School of Studies of Management

Jiwaji university Gwalior (M.P.)

BBA 3rd Sem.

Subject: fundamentals of marketing management

Unit-5th

Learning outcomes
L01: Understand the concept of marketing communication.
L02: Describe the elements of marketing communication.
LO3: Describe the importance of marketing communication.
Definition of Marketing Communication

Marketing Communication can be defined as the methodologies and tactics adopted by the
companies to convey the messages in a unique and creative manner to their existing and
prospective customers about their offerings of products and services. The messaging
communication is either direct or indirect in nature with an intention to persuade the
customers to indulge in the purchase of the products and services.

The various channels and platforms of marketing communication include Google

promotions, print advertisements, television commercials, social media marketing, PR
exercises, blogging, content marketing, and participation in trade fairs and exhibitions
amongst others.

Marketing communication is made of two terms marketing and communication. Before we

learn about what marketing communication is, let us first learn about marketing and
communication separately. Marketing consists of activities which a company takes to
increase the sales of the products.

To do this, they opt for various methods such as advertising, market research, catching up
with old customers, writing them emails, using celebrity endorsements, attention-grabbing
graphic designs, catchy slogans or phrases, etc.
The main propose of marketing is to grab the attention of potential customers using various
promotional techniques. And the dictionary meaning of our second term “communication” is
an act of sharing or exchanging information from one entity to another using some kind of
medium like writing, speaking, etc. communication can place between two parties,
communication is incomplete in the absence of one party.

Marketing communication can be defined as the use of various communication channels

like print media, radio, television, emails, events, brochures, etc. to fulfill the goals of
marketing. There are various marketing communication methods that one can choose from.

Read this article further to learn about different marketing communication techniques that
you can use to fulfill the goals of your business.
Importance of Marketing Communication:

1) Develop a strategic vision

The first point in the list of Importance of Marketing Communication is that it helps the
management of the company and marketing managers develop a strategic vision about
leveraging on the various marketing opportunities and platforms and device the plans that
make the company come up with the new and innovative methods to promote the offerings
to the customers.

It makes the company curate a distinctive identity in the market and in the minds of the
customers as the brand that craves out the marketing and promotional ways that are not
only strategic in nature but have an edge in the ways to communicate about the features
and attributes of the products and services.

2) Create brand awareness

The concept of branding is totally related to the promoting the objectives and vision of the
brand and company as a whole but understating the Importance of Marketing
Communication helps in the creating and providing the required impetus to the brand
awareness in an indirect manner as the strategy and the creative artworks of the marketing
communication starts with leveraging on the strong legacy of the brand followed by the
features and unique selling propositions of the products and services.
3) Expresses competitive advantage

There are way too many brands in the market offering the similar line of products and
services giving the customers quite many options and alternatives to pick and choose from
and many a time the customers go for the products and services offered by the competitors.

Hence, understanding the Importance of Marketing Communication helps the company to

promote its offerings in a unique and innovative manner by selecting various marketing and
media channels such as print advertisements, television commercials, radio spots, digital
marketing, interactive marketing, and PR amongst others that enables to showcase the
features and nature of the offerings in a positive light giving a tough competition to the arch-
rivals of the company and it works as a pull factor for the customers.

4) Fosters goodwill

Next in the queue of the Importance of Marketing Communication is that it helps the
company to foster the goodwill in the market as when the communication strategy is on a
consistent and continuous basis, the facet of trust gets ingrained in the minds of the existing
and prospective customers as they are steadily witnessing the communication and
messages from the company and its offerings and gives them a perspective that the
company is genuine and authentic in its offerings.

Another aspect to this point is that the marketing communication also involves participating
in various activities related to the corporate social responsibilities and in the benefit of the
society that helps the company to command the goodwill from its patrons and stakeholders.

5) Attracts talent

The genuine and innovative marketing communication and messaging strategy not only
attracts the new set of customers but also attracts the talent for the company that is willing
to get associated with the company as employees, vendors, investors, agencies, and other
business associates that helps the company to grow from strength to strength and attain its
aims and objectives in the highly successful manner.

6) Enlightens the investor community

In continuation to the above point and harping on the Importance of Marketing
Communication, yet another benefit to the company is that it enlightens the investor
community about the strengths, core values, fundamentals, vision, approach, and objectives
of the company along with its competitive advantages, unique selling propositions, and the
features and attributes of the products and services offered to the target market.

And once the investors are impressed and satisfied with the values and objectives of the
company they are ready to invest in the company and that helps the management to
achieve their financial goals that will further provide the impetus to the business operations
and result in the higher sales and elevated profits.

7) Boosts profits

As the thumb rule of business strategy states that the marketing and sales departments
work as the backbone of each other and when they both join forces, the profits of the
company are on an all-time high owing to the increased sales and market share as
compared to the competitors in the market as the marketing communication is strategic,
innovative, and creative in nature plus is well aligned with the overall business objectives of
the company.

8) Improved communication with the customers

In order to attract the new set of customers and retain the existing ones on a long-term
basis, it is important for the marketing communication to be transparent, consistent, crisp,
direct, and helps to solve the problems of the customers.

And when the management of company and marketing department duly understands and
grasps the Importance of Marketing Communication, there is an automatic improvement in
the communication with the customers and their level of trust in the brand, its offerings, and
the overall company is increased in manifolds with the company able to accomplish its
desired goals and objectives as well.

9) Come up with innovative marketing and promotional ideas

Understanding the Importance of Marketing Communication helps the management and the
marketing department to try and come up with the innovative marketing and promotional
ideas that do not only convey the brand messages in an inventive fashion but also gives the
brand an edge of creativity as compared to their competitors in the market.

It is also imperative for the company to do a continuous research on what are the latest
marketing trends in the market and be open to trying out new and novel ideas for the
promotion of products and services.

The above were all the reasons which explain the Importance of Marketing
Communications.

13 Elements of Marketing Communication

1. Advertising

First and foremost, a technique in my list of types of marketing communication is

advertising. Advertising can be defined as an activity of promoting products or services
using advertisements. Advertising is one of the most used methods of marketing
communication.

Companies spend millions of dollars on promoting their products through advertising.

However, the money spent on advertising is worth the return on investment in advertising is
quite high.

You can either choose to create your advertisement, or you can hire an advertising
company depending on your budget. There are different advertising platforms, such as
television, radio, YouTube ads, etc.

Where you can pay to run your advertisements, and you can also increase the frequency of
your advertisement by paying more. Big companies usually prefer to advertise on television
as this platform has the largest audience reach. Another preferred platform for advertising is
online ads.

Online ads are cheaper as compared to television ads and have a quite high return on
investment, and another advantage of using online ads for advertising is because of its ease
of calculation of return on investment.
#2. Public Relation

The public relation method of marketing communication is one of the most credible methods
as it is not directly from the company, but there is a third party involved in it. In this type of
marketing communication, the information is shared with the audience with spending a
single penny.

Many companies opt for this type of marketing communication, and it is effective too
because the information comes from the genuine source and not from the paid source of
company.

There is a reason that why advertising is preferred by companies rather than public relations
is because they lose control over the content.

Advertising aggressively promotes the products, whereas public relation promotes the
products in subtle and soft ways. However, if your product is genuine and you have
something worth to offer, then you should opt for this method of marketing communication.

#3. Sales Promotion

Let us talk about people’s favorite method of marketing communication. People love sales.
They fill with joy when they read the sign of “on-sale” or “50% discount”.

There are various methods that you can opt for running a sales promotion such as
discounts, coupons; premium gives away, sample’s give away, contests, two-for deals,
rebates, loyalty programs, and free shipping, etc.

Small new businesses usually prefer this marketing communication method. Using this
method, you can create your place in the market and can re-boost the sales of your
products. You can use sales promotion at any time of the year or at a specific time like in
festival season.

But make sure that you plan your sales promotion rather than simply hanging an X%
discount next to the products whose sales you want to boost. Otherwise, rather than making
profits, you will end up losing your precious money.

#4. Online Media

Online media is the most preferred type of marketing communication nowadays. There are
two reasons for this. One is nowadays, almost 90% of the total population spends their most
time online. Therefore, it has the maximum reach, and the second is that this method of
marketing communication is quite cheap as compared to other methods of marketing
communication.

The meaning of online media is to promote or to market your products using platforms
available online like advertising on Facebook, Instagram, YouTube, running ads on
websites, blogs, etc. other than that you can also pay social media influencers to promote
your products.

In this way, you can target a large audience by spending little. This method of marketing
communication is quite effective as it delivers a direct message to a future audience.

#5. Customers’ Advocacy

You must have encountered with one or two people or friends or family members who are
so in love with a product that they have used, and they force you to buy and use that
product at least once. Believe it or not, they are promoting the product of the company
without getting anything in return.

This type of marketing communication is called customers’ advocacy where your happy and
satisfied customers advocate your product for you by o expecting anything in return.

However, you can also spend a little to get your customers to promote your products. For
example, you can give them a certain amount of discount if they refer your product to their
friends.

This is quite an effective method of marketing communication a people trust more the
people they know rather than trusting television advertisements, but it has a limited
audience reach. For example, your one customer might refer your product to maximum 4 or
5 people that he knows.

#6. Product Launch

Product launch is quite an expensive type of marketing communication. Big companies with
huge budgets usually prefer this method of marketing communication as it requires an
additional team of experts and a lot of preparation to organize a product launch.
The meaning of product launch is to introduce a new or upgraded version of a new product
in the market. It boosts the sales of the product as soon as the product is launched in the
market, and it also helps in building the name and image of your brand.

#7. Brand

Yes, you have read it right. Building a brand name is one of the effective types of marketing
communication. You have observed that many people call products using their “Brand
names” rather than calling them with their product name or probably you also have been
doing the same unconsciously.

For example, rather than saying “my shoes or my sports shoes,” people referred to them
saying “my Nike” or “my Puma.” Or rather than calling a lipstick a lipstick they refer to it
using its brand name like “NARS Velvet” or “NYX” (BTW these are the names of lipstick
brands in case if you don’t know about them like me.)

#8. Market research

Marketing research is a method to learn about the market and to learn about the
requirements, expectations, motivations, and interests of their target customers before they
introduce their product in the market.

There are several methods to conduct market research such as focus group, test studies,
surveys, one on one interviews, test studies, and recognition studies, etc.

This type of marketing communication is important as you learn about the needs of your
customers and also learn about the current situation of the market, using that information
you can prepare for an effective marketing strategy to persuade your potential customers
into buying your product.

#9. Publicity

Publicity is one of the effective types of marketing communication. publicity means the
media coverage of your product in the newspaper or on television or in any other types of
media platform. This type of marketing communication can make your product famous and
boost its sales overnight.

You can take advantage of your relationship with local news media people to run a story on
your product. However, this type of marketing communication is quite risky too.
It can turn into negative publicity of your product as the content of news is out of your
control, and media people can write or say about your product as they please.

#10. Personal selling

Personal selling is one of the oldest methods of marketing communication. In the old times,
when media like television, radio, and online platforms were not very popular at those times,
companies relied on personal selling for marketing communication.

In this method of marketing communication, companies hire expert sellers to go door to

door and sell products to people.

This method is quite expensive as you are required to the huge commission to your sales
persons for every unit that they sell. In addition to this, this type of marketing communication
is quite slow too as you approach only one potential customer at a time.

#11. Digital Marketing

This type of marketing communication is only possible because of the introduction of digital
devices in our lives. Right marketing is offering the right product, with the right offer at the
right place.

Therefore, the best way to market your product is on smartphones. Nowadays, people might
forget to eat their food, but they never forget to check their phones.
Digital marketing is an effective marketing communication method as it is interactive,
portable, targetable, sharable, and, adaptable. Using digital marketing, you can tailor the
content of your marketing as per your target audience and can provide offers to individual
customers.

#12. Direct Marketing

Direct marketing is quite different from other bulk marketing methods like media marketing
and publicity, etc. in this type of marketing communication; you target the customers if you
exactly know who your target customers are. You can send them a discount coupon,
catalog, postcard, or letters.

This method is quite beneficial for those companies which use promotional codes, discount
coupons, special offers as the marketing strategies or when your business is heavily
dependent on the repurchase, etc.

If you have personal insight into the customer, you can also include a personal note or
letter. For example, you can send them a discount coupon or small gift on their birthday or
anniversary. This direct approach will make people stay loyal to your brand.

#13. Blogs and websites

This is quite a new and inexpensive type of marketing communication. In this marketing
communication, you promote your product indirectly. The blog is a type of online personal
diary where an author writes about their personal feelings or other important things.
For example, if you run a cosmetic’s company, then you can use a blog to write about
beauty products or beauty hacks. There you not only share useful content with your
audience but also indirectly promote the products of your brand. Similarly, the website is an
online identity of your company.

You put information about your company, its certification, products, contact information, and
other important stuff on the official website of your company.

Marketing communication Strategy for Small Businesses

1. Brand it to nail it

To put it bluntly, there are only two ways that your product and services can survive in the
market. Either it can become a brand or it can become a commodity and it is needless to
mention that risks are lower in being a commodity because high volumes can be achieved
but the downside is that profit margins are very low and the market is often overcrowded.

The product uses its identity and various products that are unbranded are visible across
many industries. For example, when choosing a mouse for the laptop you can either go for
a branded mouse-like Intex are you can buy any cheap unbranded mouse. The difference
would be noticed in pricing, finish, texture and overall consumer satisfaction.
The branded product provides quality and trust along with service to the customers. Since
the branded company puts so much effort and resources in creating the product, that it is
justifiable to charge a premium. For example, choosing between a one plus 7T and iPhone
11 would be an easy choice for a price-conscious customer.

In $ 600, you are getting state of the art features which are excellent on paper in one plus
7T, but comparatively, on iPhone, the quality is much better right from the picture quality to
the build, the texture feel and the overall customer satisfaction. This is why for a brand-
conscious customer, a $ 150 increase in price would not be a big challenge.

Other such examples are Yahoo, Amazon, Coca-Cola, Microsoft, Apple, Warner brothers,
Unilever, Audi, etc branded product or service is the only difference between customer
satisfaction. This is true especially in the case of premium-level products. These premium
products have popular taglines that describe the brand in the minimalist possible way or
sometimes they try to convey the core feature of the product.

For example, the tagline of Apple is “Think different”, and Audi has a tagline of Vorsprung
Dutch Technik which translates to ‘Advancement through technology.’ A brand should be an
epitome of the company’s mission and benefits of the products along with the vision of the
company and the industries which they serve in.

For this, it is necessary to associate with the customer on a personal level and understand
his needs reactions and desire which will help you to sell the product by designing an
effective marketing communication strategy. Apart from all of this branding is also how your
sales team reacts with the customer, dresses on the field and has an approach towards the
customers.

2. Focus on Logo

The logo is the most visible feature of the brand. It is also the most recalled feature of the
brand. It is saying that many of the customers me forget the name of the company but they
never forget the logo.

This is why special care should be taken while designing the logo and choosing it because
companies spend millions of dollars on the creation of which in itself signifies the priority
and importance of logo creation and branding because the logo signifies what the company
stands for.
It goes without saying that copying an existing logo would be an extremely unwise decision
and the best thing is to hire a designer or an experienced professional logo creator. The
logo should stand out from the competition and should be simple but convey a significant
message.

It should be clear so that it can be used at multiple places without creating any problems like
websites or newspapers or business cards. Many business stalwarts credit the success of a
company partly to its logo.

The use of fonts, images or colours which are used in a logo should make it stand out from
the competition. Once the logo is finalized then it should be registered with the patent office
so that no one else can copy the logo.

3. Target audience

Understanding your target audience and accordingly crafting a customized Marketing

communication strategy is a crucial thing for the success of your product. You need to
understand the target audience first and then design the communication strategy according.
Communication strategy has to be clear and concise and should directly address the needs
and characteristics of this target audience.

One of the ways to do this is to conduct many interviews and surveys and ask the
customers what exactly do they want directly. These insights that are gathered from
research and surveys are crucial for the marketing team. They clearly get a glimpse of what
the customer really is and what should be their communication strategy.

The communication strategy should be centred around the analysis of the customer and the
company should invest time in understanding the needs of the customer. Communication
strategy which is based on insufficient or incorrect research is bound to fail in the market.
The use of segmentation and positioning can be done in order to execute the strategy
effectively.

In the case of segmentation, the market audience is divided into similar and homogenous
groups and individual targeting strategy is used for those groups. When a new product or
brand is to be launched in the market then it is to be positioned suitably as premium, regular
or entry-level products. Positioning is what company creates a perception of the product of
the service in relation to their competitors and answers a very important question of what is
the company view as from the point of view of customers.

When the company enters a new market then it would be challenging to define the market
and the position of the company in it. Better positioning gives a competitive advantage to
the product as well as the organization against its competitors and rival companies.

The positioning strategy would differ in the existing market and should clearly define and
differentiate the customer base. The marketing communication should really differentiate the
products from their user base.

Examples of accurate marketing communication strategy would be of iPhone 11. The

new iPhone 11, iPhone 11 Pro and iPhone 11 Pro Max are three new flagships launched by
Apple this year. The company has clearly differentiated their products to the customers as
follows:

The tagline of the iPhone 11 is “just the right amount of everything”. This communication
clearly states that the phone is targeted for the majority of audiences. The pricing of the
phone is done at a lower rate and most of the features are added.

For iPhone 11 Pro, and Pro Max, the tagline says “Pro Camera. Pro Display. Pro
Performance.” Apple has clearly differentiated this phone for high-end users and niche
customers because the phone is priced at a higher price point as well as the features and
performance are Targeted for high-end users.
Since the price itself is a big motivation for many customers, the phone will automatically get
classified for the end-users. The positioning strategy can be a single influence that
would differentiate your product to the customer.

4. Advertising

The only purpose of advertising is to create awareness about the product or service in the
minds of consumers and prospective buyers. Advertising uses a proper message along with
convictions in order to buy the product. Proper media planning should be done before
positioning expensive brand or product because wrong media can hamper the success of
the product greatly.

Different media used for advertising such as television, print, outdoor space, radios and
nowadays social media. Digital media has become a more popular medium in order to
promote advertising to the right target audience.

Before the application of Marketing communication strategy, it should be ensured that the
marketing, as well as advertising goals, are defined by the organization. There can be a
company-specific or a brand-specific advertising promotion depending on the requirement
of the company and in any case, the USP of the brand of the product for the company
should be mentioned.

The requirement of advertising will vary depending on the size and type and the mode or
method that is used to advertise. For example in the case of a new company, there would
be a requirement for a business that is growing the primary objective would be differentiated
from the competition in which case making more convincing messages are campaigns to
pull the buyers and retain the existing buyers should be the objective of the advertising.

Advertising guidelines depend on the industry because certain industry guidelines do not
allow public advertising of their products for example in case of medicines public advertising
is banned but on the other hand products of FMCG can be advertised publicly.

Advertising with the help of digital media is known as digital marketing. The advantages of
digital media are that it is extremely economic over traditional modes of marketing and is
affordable for everyone right from a startup company to an established one.

5. Implementation, Feedback, Improvisation

Once all of these steps mentioned above are properly and thoroughly done, then it’s time to
plan and execute the campaign in order to see the results. Implementation of the plan at the
right time is also one of the crucial factors of the success of the marketing communication
strategy.

For example advertisement of cold and cough syrup in the month of Summer would be the
right strategy to target the season arriving in monsoon and winter. But starting the
advertisement in the middle of winter or at the end of the winter will have very less success
rate as compared to the situation mentioned before.

Know your product and know the customer then it would be a piece of cake to find the right
time to implement the marketing communication strategy to your target audience. Once the
implementation is done then take the feedback from the customers about the
communication strategy. The feedback should be crisp with closed-ended questions and
should address only the strategy rather than the product or service.

Asking customers if the recall the advertisement for a peculiar catchphrase related to the
product will help you understand if the customer has thoroughly understood and seen the
advertisement or not. The feedback collection may also be based on the brand recall or
product recall of the customer which will help to understand the effectiveness of marketing
communication strategy.

Once the feedback is connected then improvisation if needed can be done in the
communication strategy and may be implemented in the market. In some cases, this
feedback can be considered in the launch of the subsequent product in the same product
family. Constant feedback and improvisation is the key to a successful Marketing
communication strategy.

Multiple to evolve every day in the market and the strategy for marketing communications
changes every day because the customers and their needs change every day. It is
important for a marketing manager to stay up-to-date with the market and craft strategy
accordingly.
School of studies of Management,
Jiwaji university Gwalior (M.P.)
Bba3rd Sem.
Subject: Fundamentals of Marketing Management
Unit-1

Learning outcomes
L01: Understand the concept of pricing decision.
L02: Describe the objectives of pricing decision.
LO3: Describe the process of pricing decision.
L04: Define the strategies of pricing decision.
L05: Define the factors affecting the pricing decision.
Marketing Management - Pricing Decision

Pricing is a process to determine what manufactures receive in exchange of the product.

Pricing depends on various factors like manufacturing cost, raw material cost, profit margin
etc

Objectives of Pricing

The main objectives of pricing can be learnt from the following points −

 Maximization of profit in short run

 Optimization of profit in the long run
 Maximum return on investment
 Decreasing sales turnover
 Fulfill sales target value
 Obtain target market share
 Penetration in market
 Introduction in new markets
 Obtain profit in whole product line irrespective of individual product profit targets
 Tackle competition
 Recover investments faster
 Stable product price
 Affordable pricing to target larger consumer group
 Pricing product or services that simulate economic development

Pricing objective is to price the product such that maximum profit can be extracted from it.

Pricing process

Factors Influencing Pricing

Pricing of a product is influenced by various factors as price involves many variables.

Factors can be categorized into two, depending on the variables influencing the price.

Internal Factors
The following are the factors that influence the increase and decrease in the price of a
product internally −

 Marketing objectives of company

 Consumer’s expectation from company by past pricing
 Product features
 Position of product in product cycle
 Rate of product using pattern of demand
 Production and advertisement cost
 Uniqueness of the product
 Production line composition of the company
 Price elasticity as per sales of product

Internal factors that influence pricing depend on the cost of manufacturing of the product,
which includes fixed cost like labor charges, rent price, etc., and variable costs like
overhead, electric charges, etc.

External Factors

The following are the external factors that have an impact on the increase and decrease in
the price of a product −

 Open or closed market

 Consumer behavior for given product
 Major customer negotiation
 Variation in the price of supplies
 Market opponent product pricing
 Consideration of social condition
 Price restricted as per any governing authority

External factors that influence price depend on elements like competition in market,
consumer flexibility to purchase, government rules and regulation, etc.

Pricing Methods

Let us now discuss the various pricing methods −

Cost plus Pricing

Cost plus pricing can be defined as the cost of production per unit of product plus profit
margin decided by the management.
Step 1 − (Calculation of average variable cost)

Step 2 − (Calculation of average fixed cost), i.e.,

$$AFC=\frac{Total Fixed Cost}{Units Of Output Products}$$

or,

$$AFC=\frac{Total Fixed Cost}{Expected Unit Sales}$$

Step 3 − (Determination of the desired profit margin)

Selling Price = Unit total cost + Desired unit profit

i.e., Selling Price = AVC + AFC + Mark up

i.e.,

$$Selling Price=\frac{Unit Total Cos}{1-(Desired Profit Margin}$$

These are the steps one needs to follow to calculate cost plus pricing.

Break Even Analysis

It is a point when the investment and revenue of an enterprise is equal; after this point an
enterprise gains profit.

Prices Based on Marginal analysis

In this method, additional cost of that activity is compared to additional profit and the price is
calculated according to margin cost. Thus, the cost and price is evaluated and as per the
result, the price is decided so as to maximize the profit.

Pricing Strategies

Let us now understand the various pricing strategies –

Skimming Pricing

In this method, a new product is introduced in the market with high price, concentrating on
upper segment of the market who are not price sensitive, and the result is skimmed.

Penetration Pricing

In penetration pricing, a product is introduced in the market with a low initial price. The price
is kept low to increase target consumer. Using this strategy, more consumers can be
penetrated or reached.

Discounts and Allowances

Discounts are provided in order to increase the demand of product in the market. The main
points to be considered to offer discounts are as follows −

 Discount in quantity
 Discount in trade
 Discount in cash
 Other discounts like seasonal, promotional, etc.

Geographic Pricing Strategies

Geographic pricing strategy is used to price product as per its geographical location. As the
distance increases from the point of production, the cost of the product increases.

The main points to be considered under this are as follows −

 Point of production pricing strategy

 Uniform delivery pricing strategy
 Zone delivery pricing strategy
 Freight absorption pricing strategy

Special Pricing Strategies

Special pricing strategy is mostly used for the promotion of the product. In this strategy,
pricing is changed for a short interval of time. These strategies can be lined up as follows −

 One price strategy

 Flexible price strategy
 Flat rate pricing strategy
 Single price strategy
 Odd pricing
 Leader pricing
 High low pricing
 Resale price maintenance
 Everyday low pricing
 Price lining
School of Studies of Management
Jiwaji university Gwalior (M.P.)

BBA 3rd Sem.

Subject: fundamentals of marketing management

Unit-3rd

Learning outcomes
L01: Understand the concept of brand name selection.
L02: Describe the process of brand name selection.
LO3: Describe the principles of brand name selection .

Brand name selection

Selecting a brand name

One of the key decisions when bringing a new product to market, particularly if it is going to
be under the umbrella of a new brand, is the brand name selection.
Approaches to brand name selection.

The first approach is to have a brand name that is somehow reflective of the benefits or
unique features of the product. The second approach is to create an unusual or
distinctive brand name, perhaps by even creating a new word, with the intent of building
brand awareness and brand equity over time.

A brand name reflective of the benefits of the product

This approach is quite effective in the brand is relatively new, as it gives potential
consumers an opportunity to gain some form of understanding of the product of
its positioning relatively quickly, from making an inference about the brand name.

Simple examples of a brand name that is tied to the features or benefits of the product
include:
 Pizza Hut
 Spray and wipe
 Vitamin water
 Raisin bran cereal
 Toys “R” Us
 Kentucky Fried Chicken
 Pepsi-Cola
As you can see, even without an understanding/memory of each of these brands, a
consumer could have a pretty good guess about what the brand is all about.

Distinctive/unusual brand names

This is a common approach to stand out in the marketplace, particularly on the Internet, and
is often pursued a larger companies who have the capacity and resources to build strong
clear brands. One of the advantages of this approach is that the name is quite unusual,
which may attract attention.

Examples of brand names that are not particularly tied to the product, or tied to the original
ownership of the brand include:

 McDonald’s
 Apple
 Google
 Walmart
 J.P. Morgan
In each of these cases, it has been necessary for brand equity to be built over time – until
the consumer has a very clear understanding of what the brand is about.
Principles for brand name selection

Once the decision is made above – a descriptive or unusual name – then the following
criteria should be used to screen potential candidates for the brand name.

Distinctive – brand names need to be clear and different to other brands on the market and
be recognizable as a brand name, rather than a generic word

Easy to recall – brand name should be quite simple, recognizable and easy to remember.
Making a brand name too complicated or vague or too long should be avoided.

Avoid confusion – think about how the brand name may be used. For example, “My Credit
Union” is a cute name that has some interesting communication and slogan benefits.
However, it probably has less impact for word-of-mouth benefits, as it creates confusion as
to the actual name of the credit union when used in conversation.
Translatable – for large companies that operate in multiple markets, how the brand name
can be translated and communicated needs to be considered. Legal protection – brand
names need to be trademarked and registered (varies by country), but some generalized
names probably cannot be registered – such as, “chocolate” candy bar as it is too generic.
School of Studies of Management
Jiwaji university Gwalior (M.P.)
BBA 3rd Sem.
Subject: fundamentals of marketing management
Unit-3rd

Learning outcomes
L01: Understand the concept of product line.
L02: Describe the product line decision.
LO3: Describe the examples of product line.

What is Product Line? – Definition, Decisions & Examples

Over time, every company wants to expand its product range. Some companies
try to develop new products to its portfolio, while others develop the extension or
remake of the existing products. A group of related products constitutes a
product line, and the combination of different product lines makes the product
mix, which is owned by the parent brand.

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For example, PepsiCo has hundreds of foods, snacks, and beverage brands. Its
product category includes Pepsi, Diet Pepsi, Mountain Dew, Marinda, 7Up,
Tropicana, Aquafina, Quaker, Lay’s, Ruffles, Fritos, Cheetos, and many more.

All these brands are controlled and owned by PepsiCo, available in more than
200 countries and territories.

What is A Product Line?

According to Philip Kotler, a product line can be defined as “a group of
products that are closely related because they function in a similar manner,
and sold to the same customer groups, are marketed through these same
types of outlets, fall within given price range.”
In the above definition, Philip Kotler emphasizes a few points, which I want to
discuss below:

Closely Related Products. In any product line, the products are closely related.
For example, Pepsi has a Beverages product category which includes Pepsi,
Dew, Aquafina, Brisk, and many more. These products are related and target a
specific group of people and preferences.
Same Customer Groups. Every product category target the same customer
group. For instance, 7 UP, Pepsi, Marinda, Mountain Dew target young people,
while Gatorade is a PepsiCo brand that targets athletes. Similarly, Quaker Oat is
another Pepsi brand that focuses on health-conscious people.
According to the Forbes magazine, the PepsiCo. Target market is teenagers
and young adults. Though Pepsi contends its few brands like Quaker, Gatorade,
Aquafina, and Diet drinks to appeal to all age groups, its main focus is on young
people.
What is Product Mix? – Definition, Explanation & Examples

Managing Product Lines

If a company wants to track the sales of products in each product line or the
whole product mix, it is crucial to use the tools to make the process more
efficient. Every product line has to achieve specific goals, and it is important to
track sales and inventory for each product line and look for the alternation in the
product line strategy if needed.

Product line Decisions

The following types of product line decisions are related to the product line
strategies that are planned activities of adding and deleting a particular product
from the line.
Line Stretching Decision. Product line stretching means to lengthen the
current product line. It has three dimensions downward, upward, and both-
ways.
 Downward Stretching means adding a new product to the current line, but
at a lesser price, for example, Mercedes in a joint venture with Swatch,
introduced a $10,000 Smart Micro Compact Car.
 Upward Stretching means adding new products but at higher prices.
Companies stretch upward because they want prestige, growth rate, or
high-profit margins. For instance, General Electric successfully added its
current Monogram premium kitchen appliance to target the higher-end
consumer.
 Two-way Stretching means adding new products in both directions.
Marriot did this significantly and started the Renaissance Hotel target high-
end consumer and Town suites to cater to the needs of lower-end
consumers.

Line Filling Decisions means adding new products to the same product range
to use excess capacity, increase customer base, extra profit, and keep
competitors away. Sony added waterproof and solar-powered Walkman to its
current Walkman line.

Line Pruning Decision means to reduce the depth of a product line by

removing unprofitable products from the existing lines. Crystal Pepsi launched in
the market and discontinued after some time.

Product Line Examples

Here are a few examples of product lines from some of the reputable
companies.
Product Line of PepsiCo.
PepsiCo is a multinational company that offers hundreds of products in more
than 200 countries. Following are some of the most popular product lines of
PepsiCo.

1. Pepsi
2. Diet Pepsi
3. PepsiMax
4. Mountain Dew
5. Diet Mountain Dew
6. 7 Up
7. Gatorade
8. Tropicana
9. Aquafina
10. Lipton
11. Brisk
12. Starbucks RTD Beverages
13. Sierra Mist
14. Mirinda
15. SodaStream
16. Lay’s
17. Walkers
18. Doritos
19. Ruffles
20. Fritos
21. Cheetos
22. Tostitos
23. Quaker

Nike Product Lines

Nike Inc., is an American Multinational Company that design, manufacture and
market and sales footwears, apparel, and accessories.
According to the company’s website, it has divided into three main categories,
i.e., Men, Women, and Kids. The following are some of the Nike products Lines.

 Shoes. Lifestyle, Running, Basketball, Jordan, Training & Gym, Soccer,

Golf, Tennis, Slides & Sandals, Skateboarding, Football, and Track and
Field.
 Clothing. Tops & T-shirts, Shorts, Hoodies & Sweatshirts, Pants, Pants
and leggings, Sports Bras, Jackets & Vests, Swimmers, Plus Size, Skirts &
Dresses, Yoga, Socks & Underwear, Big & Tall and Polos.
 Kids. The Nike Kids category is based on age and sizes. Boys and Girls
Shoes, Boys and Girls Clothing

Product Line Vs. Product Mix

Sometimes people confused between product line and product mix that they are
the same. But these terms are slightly different.

A product line offers unique and related products and brands in the market.
These products have similar functions and also target a defined group of
customers.

On the contrary, the product mix is the combination of all the product lines and
categories a company offers to its customers.

Conclusion
Keep in mind that no businesses can retain customers for longer with one
product. That is why product managers are always under pressure to add
relevant products to the line.
So, companies develop product lines to attract new customers and, more
importantly, retain the existing ones. Loyal and satisfied customers will always
prefer your current brand over your competitors and tend to buy newly launched
products based on their positive experience.

Furthermore, adding a new product to the line will have the luxury to share the
goodwill, brand name, and customer base of the parent brand.
School of studies of Management,
Jiwaji university Gwalior (M.P.)
Bba3rd Sem.
Subject: Fundamentals of Marketing Management
Unit-4th

Learning outcomes
L01: Understand the concept of distribution channel.
L02: Describe the objectives of distribution channel.
LO3: Describe the types of distribution channel.
L04: Define the physical distribution.
L05: Describe the wholesaler.

A distribution channel
is the route through which goods or services move from the company to the customer or
the transfer of payment happens from the customer to the company.

Distribution channels can mean selling of products directly or selling through wholesalers,
retailers etc. The same applies for payment transfer from customers to company; it can
move through a path or can be sent directly to the company.

Functions of Distribution Channels

Distribution channels basically function to deliver goods from the manufacturer to the
customer.

The following are the functions of distribution channels −

 Facilitate selling by being physically close to customers

 Gather information about potential and current customer competitions, other factors
and forces of the environment
 Provide distributional efficiency by bridging the gap between the manufacturer and
the user efficiently and economically
 Assemble products into assortments to meet buyers’ needs
 Match segments of supply with segments of demand
 Assist in sales promotion
 Assist in introducing new products
 Assist in implementing the price mechanism
 Assist in developing sales forecast
 Provide market intelligence and feedback
 Maintain records
 Take care of liaison requirements
 Standardize transaction

Objectives of Distribution Channels

Objectives of a distribution channel are planned as per the target of the enterprise and
executed respectively. The following are the various objectives behind the planning of
distribution channels −

 To ensure availability of products at the point of sale

 To build channel member’s loyalty
 To stimulate channel members to put greater selling efforts
 To develop management efficiency in channel organization
 To identify the organization at the level
 To have an efficient and effective distribution system for making the products and
services available readily, regularly, equitably and fresh.

Major Channels of Distribution

Here is a list of some of the major channels of distribution –

 Manufacturer → Consumer
 Manufacturer → Retailer → Customer
 Manufacturer → Wholesaler → Customer
 Manufacturer → Wholesaler → Retailer → Customer
 Manufacturer → Agent → Retailer → Customer
 Manufacturer → Agent → Wholesaler → Customer
 Manufacturer → Agent → Wholesaler → Retailer → Customer

Profit distribution decreases as the channel length increases.

Designing Distribution Channels

We have seen what a distribution channel is. Let us now see the designing process of a
distribution channel.

The following steps are involved in the designing of a channel system −

 Formulating the channel objectives

 Identifying the functions to be performed by the channel
 Analyzing the product and linking the channel design to the product characteristics
 Evaluating the distribution environment, including legal aspects
 Evaluating competitor’s channel designs
 Evaluating company resources and matching the channel design to the resources
 Generating alternative designs, evaluating them and selecting the one that suits the
firm best

Classification of Wholesalers
A wholesaler purchases from the manufacturer and further distributes the product to
customers or retailers. Wholesalers can be classified into the following categories as per
area of functioning −

 Merchant wholesalers
 Agents and brokers
 Manufacturer’s sales branches and offices

The planning, implementation, and controlling of the physical flow of material or product
from one point to another to meet the customer requirements in the market is known as
physical distribution.

Importance of Physical Distribution

The importance of physical distribution becomes significant when the manufacturers and
market are geographically far from each other. The following points highlight the importance
of physical distribution −

 Execute physical flow of product from the manufacture to the customers.

 Grant time and place for the product
 Build customer for the product
 Cost reduction
 Fulfill the demand of the product in the market so that business takes place

Steps in Designing a Physical Distribution System

To design a physical distribution system for a product, following steps need to be followed −

 Step 1 − Defining distribution objective and services required for product distribution
 Step 2 − Articulating customer requirement
 Step 3 − Comparing the strategy with market competitors
 Step 4 − Managing the cost of distribution to decrease cost without compromising on
the quality of service
 Step 5 − Building physical distribution system that is flexible for implementation of
changes, if required

Designing of a physical distribution system involves these steps. It is necessary to consider

all steps involved for smooth distribution of goods and services.

Components of a Physical Distribution System

Physical distribution can be controlled and monitored by its different components. Each
component should be evaluated and managed in order to accomplish physical distribution
without any problems.

The following are the different components of the physical distribution system −

 Planning of physical distribution system

 Storage planning in plant
 Logistics
 Warehousing on field
 Receiving
 Handling
 Sub distribution of product
 Management of inventory at various levels
 Execution of order
 Accounting transactions
 Communication at different levels

Supply Chain Management (SCM)

Supply Chain Management (SCM) involves managing of goods and services. It includes
different stages like storage of goods, logistics and supply of goods to the customer after
manufacturing.

It can also be referred as the combination of materials management and product distribution
of an enterprise.
Advantages of SCM

Supply chain management increases the flexibility and efficiency for the logistics of a
product. The following are the advantages of supply chain management −

 It increases the efficiency to deliver on time by approximately 20 %.

 It reduces inventory requirement by approximately 50 %.
 It increases the sales of product from 3 to 6 %.
 It provides integrated controlling for the function of logistics at the front and back end
of business.
Disadvantages of SCM

The following are the disadvantages of supply chain management −

 It considers material management important and customer requirement for logistics

as superfluous for the supply cycle.
 Consequently, customer requirement for logistics is not executed with high
importance.

Thus, supply chain management has both advantages and disadvantages and both have to
be considered for implementation in an organization.
Integrated Marketing
Communications

Many of the companies in 1980s rather than relying only on

advertisement adopted an integrated strategy. They combined
various promotional tools and marketing activities to communicate
with their target audience. Their integrated strategy worked as they
expected. Later on, it became the trend.

Components of Integrated Marketing Communications

Integrated marketing covers a wide area and includes the following
elements −
 Ad − An ad has a very important role that increases the
visibility of your products on a very large scale.
 Social Media − Social media (such as Facebook, YouTube, etc.)
is a tool/medium to promote your business.
 Employee Branding − A reliable employment brand is one that
nicely communicates the culture, mission, and values of your
company and gives people a compelling reason to want to
work for – and stay with your company/organization. Today,
all companies practice employment branding technique.
 Conference and Events − Conference and event are the
activities, which are organized on specific time and at specific
place for brand promotion. Organizing company primarily
sends invitations to potential audience and also advertises it
through different media channels to invite maximum people to
participate in the conference/event.
 Corporate Responsibility − Corporations have a responsibility
to those groups and individuals who can affect their business.
For example, stakeholders (e.g., employees, customers,
suppliers, communities, etc.) and society at large. Therefore,
corporate responsibility suggests that corporations need to be
consistent with ethical principles and conduct such as honesty,
respect, and integrity with all stakeholders.
 Affinity Marketing − Affinity marketing is a sort of social
bonding with other organizations and customers who share the
same interest. This act increases brand loyalty for both
companies and products and promotes market awareness.
 Partnership − Partnership, simply means, an association of
two or more people/companies/organizations. More often two
people or companies agree to work in partnership for a
common goal.
 Financial Communication − The purpose of a financial
communication is to bridge the gap between the investment
decisions makers and financial experts necessary for the
financial transactions.
 Public Relation − Public relation is an important technique that
establishes a friendly relationship between a company or
organization and the public.
 Direct Marketing − Direct marketing is the technique to sell
products/goods directly to the customers through different
medium. For example, through mail, telephone, etc. Retailer
has no role in direct marketing.