principle of marketing important question.(DU)

important question for the exam

subject- the principle of marketing notes.

semester- 5th(3rd year)

#delhiuniversity

Functions of Marketing

Marketing is a very broad term and cannot be explained in a few words. Marketing is an essential business function that helps in making customers aware of the products or services that are offered by a business.

The definition of marketing as defined by the American Marketing Association is as follows.

“Marketing is the process of planning and executing conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.”

The following are the functions of marketing:

1. Identify the needs of the consumer: The first step in the marketing function is to identify the needs and wants of the consumer that is present in the market. Companies or businesses must therefore gather information on the customer and perform an analysis of the collected information.

By doing this they can present the product or service that matches closely with the customer's needs and wants.

2. Planning: The next step in the marketing function is planning. It is considered very important for a business to have a plan. The management should be very clear about the company objectives and what it wishes to achieve from the created plan.

The company should then chalk out a timeline that is essential for achieving the objectives.

3. Product Development: After the details are received from the consumer research, the product is developed for use by the consumers. Many factors are essential for a product to be accepted by the customer, a few factors among the many are product design, durability, and cost.

4. Standardisation and Grading: Standardisation refers to the process of ensuring uniformity in the product which means that a product developed by a business shall be standard for every consumer with the same quality and design and this is one of the key aspects that need to be maintained by the business.

Grading is referred to the process of classifying products that are similar in quality and characteristics. Grading helps in making the customer know about the quality of the product offered. It helps in making customers understand that the products conform to the highest quality standards.

5. Packing and Labelling: The first impressions of a product are its packaging and the label attached to it. Therefore, packaging and labeling should be looked after very well. It is a well-known fact that great packaging and labeling go a long way in ensuring product success.

6. Branding: Branding is referred to as the process of identifying the name of the producer with the product. Certain brands are there in the market which has a lot of goodwill and any product coming from the same brand will be accepted more warmly by the consumers. Although, having a separate identity for the product can be helpful.

7. Customer Service: A company has to set up various kinds of customer service based on its product. It can be pre-sales, technical support, customer support, maintenance services, etc.

8. Pricing: It can be regarded as one of the most important parts of the marketing function. It is the price of a product that determines whether it will be successful or a failure. Some other factors are market demand, competition, price of competitors.

The company or business should understand clearly that bringing about frequent changes in the price of a product can lead to confusion in the minds of consumers.

9. Promotion: Promotion is the process of making the customers aware of the product by presenting it to customers across various channels of promotion and enticing them to buy the product.

The major channels of promotion are advertising, media, personal selling, and promotion (publicity). An ideal promotion mix will be a combination of all or some methods.

10. Distribution: Distribution refers to the movement of consumer goods to the point of consumption. A company must ensure that the correct channel of distribution is selected for the product.

The mode of distribution is dependent on the factors such as shelf life, market concentration, and capital requirements. Proper management of inventory is also essential.

11. Transportation: Transportation is defined as the physical movement of goods from one place to another. In other words, it is the movement of goods from the place of production to the place of consumption.

Also, the correct mode of transportation can be selected based on the geographical boundaries of the market.

12. Warehousing: Warehousing of products creates time utility. It is often seen that there is a gap between the time a product is produced and the time when it is consumed. Companies like to maintain the smooth flow of goods even when the products are of seasonal nature. Warehousing and storing provide the opportunity to provide goods during the off-season also.

 

 

Difference between selling and marketing

	SELLING	MARKETING
01.	Selling refers to creating products and selling them to customers.	Marketing refers to finding the wants of people/customers and filling them.
02.	Selling revolves around the needs and interests of the seller.	Whereas Marketing revolves around the needs and interests of the consumer.
03.	It emphasizes more on products or services.	It emphasis more on consumer needs and wants.
04.	Selling is only an integrated part of the marketing process.	While marketing is a wider term consisting of several activities.
05.	Selling is based on short-term business planning.	Marketing is based on long-term business planning.
06.	It manufactures the product first.	It identifies the market first.
07.	It is sales volume oriented.	It is customer satisfaction with profit-oriented.
08.	It views business as a goods-producing and selling process.	It views business as a consumer-satisfying process.
09.	Here seller is considered the kingpin of the market.	Here the consumer is considered the kingpin of the market.

 

 

                                                                                             

 

 

The recent trends in marketing

 

1. More Long-Term Influencer-Brand Relationships

We’re likely to see an increase in long-term influencer-brand relationships, with creators taking on a variety of brand ambassador roles and an overall shift toward always-on programming, as opposed to one-time deals. Brands will have the opportunity to build more authentic connections with their audiences through longer-running programs that leverage influencer expertise and credibility over time.

2. ‘Conversational Commerce

Entrenched in projects and working with clients across the retail supply chain, I’m inspired by “conversational commerce.” First coined by Uber’s Chris Messina in 2015, it refers to “the intersection of messaging apps and shopping.” This is a new frontier in retail.

3. Experiential E-Commerce

Experiential e-commerce will be essential to all companies that are selling online. From retailers and subscription sites to software as a service platform, the implementation of interactive, experiential, and highly tailored pathways will be a necessity to accommodate user expectations. Brands are competing for their user base, and experiential e-commerce will be winning the answer this time around.

4. ‘Doing Digital Right’

Communications agencies will shift from a transactional approach and take on a more advisory role as they look at long-term partnerships with brands. While the communications industry has made digital-first a priority these last few years, 2022 will primarily be about “doing digital right”—leveraging digital tools to supplement integrated communications initiatives when and where it makes sense.

5. The Rise Of Interactive Content

Buyers are becoming more and more independent in their journey. So, as marketers, we need to take this into consideration and make things easier for the users. Businesses might have to put more time and effort into keeping the prospect engaged and helping them find what they are looking for, so one trend that might manifest itself in 2022 is the rise of interactive content.

6. Intent Monitoring

It’s time marketers focus on their biggest business goal: finding buyers who are ready to buy. To that end, it’s helpful to know who’s searching for your solution—and who is potentially in-market. Intent monitoring is the answer, and it’s a top trend that we anticipate will grow in 2022. When combined with actionable insights, it offers a powerful way to impact business growth.

7. The Continued Rise Of Influencer Marketing

There is a lot of distrust among the public when it comes to who they are getting their information from. Influencers have built trust with their audience over a long period. Therefore, their audience knows that when their favorite influencer backs a service or product, it’s legit. Companies need to take bigger advantage of this moving forward.

8. A Resumption Of Business Travel And In-Person Meetings

Our clients and their customer advisory board members universally express a desire to “get back on the road” and meet with their peers face-to-face as they normally would, putting the pandemic behind them once and for all.

9. New VR-Based Software Tools And Apps

With the latest announcements from Facebook (now Meta) regarding the metaverse, people can begin to expect new software tools and apps to be introduced in the virtual reality world. I would anticipate seeing more hybrid and mixed reality experiences in 2022.

10. New Methods Of Teamwork And Collaboration

The workplace is not a location; it’s a mindset. Driven by the impact of Covid, the work environment will continue to be redefined. The impact on the market is huge. Employers need to be creative in blending productivity and employee needs; those who will thrive will seek new ways of accomplishing “work” and different methods of teamwork and collaboration.

11. Alternative Targeting Solutions

With the deprecation of third-party cookies set for 2023, marketers will be testing alternative targeting solutions, such as people-based targeting, throughout 2022. Companies that can leverage and expand on your first-party data will need to be vetted before cookies are gone entirely.

12. A Massive Shift In Who Conducts Research

In the insights industry, we expect to see a massive shift in who is conducting research activities. Accelerated by both the Covid-19 pandemic and increasingly user-friendly technology, the barriers to market research have been drastically lowered. That means marketers, product designers, user experience specialists, and others will no longer simply be users of data—they will have an active role in generating it too.

13. A Renewed Emphasis On Reputation

We have seen the increased fragility of brands in the country over the last 18 months, as well as their balancing act of trying to resonate within a polarizing marketplace. How does a brand attract and gain advocates without alienating a market segment? It’s an unprecedented scenario for brands to navigate.

14. Long-Form ‘Guide’ Pages

The best content is going to win out. However, everyone is writing long-form “guide” pages. So putting them in the best format and making them readable and shareable will be key. Those who can make their pages interesting will win and have a more successful Web presence.

15. Bigger Business Pivots To Online/Digital

In 2022, I believe there is going to be a need to concentrate on and adapt to cryptocurrencies and nonfungible tokens and move businesses to the online marketplace. We already saw the pivot that had to happen during the pandemic to online/digital, and that trend is only going to get bigger. Companies should start integrating these things into their strategy as they look ahead so they don’t fall behind.

 

Types of Marketing Environment

There are different types of marketing environments businesses should explore. In this section, we’ll uncover them for you to consider.

• Internal marketing environment. These operations take place within the company. Examples include work with materials, systems, and professionals. This type of marketing environment influences the tasks of marketing and production teams and their efforts. Marketers develop strategies and campaigns and select suitable channels based on internal factors. Your brand’s culture reflects on the behavior of your employees and business operations. For instance, a company open to new ideas from active employees is more competitive within the market.
• External macro environment. These factors influence an industry. Examples include demographic, economic, technological, ecological, political, legal, and socio-cultural conditions. You can’t control these factors, and they can influence your company and operations within it. For instance, the COVID-19 pandemic changed the way businesses operate. Most companies have their employees working online, accept contactless payments, have visitor restrictions, and other requirements.
• External microenvironment. Customers, vendors, partners, and competitors belong to the marketing environment because they influence your business operations. The behavior and actions of these people and companies set the direction for your further actions, strategies, and activities. You can control these factors yet can’t prevent them from impacting your brand’s success and proper operation of your brand.

 

Factors influence consumer behavior

1. Psychological Factors

Human psychology is a major determinant of consumer behavior. These factors are difficult to measure but are powerful enough to influence a buying decision.

Some of the important psychological factors are:

i. Motivation

When a person is motivated enough, it influences the buying behavior person. A person has many needs such as social needs, basic needs, security needs, esteem needs, and self-actualization needs. Out of all these needs, the basic needs and security needs take a position above all other needs. Hence basic needs and security needs have the power to motivate a consumer to buy products and services.

 

ii. Perception

Consumer perception is a major factor that influences consumer behavior. Customer perception is a process where a customer collects information about a product and interprets the information to make a meaningful image of a particular product.

When a customer sees advertisements, promotions, customer reviews, social media feedback, etc. relating to a product, they develop an impression of the product. Hence consumer perception becomes a great influence on the buying decision of consumers. 

iii. Learning

When a person buys a product, he/she gets to learn something more about the product. Learning comes over some time through experience. A consumer’s learning depends on skills and knowledge. While skill can be gained through practice, knowledge can be acquired only through experience.

Learning can be either conditional or cognitive. In conditional learning the consumer is exposed to a situation repeatedly, thereby making a consumer develop a responsibility toward it.

Whereas in cognitive learning, the consumer will apply his knowledge and skills to find satisfaction and a solution from the product that he buys.

 

iv. Attitudes and Beliefs

Consumers have certain attitudes and beliefs which influence their buying decisions of a consumer. Based on this attitude, the consumer behaves in a particular way towards a product. This attitude plays a significant role in defining the brand image of a product. Hence, marketers try hard to understand the attitude of a consumer to design their marketing campaigns.

 

2. Social Factors

Humans are social beings and they live around many people who influence their buying behavior. Humans try to imitate other humans and also wish to be socially accepted in society. Hence their buying behavior is influenced by other people around them. These factors are considered social factors. Some of the social factors are:

 

i. Family

Family plays a significant role in shaping the buying behavior of a person. A person develops preferences from his childhood by watching his family buy products and continues to buy the same products even when they grow up.

ii. Reference Groups

A reference group is a group of people with whom a person associates himself. Generally, all the people in the reference group have common buying behavior and influence each other.

 

iii. Roles and status

A person is influenced by the role that he holds in society. If a person is in a high position, his buying behavior will be influenced largely by his status. A person who is a Chief Executive Officer in a company will buy according to his status while staff or an employee of the same company will have a different buying pattern. 

 

3. Cultural factors

A group of people is associated with a set of values and ideologies that belong to a particular community. When a person comes from a particular community, his/her behavior is highly influenced by the culture relating to that particular community. Some of the cultural factors are:

 

i. Culture

Cultural Factors have a strong influence on consumer buying behavior.  Cultural Factors include the basic values, needs, wants, preferences, perceptions, and behaviors that are observed and learned by a consumer from their near family members and other important people around them.

 

ii. Subculture

Within a cultural group, there exist many subcultures. These subcultural groups share the same set of beliefs and values. Subcultures can consist of people from different religions, castes, geographies, and nationalities. These subcultures by themselves form a customer segment.

 

iii. Social Class

Each and every society across the globe has a form of social class. Social class is not just determined by income, but also by other factors such as occupation, family background, education, and residence location. Social class is important to predict consumer behavior.

4. Personal Factors

Factors that are personal to the consumers influence their buying behavior. These personal factors differ from person to person, thereby producing different perceptions and consumer behavior.

Some of the personal factors are:

 

i. Age

Age is a major factor that influences buying behavior. The buying choices of youth differ from that of middle-aged people. Elderly people have totally different buying behavior. Teenagers will be more interested in buying colorful clothes and beauty products. Middle-aged is focused on houses, property, and vehicles for the family.

 

ii. Income

Income can influence the buying behavior of a person. Higher-income gives higher purchasing power to consumers. When a consumer has higher disposable income, it gives more opportunities for the consumer to spend on luxurious products. Whereas low-income or middle-income group consumers spend most of their income on basic needs such as groceries and clothes.

 

iii. Occupation

The occupation of a consumer influences buying behavior. A person tends to buy things that are appropriate to this/her profession. For example, a doctor would buy clothes according to this profession while a professor will have a different buying pattern.

 

iv. Lifestyle

Lifestyle is an attitude and a way in which an individual stay in society. Buying behavior is highly influenced by the lifestyle of a consumer. For example when a consumer leads a healthy lifestyle, then the products he buys will relate to healthy alternatives to junk food.

 

5. Economic Factors

Consumer buying habits and decisions greatly depend on the economic situation of a country or a market. When a nation is prosperous, the economy is strong, which leads to a greater money supply in the market and higher purchasing power for consumers. When consumers experience a positive economic environment, they are more confident to spend on buying products.

Whereas, a weak economy reflects a struggling market that is impacted by unemployment and lower purchasing power.

Economic factors bear a significant influence on the buying decision of a consumer. Some of the important economic factors are:

 

i. Personal Income

When a person has a higher disposable income, the purchasing power increases simultaneously. Disposable income refers to the money that is left after spending on the basic needs of a person.

When there is an increase in disposable income, it leads to higher expenditure on various items. But when the disposable income reduces, parallelly the spending on multiple items also reduced.

 

ii. Family Income

Family income is the total income from all the members of a family. When more people are earning in the family, there is more income available for shopping for basic needs and luxuries. Higher family income influences the people in the family to buy more. When there is a surplus income available for the family, the tendency is to buy more luxury items that otherwise a person might not have been able to buy.

 

iii. Consumer Credit

When a consumer is offered easy credit to purchase goods, it promotes higher spending. Sellers are making it easy for consumers to avail of credit in the form of credit cards, easy installments, bank loans, hire purchases, and many such other credit options. When there is higher credit available to consumers, the purchase of comfort and luxury items increases.

 

iv. Liquid Assets 

Consumers who have liquid assets tend to spend more on comfort and luxuries. Liquid assets are those assets, which can be converted into cash very easily. Cash in hand, bank savings, and securities are some examples of liquid assets. When a consumer has higher liquid assets, it gives him more confidence to buy luxury goods.

 

v. Savings

A consumer is highly influenced by the amount of savings he/she wishes to set aside from his income. If a consumer decided to save more, then his expenditure on buying reduces. Whereas if a consumer is interested in saving less, then most of his income will go towards buying products.

 

 

Process of consumer buying behavior

 

1. Identify the Problem

This is the first stage of the buying process. A consumer will not initiate a purchase without the recognition of the needs or wants. When a consumer feels the need to buy a particular product, he will go for a purchase decision.  There is an unmet need or there is a problem that can be solved by buying a particular product.

Needs arise as there is a problem. For example, you broke the table that you were regularly ling using for your business. And due to this problem, you now have to buy a new table.

Wants arise either because you have to need a product or just because you are influenced by external factors. For example, you see your friends using a laptop for their project work. You might also have seen numerous advertisements about how a laptop can help you in your project work. Due to this influence, you feel you want to upgrade to a laptop though you may already have a desktop. 

In this stage, the marketer should identify the needs of the consumers and offer the products based on their desire. 

 

2. Information search

At this stage, the consumer is aware of his need or want. He also knows that he wants to buy a product that can relieve his problem. Therefore, he wants to know more about the product that can relieve his problem. This leads to the information search stage. 

The consumer will try to find out the options available and the best solution for his problem. The buyer will look for information in internal and external business environments. A consumer may look into advertisements, print, videos, and online and even might ask his friends and family.

When consumers want to buy a laptop, they look for a laptop, its features, price, discounts, warranty, after-sales service, insurance, and a lot of other important features.

Here, a marketer must offer a lot of information about the product in the form of informative videos, demos, blogs, how-to-do videos, and celebrity interviews.

 

3. Evaluation of Alternatives

By now the consumer has done enough research about the kind of product that can solve his problem. The next step is to evaluate alternative products that can solve his problem. Various points of information gathered from different sources are used in evaluating alternatives. 

Generally, consumers evaluate the alternatives based on several attributes of the product. Looks, durability, quality, price, service, popularity, brand, and social media reviews are some of the factors that consumers consider. 

The market offers many products that can solve the problem of a consumer. Hence the consumer has to make a choice after evaluating the various alternatives available.

At the end of this stage, the consumer will rank his choices and pick a product that best matches his needs and wants.  

 

4. Purchase Decision/Purchase

At this point, customers have already explored multiple options. They are aware of the pricing and payment options available. Here, consumers are deciding whether to buy that product or not. Yes, even at this stage they can still drop the purchase and walk away. 

Philip Kotler (2009) says the final purchase decision may be ‘interrupted’ by two factors. Customers may get negative feedback from friends or other customers who bought it. For example, a customer shortlisted a laptop, but his friend gave negative feedback. This will make him change his decision. Furthermore, the decision might also change. Sudden changes in business plans, financial crunch, unexpected higher prices, etc. might lead the consumer to drop the idea of buying the laptop. 

The Consumer chooses the product that he wants to buy, but many times, he may not actually buy it for various reasons. At this stage, a marketer should find out the various reasons why the consumer is hesitating to buy. The reasons could be price, value, and changes in the needs of the consumer.

A marketer needs to step up the game.  Start by reminding the customers of the reason behind their decision to buy the product. Furthermore, give as much information regarding your brand reiterating that you are the best provider of the product that can fulfill his needs. 

Retargeting by simple email reminders can enforce the purchase decision.

 

5. Post-Purchase Evaluation

This is the last stage and is most often ignored by marketers.

After buying the product, customers compare products with their expectations. There can be two outcomes:  Either satisfaction or dissatisfaction.  Consumers will be happy after buying the product if it has satisfied their needs. But in case the product was not up to his expectations, the consumer will be dissatisfied. A consumer can be lost even at this stage.

A dissatisfied customer might feel as though he took an incorrect decision. This will result in returns! Offering an exchange will be a straightforward action. However, even when a customer is satisfied, there is no guarantee that the customer might be a repeat customer. 

Customers, either satisfied or dissatisfied, can take action to distribute their experience in the form of customer reviews. This may be done through reviews on customer forums, websites, social media conversations, or word of mouth.

A marketer has to make sure that the consumer will be satisfied with the product so that his experience will lead to repeat customers. Brands need to be careful to create a positive post-purchase experience.

 

Types of marketing segmentation

 

Demographic Segmentation

Demographic segmentation is one of the simple, common methods of market segmentation. It involves breaking the market into customer demographics such as age, income, gender, race, education, or occupation. This market segmentation strategy assumes that individuals with similar demographics will have similar needs.

Example: The market segmentation strategy for a new video game console may reveal that most users are young males with disposable income.

Firmographic Segmentation

Firmographic segmentation is the same concept as demographic segmentation. However, instead of analyzing individuals, this strategy looks at organizations and looks at a company's number of employees, number of customers, number of offices, or annual revenue.

Example: A corporate software provider may approach a multinational firm with a more diverse, customizable suite while approaching smaller companies with a fixed fee, more simple product.

Geographic Segmentation

Geographic segmentation is technically a subset of demographic segmentation. This approach groups customers by physical location, assuming that people within a given geographical area may have similar needs. This strategy is more useful for larger companies seeking to expand into different branches, offices, or locations.

Example: A clothing retailer may display more raingear in their Pacific Northwest locations compared to their Southwest locations.

Behavioral Segmentation

Behavioral segmentation relies heavily on market data, consumer actions, and the decision-making patterns of customers. This approach groups consumers based on how they have previously interacted with markets and products. This approach assumes that consumers' prior spending habits are an indicator of what they may buy in the future, though spending habits may change over time or in response to global events.

Example: Millennial consumers traditionally buy more craft beer, while older generations are traditionally more likely to buy national brands.1

Psychographic Segmentation

Often the most difficult market segmentation approach, psychographic segmentation strives to classify consumers based on their lifestyle, personality, opinions, and interests. This may be more difficult to achieve, as these traits (1) may change easily and (2) may not have readily available objective data. However, this approach may yield the strongest market segment results as it groups individuals based on intrinsic motivators as opposed to external data points.

Example: A fitness apparel company may target individuals based on their interest in playing or watching a variety of sports.

 

Components of the marketing mix

1. Product (or Service)

Your customer only cares about one thing: what your product or service can do for them. Because of this, prioritize making your product the best it can be and optimize your product lines accordingly. This approach is called “product-led marketing.” In a marketing mix, product considerations involve every aspect of what you're trying to sell. This includes:

• Design
• Quality
• Features
• Options
• Packaging
• Market positioning

Five components of successful product-led marketing are important for product marketers to take into consideration::

• Get out of the way. Let your product or service sell itself. Focus your marketing efforts on getting consumers to try what you have to offer so they can learn its value for themselves.
• Be an expert (on your customers). Know your customer's needs and use that knowledge to help communicate your product's value.
• Always be helping. Position yourself as an ally by creating informative content that meets your target customers’ needs, and they'll be more likely to buy from you. (This is also called content marketing.)
• Share authentic stories. Encourage happy customers to share their experiences and tell others why they appreciate your brand.
• Grow a product mindset. Focus on your product before you consider how to sell it. Invest in development, and the product quality will take care of the rest.

2. Price

Many factors go into a pricing model. Brands may:

• Price a product higher than competitors to create the impression of a higher-quality offering.
• Price a product similar to competitors, then draw attention to features or benefits other brands lack.
• Price a product lower than competitors to break into a crowded market or attract value-conscious consumers.
• Plan to raise the price after the brand is established or lower it to highlight the value of an updated model.
• Set the base price higher to make bundling or promotions more appealing.

Consider what you're trying to achieve with your pricing strategy and how the price will work with the rest of your marketing strategy. Some questions to ask yourself when selling products:

• Will you be offering higher-end versions at an additional cost?
• Do you need to cover costs right away, or can you set a lower price and consider it an investment in growth?
• Will you offer sales promotions?
• How low can you go without people questioning your quality?
• How high can you go before customers think you’re overpriced?
• Are you perceived as a value brand or a premium brand?

3. Promotion

Promotion is the part of the marketing mix that the public notices most. It includes television and print advertising, content marketing, coupons or scheduled discounts, social media strategies, email marketing, display ads, digital strategies, marketing communication, search engine marketing, public relations, and more.

All these promotional channels tie the whole marketing mix together into an omnichannel strategy that creates a unified experience for the customer base. For example:

• A customer sees an in-store promotion and uses their phone to check prices and read reviews.
• They view the brand's website, which focuses on a unique feature of the product.
• The brand has solicited reviews addressing that feature. Those reviews appear on high-ranking review sites.
• The customer buys the product and you’ve sent a thank you email using marketing automation.

Here are the ways you can use these channels together:

• Make sure you know all the channels available and make the most of them to reach your target audience.
• Embrace the move toward personalized marketing.
• Segment your promotional efforts based on your customers' behavior.
• Test responses to different promotions and adjust your marketing spending accordingly.
• Remember that promotion isn't a one-way street. Customers expect you to pay attention to their interests and offer them solutions when they need them.

4. Place

Where will you sell your product? The same market research that informed your product and price decisions will inform your placement as well, which goes beyond physical locations. Here are some considerations when it comes to place:

• Where will people be looking for your product?
• Will they need to hold it in their hands?
• Will you get more sales by marketing directly to customers from your own e-commerce website, or will buyers be looking for you on third-party marketplaces?
• Do you want to converse directly with your customers as they purchase, or do you want a third party to solve customer service issues?

5. People

People refer to anyone who comes in contact with your customer, even indirectly, so make sure you're recruiting the best talent at all levels—not just in customer service and sales force.

Here’s what you can do to ensure your people are making the right impact on your customers:

• Develop your marketers’ skills so they can carry out your marketing mix strategy
• Think about company culture and brand personality.
• Hire professionals to design and develop your products or services.
• Focus on customer relationship management, or CRM, which creates genuine connections and inspires loyalty on a personal level.

6. Packaging

A company's packaging catches the attention of new buyers in a crowded marketplace and reinforces value to returning customers. Here are some ways to make your packaging work harder for you:

• Design for differentiation. A good design helps people recognize your brand at a glance, and can also highlight particular features of your product. For example, if you’re a shampoo company, you can use different colors on the packaging to labeling different hair types.
• Provide valuable information. Your packaging is the perfect place for product education or brand reinforcement. Include clear instructions or an unexpected element to surprise and delight your customers.
• Add more value. Exceed expectations for your customers and give them well-designed, branded extras they can use, like a free toothbrush from their dentist, a free estimate from a roofer, or a free styling guide from their hairdresser.

7. Process

Prioritize processes that overlap with the customer experience. The more specific and seamless your processes are, the more smoothly your staff can carry them out. If your staff isn't focused on navigating procedures, they have more attention available for customers—translating directly to personal and exceptional customer experiences.

Some processes to consider:

• Are the logistics in your main distribution channel cost-efficient?
• How are your scheduling and delivery logistics?
• Will your third-party retailers run out of products at critical times?
• Do you have enough staff to cover busy times?
• Do items ship reliably from your website?

 

Stage of product life cycle

Introduction Stage

The introduction phase is the first time customers are introduced to the new product. A company must generally include a substantial investment in advertising and a marketing campaign focused on making consumers aware of the product and its benefits, especially if it is broadly unknown what the good will do.

During the introduction stage, there is often little to no competition for a product as other competitors may be getting a first look at rival products. However, companies still often experience negative financial results at this stage as sales tend to be lower, promotional pricing may be low to drive customer engagement, and the sales strategy is still being evaluated.

Growth Stage

If the product is successful, it then moves to the growth stage. This is characterized by growing demand, an increase in production, and expansion in its availability. The amount of time spent in the introduction phase before a company's product experiences strong growth will vary from between industries and products.

During the growth phase, the product becomes more popular and recognizable. A company may still choose to invest heavily in advertising if the product faces heavy competition. However, marketing campaigns will likely be geared towards differentiating their product from others as opposed to introducing their goods to the market. A company may also refine its product by improving functionality based on customer feedback.

Financially, the growth period of the product life cycle results in increased sales and higher revenue. As the competition begins to offer rival products, competition increases, potentially forcing the company to decrease prices and experience lower margins.

Maturity Stage

The maturity stage of the product life cycle is the most profitable, while the costs of producing and marketing decline. With the market saturated with the product, competition now higher than at other stages, and profit margins starting to shrink, some analysts refer to the maturity stage as when sales volume is "maxed out".

Depending on the good, a company may begin deciding how to innovate its product or introduce new ways to capture a larger market presence. This includes getting more feedback from customers, their demographics, and their needs.

During the maturity stage, competition is now the highest. Rival companies have had enough time to introduce competing and improved products, and competition for customers is usually the highest. Sales levels stabilize, and a company strives to have its product exist in this maturity stage for as long as possible.

 

A new product needs to be explained, while a mature product needs to be differentiated.

Decline Stage

As the product takes on increased competition as other companies emulate its success, the product may lose market share and begin its decline. Product sales begin to decline due to market saturation and alternative products, and the company may choose to not pursue additional marketing efforts as customers may already have determined themselves loyal to the company's products or not.

Should a product be entirely retired, the company will stop generating support for the good and entirely phase out marketing endeavors. Alternatively, the company may decide to revamp the product or introduce it with a next-generation, completely overhauled item. If the upgrade is substantial enough, the company may choose to re-enter the product life cycle by introducing the new version to the market.

The stage of a product's life cycle impacts how it is marketed to consumers. A new product needs to be explained, while a mature product needs to be differentiated from its competitors.

 

Types of pricing

 

1. Penetration pricing

It’s difficult for a business to enter a new market and immediately capture market share, but penetration pricing can help. The penetration pricing strategy consists of setting a much lower price than competitors to earn initial sales. These low prices can draw in new customers and divert revenue from competitors.

This strategy is meant to jumpstart sales and won’t be effective for your long-term growth. You’ll likely take a monetary loss at first in exchange for higher sales volume and brand recognition. As you eventually raise prices to be more in line with the market, prepare for some customers to drop off as they continue to look for the cheapest option. You can combat customer churn upfront with strategies that turn those new buyers into loyal customers.

Pro: Market penetration is much easier than entering with an average price, and you can quickly earn new customers.

Con: It’s not sustainable in the long run and should only be a short-term pricing strategy.

Example: A new cafe opens up in town and offers coffee that is 30% cheaper than any other cafe in the area. They also focus on excellent customer service and implement a loyalty program that offers every tenth coffee for free. When customer demand has built up, the cafe slowly starts increasing the coffee price to a more profitable level. This gives customers a chance to build a taste for the coffee and other products and enjoy the great service as they work towards their free tenth coffee. Many of them will keep coming back as the price rises.

 

2. Skimming pricing

Businesses that charge maximum prices for new products and gradually reduce the price over time follow a price-skimming strategy. In this type of pricing strategy, prices drop as products end their life cycle and become less relevant. Businesses that sell high-tech or novelty products typically use price skimming.

Pro: You can maximize profits of new products and make up for production costs.

Con: Customers may become frustrated that they purchased at a higher price and watch as the price gradually declines.

Example: A home entertainment store starts selling the latest, most advanced television well above market price. Prices then gradually decrease over the year as newer products come to market.

 

3. High-low pricing

High-low pricing is similar to skimming, except the price drops at a different rate. With the high-low pricing method, the price of a product drops significantly all at once rather than at a gradual pace. Retail businesses that sell seasonal products typically use a high-low strategy, often using a promotion to clear stock they won’t be able to sell for much longer.

Pro: You can clear your inventory of out-of-date products by discounting them and putting them on clearance.

Con: Customers may wait for impending sales rather than purchasing at full price.

 

4. Premium pricing

Premium pricing occurs when prices are set higher than the rest of the market to create perceived value, quality, or luxury. If your company has a positive brand perception and a loyal customer base, you can often charge a premium price for your high-quality, branded products. 

This type of pricing strategy works especially well if your target audience includes early adopters who like to be ahead of the pack. Companies that sell luxury, high-tech, or exclusive products—especially within the fashion or tech industry—often use a premium pricing strategy. 

Pro: Profit margins are higher since you can charge much more than your production costs.

Con: This type of pricing strategy only works if customers perceive your product as premium.

Example: A beauty salon builds up credibility within its market (such as via word of mouth or online reviews) and offers its services for 30% higher than its competitors.

 

5. Psychological pricing

Psychological pricing strategies play on the psychology of consumers by slightly altering price, product placement, or product packaging. Some psychological pricing techniques include offering a “buy two, get one half off” deal or setting the price to $9.99 rather than $10 (“well, it’s cheaper than $10, isn’t it?”). Some businesses also use artificial time constraints to speed customers into stores, such as one-day or limited-time sales.

Nearly any type of business can use this strategy, but retail and restaurant businesses most commonly employ this method as it creates the perception of getting a bargain.

Pro: You can sell more products by slightly tweaking your sales tactics without losing profits.

Con: Some customers may perceive it as being tricky for sales, which could potentially tarnish your reputation or lead to missed sales.

Example: A restaurant sets a gourmet hamburger’s price at $12.95 to lure customers into purchasing at a perceived lower price compared to $13.

 

6. Bundle pricing

Bundle pricing is a type of promotional pricing where two or more similar products or services are sold together for one price. Bundling is an effective way to upsell additional products to customers or add value to their purchases. Restaurants, beauty salons, and retail stores are among the many businesses that apply this type of pricing strategy.

Pro: Customers discover new products they weren’t initially planning to buy and may end up purchasing them again.

Con: Products that are sold within a bundle will be bought less often individually since consumers are saving money on a bundled purchase.

Example: A taco cantina sells tacos, tortilla chips, and salsa individually but offers a discounted price if customers buy an entire meal with all of these items.

 

7. Competitive pricing

The competitive pricing strategy sets the price of your products or services at the current market rate. Your pricing is determined by all other products in your industry, which helps you stay competitive if your business is in a saturated industry. You can also decide to price your products above or below the market rate, as long as it’s still within the range of prices set by all competitors in your industry. 

With the advent of e-commerce, it‘s now easy to compare prices before purchasing—and 96% of consumers do. This allows you to win over customers with a price slightly below the market average.

Pro: You can maintain market share in a competitive market and attract customers who are interested in paying slightly less than your competitors’ rates.

Con: You need to diligently watch average market prices to maintain a competitive advantage for price-conscious consumers.

Example:  A landscaping company compares its prices to local competitors. It then sets the price for its most popular service, a lawn maintenance package, below the market average to attract price-sensitive customers.

 

8. Cost-plus pricing

Cost-plus pricing involves taking the amount it cost you to make the product and increasing that amount by a set percentage to determine the final price. You can work backward to determine your markup percentage by first figuring out how much you want to profit from each product sold.

Pro: Profits are more predictable since you’re setting your markup price to a fixed percentage.

Con: Since this type of pricing strategy doesn’t account for external factors, like your competitors’ pricing, or market demand, you may miss out on sales if you set your markup percentage too high.

Example: A pizza shop adds up the cost of its ingredients and labor, then sets the pizza price to receive a 20% profit margin.

9. Dynamic pricing

Dynamic pricing matches the current market demand for a product. Also known as demand pricing, this pricing strategy most often occurs when the product at hand fluctuates on a daily or even hourly basis. Industries like hotels, airlines, and event venues set different prices daily and apply this strategy to maximize profits.

Pro: You can increase overall revenues by raising prices when demand is on the rise.

Con: Dynamic pricing requires complex algorithms that small businesses may not have the ability to manage.

Example: A boutique hotel raises its room rates for one weekend because there is a popular summer festival in town.

 

10. Economy pricing

Economy pricing consistently undercuts competitors to make a profit through high sales volumes. This type of pricing strategy usually goes hand-in-hand with low production costs. It works well in the commodity goods sector and is used by companies like Walmart and Costco.

Pro: You‘re likely to sell a large volume of products.

Con: You won’t be making much on each item, so you’ll need to sell more goods than usual. Also, if you don‘t manage your pricing carefully, you might create the perception of a low-value product or business.

Example: A superstore sells a generic brand of tea for 10% less than its local grocery store competitors.

11. Freemium pricing

Freemium pricing offers a basic product or service for free, then encourages customers to upgrade to the paid, premium version to access more features or choices. Potential customers get a taste of what the product or service can do for them and gain insight into your company. This is a popular strategy for software businesses and membership-based organizations.

Pro: You‘re building trust and educating potential customers about your product. You also get their contact details so you can stay in touch through email marketing.

Con: You don’t make money from every customer immediately and many users may choose not to upgrade.

Example: A software company offers basic virus protection for free with the option to upgrade to several other tiers of progressively higher levels of online security.

12. Loss-leader pricing

Loss-leader pricing brings customers to your store to buy a highly discounted product (the loss leader). While they’re there, they might buy other full-price items they didn’t plan on—which should more than makeup for the loss of the original product.

Pro: This type of pricing strategy attracts customers who might not otherwise visit your store and exposes them to your full range of products.

Con: Some customers will only buy the loss leader product (and possibly many of them), so you need to watch your profit and stock levels closely.

Example: A supermarket offers bread at a very low price on Fridays, attracting people who might then do all their shopping for the week.

 

Example: A boutique clothing store sells women’s sundresses at a high price during the summer and then puts them on clearance once autumn arrives.

 

 

Factor affecting pricing decision

1.    Objectives of the Business: There may be various objectives of the firm such as getting a reasonable rate of return, capturing the market, maintenance of control over sales and profits, etc. A pricing policy thus should be established only after proper consideration of the objectives of the firm.

2.    Cost of the Product: The cost and price of a product are closely related. Normally, the price cannot or shall not fix below its cost (including the product, administrative and selling costs). Price also determines the cost.

3.    Market Position. The prices of the products of different producers are different either because of differences in quality or because of the goodwill of the firm. A reputed concern may fix higher prices for its products, on the other hand, a new producer may fix lower prices for its products. Competition may also affect pricing decisions.

4. Competitors' Prices: Competitive conditions affect the pricing decisions. The company considers the prices fixed and the quality maintained by the competitors for their products.

5.    Distribution Channels Policy: The nature of distribution channels used, and trade discounts which have to be allowed to distributors, and distribution expenses also affect the pricing decisions.

6.    Price Elasticity and Demand Elasticity: Price elasticity affects the decisions of price fixation. Price elasticity means the consequential change of demand for the change in the prices of the commodity. If demand is elastic, the firm should not fix high prices rather it should fix lower prices than that of the competitors.

7.    Product’s Stage in the Life Cycle Product: Pricing decision is affected by the stage of the product in its life cycle. In the introductory stage of the product, it is the price strategy that determines the price of the product.

8.    Product Differentiation: The price of the product also depends upon the characteristics of the product. To attract customers different characteristics are added to the product such as quantity, size, color, alternative uses, etc.

9.    Buying Patterns of the Consumers: If the purchase frequency of the product is higher, lower prices should be fixed to have a low-profit margin. It will facilitate increasing the sale volume and the total profits of the firm.

10.                    Economic Environment: In a recession period, the prices are reduced to a sizable extent to maintain the level of turnover. On the other hand, the price increased in the boom period to cover the increasing cost of production and distribution.

11.                    Government Policy: Price discretion is also affected by the price control by the government through the enactment of legislation when it is thought proper to arrest the inflationary trend in prices of certain commodities.

 

Explain advertisement copy with merit and demerit of advertisement.

Advertisement copy is the subject matter or the message of the advertisement. Stanton defines advertisement copy as "all the written or spoken material in it, including the headline, coupons, and advertiser's name and address, as well as the main body of the massage. The importance of a good advertisement copy can hardly be overemphasized. It is the heart of the entire advertising program. it is the advertisement copy that contains the message and helps in communicating it to the prospects. It must first attract the attention of the prospect and hold his interest long enough to stimulate a desire for the product, service, or idea, and finally, it must move the prospect to some kind of action. To achieve this an advertisement copy must be prepared with utmost care and by experts in the field. The copy should be such that attracts attention, creates interest, produces a desire, and ultimately leads the prospect to action.

List of the Advantages of Advertising

1. Advertising is what sets companies apart from each other.
Advertising is the fastest way for an organization to prove the expertise it offers in its industry. This marketing approach allows a company to look at the specific pain points its goods or services address so that customers can independently decide if there is value available to consider. The free-market system allows consumers to make choices based on their needs for innovation, so the advantage here is that improved communication occurs from the business to the consumer.

2. Companies can reach multiple markets and population groups simultaneously.
Advertising is one of the most straightforward ways to contact multiple demographics simultaneously. This investment helps a company to discover who its primary consumers are in better ways, along with the demographics to which they belong. Marketing through paid and unpaid platforms contributes to data that enables prospect duplication.

Advertising also allows a company to reach out to multiple new markets to judge how influential its marketing messages can be in the future.

3. Businesses can concentrate their advertising on a single population group.
Advertising enables a company to target one population group specifically. We see this benefit daily through direct mail efforts, email marketing blasts, and television commercials. When you can time these messages to correspond with times or circumstances where a consumer feels a pain point, then a successful conversion is more likely to happen. It forms a natural networking opportunity that helps prospects engage with a brand message because they can acknowledge the created value proposition.

 

4. Advertising creates economic benefits at every level.
The advertising economy in the United States is responsible for almost 20 million jobs. It is available in every market at each level, from ultra-local to international campaigns. This industry provides opportunities for almost every skill, ranging from sales-based approaches to creative careers like graphic design or writing. When successful outreach efforts occur, then businesses increase revenues. That creates even more jobs that support other companies at every level.

This cycle repeats itself every time a new advertising campaign occurs. Although there are no guarantees for success, a company must make itself known to its community so customers become aware of its goods or services. That means there’s always a place for it.

5. The advertising industry creates a global culture.
Every global event that involves participation, goods, or services requires advertising content to increase exposure. The budget for the Olympic Games in each cycle is several billion dollars. Companies use sponsorships, naming rights, and other strategies to increase brand awareness in a variety of ways. It allows us to work together to support the common good at every level.

Even a group of businesses that support a youth soccer league get to take advantage of this benefit. Although the benefits are more localized with that support, it’s still creating a global culture within that community.

6. It allows the creation of niche expertise presentations.
The prevalence of PDF downloads, ebooks, whitepapers, and similar written content is a form of advertising that businesses use to prove their expertise. Advertising is moving toward a place where the value to the consumer is the priority instead of what the customer can do for the business. This benefit works for B2B and B2C firms because it shows people what can be done for them instead of telling them what can happen.

That’s why this form of advertising is so effective. It builds loyalty by focusing on relationships instead of relying on logo recognition or a tagline to stay at the top of the mind of possible consumers.

7. Advertising helps a customer make positive choices.
Each customer has a different preference for specific products or services based on the pain points they encounter in life. Some choices are going to be more appealing than others, which is why businesses promote what they offer proactively. If someone can compare value propositions in real-time situations to determine what options provide the best value, then that ability increases the likelihood of a transaction taking place. Businesses can provide specific or broad data about their goods or services to each demographic in unique ways to encourage this advantage. It is a benefit that can lead to tremendous growth opportunities when handled appropriately.

8. It is a straightforward way to support moral or social issues.
Companies can support the public good by producing advertising campaigns that can bring more awareness to specific societal issues. Homelessness, cyberbullying, and similar concerns receive exposure in ways that wouldn’t be available to consumers without this marketing effort. Even though there are production costs to consider with this advantage, the value that occurs through increased revenues and economic activities from helping others more than makes up for the initial investment.

List of the Disadvantages of Advertising

1. Everyone is advertising.
The average person gets exposed to over 2,000 brand messages every day because of advertising. That makes this marketing effort less effective unless there is a way for a company to rise above all of that noise. This disadvantage is the reason why you see businesses like Geico take unique approaches to this investment, using a mix of humor and character development to create something memorable.

Most people spend less than five seconds to determine if an advertisement is worth their attention. If that content fails, then the remainder of the ad gets forgotten.

2. Advertising cannot produce guaranteed results.
Businesses take a gamble when they pay for advertising. This marketing effort doesn’t come with a guarantee. The companies that purchased TV spots during the 2020 Super Bowl were paying over $5 million for a segment. That’s a massive investment in something that may not produce additional revenues.

Although there is value in brand recognition, that outcome only translates to investment when it creates an eventual conversion. Having someone know that Flo represents Progressive isn’t beneficial if that person always uses public transportation. That’s why most small businesses focused on targeted, localized ads as a way to create results.

3. The cost of advertising can be a disadvantage to small businesses.
The cost of TV advertising at local television stations is at least $5 for every 1,000 viewers during a 30-second commercial. Then you have the cost of creative development when taking this marketing approach to consider. By the time the first spot hits the air, a company has likely spent at least $10,000 to create the materials and purchase the airtime. National spots are much more expensive. Businesses that purchase a 30-second television ad on a national broadcast spent an average of $115,000 per slot in 2019.

4. Potential customers may be on multiple platforms.
If brand recognition is the goal of an advertising effort, then a business may need to invest in multiple platforms to gain the levels of familiarity they require. You can advertise in printed publications, online blogs, television, radio, Internet ad services, and all of the other traditional methods. A company might find over 100 different ways to reach its customers. When an advertising budget is financially limited, then finding out where most people are consistently becoming a top priority.

5. Advertising requires interesting materials to be useful.
The best advertising efforts create memorable experiences for targeted consumers. If you’re a science-fiction fan, then you probably remember all of the exposure Taco Bell paid for itself in the movie Demolition Man. If you’re a fan of older superhero movies, then you may remember the giant Coca-Cola billboard blowing up in Superman. If a business can’t create such an experience, then the entire message gets forgotten.

This disadvantage means that every business must continuously invest in innovative marketing approaches to stay relevant. It’s also the reason why you see brands trying to copy the success that others find in this arena.

6. The “Fake News” movement tarnishes the reputation of advertisers.
Politics in the United States has become a fractured, cantankerous space where anyone who doesn’t agree becomes an enemy. If a business advertises through a traditional media outlet that promotes a political agenda or news stories that someone finds to be disagreeable, then that company’s brand becomes directly tied to that experience. Although the people who agree will be more likely to purchase goods or services, those who don’t will boycott the agency indefinitely.

7. Advertising increases the risk of a brand message getting tarnished.
Advertising can be memorable for all of the wrong reasons sometimes, leaving viewers to wonder what a business was thinking when putting a spot together. Qiao often receives credit for putting together one of the most racist commercials in history by having a Chinese woman forcing a black man into her washing machine after he whistles at her. Once the washing cycle is finished, a winking Asian man emerges.

Miracle Mattress put together a local advertising spot that mocked the events of 9/11, including having two stacks of mattresses fall on workers. Burger King unleashed a regional spot for their Texican Whopper that had the tagline “The taste of Texas with a little spicy Mexican” – and the ad featured a tall American cowboy and a short Mexican wrestler.

8. Most people consider advertising to be a nuisance.
Extravagant advertising may have a positive effect on the economy. Still, it tends to harm consumers when the same promotions happen repetitively. This disadvantage occurs in the United States every two years during the election cycles when political ads take over the television and radio. It can also happen when spots frequently occur within the same broadcast or publication.

Hundreds of millions of dollars in advertising may get spent on a single election, exposing populations to competing messages that get monotonous and bothersome when they air several times per hour.

9. The targeted consumers may not see the marketing message from an advertising effort.
New technologies make it easier than ever before for consumers to proactively opt out of viewing advertisements. Popup blockers for Internet browsers can eliminate almost every ad that might display when users are online. Families can fast-forward through ads on broadcast networks when they record shows to watch. Some providers even offer tech that eliminates this marketing effort automatically.

Even if someone is watching live TV, an advertisement break creates an opportunity to walk away from the television. Companies can pay millions without ever knowing if their intended audience is available to watch what they’ve put together.

 

Process and quality of personal selling

The process of personal selling includes prospecting and evaluating, preparing, approaching and presenting, overcoming objections, closing the sale, and follow-up service.

1. Prospecting and evaluating:

The effort to develop a list of potential customers is known as prospecting. Salespeople can find potential buyers, names in company records, customer information requests from advertisements, telephone and trade association directories, current and previous customers, friends, and newspapers. Prospective buyers are predetermined, by evaluating (1) their potential interest in the salesperson’s products and (2) their purchase power.

2. Preparing:

Before approaching the potential buyer, the salesperson should know as much as possible about the person or company.

3. Approach and presentation:

During the approach, which constitutes the actual beginning of the communication process, the salesperson explains to the potential customer the reason for the sales, possibly mentions how the potential buyer’s name was obtained, and gives a preliminary explanation of what he or she is offering. The sales presentation is a detailed effort to bring the buyer’s needs together with the product or service the salesperson represents.

4. Overcoming objections:

The primary value of personal selling lies in the salesperson’s ability to receive and deal with potential customers’ objections to purchasing the product. In a sales presentation, many objections can be dealt with immediately. These may take more time, but still may be overcome.

5. Closing the sale:

Many salespeople lose sales simply because they never asked the buyer to buy. Several times in a presentation the salesperson may gauge how near the buyer is to closing.

6. Follow up:

To maintain customer satisfaction, the salesperson should follow up after a sale to be certain that the product is delivered properly and the customer is satisfied with the result.

Essential Qualities Of A Good Salesperson

1. Practicing Active Listening

Active listening is an essential quality. Without this ability, the salesperson is just marketing their product or services and not selling. To sell, one has to identify the real need of the client and match that with a solution that meets the need as well as the client's other constraints like financial, technical, or structural.

2. Finding An Emotional Connection

The best salespeople know how to find a deeper emotional connection to whatever it is they’re selling. People make decisions based on their feelings much more than their logic. So the strongest salespeople are strong storytellers selling something they emotionally connect with. It’s not something you can fake as any buyer will sense your lack of integrity if you do.

3. Understanding The Product

Understand your product and the value it creates. Trying to sell a product that isn't what the client already wants (or would want if they knew it existed) is challenging. Good salespeople actually choose the product they want to sell and make sure it's a fit for the market. A company will not have a good sales team if they don't have a good product.

4. Having Excellent Interpersonal Skills

A successful salesperson will have excellent interpersonal skills and focus on building authentic connections with their customers. Customers want a salesperson to be personally invested in their success, not just landing the sale.

5. Approaching Sales As A Service

The best salespeople are those who are humble and those who approach sales as a service to others. It's not about convincing someone to buy something they don't need or telling people why you're so great. It's about identifying what creates value for them. If that's something you can provide, helping the potential buyer navigate through their concerns to the point of making a purchasing decision.

6. Asking Great Questions

Good salespeople—the very best—ask great questions. They can follow a question path that gets to the root of what's important to the prospective customer. Those answers to those questions provide the information needed for a good salesperson to deliver a winning solution. 

7. Putting Yourself In Their Shoes

The ability to put themselves in the shoes of the customer is key for any great salesperson. This is an important quality that can enable the salesperson to tackle objections, have a deeper emotional connection with the customer, and even increase the odds of securing the deal on hand. This also builds trust and enables the salesperson to table objections with more ease. 

8. Exhibiting Emotional Intelligence

Elite salespeople exhibit emotional intelligence (EQ). While a certain level of IQ is required to execute the task (competence), intellectual abilities alone will not bridge the gap from prospect to high-value client. EQ will drive rapport and trust which are foundational to influencing (advocacy) or selling (closing). This ability to positively influence starts with emotional intelligence. 

9. Being Honest With Clients

Honesty is key. If a salesperson is honest with his client, there is a high likelihood of closing a deal and creating a long-term relationship for future deals. The better connections a salesperson has, the better he is. 

10. Being Likeable And Trustworthy

A key trait is definitely likeability. If someone likes you they are more likely to trust you which puts you in a power position from a sales perspective. A good way to build likeability is to read the room and immediately identify connection points with prospects. Social media is a great way to do this before a meeting as you can quickly identify values, hobbies, and passion points. 

11. Having A Commitment To Growth

Great salespeople should exhibit a commitment to growth! Salespeople who cannot update their approach based on their experience have to take a brute force approach, hoping their prospect will be receptive to their sales style. Salespeople who commit to growing and learning from the prospects that didn't say yes will ultimately have better and better client conversations in the long term. 

12. Being Optimistic

One quality that we do not innately look for is optimism. Selling is a unique skill and top-selling individuals are highly influenced by an inner belief that no matter what happens during the present sales call, the next pitch, call, or dialogue will have a better outcome. Clients can easily sense energy, drive, and confidence in a salesperson. All three traits are greatly impacted by optimism. 

13. Being Relatable And Knowledgeable

Relatability is key. Consult and not sell. Please hear the need and educate them about your solution—you’re halfway there. Accept the pros and cons of your business model and maintain transparency; don’t over- or underpromise and you’re already on your way to a successful and long-term business association! 

14. Building Trust By Asking Questions

Trust is of utmost importance. People buy from people they trust. Great salespeople build trust with their ability to ask the right questions, listen and provide solutions aligned with client needs and goals. Great salespeople also do not overpromise and underdeliver.

 

 

Types of retail outlet and their characteristics

Specialty stores

 

Specialty stores, as the name suggests, have a relatively narrow product line. They usually sell one or two products or multiple products of similar nature. Generally, specialty stores sell products to a group of customers that are not really price-driven.

For example, an electronics retail store may sell air conditioners, water purifiers, refrigerators, etc. Similarly, a sports store may specialize in equipment related to a particular sport or multiple sports.

In a broader sense, company franchises or independent agencies selling products of one company can also be categorized as specialty stores. For example, a retailer may sell multiple products of Pel or Dawlance Company.

Department stores

 

Departmental stores are generally bigger retail units where you can find a wide array of products. These stores are generally located in shopping malls, but some retailers may have their own separate spaces. Department stores may sell garments, beauty products, toys, FMCGs, eatable items, etc. Moreover, department stores usually have different sections for different types of products.

However, it is important to note that department stores don’t cover as many categories as hypermarkets or supermarkets. Common examples include Kohl’s, Macy’s, Pantaloons, etc.

Convenience stores

Convenience stores basically provide commonly or routinely used goods to customers near their doorsteps. These stores have a narrow product line and may not have much of variations in the products they sell. Convenience stores have smaller stocks, and their prices are higher than departmental stores or hypermarkets.

Convenience stores are successful in attracting customers because people usually avoid traveling miles just to buy a few regular-use products. You can find these types of stores on every other street or block.

Supermarkets

Supermarkets are probably the most comprehensive and highly categorized form of retailing. Supermarkets mostly target FMCGs such as eatables, groceries, laundry, bakery products, detergents, soaps, shampoos, etc. Supermarkets have less focus on durable consumer goods, but the best thing about supermarkets is the number of variations/options available.

Unlike convenience stores, you can find multiple varieties of a single product, and prices are also lower. Supermarkets pay attention to segmentation/categorization to attract customers. Common examples include Costco, Whole Foods, and Big Bazaar.

Discount stores

Discount stores, as the name suggests, attract customers by selling products at discounted prices. These stores earn profits by lowering prices and increasing sales volume. Walmart is a classic example of discount store retailing. Although Walmart can be categorized as a supermarket, its marketing model is based on attracting customers by offering huge discounts. Basically, discount stores buy products from manufacturers in massive quantities and at lower prices. Then, even after offering discounted prices to customers, discount stores can still make high profits due to greater sales volume.

Drug stores/medicine stores

Traditionally, medical stores used to sell medicines and basic medical apparatus, but things have changed now. Drug stores have widened their product line by adding cosmetics, beauty products, common eatable items, healthcare products, basic-to-advanced medical apparatus, personal care products, and groceries as well. In fact, drug stores in many countries are offering basic medical checkups/consultations.

Hypermarkets

Hypermarkets are basically a broadened form of supermarkets with more variation and diverse product lines. Hypermarkets basically provide you FMCGs and durable consumer products under one roof. From electronics to clothing to footwear to cosmetics, you can find almost every product you need as a “residential consumer.”

Another good thing about Hypermarkets is you can find products with different qualities. You can find low, medium, high, and premium-quality products in the same category. Common examples include Tesco, Walmart, Sainsbury, Costco, and Asda.

Used goods store

Selling used or second-hand products have been a common practice for decades, but it was limited to occasional or seasonal selling. Mostly, sellers used to arrange infrequent stalls to sell their used products, but it is now becoming a widely recognized form of retailing. In fact, many renowned brands like Audi are endorsing used goods consumption to normalize it in the communities.

Off-price stores

Off-price stores sell products that are either damaged during transportation or had minor defects during production. Manufacturers or wholesalers sell these products to off-price stores for considerably low prices. However, these products may be cheaper, but they usually don’t last long. Alibaba and Amazon have really promoted the sale of off-price goods.

 

Ecommerce stores

E-commerce retailing is the latest addition to the retailing business, and it indeed is the future. E-commerce stores don’t have to bear distribution and storage costs, thus making it easier for them to sell products at amazingly low prices.

Buyers book their orders on sellers’ websites or social media outlets and make payments online. The company then delivers the product to the given address. E-commerce retailing is becoming a global practice because of changing consumer behavior. Common examples include Amazon, Etsy, Alibaba, eBay, Macy’s, etc.

 

Characteristics of Retailing and Retailers:

1. Retailing brings goods and services closer to the consumers

2. A Retailer is the last link in the distribution channel

3. Retailers buy in large quantities but sell in individual units

4. There are a large number of retailers as compared to manufacturers and wholesalers

5. Retailing can be organized (branded chain stores) or un-organized (that is normal stores that we find in our neighborhood)

6. Retailing provides direct contact with the customers

7. Retailing is the function that keeps an eye on the pulse of the customers

8. Retailing can also be done through online stores, and

9. Provides a variety of products in a single place.

 

 

Types of distribution channel

1. Direct Channel (Zero Level)

As the name suggests, a direct channel or zero level is a distribution level through which an organization directly sells its products to the customers with the involvement of any intermediary. For example, jewelers use direct channels, Apple sells its products directly to the customers through its stores, Amazon sells directly to the consumers, etc. Some of the most common types of direct channels of distribution are Direct sales by appointing salesmen, through the Internet, teleshopping, mail order house, etc. 

2. Indirect Channels

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, 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. 

 

 

Characteristics of service marketing

The defining characteristics of a service are:

Intangibility: Services are intangible and do not have a physical existence. Hence services cannot be touched, held, tasted, or smelt. This is a defining feature of a service and that which primarily differentiates it from a product. Also, it poses a unique challenge to those engaged in marketing a service as they need to attach tangible attributes to an otherwise intangible offering.

1.    Heterogeneity/Variability: Given the very nature of services, each service offering is unique and cannot be exactly repeated even by the same service provider. While products can be mass-produced and be homogenous the same is not true of services. eg: All burgers of a particular flavor at Mcdonald's are almost identical. However, the same is not true of the service rendered by the same counter staff consecutively to two customers.

2.    Perishability: Services cannot be stored, saved, returned, or resold once they have been used. Once rendered to a customer the service is completely consumed and cannot be delivered to another customer. eg: A customer dissatisfied with the services of a barber cannot return the service of the haircut that was rendered to him. At the most, he may decide not to visit that particular barber in the future.

3.    Inseparability/Simultaneity of production and consumption: This refers to the fact that services are generated and consumed within the same time frame. Eg: a haircut is delivered to and consumed by a customer simultaneously unlike, say, a takeaway burger which the customer may consume even after a few hours of purchase. Moreover, it is very difficult to separate a service from the service provider. Eg: the barber is necessarily a part of the service of a haircut that he is delivering to his customer.

 

Characteristics of the marketing mix

 

1) Marketing Mix is the Crux of the Marketing Process: Marketing mix involves many important decisions relating to each element of the mix. The impact of the mix would be the most suitable when proper weightage is given to each element and they are integrated so that the combined effect leads to the best results.

2) Marketing Mix Reviewed Constantly to Meet Changing Requirements: The marketing manager is needed to constantly review the mix and conditions of the market, and make required changes in the marketing mix according to changes in the conditions and face of the market.

3) Changes in External Environment Necessitate Alterations in Mix: Changes keep on taking place in the external environment For many industries, the customer is the most fluctuating variable of the environment Customers' tastes and preferences change very fast Brand loyalty and purchasing power change over some time. The marketing manager has to carry out market analysis regularly to make essential changes in the marketing mix.

4) Changes within the Firm to 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 corresponding changes in the marketing mix.

 

Short note:-

Direct marketing- Direct marketing is a type of marketing campaign whose goal is to initiate a personal relationship between the customer and the marketing organization. In a direct marketing campaign, the marketing organization communicates directly with a pre-selected customer or segment of customers via one or more marketing channels. A key feature of direct marketing is a direct response – organizations that engage in direct marketing must establish the means for customers to respond directly to their marketing efforts, especially with orders and purchase requests.

Direct marketing stands in contrast to traditional advertising mediums that communicate messages on a many-to-one basis. In traditional ad platforms (billboards, print media, broadcast ads, etc.), the marketing organization relies on intermediaries to spread its promotional message to large swaths of consumers, in hopes that some consumers who see the ad will seek out the organization and its products. Direct marketing typically happens directly between the marketing organization and the customer, with no mass messaging and without the use of intermediaries.

Relationship marketing- Relationship marketing is a facet of customer relationship management (CRM) that focuses on customer loyalty and long-term customer engagement rather than shorter-term goals like customer acquisition and individual sales. The goal of relationship marketing (or customer relationship marketing) is to create strong, even emotional, customer connections to a brand that can lead to ongoing business, free word-of-mouth promotion, and information from customers that can generate leads.

Relationship marketing stands in contrast to the more traditional transactional marketing approach, which focuses on increasing the number of individual sales. In the transactional model, the return on customer acquisition cost may be insufficient. A customer may be convinced to select that brand one time, but without a strong relationship marketing strategy, the customer may not come back to that brand in the future. While organizations combine elements of both relationship and transactional marketing, customer relationship marketing is starting to play a more important role for many companies.

Importance of relationship marketing

Acquiring new customers can be challenging and costly. Relationship marketing helps retain customers over the long term, which results in customer loyalty rather than customers purchasing once or infrequently.

Relationship marketing is important for its ability to stay in close contact with customers. By understanding how customers use a brand’s products and services and observing additional unmet needs, brands can create new features and offerings to meet those needs, further strengthening the relationship.

Social marketing- Social marketing is an approach that uses marketing tools to bring social change. Social marketers promote social, environmental, and economic issues. They raise hunger, poverty, sustainability, education, public health, and global warming problems. Through social marketing activities, communities strive to impact people’s behavior, evoke consciousness, and bring change. With social marketing, companies encourage people to be more aware and compassionate with the environment and help those in need.

Social marketing usually has a broad audience of people, and it’s often a problem to reach them. With the help of public funds, social marketers try to change our society for the better.

Why social marketing?

Social marketing helps change the behavior of the masses for the common good. When implementing this approach, companies don’t try to transform people’s perceptions for their benefit but to bring social change. Marketing techniques allow companies to contribute to the well-being of society.

Unlike commercial marketing, social marketing focuses on solving problems that emerge in the world. It aims at evoking consciousness, changing behavior, and helping the environment people live in. It’s possible to reach these goals when people are ready to change. According to statistics, 80 out of 100 adults are ready to contribute to social change.

Since there’s an increasing number of social and environmental problems, sustainability should be the priority of citizens. Negative environmental and social changes worsen the quality of life. To prevent this, some companies turn to social marketing. It questions the major world problems like hunger, poverty, inaccessibility of education, air, water, and noise pollution, global warming, deforestation, loss of biodiversity, etc. They raise these issues to encourage individuals to be more conscious and care about their environment, help people in need, and change their perspectives.

Now that you have a clear understanding of social marketing and its benefits for society, let’s proceed to the next section to find the difference between the two types of marketing to avoid confusion.

 

Marketing ethics- Marketing ethics are a set of moral principles that guide a company's promotional activities. Organizations that establish and implement marketing ethics are typically trying to respect the rights, desires, and expectations of consumers. While business leaders seek to generate operational revenue and earn profits, they may also prioritize the goals of practicing integrity, honesty, and fairness. A company's philosophy of ethics often relates to its organizational mission. Usually, C-level executives, directors, and high-level managers are responsible for creating and enforcing these guidelines. The idea of marketing ethics is similar to the concept of corporate social responsibility (CSR). This term refers to the notion that businesses have certain obligations to fulfill regarding the public and the company's stakeholders. CSR typically emphasizes the importance of integrating social and environmental concerns into business goals and practices. For example, organizations practicing CSR may highlight their commitment to the following types of activities:

·       Treating and paying employees fairly

·       Sourcing sustainable materials

·       Caring for the environment

·       Making charitable donations

·       Addressing social issues

 

Sales promotion- A sales promotion is a marketing strategy where a business will use short-term campaigns to spark interest and create demand for a product, service, or other offers.

 

Sales promotions can have many objectives and ideal outcomes, which we will explore in detail throughout this article.

 

Primarily, sales promotions are used to motivate buying behavior or trigger an uptick in purchases in the short term, to reach a benchmark or goal. Although the immediate purpose of a sales promotion is an uptick in sales, there are plenty of other benefits to building out a strategic sales promotion technique with your marketing team.

Some of the benefits of running a sales promo include:

 

Creating loyalty and enthusiasm for your brand

Increasing sales and revenue

Gaining valuable insights into customer behavior and price sensitivity

Strategically using sales promotions helps support a variety of business interests and keep your existing audience engaged with your offers.

 

The downside of sales promotions is that some businesses suffer from becoming overly dependent on them to boost sales. As a result, they enter a precarious short-term marketing cycle and struggle to plan for long-term goals and growth.

 

Take the “sales promotion trap” as an example. If you consistently run promotions, your consumers may come to expect them and only buy products or services when they’re on promotion. This can work to:

 

Devalue your brand

Make it difficult to sell products or services at your standard price point.

Howard Freidman, former CEO of Aptela (Now Vonage Business) speaks to this pain point:

 

“The trap is running constant promotions to spike sales. As a result, [owners and manufacturers] condition consumers to wait for them and erode their price integrity.”

 

Further, if your competitors also run tons of sales promotions, the market itself may be negatively affected. Bidyut Bikash Das, former Demand Manager at OYO, notes that “...when several competitors extensively use promotions to differentiate products or services, and other competitors copy the strategy, [it can result in] no differential advantage and a loss of profit margins to all.”

 

Therefore, the definition of a good sales promotion is one that’s run strategically to work in conjunction with your sales cycle.

 

In addition, too many promotions can damage your business reputation because the offers no longer seem exclusive or valuable and clients begin to see your product or service as worth less than what you typically sell it for.

 

Overall, sales promotions are a powerful tool to rapidly inject sales, attention, and demand into your business. To ensure they remain effective, they should be used strategically and with a specific goal in mind.

 

Although the main driver of running a sales promotion is to increase demand for a particular offer, sales promotions can help you to achieve multiple outcomes, depending on your end goals.