Comprehensive CBSE Class XII Marketing Study Guide
Unit 1: Product
Meaning and Importance of Product
Concept and Definition of Product
A product is primarily a need-satisfying entity that represents solutions to customer problems.
According to Peter Drucker, a product remains mere raw material or at best an intermediate until it is bought or consumed.
According to Philip Kotler, "Product is anything that can be offered to someone to satisfy a need or a want."
According to William Stanton, "Product is a complex of tangible and intangible attributes, including packaging, colour, price, prestige and services that satisfy needs and wants of people."
A product is defined as a good or service that most closely meets the requirements of a particular market and yields enough profit to justify its continued existence.
Products encompass physical goods, services, experiences, events, places, properties, organizations, information, and ideas.
Consumer purchasing decisions depend on tangible attributes as well as psychological attributes like brand image, packaging, warranties, and post-sale service.
Components of a Product
The Core Product: The basic generic constituent or basic element of the product (e.g., in Dove Soap, the generic bathing soap constituent).
Associated Features: Functional and aesthetic attributes built around the core element that enhance product personality and differentiate it from competitors (e.g., Dove's fragrance, moisturizing ability, and pristine white color).
Brand Name: A name, term, symbol, design, or combination intended to identify goods/services of one seller and differentiate them from competitors. A trademark is a legally protected brand.
Logo: The brand mark or symbol ensuring brand recognition and recall, particularly critical in rural markets where pictorial identification drives purchasing.
Package: The container or wrapper performing three essential functions: product protection, providing information, and increasing sales appeal/aesthetics.
Label: An integral part of the package carrying written information regarding product nature, features, composition, usage instructions, and performance.
Characteristics of a Product
Core element of the marketing mix ().
Subjective utility: viewed differently by consumers, organizations, and society based on varying needs.
Comprises both physical goods and intangible services.
Serves as a vehicle/medium to deliver benefits and customer satisfaction.
Value lies in services rendered by the product rather than mere physical ownership.
Importance of Product to a Firm
Focal Point: All marketing activities (selling, purchasing, advertising, distribution, sales promotion) revolve around the product.
Starting Point of Planning: Product nature, quality, and market demand decide all secondary policies (pricing, distribution, promotion).
End Goal: Represents the ultimate end (customer satisfaction); low-quality products face restricted lifespans in competitive markets.
Product Levels (Levitt's Hierarchy)
Core Benefit: The fundamental need or purpose for which the product is purchased (e.g., buying a car for rapid, convenient personal transportation).
Generic Product: The unbranded, undifferentiated basic commodity (e.g., unbranded rice, pulses, wheat flour).
Branded Product: A product given a specific identity through a unique brand name by a specific firm.
Differentiated Product: A product distinguished from competitor clutter through specific tangible or psychological attributes (e.g., Knorr's Soups positioned as healthy, tasty, and easy to prepare).
Customized Product: A product modified to suit explicit individual customer specifications (e.g., custom computer builds, automobiles, shoes, garments).
Augmented Product: A product offering voluntary, unexpected features or services added by the marketer based on research insights to enhance value.
Potential Product: The future product encompassing all possible advancements and refinements feasible under technological and economic conditions.
Factors Influencing Product Mix
Market Demand: Determines product launch, expansion, or line deletion.
Cost of Product: Low-cost capabilities enable affordable product launches (e.g., Nirma washing powder launched to counter high-priced Surf).
Quantity of Production: Economies of scale encourage adding items to the line if large-scale manufacturing is feasible.
Advertising and Distribution Factors: Leveraging existing ad channels and distribution networks without incurring incremental expenses.
Use of Residuals: Utilizing industrial by-products (e.g., sugar manufacturing units utilizing molasses).
Competitor Actions: Reacting to rival strategies by adding or pruning items.
Marketing Capacity Utilization: Adding products to fully utilize underemployed marketing resources.
Company Goodwill: Existing strong corporate reputation facilitates smooth product launches.
Product Terminology and Decision Concepts
Product Mix: The composite list of all products offered for sale by a firm.
Breadth/Width: Number of distinct product lines produced (e.g., LG producing TVs, washing machines, refrigerators).
Depth: Assortment of sizes, colors, models, and variants within a product line.
Consistency: Relationship of various product lines regarding end-use, production requirements, or distribution channels.
Product Line: Group of closely related products functioning similarly, sold to similar consumer groups, or falling within similar price bands.
Product Positioning: The specific manner in which a product is presented to a target market segment to satisfy needs (e.g., Wagon R as a compact urban car; MTR as ready-to-eat convenience food; Coca-Cola as "Taste the Feeling").
Product Repositioning: Changing a product's physical characteristics or brand image to appeal to a new or altered market segment.
Product Differentiation: Altering product quality, design, and support services to make it distinct from competitors and internal product lines.
Product Diversification: Expanding product offerings into new lines in depth or width (e.g., Godrej expanding from locks, safes, and refrigerators into cosmetics and soaps).
Product Modification: Deliberately altering physical attributes or packaging to suit changing customer preferences (e.g., updates in TV technology).
Product Standardization: Limiting manufacturing variations to uniform quality specifications to achieve cost efficiencies (e.g., readymade garments in standard sizes).
Product Elimination: Pruning unviable, unprofitable products from the lineup (e.g., replacing Maruti 800 with newer models).
Product Classification
Bases of Product Classification
Durability and Tangibility: Classified into non-durable goods, durable goods, and services.
Consumer Goods: Categorized by consumer shopping effort and habits.
Industrial Goods: Categorized by business operational utility.
Durability and Tangibility Categories
Non-durable Goods: Tangible items consumed in one or a few uses, purchased frequently (e.g., toiletries, food products). Requires wide distribution and heavy promotional pull.
Durable Goods: Tangible items surviving extended usage over many years (e.g., LCD TVs, mobile phones, microwaves). Requires personal selling and post-sale service.
Services: Intangible, inseparable, variable, and perishable activities yielding satisfaction without physical ownership (e.g., banking, airlines, insurance).
Classification of Consumer Goods
Convenience Products: Inexpensive, frequently purchased goods requiring minimal buying effort.
Staple Goods: Regular, routine purchases (e.g., milk, bread, eggs).
Impulse Goods: Unplanned purchases triggered by immediate visual exposure (e.g., chocolates, magazines at checkout counters).
Emergency Goods: Purchased urgently in response to unexpected compelling needs (e.g., umbrellas during rain, basic medicines on trips).
Shopping Products: Higher-priced goods where consumers compare quality, price, style, and suitability before purchasing.
Homogeneous Shopping Goods: Similar in quality; buyers shop primarily for price differentials.
Heterogeneous Shopping Goods: Distinct physical/style features where product features override price considerations (e.g., clothing, furniture).
Specialty Products: High-priced goods with unique characteristics or strong brand identification where buyers expend extraordinary purchase effort (e.g., luxury watches like Rolex, high-end cars, diamond jewelry).
Unsought Products: Products potential buyers are unaware of or do not actively think of purchasing.
Regularly Unsought: Existing products bought due to long-term necessity or persuasion rather than immediate desire (e.g., life insurance, blood donation).
New Unsought: Innovations requiring aggressive educational advertising (e.g., initial launch of Oral Polio Vaccines).
Classification of Industrial Goods
Materials and Parts: Goods fully entering the manufactured product.
Raw Materials: Agricultural products (wheat, rubber, sugarcane) or natural products (iron ore, crude oil).
Manufactured Materials and Parts: Component materials (pig iron, glass, yarn) and component parts (batteries, tires, steering wheels).
Capital Items: Long-lasting industrial goods facilitating finished product production.
Installations: Major capital investments (industrial buildings, machinery, mainframe computers, elevators).
Equipment: Portable factory equipment and office tools (hand tools, laptops, fax machines).
Supplies and Business Services: Short-term goods and services facilitating business operations.
Maintenance and Repair Items: Paint, nails, copier repair.
Operating Supplies: Lubricants, coal, computer paper, stationery.
Business Advisory Services: Legal advice, management consulting, advertising agency services.
Product Life Cycle
Concept of Product Life Cycle (PLC)
Illustrates the sales volume and profit history of a product over time across four distinct sequential stages.
Typically follows an S-shaped curve, though variations exist for fashions, fads, commodities, and monopoly markets.
Applies to product categories (longest PLC), product forms (standard PLC curve), and individual brands (shortest, highly variable PLC).
Stages of the Product Life Cycle
Introduction Stage:
Characteristics: Low initial sales volume, high unit costs due to operational inefficiencies, negative profits, limited distribution outlets, low consumer awareness, high promotional spending to arouse primary demand.
Marketing Strategies: Educate target audience, establish initial trade distribution, price high (skimming) to recover development costs or low (penetration) to gain immediate market footprint.
Growth Stage:
Characteristics: Rapidly rising sales volume, rising profits, declining unit costs due to scale economies, entry of new competitors, market expansion, focus on selective brand demand.
Marketing Strategies: Maintain product quality, introduce new variants/features, expand distribution channels, shift promotional focus from awareness to brand preference.
Maturity Stage:
Characteristics: Peak sales volume, declining profit margins, market saturation, intense price competition, proliferation of private retailer brands, middle-majority buyers.
Marketing Strategies: Modify market segments, alter product features, reposition brand image, provide enhanced post-sale services, optimize marketing mix.
Decline Stage:
Characteristics: Rapidly falling sales and profits, cost conscious remaining competitors, changing customer preferences, laggard buyers, obsolete product technology.
Marketing Strategies: Prune unviable models, reduce promotional expenditures, harvest niche profits from loyal segments, sell brand rights, or discontinue the product entirely.
Packaging and Labelling
Packaging Concept and Levels
Defined as the art, science, and technology of preparing goods for transport, storage, and sale. Functions as the fifth "P" of the marketing mix.
Primary Package: Immediate container directly enclosing the product (e.g., tube of toothpaste, PET bottle, can).
Secondary Package: Additional protective layer discarded prior to product use (e.g., cardboard box containing a shaving cream tube).
Transportation/Bulk Package: Outer container engineered for long-distance transport, bulk handling, and warehousing (e.g., corrugated shipping cartons).
Functions and Qualities of Packaging
Protection: Shields goods from moisture, evaporation, temperature changes, rough handling, breakage, and pilferage.
Appeal: Acts as a passive salesman, attracting visual attention in self-service retail setup.
Performance: Functional ease of pouring, dispensing, closing, and reuse.
Convenience: Facilitates easy stocking, shelf display, handling, transportation, and disposal.
Cost-Effectiveness: Balances protection/aesthetics against product cost constraints.
Packaging Types
Consumer Package: Economical unit size designed for family/individual consumption.
Bulk Package: Large volume container for industrial users or cost-conscious high-volume buyers.
Industrial Package: Heavy-duty protection for industrial goods and durable machinery.
Dual-Use Package: Secondary utility container usable after consuming contents (e.g., drinking glass jars, decorative tins).
Labelling Concept and Statutory Regulations
Informative printed tag, graphics, or statement attached to or printed directly on the product package.
Provides mandatory legal details, usage guidelines, safety warnings, and nutritional disclosures.
In India, prepackaged food labels must strictly comply with the Food Safety and Standards (Packaging and Labelling) Regulations 2011 issued by FSSAI under the Ministry of Health and Family Welfare.
Key mandatory details include: product name, list of ingredients, nutritional facts, vegetarian (green dot) / non-vegetarian (brown dot) symbols, food additives, manufacturer address, net quantity, batch/lot identification, manufacturing date, expiry/best-before date, and country of origin for imports.
Types of Labels (William J. Stanton Taxonomy)
Brand Label: Focuses purely on popularizing the brand name or brand mark (e.g., cosmetics, perfumes).
Grade Label: Identifies product quality standards, ratings, or specifications (e.g., fabric types, tea leaves).
Descriptive Label: Explains detailed usage instructions, ingredients, product features, and storage directions (e.g., processed foods, milk).
Informative Label: Provides comprehensive operational information, detailed technical data, and health safety warnings (e.g., pharmaceutical medicines).
Unit 2: Price Decision
Meaning and Importance of Price
Definition of Price and Pricing
Price represents the monetary value exchanged by a customer to acquire goods or services.
The only element in the marketing mix () that generates revenue; all other elements (Product, Place, Promotion) represent cost centers.
According to Philip Kotler, "Price is the amount of money charged for a product or service."
According to William Stanton, "Price is the amount of money needed to acquire some combination of goods and its accompanying services."
Pricing is defined as the operational process whereby a business determines the selling price for its product offerings.
Operational Aspects Considered in Pricing
Raw Material Procurement Costs
Direct Labor and Overhead Manufacturing Expenses
Market Demand Sentiments (high purchasing power permits higher pricing; economic slumps force price reductions)
Industry Competition Intensity
Brand Equity and Perceived Product Quality
Objectives of Pricing
Profitability Objectives: Achieving a Target Rate of Return on Investment (ROI) or Net Sales; Profit Maximization.
Market-Related Objectives: Meeting or preventing market competition; maintaining or increasing market share percentage; price stabilization in oligopolistic markets led by market leaders.
Public Relations and Strategic Objectives: Enhancing corporate image; mobilizing capital resources for reinvestment (e.g., high petroleum tax revenues).
Importance of Pricing
To the Firm: Determines competitive positioning, direct revenue, profitability, total output volume, product positioning, and long-term business survival.
To Consumers: Facilitates rational choice, maximizes satisfaction relative to budget, and reflects consumer standard of living.
Factors Affecting Pricing
Internal Factors (Controllable Forces)
Organizational Objectives: Revenue maximization, profit goals, or market share growth.
Role of Top Management: Establishing overall policy guidelines within which marketing managers set operational prices.
Product Costs: Direct floor limit imposed by manufacturing, labor, and materials expenses.
Product Differentiation: Unique attributes justify premium pricing over standardized rivals.
Marketing Mix Coordination: Harmony with product design, premium distribution, and heavy advertising expenses.
Scale and Location of Organization: Economies of scale allow lower prices; plant location affects freight costs and market choices (e.g., small sachet packaging in rural markets).
External Factors (Uncontrollable Environmental Forces)
Market Demand Elasticity: Inelastic demand (necessities) allows higher pricing; elastic demand requires competitive lower pricing.
Buyer Behavior and Perception: Prestige perceptions allow higher pricing (e.g., luxury automobiles).
Market Structure and Competition: Highly competitive markets limit pricing power, requiring price matching.
Input Suppliers: Cost increases in raw materials passed on to end-consumers.
Economic Conditions: Inflationary booms allow higher pricing; recessions force discounts.
Government Regulations: Statutory price controls, anti-profiteering laws, and tax policies.
Types of Pricing
Demand-Oriented Pricing Strategies
Perceived Value Pricing: Setting price based on buyers' perception of value rather than seller's cost (e.g., varying price of Coca-Cola in a family restaurant vs. 5-star hotel vs. cinema hall).
Differential Pricing: Charging different prices based on transaction variables:
Time of Purchase (day vs. night taxi rates; seasonal hotel tariffs)
Location (regional price variations)
Product Version (premium leather-bound books vs. paperbacks)
Customer Segment (student discounts on railways)
Bargaining Ability and Customer Knowledge
Skimming Pricing: Launching an innovation at a very high price to "skim" price-insensitive top-tier buyers, systematically lowering price later as competition emerges.
Penetration Pricing: Launching a product at a low price to penetrate the market, gain high sales volume, build market share, and deter competitive entrants.
Cost-Oriented Pricing Strategies
Cost-Plus Pricing: Adding a fixed percentage profit margin to total unit production cost.
Markup Pricing: Adding a set percentage markup on top of purchase cost, used by retailers and wholesalers.
Break-Even Pricing: Setting price to cover fixed and variable costs without profit ().
Break-Even Calculation Example
Given:
Total Fixed Cost =
Variable Cost per unit =
Selling Price per unit =
Calculation:
If BEP output target is brought down to , required selling price is:
Competition-Oriented and Market-Driven Pricing Strategies
Going Rate Pricing: Setting prices in line with prevailing market trends or industry leader prices.
Sealed Bid Pricing: Quoting competitive tender rates based on expected competitor bidding strategies.
Discriminatory Pricing: Selling same offering at different price levels unrelated to cost variations (customer segment, product form, locational, seasonal, image discrimination).
Value-Based Pricing: Pricing determined primarily by target consumer value perceptions rather than seller cost structures.
Summary of Major Specific Pricing Methods
Competitive Pricing: Matching rival market rates.
Penetration Pricing: Low entry price for mass adoption.
One-Price vs. Variable-Price Policy: Charging uniform non-negotiable prices vs. flexible prices based on customer type.
Market Skimming Pricing: High entry price for maximum short-term profit extraction.
Discrimination / Dual Pricing: Price variations based on customer purchasing capacity.
Premium / Prestige Pricing: High prices to signify superior luxury quality (e.g., Van Heusen garments).
Leader Pricing: Temporarily cutting prices on popular "loss leaders" to drive retail store traffic.
Psychological / Odd Pricing: Setting prices ending in odd figures (e.g., , , ) to convey perceived affordability.
Price Lining: Establishing fixed price bands for quality tiers (economy, medium, premium).
Resale Price Maintenance: Manufacturer legally enforcing minimum resale price thresholds across retail channels.
Everyday Low Pricing (EDLP): Setting low steady prices without promotional price fluctuations.
Team Pricing / Product Bundling: Selling a package of goods/services at a lower total price than individual sales (e.g., option packages on cars, value meals).
Unit 3: Place & Distribution
Meaning and Importance of Place
Concept of Place in Marketing Mix
Place refers to the channel, route, or mechanism through which products move from point of production to ultimate consumer.
According to Philip Kotler, "Every producer seeks to link together the set of marketing intermediaries that best fulfill the firm's objective. This set of marketing intermediaries is called marketing channel."
According to William Stanton, "A distribution channel for a product is the route taken by the title to the goods as they move from the producer to the ultimate customer."
Channels establish possession, place, and time utilities.
Participants in the Distribution System
Manufacturers: The primary producers of goods or services.
Intermediaries: Commercial entities (wholesalers, retailers, agents) negotiating transactions, buying, selling, and transferring title.
Facilitating Agencies: Independent auxiliary entities assisting physical movement without taking title or negotiating sales (banks, insurance companies, transport providers, public warehouses).
Consumers: The ultimate end-users buying for personal consumption.
Functions Performed by Distribution Channels
Transactional Functions: Buying, selling, title transfer, and risk-bearing (assuming losses from market price drops, damage, spoilage).
Logistical Functions: Physical exchange activities including assembling, storage, grading, sorting, packaging, and transportation.
Facilitating Functions: Financing credit terms, providing post-purchase maintenance, gathering market intelligence, promotional merchandising, and contract negotiation.
Types of Distribution Channels
Direct Distribution Channel (Zero Level)
Producer sells directly to end consumers without intermediaries.
Methods: Manufacturer-owned retail outlets (e.g., Patanjali outlets, Maruti NEXA showrooms), door-to-door direct sales (e.g., Eureka Forbes), mail order, e-commerce direct selling (e.g., Dell Computers online model).
Indirect Distribution Channels
One-Level Channel (): Includes one intermediary (e.g., Maruti cars sold through authorized dealer outlets like DD Motors).
Two-Level Channel (): Standard channel structure for Fast-Moving Consumer Goods (FMCG) like soaps, rice, sugar, pulses.
Three-Level Channel (): Involves mercantile agents handling limited lines across vast geographic markets.
Distribution Intermediaries Taxonomy
Middlemen: Any commercial entity operating between manufacturer and end user.
Agents: Independent individuals/firms securing sales contracts for commissions without taking title/ownership of goods (e.g., travel agents, Tupperware direct sales agents).
Wholesalers: Independently owned merchant firms taking title to bulk merchandise, storing goods, and reselling to retailers in smaller lots.
Distributors: Channel partners who buy and take title to goods, operating exclusive complementary product lines from single producers (e.g., exclusive Pepsi distributor).
Retailers: Commercial outlets purchasing goods from wholesalers/producers and reselling directly to ultimate consumers for personal use.
Functions of Intermediaries
Functions of Wholesalers
Bulk buying from diverse producers and assembling inventory.
Warehousing and inventory storage, mitigating holding costs for manufacturers and retailers.
Transportation and delivery logistics.
Product grading, standardization, and convenience packaging.
Providing financial credit facilities to retailers and cash advances to manufacturers.
Risk-taking (bearing inventory obsolescence, price drops, debt defaults).
Local promotional support and market information feedback.
Functions of Retailers
Assembling diverse product assortments under one roof.
Creating time and place utility through localized convenience.
Breaking bulk and selling small unit quantities.
Extending short-term consumer credit.
Educating consumers and demonstrating products.
Communicating consumer preferences and complaints back to wholesalers and producers.
Detailed Comparison: Wholesalers vs. Retailers
Scale of Operations: Wholesalers deal in bulk quantities on a large scale; Retailers deal in small quantities on a small scale.
Product Variety: Wholesalers handle limited product categories; Retailers stock diverse varieties and multiple competing brands.
Position in Channel: Wholesalers represent first distribution outlet; Retailers represent second/final distribution outlet.
Target Customers: Wholesalers sell to retailers and industrial users; Retailers sell directly to end consumers.
Location Requirements: Wholesalers operate from commercial godowns/warehouses; Retailers require prime retail locations near residential areas.
Merchandising: Wholesalers do not emphasize window displays; Retailers rely heavily on window displays and store layout appeal.
Profit Margins: Wholesalers operate on low profit margins with fast turnover; Retailers command higher profit margins to cover operational overheads.
After-Sales Services: Wholesalers generally do not provide post-sale services; Retailers frequently provide post-sale services and home delivery.
Selection of Distribution Channels
Factors Pertaining to the Product
Unit Price: Low-priced goods use long indirect channels; high-priced luxury goods use direct or short channels.
Perishability: Highly perishable food/bakery items require direct or short, rapid channels.
Size and Weight: Heavy, bulky goods require direct distribution to minimize handling expenses.
Technical Complexity: Complex equipment requires direct sales forces for technical guidance.
Customization: Custom, made-to-order products rely on direct distribution.
After-Sales Service Requirements: Goods requiring maintenance use authorized direct dealer networks.
Factors Pertaining to Consumer or Market
Number of Buyers: Large buyer bases require multi-tiered indirect channels; small buyer groups use direct sales.
Geographic Spread: Geographically concentrated buyers rely on direct selling; widely scattered buyers across regions require wholesalers and retailers.
Order Quantity: Large bulk purchases shipped directly; small frequent purchases handled by retail networks.
Purchase Purpose: Industrial buyers shipped directly; household consumer purchases routed through retail channels.
Credit Facility Demand: Markets demanding credit require intermediate retail networks.
Factors Pertaining to Middlemen
Availability and quality of middleman services.
Anticipated sales turnover potential.
Middleman attitude toward producer policies.
Distribution cost per unit charged by channel options.
Factors Pertaining to the Producer / Company
Financial Capacity: Financially strong firms establish direct retail branches; weaker firms rely on external middlemen.
Managerial Experience: Inexperienced manufacturers depend heavily on established channel networks.
Level of Production Volume: High output enables dedicated sales forces and direct outlets.
Environmental and Competitor Factors
Competitors' distribution strategies.
Social acceptability of channel arrangements.
Flexibility to alter agency agreements.
Unit 4: Promotion
Concept and Importance of Promotion
Concept of Promotion
External communication link connecting marketer with target consumers.
Informs, persuades, and reminds target buyers regarding product availability, attributes, and pricing.
Functions and Importance of Promotion
Information: Creates customer awareness and educates target markets about new launches.
Persuasion: Convinces prospective consumers to choose a specific brand in competitive markets.
Reminding: Reinforces brand recall and maintains customer loyalty during off-seasons or supply shortages.
Relationship Building: Fosters ongoing customer engagement and lifetime value.
Value Creation: Enhances perceived product quality and value positioning.
Sales Support: Assists sales representatives and complements general marketing mix efforts.
Elements of Promotional Mix
Broad Classification of Promotion
Above-the-Line (ATL): Mass broadcast media (TV, radio, print, national newspapers) reaching large target audiences.
Below-the-Line (BTL): Highly targeted non-broadcast promotional interventions (in-store displays, trade fairs, melas, wall paintings, sampling, point-of-sale activities).
The 5 Core Elements of Promotion Mix
Advertising and Word-of-Mouth Communication:
AMA Definition: "Any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor."
Word-of-Mouth (WOM): Customer-to-customer communication. Opinion leaders and community influencers play critical roles (e.g., barbers recommended for Parachute After-Shower Cream promotions; Jonah Berger notes of WOM occurs offline, with only occurring online).
Sales Promotion:
Definition: Value-adding incentive schemes designed to stimulate immediate sales volume over a short duration.
Direct Marketing and Online Marketing:
Targeted, personalized dialogue established directly with consumers using databases, direct mail, telemarketing, e-commerce, and digital platforms.
Personal Selling:
Two-way, direct face-to-face or telephonic persuasive communication conducted by sales professionals.
Public Relations (PR) and Sponsorship:
PR manages mutual understanding and corporate goodwill across stakeholders (Bernays definition).
Sponsorship involves supporting events, sports, or organizations financially to achieve commercial advantage.
Modes of Advertising
Print Media
Newspapers: In-depth coverage, mobility, measurable coupon results, high speed. Limitations: short lifespan, poor print quality, visual clutter.
Magazines: High audience selectivity, superior print quality, extended shelf life. Limitations: long lead time, high ad placement costs.
Yellow Pages: Wide distribution, non-intrusive. Limitations: declining usage due to digital search, static listings.
Radio
High geographic and demographic audience selectivity, low operational costs, rapid production turnaround. Limitations: lack of visual element, listener distraction.
Television
Combines sight, sound, color, and motion; high realism; broad reach. Limitations: high ad production and airtime costs, channel switching via remote controls.
Mobiles and Telephones (Telemarketing)
Cost-effective, direct response tracking, independent of time/location. Limitations: consumer irritation, call-blocking call screeners.
Cinema Advertising
Captive audience, large visual screens, high impression quality. Limitations: limited strictly to moviegoers, localized reach.
Out-of-Home (OOH) Advertising
Billboards, transit posters, bench ads, metro wrappings. High visual reach, mass visibility, color impact. Limitations: quick glance medium ( viewing time), brief messaging.
Sales Promotion Techniques and Types
Objectives of Sales Promotion
Stimulate trial purchases among new users.
Increase consumer loyalty and repeat purchase frequency.
Encourage wider usage applications.
Build retail interest through humor or celebrity linkage.
Deflect attention from price increases.
Gain trade support from wholesalers and retailers.
Price Promotions
Discounts / Price Offs (e.g., up to off).
Extra Fill Packs (e.g., extra product free).
Free Unit Offers (e.g., Buy 2, Get 1 Free).
Reduced Price Offers (RPOs) flashed on packaging.
Cash Rebates and Cash Share-Out vouchers.
Repurchase Buy-Back commitments.
Frequent User Miles / Points Programs.
Low-interest or zero-interest financing deals.
Prize Promotions
Free Prize Draws / Lotteries (computerized random winner selection).
Sweepstakes / Games (contest entry based on winning tickets).
Skill Competitions (winners judged on skill demonstration).
Premium Promotions and Off-the-Shelf Offers
On-packet Premiums (free item attached to package).
Free Mail-In Premiums.
Free Hotel Accommodation / Vacation Vouchers.
Redeemable Discount Coupons (e.g., Snapdeal vouchers, Sodexo passes).
Free Car Insurance for the initial year during slack sales periods.
Promotional Strategy Comparisons
Advertising vs. Sales Promotion
Etymology: Derived from Latin advertere ("turn towards") vs. promovere ("move forward").
Objective: Long-term positive brand equity building vs. immediate short-term sales volume push.
Mode: Indirect influence via mental perceptions vs. direct tangible purchasing incentives.
Duration: Long-term strategic pursuit vs. short-term tactical intervention.
Cost relative to audience: High total campaigns vs. lower promotional run costs.
Measurability: Slower, indirect sales impact vs. immediate, measurable sales responses.
Personal Selling vs. Sales Promotion
Interaction: Direct face-to-face dynamic dialogue vs. non-personal incentive distribution.
Product Application: High unit value, technically complex, customized items vs. low unit value standardized consumer goods.
Market Type: Concentrated industrial buyers vs. mass consumer markets.
Cost: High expense (salesforce training, salaries, travel) vs. lower cost per reach.
Factors Affecting Selection of Promotion Mix
Push vs. Pull Strategy
Push Strategy: Directs promotional efforts (personal selling, trade allowances) at channel intermediaries to force products through the channel. Aligns with the Selling Concept.
Pull Strategy: Directs aggressive promotion (mass advertising, consumer discounts) at ultimate consumers to demand products from retailers, pulling products through channels.
Product Features: Industrial complex goods require personal selling; consumer non-durables rely on mass advertising.
Stage of Product Life Cycle: Introduction relies on advertising and direct sampling; Growth emphasizes selective brand advertising; Maturity relies on heavy sales promotions; Decline prunes ad expenditures.
Buyer Readiness: Unaware buyers need mass media advertising/PR; store buyers need sales promotions and personal selling to close transactions.
Distribution Type: Intensive distribution uses mass advertising and retail promotions; exclusive distribution relies on premium personal selling.
Budget Constraints and Media Availability: Small budgets restrict firms to personal selling or direct localized media; direct broadcast media require substantial financial resources.
Unit 5: Emerging Trends in Marketing
Services Marketing
Concept and Definition of Service
A service is an intangible process or performance rather than a tangible physical object.
Defined as "a deed, a performance, an effort" (Shostack, Rathmell).
Represents of India's GDP (2012-13 figures), representing the fastest growing sector in the national economy.
Characteristics of Services
Intangibility: Cannot be seen, touched, tasted, or stored prior to purchase.
Simultaneity / Inseparability: Production and consumption occur simultaneously in the presence of the customer.
Heterogeneity / Variability: Service performance varies based on human interactions, service employees, and context.
Perishability: Unused service capacity cannot be stored or inventoried for future sale (e.g., empty airline seats on a flight).
Non-Ownership: Title or physical ownership is not transferred to the consumer; buyers receive access or experiences.
Taxonomy / Types of Services
Customer Volume Basis (Silvestro): Professional Services (low volume, high customization e.g., accountants); Service Shops (medium volume e.g., hotels, banks); Mass Services (high volume e.g., public transport).
Tangibility Continuum: Tangible-dominant (e.g., fast food) to Intangible-dominant (e.g., consulting).
Customer-Employee Presence: Self-service (ATMs); Interpersonal service (hair salons, schools); Remote service (insurance processing).
Customization and Empowerment: Low/High customization paired with Low/High employee empowerment.
Ten Dimensions of Service Quality
Reliability: Performing promised service dependably and accurately (e.g., on-time flight schedules).
Access: Ease of contact and approachability.
Security: Freedom from danger, physical risk, or financial doubt.
Credibility: Trustworthiness, honesty, and corporate reputation.
Understanding the Customer: Striving to comprehend specific customer needs.
Responsiveness: Prompt service delivery and willingness to help.
Competence: Possession of required technical skills and knowledge.
Courtesy: Politeness, respect, and friendliness of contact personnel.
Tangibles: Physical appearance of facilities, equipment, uniforms, and communication materials.
Communication: Keeping customers informed in clear language.
Online Marketing and Social Media Marketing
Online Marketing Concept
Utilizing Internet-based digital channels (email, search engines, display ads, website analytics) to communicate brand messages and drive customer acquisition.
Differs from traditional marketing by providing real-time data tracking, precise performance metrics, and interactive engagement at lower cost levels.
Core Digital Marketing Tools: Email marketing, Search Engine Optimization (SEO), Search Engine Marketing (SEM), Display Advertising, Content Marketing, Video Marketing, Web Analytics, Customer Relationship Management (CRM) systems.
Advantages: High brand awareness, measurable ROI analytics, efficient customer acquisition, personalized customer segment analysis.
Disadvantages: Lack of touch-and-feel physical verification, online clutter/competition, risk of impersonal customer interactions.
Social Media Marketing
Leveraging social networking platforms to engage target markets, build brand equity, and collect direct consumer insights.
Key Social Media Platforms and Statistics in India
Facebook: Dominant platform utilized by of business marketers. India user base demographics: male users, female users. Mobile usage stats: access Facebook via mobile phones, via smartphones. Leading user cities: New Delhi (), Kolkata (), Bangalore (), Mumbai (), Hyderabad (), Chennai ().
Twitter: Microblogging platform limited to short messages (originally 140 characters) featuring text, hashtags, photos, videos, and website links; heavily utilized for real-time customer service.
LinkedIn: Professional business-related networking network. Indian demographic profile: male users, female users. Dominates B2B sales lead generation.
Google+: Integrated with Google Search, Google AdWords, and Google Maps.
WhatsApp: Direct messaging app supporting end-to-end encrypted text, photos, videos, voice calls, and documents across global users.
Foursquare: Location-based social network utilizing GPS check-ins for venue promotions.
Instagram: Visual photo/video sharing platform commanding high customer engagement rates ( higher than Facebook, higher than Twitter).
Advantages of Social Media Marketing
Enhanced brand awareness and direct engagement.
Real-time positive/negative consumer feedback tracking.
Strategic competitive advantage via behavioral web tracking.
Amplification of organic word-of-mouth (WOM) user recommendations.