various marketing teams across the company, all working toward the same business goals.
The purpose of a marketing plan is to write down strategies in an organized manner. This will help
keep you on track and measure the success of your campaigns. The marketing plan will help to
think of each campaign‘s mission, buyer personas, budget, tactics, and deliverables.
Marketing Planning-Meaning
Marketing planning is the process – Marketing planning is a process that consists of analyzing
current situation and information about marketing opportunities, forecasting and establishing
planning premises, selecting target market(s), determining marketing objectives, designing and
developing marketing strategy or courses of action for achieving these objectives and allocating
resources to the ingredients of marketing effort i.e., marketing mix and developing procedure and
policies.
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Marketing Planning-Definition
Marketing planning is a comprehensive blueprint that outlines an organization’s overall marketing

efforts. It typically results in a marketing strategy that can be used to increase sales for the business
producing it. The definition of marketing planning as given by some prominent scholars has been
given below:
According to Stephen Morse: “Marketing planning is concerned with the identification of

resources that are available and their allocation to meet specified objectives.”
According to the American Marketing Association: “Marketing planning is the work of setting
up objectives for marketing activities and of determining and scheduling the steps necessary to
achieve such objectives.”
Marketing Planning Process
Marketing planning is the process of developing a comprehensive strategy to guide a company's

marketing efforts and achieve its business objectives. It involves analyzing the market, setting
clear goals, formulating strategies, and outlining actionable tactics to effectively promote products
or services and engage with target audiences. A well-structured marketing plan helps align the
marketing team's efforts with the overall business strategy and ensures a cohesive approach to
reaching and satisfying customers.
Features of Marketing Planning Process
1. The success of marketing planning depends on individual behavior and response.

2. It is complex in nature as it includes the past, present, and future predictions of the
company.
3. Marketing planning is often a decision-making procedure.
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4. Marketing resolutions have long-term holdings on the efficiency, profitability, and market
position of a company.
5. It is an explicit and organized approach toward the planning of all marketing actions such
as price setting, product positioning, distribution channels etc.
6. Marketing planning as an analytical action needs thinking, imagination, and foresight.
Market projection, market analysis, consumer behavior analysis, and direct marketing
outcomes are based on data and measurements drawn from internal and external
environments.
7. It is a progressive and changing process design to develop market-oriented or customer-
oriented business activities.
8. Marketing planning is concerned with two things, first is, refraining from incorrect
activities, and second is, diminishing the frequency of failure.
9. The marketing department of the company handles all the marketing planning on the basis
of the proposals given by the distinct divisions of their department; considering all
suggestions; marketing plans are developed.
Phases of Marketing Planning Process

The planning process is divided into the following phases, which are determined by answering the
questions as per the indicated phases.
1. Diagnosis: Where is the company now and why?
2. Prognosis: Where is the company headed?
3. Objectives: Where should the company be headed?
4. Strategies: What is the best way to get there?
5. Tactics: What specific action(s) should be undertaken, by whom and when ?
6. Control: What measures and steps to be seen and watched to depict the success of the
company?
Steps/Content of the Marketing Planning Process
1. Situation Analysis:
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• Gather information about the company's internal environment (resources,
capabilities) and external environment (competitors, market trends, customer
behavior).
• Conduct a SWOT analysis to identify strengths, weaknesses, opportunities, and
threats.
2. Define Goals and Objectives:
• Set clear and measurable marketing objectives that support the company's overall
business goals.
• Objectives should be specific, measurable, achievable, relevant, and time-bound
(SMART).
3. Target Audience Identification:
• Determine who your ideal customers are by creating detailed buyer personas.
• Understand their demographics, psychographics, behaviors, needs, and pain points.
4. Value Proposition and Positioning:

• Define your unique value proposition (UVP) that sets your products or services
apart from competitors.

• Determine how you want your brand to be perceived in the market and by your
target audience.
5. Marketing Strategies:
• Develop high-level strategies that outline how you'll achieve your marketing
objectives.
• Consider strategies for brand awareness, lead generation, customer retention, etc.
6. Tactical Planning:
• Break down your strategies into actionable tactics and activities.
• Define the specific marketing channels (such as social media, content marketing,
email marketing) you'll use to execute your strategies.
7. Budget Allocation:
• Estimate the budget required for each tactic and strategy.
• Allocate funds based on the importance of each tactic and the expected return on
investment (ROI).
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8. Implementation Timeline:
• Create a timeline that outlines when each tactic will be executed.
• Ensure that activities are coordinated and spaced out appropriately to achieve a
smooth and effective marketing effort.
9. Key Performance Indicators (KPIs):

• Define metrics that will help you measure the success of your marketing activities.
• KPIs could include metrics like website traffic, conversion rates, social media
engagement, etc.
10. Monitoring and Evaluation:

• Regularly track and measure the performance of your marketing activities against
the defined KPIs.

• Analyze the data to identify areas of improvement and make informed adjustments
to your tactics and strategies.
11. Review and Adaptation:

• Periodically review the marketing plan to ensure it remains aligned with changing
market conditions and business objectives.

• Adapt the plan as needed based on feedback and results.
12. Communication and Collaboration:

• Ensure that all relevant team members and stakeholders are informed about the
marketing plan and their roles in its execution.

• Foster collaboration and open communication to achieve the plan's objectives
effectively.
A successful marketing plan is dynamic, flexible, and responsive to changes in the market
landscape. Regular reviews and adjustments are essential to ensure that the plan remains effective
and relevant over time.
The Marketing Planning Process includes various sub-plans which are prepared for the success of
the marketing planning.
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1. Strategic Marketing Planning:
• This type of planning focuses on long-term goals and strategies that align with the
company's overall business objectives.

• It involves high-level decisions about market positioning, target audience,
competitive advantage, and resource allocation.
2. Tactical Marketing Planning:
• Tactical planning is more short-term and involves the implementation of specific
marketing initiatives.
• It breaks down the strategies outlined in the strategic plan into actionable tactics,
such as social media campaigns, email marketing, events, etc.
3. Annual Marketing Planning:
• Annual planning involves creating a comprehensive marketing plan for the
upcoming year.
• It includes setting goals, strategies, and tactics for the entire year, as well as
budget allocation and resource planning.
4. Campaign-Specific Planning:
• This type of planning focuses on creating a detailed plan for a specific marketing
campaign or promotion.
• It involves defining the campaign's objectives, target audience, messaging,
channels, and timeline.
5. Product Launch Planning:
• When introducing a new product or service to the market, a specialized plan is
needed to ensure a successful launch.
• This plan covers pre-launch activities, launch day strategies, and post-launch
follow-up.
6. Digital Marketing Planning:
• Digital marketing planning centers on online channels such as social media,
websites, email, and online advertising.
• It outlines strategies and tactics to reach and engage customers in the digital
space.
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7. Content Marketing Planning:
• Content marketing planning focuses on creating valuable and relevant content to
attract and engage a target audience.
• It involves planning content topics, formats, distribution, and promotion.
8. Social Media Marketing Planning:
• This planning type is specific to social media platforms and involves strategies for
content creation, posting schedules, engagement, and community building.
9. Event Marketing Planning:
• When organizing events, a specialized plan is necessary to ensure smooth
execution and effective promotion.
• It covers event goals, logistics, promotion strategies, attendee engagement, and
follow-up.
10. International Marketing Planning:
• If a company is expanding into international markets, specialized planning is
needed to address cultural differences, language barriers, and market-specific
challenges.
11. Crisis Marketing Planning:
• This type of planning is focused on managing potential crises that could impact a
company's reputation.
• It involves preparing strategies and communication plans to address and mitigate
negative situations.
12. Integrated Marketing Planning:
• Integrated planning aims to align and synchronize various marketing channels and
strategies for a cohesive and consistent customer experience.
• It involves combining efforts across traditional marketing, digital marketing,
public relations, and more.
These types of marketing planning can be used individually or in combination, depending on the
company's goals, resources, and the nature of the marketing initiatives. The choice of planning
type will depend on the specific needs and context of the business.
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Benefits of Marketing Planning
1. It encourages successful marketing actions.

2. Marketing planning helps to harmonize activities that can expedite the achievement
of targets over time.
3. It obliges management to evaluate the future in an organized way.
4. Resources can be more equitable, respecting identified market events.
5. Planning gives a framework for an ongoing check to operations. It will allow the
company to pay more attention to market expansion instead of market maintenance.
6. It helps to examine performance, take advantage of strength, minimize weakness and
risks and lastly, open up new opportunities.
7. Marketing planning can be recommended to minimize the threats of failure.
8. It decreases the conflicting results of unfavorable circumstances above the control
of the management.
9. Marketing planning benefits an extensive view of the company and acts as a process
of communication and co-ordination between the marketing department and other
departments.
10. Greater alertness to make a change can be stimulated. Marketing strategy is equal to
the marketing sense by which the business unit wishes to attain its marketing
objectives.
Marketing planning is an organized method of evaluating marketing opportunities and resources,

deciding marketing goals, describing marketing strategies and implementing guidelines for
application and control of the marketing plan. The marketing planning cycle is a circular
procedure, with assessment used to relate and synchronize all steps of the planning cycle.
Marketing Control- Meaning
Marketing control involves setting a desired standard, measuring deviations from the standard and
taking the appropriate action. In many cases the standard is expressed in terms of budgets and any
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substantial deviation from budget is investigated. Both positive as well as negative deviations can
be a cause for concern. If sales are far in excess of planned levels then this can over-stretch the
enterprise's production, storage and distribution resources, for example. At the same time, the
investigation of all deviations from budgeted levels would prove an unbearable load on managers.
Instead, since not all deviations are significant, parameters are set for “allowable” deviations and
only those exceeding these parameters are investigated.
Marketing control is the process of monitoring the proposed plans as they proceed and adjust where
necessary. If an objective states where you want to be and the plan sets out a road map to your
destination, then control tells you whether you are on the right route or whether you have arrived
at your destination.
Marketing control is concerned with analyzing the performance of marketing decision, identifying
the problem/opportunities, and taking actions to take advantage of opportunities and resolving
problems. It is the sequel to marketing planning.
Marketing Control Definition:
Marketing control refers to the measurement of the company’s marketing performance in terms
of the sales revenue generated, market share captured, and profit earned. Here, the actual result is
compared with the standard set, to find out the deviation and make rectifications accordingly.
According to Kotler, “Marketing control is the process of measuring and evaluating the results
of marketing strategies and plans and taking corrective action to ensure that marketing objectives
are attained.”
Need of Marketing Control
Marketing control is a crucial component of the marketing management process that involves
setting performance standards, monitoring actual performance, and taking corrective actions to
ensure that marketing objectives are achieved efficiently and effectively. The need for marketing
control arises from several important reasons:
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1. Goal Achievement: Marketing control helps organizations track and evaluate their
progress toward achieving marketing goals and objectives. By regularly monitoring
performance metrics, companies can ensure that their marketing efforts are aligned with
overall business goals.
2. Resource Optimization: Marketing control allows companies to optimize the allocation
of resources, including budget, personnel, and time. By identifying areas of inefficiency or
underperformance, organizations can reallocate resources to strategies that yield better
results.
3. Performance Measurement: Marketing control provides a systematic way to measure the
effectiveness of marketing strategies and campaigns. This includes assessing key
performance indicators (KPIs) such as sales growth, market share, customer satisfaction,
and return on investment (ROI).
4. Budget Management: Controlling marketing activities helps in managing and controlling
budgets effectively. By comparing actual expenditures with planned budgets, organizations
can identify discrepancies and adjust avoid overspending or underspending.
5. Adaptation to Changes: The business environment is dynamic, and factors such as
consumer preferences, competition, and technology can change rapidly. Marketing control
allows organizations to adapt to these changes by adjusting strategies and tactics in real-
time.
6. Risk Management: Marketing control helps in identifying and mitigating risks associated
with marketing initiatives. It allows companies to assess the potential impact of external
factors on their marketing performance and take preventive measures to minimize risks.
7. Quality Improvement: Continuous monitoring and evaluation through marketing control
contribute to the identification of areas that need improvement. This process fosters a
culture of quality improvement, ensuring that marketing strategies are refined and
enhanced over time.
8. Feedback and Learning: Marketing control provides valuable feedback on the
effectiveness of marketing efforts. Analyzing this feedback allows organizations to learn
from both successes and failures, refining their marketing strategies and adapting to market
dynamics.
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9. Customer Satisfaction: Monitoring customer satisfaction and feedback is an essential
aspect of marketing control. Ensuring high levels of customer satisfaction is vital for
maintaining customer loyalty and positive brand perception.
10. Competitive Advantage: Marketing control helps organizations maintain a competitive
advantage by ensuring that marketing strategies are in line with market trends and customer
expectations. It allows businesses to stay ahead of competitors by adapting quickly to
changes in the business environment.
11. Legal and Ethical Compliance: Marketing control ensures that marketing activities
adhere to legal and ethical standards. This is crucial for maintaining the reputation of the
organization and avoiding legal issues that may arise from non-compliance.
In summary, marketing control is essential for achieving efficiency, effectiveness, and adaptability
in the dynamic field of marketing. It enables organizations to navigate challenges, seize
opportunities, and continuously improve their marketing performance to meet business objectives.
Types of Marketing Control
Control means not about overpowering the personnel, but it means enhancement of efficiency, by
reducing the chances of errors and meeting the standards set by the management. There are four
major types of control, implemented in an organization which are as follows:
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1. Annual Plan Control: As the name suggests, the plans which are determined for one year
for the control of operational activities through the successful implementation of
management by objectives is termed as annual plan control. Such programs are usually
framed and controlled by the top management of the organization. Following are the five
vital tools used under the annual plan control mechanism:
2. Profitability Control: Maximizing the profit margin has become a difficult task in today’s
highly competitive market. This has enforced pressure on the marketing team of the
organizations too. Companie’s need to frame strategies for profit assessment and control
in the different product line, trade channels and territories.
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3. Profitability Control: The management and the marketers are regularly involved in
finding out ways to improve the task performance in the organization. These improvements
bring in efficiency and perfection in marketing operations. The three essential mechanisms
used under efficiency control are as follows
4. Strategic Control: The external environment creates a significant impact on the

organization’s marketing strategies. To understand and align the plans with the prevailing
external environment, the organization can adopt any of the following control functions:
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Customer Relationship Barometer: To determine the customer’s loyalty towards the brand and
its products, the organization uses the relationship barometer.
Here, the company studies the customer’s perception based on the criteria like organization’s core
values, system, policies, structure, customer orientation strategy, technology, personnel attitude,
knowledge, skills and behaviour.
Marketing Control Process
Marketing control is a systematic and integrated process. A marketer follows the following steps
while exercising control over the marketing operation in an organization:
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1. Determining Marketing Objectives: The initial step in marketing control is the setting
up of the marketing goals, which are in alignment with the organizational objectives.
2. Establishing Performance Standards: To streamline the marketing process,
benchmarking is essential. Therefore, performance standards are set for carrying out
marketing operations.
3. Comparing Results with Standard Performance: The actual marketing performance is
compared and matched with the set standards and variation is measured.
4. Analyzing the Deviations: This difference is then examined to find out the areas which
require correction, and if the deviation exceeds the decided range, it should be informed to
the top management.
5. Rectification and Improvement: After studying the problem area responsible for low
performance, necessary steps should be taken to fill in the gap between the actual and
expected returns.
Thus, marketing can be seen as a complete function, which needs to be performed successfully
through proper control over the related activities, to ascertain the achievement of the set goals and
objectives.
Marketing Audit: Like accounting audits, marketers carry out marketing audit to get a clear
picture of the company’s performance while executing the various marketing operations.
It is a systematic record which periodically examines the problem areas and provides for the means
of rectification, to overcome the weakness by utilizing the organizational strength and grab the
current opportunities.
Marketing audit is a systematic and objective study of the total marketing efficiency of the firm. It
critically evaluates the marketing policies and activities of the firm and measures the extent and
direction of its growth.
It is concerned with the long-term business interests and challenges of the firm rather than short-
term achievements. He may ask the following questions:
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• What is the pricing strategy of competitor?
• What are the changes in consumer behaviour?
• What is the distribution strategy of competitor?
• What are the likes of consumer?
• What are the needs of retailers?
Features of Marketing Audit:
There are four basic features of marketing audit that emerge from the definitions and descriptions
given above. These are:
1.It is comprehensive: The phrase ‘marketing audit’ covers all the major activities of a business
and business house; it is not spotlighting on only the trouble points. It covers the thorough and
critical analysis of total environment its objectives, strategies and the systems and the sub-systems.
A comprehensive marketing audit is more effective in locating the real source of the firm’s
marketing problems as nothing is left to chance.
2.It is systematic: Marketing audit is not haphazard activity. It involves orderly sequence of
diagnostic steps covering the firm’s marketing environment, internal marketing systems, and the
specific marketing activities. Further diagnosis is followed by a corrective action plan involving
both short-run proposals to improve the firm’s overall marketing effectiveness.
3.It is independent: Marketing audit is an independent activity in that it can be conducted at least
in six alternative ways as self-audit, audit from across, audit from above, company auditing office,
company task-force audit and outsider audit.
The experience has proved beyond doubt that best results have been achieved through outsider
audit consultants who have necessary objectivity and independence, broad and requisite
experience and undivided time and devotion.
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4.It is periodic: A sound marketing audit is one which is conducted periodically as a weapon to
signal the dangers or the signs of success. It is unfortunate that market audits are ordered only
when sales have dwindled or sales-force morale has fallen or any other such unavoidable problem
has cropped up. It is wrong because, periodic marketing audit promises benefits for all types of
firms namely those doing very well, those doing so and those which are in trouble. What is
important is the firm should learn from the adage “precaution is better than cure” that pays.
The Components of Marketing Audit:
The marketing audit consists of the detailed examination of six major components of the
company’s marketing situation. Each component is semi- autonomous in status in case firm wants
less than total marketing audit.
These six major components are made up of sub-components which can be outlined as under:
1.Marketing environment audit: It is divided into two broad groups as macro-environment and
task-environment. ‘Macro- environment’ audit is the analysis of forces and trends in the areas of
demography, economy, ecology, technology, politics and culture.The ‘task-environment’ audit
covers the audit of the key components namely, markets, customers, competitors, distributors,
dealers, suppliers, facilitators and marketing firms and publics.
2.The marketing strategy audit: This audit calls for critical review of the firm’s marketing
mission, objectives and goals and strategies to appraise how well these are adapted to the present
and future marketing environment.
3.The marketing organization audit: This audit warrants evaluation of the capability of the
marketing organization implementing the necessary strategy for the future marketing environment.
It is the review of the formal structure, functional efficiency and interface efficiency.
4.The marketing systems audit: It is the in-depth study of subsystems of the system namely,
organization for marketing as to their quality standards. It covers the review of marketing
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information system, marketing planning system, marketing control system and new product
development system.
5.Marketing productivity audit: It is the crucial and, therefore, critical examination of

profitability of different marketing entities and cost effectiveness of different heads of marketing
expenditure. Thus, it is a matter of profitability and cost effectiveness analysis.
6.The marketing function audit:This is a functional audit covering each function or marketing
mix components namely, products, price, distribution, sales-force, advertising, sales-promotion
and publicity.
Marketing Audit Process
1. Choose, what to audit: As already mentioned, your marketing audit can cover your entire
operation or target a specific campaign, process, or area. That said, your marketing is likely
comprised of interrelated components, so it can be beneficial to analyze "the big picture."
Ultimately, what you choose to audit is entirely up to you and will depend on your
marketing priorities.
2. Identify goals and objectives: Want to know which of your social media campaigns are
performing well? Or how your content strategy stacks up against your competitors? Or,
maybe you want to refresh your branding or customer personas. Start by picking an
objective that will suitable for the your audit. Next, break down your object into
measurable goals.
3. Collect the right information: Now that you have well-defined and measurable goals, the
next step is gathering information. This can come from a number of sources — such as
campaign metrics, website traffic, social media metrics, and marketing spend. You can also
gather data from external sources like market research reports, industry benchmarks, and
competitor analysis — but ensure the data is reliable and accurate. Once you've gathered
the data, organize it in a way that is easy to analyze and reference later. You may want to
create charts and graphs and consolidate data into a single document.
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4. Data Analysis & Interpretation: How you evaluate your data depends on the goals of the
audit. For instance, you might perform a competitive analysis if you're looking to evaluate
your pricing strategy against your competitors. Document the results or findings from this
step so you can make effective recommendations down the line.
5. Make recommendations (and track them): Lastly, make recommendations for
improving your marketing strategy — such as readjusting your messaging, marketing
channels, or spend.
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Unit-06
Marketing Research
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Meaning of Research
Research is defined as the aspects of new knowledge and/or the use of existing knowledge in a
new and creative way so as to generate new concepts, methodologies, and understandings. This
could include synthesis and analysis of previous research to the extent that it leads to new and
creative outcomes.
As per the Merriam-Webster Online Dictionary, the word research is derived from the Middle
French ―recherche, which means ―to go about seeking.
The earliest recorded use of the term was in 1577. Research is a structured inquiry that utilizes
acceptable scientific methodology to solve problems and create new knowledge that is generally
applicable.
Research is a process of discovering new knowledge to find answers to a question. The word
research has two parts re (again) and search (find) which denote that we are taking up an activity
to look into an aspect once again or we want to look for some new information about something.
Research is an activity that leads us to finding new facts, information, assisting us in verifying the
available knowledge and in making us question things that are difficult to understand as per
existing data.
Clifford Woody states that research comprises defining and redefining problems, formulation of
hypothesis; collection, organizing, and evaluation of data; and reaching conclusions. Here it is
emphasized that all research has to be systematic and logical to arrive at the expected outcome. D.
Slesinger and M. Stephenson in the Encyclopedia of Social Sciences Research define research as
"The manipulation of things, concepts or symbols for the purpose of generalizing to extend, correct
or verify knowledge, whether that knowledge aids in the construction of theory or in the practice
of an art." The authors have a different view of research as they suggest that it can be taken up by
modifying, challenging, and changing; available knowledge either to prove a process being
appropriate or to develop it in entirety.
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Definitions of Research
Research has been interpreted and defined by various scholars as per their fields of study which
are as follows:
According to (Rocco, 2011): "Research is a careful investigation or inquiry especially through

search for new facts in any branch of knowledge."
According to (Redman and Mory, 2010): “Research is a movement, a movement from the
known to the unknown.”
According to (Kothari, C.R): Research is the manipulation of things, concepts, or symbols for
the purpose of generalizing to extend, correct, or verify knowledge, whether that knowledge aids
in the construction of theory or in the practice of an art.
According to (Creswell, 2008): "Research is a systematic investigation to establish the facts." In

the broadest sense of the word, the definition of research includes any gathering of data,
information, and facts for the advancement of knowledge.”
It is a prearranged/structured inquiry (a formal step-by-step method or sequence to take up research

activity is developed to ensure the correctness of data and validity of processes).
Scientific methods consist of systematic observation, classification, and interpretation of data. The
degree of formality, rigorousness, verifiability, and general validity of scientific methods establish
the results obtained.
It utilizes acceptable scientific methodology to solve problems (the method used should be able to
give repetitive results under similar conditions)
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It should create new knowledge that is generally applicable. (The outcomes should be such that
they are not specific to a particular issue or a situation but need to be generalized for application
to comparable issues).
It is a creative process to develop a better understanding of mankind, social and cultural, and
economic issues.
It should be useful to others who wish to apply the findings in developing new policies or
applications of findings of research to the benefit of the public.
Marketing Research
Marketing research is "the process or set of processes that links the producers, customers, and
end users to the marketer through information used to identify and define marketing opportunities
and problems; generate, refine, and evaluate marketing actions; monitor marketing performance;
and improve understanding of marketing as a process. Marketing research specifies the
information required to address these issues, designs the method for collecting information,
manages and implements the data collection process, analyzes the results, and communicates the
findings and their implications."
Market research involves designing a research project and collecting, analyzing, and reporting
relevant data. As a result, market research may help companies understand:
• Customer wants and needs.
• Consumer behavior,
• Customer satisfaction,
• Customer attitudes and preferences,
• Market potential,
• Market share,
• Market growth,
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• Demand trends,
• The impact of marketing mix elements like pricing, promotion, etc.
Some organizations might have large departments working on research and spend millions yearly
conducting market research. Other companies might hire external organizations and consultants to
help them conduct market research for specific projects.
For instance, pharmaceutical giant Novartis spent $9.5 billion on research and development
in 2021.
Definition of Marketing Research
According to the American Marketing Association (AMA): “Marketing research is the

systematic gathering, recording, and analyzing of data about problems relating to the marketing of
goods and services."
According to Richard D. Crisp: “Marketing Research is the systematic, objective, and exhaustive
search for and study of the facts relevant to any problem in the field of marketing."
According to Philip Kotler: "Marketing research is systematic problem analysis, model building
and fact-finding for the purpose of improved decision-making and control in the marketing of
goods and services."
Features of Marketing Research
The salient characteristics or features of marketing research are as follows:
1. Wide and comprehensive scope - Marketing research has a very wide scope. It includes
product research, packaging research, pricing research, market research, sales research, etc.
It is used to solve marketing problems and to take marketing decisions. It is used to make
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marketing policies. It is also used to introduce new products in the market and to identify
new markets. Marketing research is used to select channels of distribution, in advertising
strategy, for sales promotion measures, etc.
2. Systematic and scientific - Marketing research is conducted in a step-by-step manner. It
is conducted in an orderly fashion. Therefore, it is systematic. Marketing research uses
scientific methods. Thus, it is also scientific.
3. Collects and analyzes data - Marketing research gathers data accurately and objectively.
It first collects reliable data and then analyses it systematically and critically.
4. Continuous and dynamic process - The company faces marketing problems throughout
the year. So, Marketing research is conducted continuously. It continuously collects up-to-
date data for solving the marketing problems. Large companies have their own marketing
research departments. They conduct Marketing research continuously throughout the year.
Therefore, Marketing research is a continuous process. It is a dynamic process because it
goes on changing. It does not remain static (the same). It uses new methods and techniques
for collecting, recording, and analyzing the data.
5. Tool for decision-making - The marketing manager has to take many decisions. For this,
he requires a lot of data. Marketing research provides correct and up-to-date data to the
marketing manager. This helps him to take quick and correct decisions. Therefore,
Marketing research is an important tool for decision-making.
6. Benefits company and consumers - Marketing research is useful to the company in many
ways. It increases the sales and profits of the company. It helps the company to fight
competition and boost its goodwill in the market. It reduces the marketing risks. In short,
Marketing research brings success to the company. It also brings the company closer to the
consumers. It gives convenience and satisfaction to the consumers.
7. Similar to military intelligence - Marketing research is a commercial intelligence-
gathering activity. It works similarly to military intelligence. Marketing intelligence first
makes a systematic study and only then takes a business action. Marketing research collects
reliable data about the consumers, the competitors, the market, etc. This data is then
organized and used for planning, decision-making, and problem solving. This data is also
further used for introducing new products and services in the market.
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8. Applied research - Applied research is used for solving problems. Marketing research is
used for solving marketing problems. Therefore, we can say that Marketing research is also
applied research. It has practical value because it is used for solving present and future
problems.
9. Reduces gap between producers and consumers - Marketing research informs producers
about the needs and wants of the consumers. The producers produce goods according to
the needs and demands of the consumers. This brings satisfaction to the consumers and in
return producers make good profits. So, Marketing research reduces the gap between the
producers and the consumers.
10. Uses different methods - Marketing research uses various methods such as Descriptive
method, exploratory method, and causal method of systematic research.
Needs/Importance of Marketing Research
1. Identifying problems and opportunities in the market: It helps in identifying new

market opportunities for existing and new products. It provides information on market
share, the nature of competition, customer satisfaction levels, sales performances, and
channels of distribution. This helps the firms solve problems.
2. Formulating market strategies: Today, markets are no longer local. They have become
global. Manufactures find it difficult to contact customers and control distribution
channels. Competition is equally severe. The consumer needs are difficult to predict.
Market segmentation is a complicated task in such wide markets. The marketing
intelligence provided through marketing research not only helps in framing but also in
implementing the market strategies.
3. Determining consumer needs and wants: Marketing has become customer centric.
However, large-scale production needs intermediaries for mass distribution. Due to
prevalence of multi channels of distribution, there is an information gap. Marketing
research helps in collecting information on consumers from structured distribution research
and helps in making marketing customer oriented.
4. Effective communication mix: In an era of micro- rather than mass-marketing,
communication plays a vital role. Marketing research uses promotional research to study
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media mix, advertising effectiveness and integrated communication tools. Research on
such aspects will help in effectively promoting a company’s product in the market.
5. Improving selling activities: Marketing research is used to analyze and evaluate the
performance of a company within a market. It also studies the effectiveness of a sales force.
It helps in identifying sales territories. Such information helps the companies in identifying
areas of shortcoming in sales. It also examines alternative methods for distribution of
goods.
6. Sales forecasting: The most challenging task for any production manager is to keep
optimum levels of inventory. However, production is undertaken in anticipation of
demand. Therefore, a scientific forecast of sales is required. Marketing research helps in
sales forecasting by using the market share method, sales force estimate method, and jury
method. This can also help in fixing sales quotas and marketing plans.
7. Revitalize Brands: Marketing research is used to study and find out the existing brand
position. It finds out the recall value of brands. It explores the possibilities of brand
extension or prospects of changing existing brand names. The main purpose of marketing
is to create brand loyalty. Marketing research helps in developing techniques to popularize
and retain brand loyalty.
8. Facilitate the smooth introduction of new products: Marketing research helps in testing
the new products in one or two markets on a small scale. This helps in finding out consumer
response to a new product and develop a suitable marketing mix. It reveals the problems
of the customers regarding new products. Thus, it controls the risk involved in introducing
a new product.
9. Determine export potential: The development in transport and communication has helped
in globalization and digitalization of world trade. This has helped in boosting the growth
of international markets. Marketing research helps in conducting market surveys for
exports. It. collects information on the marketing environment prevailing in a country. By
collecting data on consumers from different countries, it indicates export potential.
10. Managerial decision-making: Marketing research plays a vital role in the decision-
making processes by supplying relevant, up-to-date, and accurate data to the decision-
makers. Managers need up-to-date information to access customer needs and wants, market
situation, technological change, and extent of competition.
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Limitations of Marketing Research
Marketing research has a few limitations too.
1. Sampling Error: The choice of a sample that is not representative of the entire target
population can lead to sampling bias. Small sample sizes may not accurately reflect the
diversity of the target population.
2. Limited time frame: Research conducted over a short period might not capture long-term
trends, market fluctuations, or seasonal variations.
3. Response Bias: Participants' responses can be influenced by social desirability bias or their
desire to present themselves in a favorable light, leading to skewed or inaccurate data.
4. Data Quality: Inaccurate, incomplete, or biased data can compromise the reliability and
validity of research findings.
5. Question Wording: Poorly worded survey questions or interview scripts can lead to
confusion, ambiguity, or misinterpretation by respondents.
6. Non-Response Bias: When a significant portion of the selected sample does not respond,
the findings might not accurately represent the target population.
7. Cultural and Language Bias: Cultural differences and language barriers can affect the
accuracy of data collected, particularly in international research.
8. Data Interpretation: Misinterpreting data, especially complex statistical analyses, can
lead to incorrect conclusions.
9. Changing Market Dynamics: Markets are dynamic and can change rapidly. Research
findings might become outdated by the time they are applied.
10. Time & Cost: In order to conduct various marketing research, more time is required and
also incurred cost of conducting research.
Marketing Research Process
The marketing research process involves a series of systematic steps that researchers follow to
gather information and insights for making informed marketing decisions. This process ensures
that the research is well-structured, objective-driven, and capable of providing meaningful results.
While variations can exist depending on the specific research project, the core steps typically
remain consistent. Here's an overview of the marketing research process:
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1. Define the Research Problem and Objectives:
• Clearly articulate the problem or issue that the research aims to address.
• Formulate specific research objectives or questions that guide the entire research
process.
2. Develop a Research Plan:
• Determine the type of research (exploratory, descriptive, causal), methodology
(qualitative, quantitative, mixed methods), and data collection techniques to be
used.
• Define the target audience and sampling strategy (probability or non-probability
sampling).
3. Collect Data:
• Implement the data collection methods outlined in the research plan.
• Conduct surveys, interviews, observations, experiments, or other data collection
activities.
4. Process and Prepare Data:
• Clean, organize, and process the collected data to ensure its accuracy and
readiness for analysis.
• Check for missing values, inconsistencies, and errors.
5. Analyze Data:
• Apply appropriate data analysis techniques to derive insights from the collected
data.
• Quantitative analysis might involve statistical tests, correlation analyses, and
regression analysis.
• Qualitative analysis might involve content analysis, thematic analysis, or coding
of textual or visual data.
6. Interpret Findings:
• Interpret the analyzed data to extract meaningful insights.
• Relate the findings back to the research objectives and questions.
7. Draw Conclusions and Make Recommendations:
• Summarize the key findings and draw conclusions based on the analysis.
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• Translate the insights into actionable recommendations for marketing strategies or
decision-making.
8. Report and Present Findings:
• Prepare a research report that includes an overview of the research process,
objectives, methods, findings, conclusions, and recommendations.
• Present the findings to relevant stakeholders through presentations, reports, or
dashboards.
9. Evaluate and Validate:
• Review the research process to assess the validity and reliability of the research
findings.
• Consider the limitations and potential biases in the research design.
10. Apply Insights to Marketing Decisions:
• Use the research insights and recommendations to inform marketing strategies,
product development, pricing decisions, promotional activities, and other
marketing initiatives.
11. Monitor and Adapt:
• Continuously monitor the impact of the decisions made based on the research
findings.
• Adapt strategies as needed based on changing market conditions and customer
feedback.
The marketing research process is iterative and dynamic, with feedback loops that allow
researchers to refine their approach based on new insights or unexpected findings. Throughout the
process, ethical considerations, data privacy, and transparency are crucial to ensure that the
research is conducted responsibly and respects participants' rights.
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Types of Marketing Research
There are several specific methods of marketing research used to collect market data. These
include:
1. Surveys: With surveys, companies reach out to participants to answer questions. They can
conduct surveys through various means, including:
• Phone: Company representatives make cold calls to ask people to respond to a series of
scripted questions.
• Mail: The company sends the questions in written format to people's mailing addresses.
• Online: The company reaches out to participants by email or with a link to an online form
they can fill out.
• In-person: The company communicates with people they encounter in high-traffic areas.
In-person surveying allows participants to sample products or services.
2. Focus groups: A focus group is a group of people who take part in a moderated discussion. To
conduct a focus group, companies gather individuals who represent a consumer demographic, ask
questions, and record the responses. Because the opinions represent a larger group of people, their
responses may provide insight into what consumers want in a company or a product. Focus groups
provide an advantage over surveys in that they allow for longer periods of interaction with
participants.
3. Qualitative interviews: A qualitative interview combines elements of the focus group and the
one-on-one survey. It involves surveying one participant at a time and recording their responses.
The questions are often open-ended, and the researchers encourage the interviewee to give in-
depth answers. The researchers can ask follow-up questions and sometimes allow the interviewee
to ask their own questions. Qualitative interviews require more time and other resources to execute,
but they often produce profound insight into consumers' values and priorities.
4. Social media listening: Users of social media often offer opinions about a wide variety of
topics, including companies and their products. With social media listening, researchers can search
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for topics of discussion and analyze what consumers are saying. For example, a company might
search for mentions of their flagship product and see the opinions of people who have bought it.
In this way, they can gather data about perceived strengths, weaknesses, and potential areas of
improvement. Because the opinions are unsolicited, the data is likely to represent honest, unfiltered
views.
5. Observations: In market research, observation refers to the act of studying how consumers
actually behave when they shop. Often, it involves filming shoppers in a market environment, such
as a store, and analyzing their shopping habits or patterns. If they are unaware of the observation,
this method can show their natural selves, as opposed to how they think of themselves. For
example, observation can show researchers what stimuli in the store might affect shoppers'
purchases, what products attract the most buyers and how packaging or displays influence
decisions.
6. Field trials: In a field trial, a company allows users to use a product under normal conditions
and then collects data provided by the participants. For example, a company developing a novel
type of toaster might recruit individuals to use the toaster for a specified period. The participants
would record and submit their impressions, which the company would analyze to improve the
product.
7. Competitive analysis: Competitive analysis is a secondary market research method where a

company collects and analyzes information about competitors in their market. It involves
identifying all the primary and secondary rivals to the business and determining their offerings,
profits, marketing strategies, and more. This information can give a sense of competitor’s
strengths and weaknesses and your position relative to them. It can also provide insight into
successful business models and consumer preferences, allowing you to implement strategies that
are more likely to be profitable.
8. Public data: Public data is a secondary market research method that involves seeking and
analyzing market-related data that's available to the public. Often, this research is available for free
on the internet or at the library. The sources for this information might be research centers, polls,
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or government databases. Often, companies supplement their primary market research with public
data in order to confirm information or measure it against other data.
9. Purchased data: Companies that lack the time or resources to conduct their own market
research can purchase research data from various sources. There are several market research
companies that sell subscriptions to access their research databases. An annual subscription can be
as much as $8,000, which provides you with market research spanning various industries and
countries. This option may be helpful to small or medium-sized companies that cannot afford to
invest in primary market research.
10. Sales data analysis: Analyzing sales data can be a helpful secondary market research method
used alongside other methods, such as competitive analysis, to show the relationships between a
business's strategies and sales. It can also give insight into the buying habits of consumers in your
market and help you spot consumer trends.
Scope/Application of Marketing Research
Marketing research is applied in various ways to gather, analyze, and interpret information that
aids in making informed business decisions. Here are some key applications of marketing research:
1. Market Segmentation Research: Understanding the characteristics and preferences of

different market segments is crucial for effective targeting. Marketing research helps
businesses identify and define these segments based on demographics, psychographics, and
behavior, allowing for more personalized and targeted marketing strategies.
2. Product Development Research: Before launching a new product or making
modifications to existing products, companies conduct market research to assess consumer
needs, preferences, and expectations. This research helps in designing products that meet
customer demands and have a higher likelihood of success in the market.
3. Competitor Analysis Research: Companies use marketing research to gather information
about competitors, their products, pricing strategies, and market positioning. This analysis
allows businesses to identify strengths, weaknesses, opportunities, and threats in the
competitive landscape.
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4. Branding Research: Marketing research helps businesses understand how their brand is
perceived by consumers. By assessing brand image, reputation, and associations,
companies can develop strategies to strengthen their position in the market and differentiate
themselves from competitors.
5. Pricing Research: Determining the optimal pricing strategy is crucial for success.
Marketing research assists in understanding price sensitivity, competitive pricing, and the
perceived value of products or services, helping businesses set prices that are attractive to
consumers and profitable for the company.
6. Advertising Research: Before launching advertising campaigns, businesses conduct
research to evaluate the potential effectiveness of different messages, channels, and
creative elements. This helps in refining advertising strategies to better resonate with the
target audience.
7. Customer Behavior Research: Understanding Consumer Behavior, buyig motives, roles
and their decision making is understood through research. Measuring customer satisfaction
and loyalty is essential for retaining existing customers and attracting new ones. Marketing
research methods, such as surveys and feedback analysis, provide insights into customer
perceptions, expectations, and areas for improvement.
8. Distribution Channels Research: Research is conducted to assess the effectiveness of
distribution channels and identify opportunities for expansion or optimization.
Understanding how consumers prefer to access products or services helps in refining
distribution strategies.
9. Market Trends and Forecasting Research: Tracking market trends and forecasting
future developments is vital for staying ahead of the competition. Marketing research
enables businesses to anticipate shifts in consumer behavior, technology, and market
dynamics.
10. Risk Management Research: Before entering new markets or making significant business
decisions, companies use marketing research to assess potential risks. This includes
understanding regulatory environments, cultural nuances, and potential challenges in
specific markets.
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11. Social and Cultural Trends Research: Marketing research helps companies stay attuned
to social and cultural trends that may impact consumer behavior. This understanding is
crucial for adapting marketing strategies to align with changing societal values.
12. E-commerce and Online Presence Research: With the growth of e-commerce, marketing
research is applied to understand online consumer behavior, preferences, and trends. This
includes optimizing websites, improving user experiences, and leveraging digital
marketing channels effectively.
Marketing Information System
The Marketing Information System refers to the systematic collection, analysis, interpretation,
storage, and dissemination of market information, from both internal and external sources to the
marketers on a regular, continuous basis.A marketing information system (MIS) is a management
information system (MIS) designed to support marketing decision-making.
Jobber (2007) defines it as a "system in which marketing data is formally gathered, stored,
analyzed and distributed to managers in accordance with their informational needs on a regular
basis."
Features of Marketing Information System
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• Continuous system : MkIS is a permanent and continuous system of collecting
information. It collects information continuously.
• Basic objective : The basic objective of MIS is to provide the right-information at the
right-time to the right-people to help them take right decisions.
• Computer based system : MkIS is a computer-based system. It uses computers for storing,
analyzing and supplying information. It also uses micro-films for storing information.
Therefore, it is very quick and accurate.
• Future-oriented : MkIS is future-oriented. It provides information for solving future
problems. It is not past-oriented.
• Used by all levels : MkIS is used by all three levels of management, i.e. top, middle and
lower. It is used for making marketing plans, policies and strategies. This is used to solve
marketing problems and to take advantage of business opportunities.
• Sources : MIS collects information from both, internal and external sources. For example,
information is collected from company records, publications, etc.
• Collects marketing information : MIS collects all types of marketing information. It
collects information about the consumer competition, marketing environment, government
policies, etc. It supplies this information to the marketing managers.
• Helps in decision making : MIS supplies up-to-date and accurate information. It helps
marketing managers to take quick and right decisions.
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Components/Functions of Marketing Information System (MIS)A Marketing
Information System (MIS) is a structured and systematic approach to collecting, processing,
storing, and distributing information related to marketing activities and decisions within an
organization. The primary goal of an MIS is to provide relevant, accurate, and timely information
that helps marketing professionals make informed decisions, plan strategies, and evaluate
performance. An effective MIS serves as a valuable tool for managing marketing activities and
adapting to changing
market conditions.
According to Philip
Kotler, there are four
important components
that comprise the
Marketing Information
System the Internal
Reports (Records)
System, Marketing
Research System,
Marketing Intelligence System, and Marketing Decision Support System.
1. Internal Records: The Company can collect information through its internal records
comprising of sales data, customer database, product database, financial data, operations
data, etc.
2. Marketing Intelligence System: The marketing intelligence system provides data about
the happenings in the market, i.e. data related to the marketing environment which is
external to the organization. It includes information about the changing market trends,
competitor’s pricing strategy, change in the customer’s tastes and preferences, new
products launched in the market, promotion strategy of the competitor, etc.
3. Marketing research: The Marketing Research is the systematic collection, organization,
analysis and interpretation of the primary or the secondary data to find out the solutions to
the marketing problems. Several Companies conduct marketing research to analyze the
marketing environment comprising of changes in the customer’s tastes and preferences,
225
competitor’s strategies, the scope of new product launch, etc. by applying several statistical
tools. In order to conduct the market research, the data is to be collected that can be either
primary data (the first-hand data) or the secondary data (second-hand data, available in
books, magazines, research reports, journals, etc.)
4. Marketing Decision Support System: It includes several software programs that can be
used by the marketers to analyze the data, collected so far, to take better marketing
decisions. With the use of computers, the marking managers can save the huge amount of
data in a tabular form and can apply statistical programs to analyze the data and make the
decisions in line with the findings.
A well-implemented Marketing Information System can significantly enhance a company's ability

to make data-driven decisions, respond to market changes, and achieve marketing objectives
effectively.
Importance of Marketing Information System
A Marketing Information System (MIS) plays a crucial role in the success of businesses by
providing timely and accurate information that guides marketing strategies, decision-making, and
overall business operations. Here are some key reasons highlighting the importance of a Marketing
Information System:
1. Informed Decision-Making: An MIS provides relevant and up-to-date information to

marketing managers, enabling them to make informed decisions based on data rather than
intuition or assumptions.
2. Strategic Planning: The system helps organizations develop and implement effective
marketing strategies by providing insights into market trends, customer behaviors, and
competitive landscapes.
3. Competitive Advantage: A well-utilized MIS can lead to a competitive edge by offering
insights into competitors' activities, helping businesses position themselves more
effectively in the market.
226
4. Customer Understanding: An MIS gathers data on customer preferences, behaviors, and
feedback, allowing organizations to tailor their products and services to meet customer
needs.
5. Market Segmentation: By analyzing customer data, an MIS assists in identifying distinct
market segments and tailoring marketing efforts to specific target audiences.
6. Resource Allocation: The system helps allocate resources efficiently by identifying which
marketing activities yield the best return on investment (ROI).
7. Trend Identification: By tracking market trends, an MIS enables organizations to
anticipate changes and adapt their strategies accordingly.
8. Risk Management: The insights provided by an MIS help identify potential risks and
challenges, enabling organizations to proactively mitigate negative impacts.
9. Customer Relationship Management (CRM): An MIS can integrate with CRM systems,
facilitating better customer engagement and building stronger customer relationships.
10. Measurable Results: With an MIS, organizations can track the outcomes of marketing
activities and campaigns, enabling them to measure their impact and adjust strategies as
needed.
11. Data Privacy and Security: Implementing an MIS can include measures to ensure data
privacy and security, which is especially important in today's digital age.
Overall, a Marketing Information System empowers organizations to make data-driven decisions,

adapt to market changes, build customer relationships, and achieve their marketing and business
objectives more effectively. It helps bridge the gap between marketing efforts and successful
outcomes by providing valuable insights that guide actions and strategies.
227
Case Studies
228
229
230
231
232
233
234
235
236
237
238
239
240
241
242
Multiple
Choice
Questions
243
1. Good marketing is no accident, but a result of careful planning and .
a. execution
b. selling
c. strategies
d. tactics
e. research
Answer: a Level of difficulty: Medium
2. Marketing is both an “art” and a “science”—there is constant

tension between theformulated side of marketing and the side.
a. creative
b. selling
c. management
d. forecasting
e. behavior
Answer: a Level of difficulty: Easy
3. The most formal definition of marketing is .

a. meeting needs profitably
b. identifying and meeting human and social needs
c. the 4Ps (Product, Price, Place, Promotion)
d. an organizational function and a set of processes for creating,
communicating, and delivering, value to customers, and for managing
customer relationships in ways that benefit the organization and its
stake holders.
e. improving the quality of life for consumers
Answer: d Level of difficulty:
Medium
4. Marketing management is .
a. managing the market
244
b. ing process
c. monitoring the profitability of the companies products and services
d. selecting target markets
e. developing marketing strategies to move the company forward
f. the art and science of choosing target markets and getting, keeping,
and growing customers through creating, delivering, and
communicating superior customer value
Answer: e Level of difficulty: Easy
5. A transaction involves .
a. at least two parties
b. each party has something that might be of value to the other party
c. each party is capable of communication and delivery
d. each party is free to accept or reject the exchange offer
e. all of the above
Answer: e Level of difficulty: Medium
245
6. goods constitute the bulk of most countries’ production and
marketingefforts.
a. Durable
b. Impulse
c. Physical
d. Service
e. Event
Answer: c Level of difficulty: Medium
7. can be produced and marketed as a product.

a. Information
b. Celebrities
c. Durable goods
d. Organizations
e. Properties
8. Charles Revson of Revlon observed: “In the factory, we make cosmetics; in the
store,
.”
a. we make profits
b. we challenge competitors
c. we implement ads
d. we sell hope
e. we sell quality
Answer: d Level of difficulty: Easy
9. Ais someone seeking a response (attention, a purchase, a vote, a

donation)from another party, called the .
a. salesperson, customer
b. fund raiser, contributor
c. politician, voter
d. marketer, prospect
e. celebrity, audience
Answer: d Level of difficulty: Hard
10. In —consumers may share a strong need that
cannot be satisfied by anexisting product.
a. negative demand
b. latent demand
c. declining demand
d. irregular demand
e. non-existent demand
Answer: b Level of difficulty: Medium
11. In —more customers would like to buy the product than can be satisfied.
a. latent demand
b. irregular demand
c. overfull demand
d. excessive
246
e. negative demand
12. Marketers often use the term to cover various groupings of customers.
a. people
b. buying power
c. demographic segment
d. social class position
e. market
Answer: e Level of difficulty: Hard
13. Companies selling mass consumer goods and services such as soft
drinks, cosmetics, air travel, and athletic shoes and equipment
spend a great deal of time trying to establish a superior brand image
in markets called .
a. business markets
b. global markets
c. consumer markets
d. nonprofit and governmental markets
e. service markets
14. In business markets, advertising can play a role, but a stronger

role may be played bythe sales force, , and the company’s
reputation for reliability and quality.
a. brand image
b. distribution
c. promotion
d. price
e. performance
15. Global marketers must decide .
a. which countries to enter
b. how to enter each country (as an exporter, licenser, joint venture
partner, contractmanufacturer, or solo manufacturer)
c. how to adapt their product and service features to each country
d. how to price their products in different countries
e. all of the above
Answer: e Level of difficulty: Medium
16. Mohan Sawhney has proposed the concept of to

describe a cluster ofcomplementary products and services that are
closely related in the minds of consumersbut are spread across a
diverse set of industries.
a. metamarket
b. vertical integration
c. horizontal integration
d. betamarket
e. synchronized marketing
Answer: a Level of difficulty: Hard
247
17. The promises to lead to more accurate levels of
production, more targeted communications, and more relevant
pricing.
a. Age of Globalization
b. Age of Deregulation
c. Industrial Age
d. Information Age
e. Production Age
Answer: d Level of difficulty: Medium
18. Many countries have industries to create greater

competition and growthopportunities.
a. open-market
b. deregulated
c. regulated
d. scientifically segmented
e. created mass market
19. Customers are showing greater price sensitivity in their search for .
a. the right product
b. the right service
c. the right store
d. value
e. relationships
Answer: d Level of difficulty: Medium
20. Rising promotion costs and shrinking profit margins are the result of .
a. changing technology
b. globalization
c. deregulation
d. privatization
e. heightened competition
Answer: e Level of difficulty: Hard
21. Industry boundaries are blurring at an incredible rate as companies

are recognizing thatnew opportunities lie at the intersection of
two or more industries—this is called
.
a. globalization
b. customization
c. industry convergence
d. heightened competition
e. acquisition
22. In response to giant retailers and category killers, entrepreneurial

retailers are building entertainment into stores with coffee bars,
lectures, demonstrations, and performances. They are marketing
248
a(n) _______________________________________ rather than a
product assortment.
a. experience
b. customer value
c. customer delight
d. total service solution
e. intangible benefit(s)
23. In response to threats from such companies as AOL, Amazon,

Yahoo, eBay, E’TRADE, and dozens of others, established
manufacturers and retailers became “brick-and-click” oriented by
adding online services to their existing offerings. This process
became known as .
a. reintermediation
b. disintermediation
c. e-commerce
d. e-collaboration
e. new market synchronization
24. Many brick-and-click competitors became stronger contenders in
the marketplace thanthe pure-click firms because they had a
larger pool of resources to work with and
.
a. better prices
b. greater value
c. well-established brand names
d. one-on-one communications
e. direct selling capability
25. The is practiced most aggressively with unsought

goods, goods that buyersnormally do not think of buying, such as
insurance, encyclopedias, and funeral plots.
a. marketing concept
b. selling concept
c. production concept
d. product concept
e. holistic marketing concept
26. The concept holds that consumers will favor those

products that offer themost quality, performance, or innovative
features.
a. product
b. marketing
c. production
d. selling
e. holistic marketing
249
27. The concept holds that consumers and
businesses, if left alone, willordinarily not buy enough of
the organization’s products.
a. production
b. selling
c. marketing
d. product
e. holistic marketing
28. Several scholars have found that companies who embrace the
marketing concept achieve superior performance. This was first
demonstrated for companies practicing a
—understanding and meeting customers’ expressed needs.
a. reactive market orientation
b. proactive marketing orientation
c. total market orientation
d. impulsive market orientation
e. holistic market orientation
29. According to Theodore Levitt, who drew a perceptive contrast
between the selling and marketing concepts, is preoccupied
with the need to convert products intocash.
a. marketing
b. selling
c. direct marketing
d. holistic marketing
e. service marketing
30. In the course of converting to a marketing orientation, a company faces three

hurdles—
.
a. organized resistance, slow learning, and fast forgetting
b. management, customer reaction, competitive response
c. decreased profits, increased R&D, additional distribution
d. forecasted demand, increased sales expense, increased inventory costs
e. customer focus, profitability, slow learning
31. Companies that practice both a reactive and proactive

marketing orientation areimplementing a and are likely to
be the most successful.
a. total market orientation
b. external focus
c. customer focus
d. competitive, customer focus
e. confrontation process
250
32. Marketers argue for a in which all functions work together to
respond to,serve, and satisfy the customer.
a. cross-functional team orientation
b. collaboration model
c. customer orientation
d. management-driven organization
e. total quality model
33. can be seen as the development, design, and implementation of

marketing programs, processes, and activities that recognizes the
breadth and interdependencies oftheir effects.
a. Niche marketing
b. Holistic marketing
c. Relationship marketing
d. Supply-chain marketing
e. Demand-centered marketing
34. marketing has the aim of building mutually satisfying long-term relations with key
parties such as customers, suppliers, distributors, and other marketing partners in
order to earn and retain their business.
a. Holistic
b. Demand-based
c. Direct
d. Relationship
e. Synthetic
Answer: d Level of difficulty: Easy
35. Companies who form a collect information on each customer’s

past transactions, demographics, psychographics, and media and distribution
preferences.
a. sales network
b. holistic union
c. marketing network
d. supply-chain network
e. integrated network
Answer: c Level of difficulty: Hard
36. The ability of a company to deal with customers one at a time has become practical
as aresult of advances in , computers, the Internet, and database
marketingsoftware.
a. improved communication flow
b. information technology
c. just-in-time manufacturing
d. factory customization
e. customer-centered strategies
37. One traditional depiction of marketing activities is in terms of the marketing mix
251
orfour Ps. The four Ps are characterized as being .
a. product, positioning, place, and price
b. product, production, price, and place
c. promotion, place, positioning, and price
d. place, promotion, production, and positioning
e. product, price, promotion, and place
Answer: e Level of difficulty: Easy
38. The four Ps represent the sellers’ view of the marketing tools available for influencing
buyers. From a buyer’s point of view, each marketing tool is designed to deliver a
customer benefit. Robert Lauterborn suggested that the sellers’ four Ps correspond to
the customers’ four Cs. The four Cs are .
a. customer focus, cost, convenience, and communication
b. customer solution, customer cost, convenience, and communication
c. convenience, control, competition, and cost
d. competition, cost, convenience, and communication
e. category control, cost, concept
development, and competition Answer: b
Level of difficulty: Medium
39. Holistic marketing incorporates , ensuring that everyone in the

organization embraces appropriate marketing principles, especially senior
management.
a. profit objectives
b. share of customer
c. internal marketing
d. the marketing mix
e. strategic planning
Answer: c Level of difficulty: Hard
40. Marketing is not a department so much as a .

a. company orientation
b. philosophy
c. function
d. branch of management
e. branch of economics
41. Holistic marketing incorporates and understanding

broader concerns and theethical, environmental, legal, and social
context of marketing activities and programs.
a. safe product design
b. cultural marketing
c. social responsibility marketing
d. cross-functional teams
e. direct sales policies
42. The holds that the organization’s task is to determine the needs, wants,
and interests of target markets and to deliver the desired satisfactions more effectively
and efficiently than competitors in a way that preserves or enhances the consumer’s
and thesociety’s well-being.
252
a. customer-centered business
b. focused business model
c. societal marketing concept
d. ethically responsible marketing manager
e. production-centered business
43. Companies see as an opportunity to enhance their corporate reputation,

raise brand awareness, increase customer loyalty, build sales, and increase press
coverage.
a. cause-related marketing
b. brand marketing
c. equity marketing
d. direct marketing
e. recognition marketing
44. When a customer has a(n) need he/she wants a car whose operating
cost, notits initial price, is low.
a. stated
b. real
c. unstated
d. delight
e. secret
Answer: b Level of difficulty: Hard
45. When a customer has a(n) need the customer wants to be seen by
friends as asavvy consumer.
a. real
b. unstated
c. delight
d. secret
e. stated
46. During market segmentation analysis, the marketer identifies which segments present
the greatest opportunity. These segments are called .
a. target markets
b. primary markets
c. tertiary markets
d. demographic markets
e. focused markets
47. For each target market, the firm develops a . The offering is positioned
in theminds of the target buyers as delivering some central benefit(s).
a. value offering
b. niche offering
c. market offering
d. segment offering
e. social offering
253
48. reflects the perceived tangible and intangible benefits and costs to customers.
a. Loyalty
b. Satisfaction
c. Value
d. Expectations
e. Comparison shopping
49. If a marketer decides to use warehouses, transportation companies, banks, and

insurance companies to facilitate transactions with potential buyers, the marketer is
using what is called a .
a. service channel
b. distribution channel
c. brand channel
d. relationship channel
e. intermediary channel
50. includes all the actual and potential rival offerings and substitutes that abuyer
might consider.
a. Competition
b. The product offering
c. A value proposition
d. The supply chain
e. The marketing environment
254
Research Papers
255
256
257
258
259
260
261
262
263
264
265
266
267
268
Previous Years
Question Papers
269
270
271
272
273

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PROFILE OF INSTRUCTORS

Dr. Mahtab Alam: He is a BBA Graduate with a Marketing

Established in 1992, Bharati Vidyapeeth (Deemed to be University) Institute of Management and

S. No Topics Page No.

10. Unit-2 (Segmentation, Marketing & Positioning) 49-77

11. Unit-3 (Marketing Mix) 78-173

12. Unit-4 (Consumer Behavior) 174-187

13. Unit-5 (Marketing Planning & Control) 188-207

14. Unit-6 (Marketing Research) 208-227

15. Case Studies 228-242

16. Multiple Choice Questions 243-254

17. Research Papers 255-268

18. Previous Year Question Papers 269-273

The marketing management course enables a student to understand the fundamentals of

• To understand the core concepts of Marketing and approaches to Marketing.

Program Outcomes (POs):

CO/PO PO1 PO2 PO3 PO4 PO5 PO6

1- Low, 2- Medium, 3- High, if no correlation, put ‘-’

The ability to understand, analyze, and communicate global, economic, legal,

85% or above 10 Marks

Below 85% Prorata Basis

Unit-4 Consumer Behaviour

Philip Kotler,Gary Armstrong, Prafulla

Philip Kotler,Gary Armstrong, Prafulla

Unit-6 Marketing Research

Philip Kotler,Gary Armstrong, Prafulla

Philip Kotler,Gary Armstrong, Prafulla

Various Global wants

Various Indian Wants

Demand = Wants + Purchasing Power

Value/Customer Value: It means how much a product or service is worth to a customer is a

 Quality Product at the right price

(1) Consumption Era: In the beginning phase of human evolution,

(2) Agriculture Era: After the Passage of time Human knowledge

(3) Exchange Era: Early forms of marketing were centered around

Industrial Revolution (18th Century)

8. Relationship Marketing Era (1980-1990): The Relationship Marketing Era is a phase in

Key Characteristics of the Societal Marketing Era:

Marketing Phases (Marketing 1.0 to Marketing 5.0)

2. Marketing 2.0 (1970s) : Marketing 2.0 is characterized by a shift towards a customer-

Scope of Marketing/Marketing Offerings

(1) Importance of Marketing to Customers:

(a) Delivery of standard of living to customers: By providing standardized product of

(2) Importance of Marketing to Firms:

(a) Helpful in Business Planning & Decision-making: Marketing provides information

(3) Importance of Marketing to Society:

(a) Employment Opportunities: Marketing provides several employment opportunities

Marketing philosophies, also known as marketing, concepts or approaches of marketing and

1. Production Concept: This concept emphasizes maximizing production efficiency and

4. Marketing Concept: The marketing concept emphasizes understanding and satisfying

5. Relationship Marketing Concept: Relationship marketing focuses on building and

6. Societal Marketing Concept: This concept expands on the marketing concept by

7. Holistic Marketing Concept: Holistic marketing integrates various marketing

Old Concept Vs New Concept of Marketing

Old Concept New or Modern Concept

1. Old concept or Product-Oriented Concept or Traditional concept

1 It stresses upon production.

2. New Concept or Customer Oriented Concept or Modern Concept

1. The customer is the king.

The functions of marketing management are broadly classified in 4 categories.