SUDHIR II 1

UNIT-1
MEANING AND SCOPE OF MARKETING
Marketing refers to the process of creating, delivering, and promoting products or services to meet the needs of
customers. It is a crucial aspect of business, as it enables companies to reach their target audiences and grow their
customer base. Marketing has evolved over the years, and its scope has expanded to encompass various strategies
and techniques used to achieve marketing goals.

The scope of marketing is vast and includes various functions and activities that are aimed at promoting and selling
products or services. The key functions of marketing include market research, product development, pricing,
promotion, and distribution. These functions are interrelated and work together to ensure that the company’s
products or services are marketed effectively.

1. Market research is the process of gathering information about the target market, including their needs,
preferences, and behaviors. This information is used to develop products or services that meet the needs of
the target audience. Market research also helps companies to identify their competitors and market trends,
enabling them to adjust their marketing strategies accordingly.
2. Product development involves designing and creating products or services that meet the needs of the target
audience. This process involves identifying the features and benefits that customers are looking for and
developing products that meet those needs. Product development also includes testing and refining the
products to ensure that they meet quality standards.
3. Pricing is an important aspect of marketing, as it determines the value that customers place on the products
or services. The pricing strategy used will depend on various factors, including the cost of production,
competition, and customer demand. The right pricing strategy can help to attract customers and increase
sales.
4. Promotion involves communicating the value of the products or services to the target audience. This can be
done through various channels, including advertising, public relations, and sales promotions. The promotion
strategy used will depend on the target audience and the marketing goals of the company.
5. Distribution refers to the process of getting the products or services to the target audience. This includes
selecting the right distribution channels, such as retail stores or online platforms, and ensuring that the
products or services are available to customers when and where they need them.

In addition to these key functions, marketing also includes various techniques and strategies that are used to
achieve marketing goals. These include digital marketing, social media marketing, content marketing, influencer
marketing, and email marketing, among others. These techniques are designed to reach customers through
various channels and engage them in meaningful ways.

1. Digital marketing refers to the use of digital channels, such as search engines, social media, and email, to
promote products or services. This technique has become increasingly popular in recent years, as more and
more customers are using digital channels to research and purchase products or services.
2. Social media marketing involves using social media platforms, such as Facebook, Instagram, and Twitter, to
promote products or services. This technique is effective in reaching a broad audience and engaging them in
meaningful ways.
3. Content marketing involves creating and sharing valuable content, such as blog posts, videos, and
infographics, to attract and engage customers. This technique is effective in building brand awareness and
establishing the company as a thought leader in the industry.
4. Influencer marketing involves partnering with influential people, such as bloggers and social media
personalities, to promote products or services. This technique is effective in reaching a target audience and
building trust with customers.
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5. Email marketing involves sending promotional emails to customers to promote products or services. This
technique is effective in reaching customers directly and engaging them in a personalized way.

In conclusion, marketing is a crucial aspect of business, as it enables companies to reach their target audience and
grow their customer base. The scope of marketing is vast and includes various functions and activities that are aimed
at promoting and selling products or services. The key functions of marketing include market research, product
development, pricing, promotion, and distribution. In addition to these key functions, marketing also includes
various techniques and strategies that are used to achieve marketing goals

MARKETING PHILOSOPIES
Marketing philosophies are the fundamental beliefs and approaches that guide a company's marketing strategy and
decision-making process. There are five main marketing philosophies: production, product, sales, marketing, and
societal marketing. Each philosophy has a different focus and approach to marketing, and understanding them can
help companies develop an effective marketing strategy.

1. Production Philosophy:

The production philosophy is the oldest and most basic of all the marketing philosophies. It focuses on maximizing
production efficiency and reducing costs. This philosophy assumes that consumers will prefer products that are
affordable and readily available. The goal of companies following this philosophy is to produce large quantities of
goods and distribute them widely at low prices. Companies that use this philosophy often have a production-
oriented culture that values efficiency and cost-effectiveness.

2. Product Philosophy:

The product philosophy focuses on creating high-quality products that meet the needs and wants of customers.
Companies that follow this philosophy believe that if they create superior products, customers will naturally
gravitate towards them. The focus is on continuous product improvement and innovation, rather than on reducing
costs or maximizing production efficiency. Companies that follow this philosophy are often willing to invest heavily in
research and development to create innovative products.

3. Sales Philosophy:

The sales philosophy focuses on aggressive sales techniques and promotion to generate sales. Companies that follow
this philosophy believe that selling is the most important aspect of their business, and that they need to be highly
persuasive in order to convince customers to buy their products. The focus is on using advertising, personal selling,
and other promotional techniques to convince customers to buy their products. Companies that follow this
philosophy often have a highly motivated sales force and invest heavily in advertising and promotion.

4. Marketing Philosophy:

The marketing philosophy focuses on creating customer value and building long-term relationships with customers.
Companies that follow this philosophy believe that the key to success is to understand the needs and wants of
customers and to deliver products that satisfy those needs. The focus is on creating a customer-centric culture that
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values customer satisfaction and loyalty. Companies that follow this philosophy often invest heavily in market
research to better understand their customers and create products that meet their needs.

5. Societal Marketing Philosophy:

The societal marketing philosophy is the newest and most modern of all the marketing philosophies. It focuses on
creating products that are not only profitable but also socially and environmentally responsible. Companies that
follow this philosophy believe that they have a responsibility to society and the environment and that they can make
a positive impact by creating products that are sustainable and socially responsible. The focus is on balancing the
needs of customers, the company, and society as a whole. Companies that follow this philosophy often invest in
corporate social responsibility initiatives and work to create products that have a positive impact on society and the
environment.

In conclusion, understanding the various marketing philosophies is essential for companies looking to develop an
effective marketing strategy. Each philosophy has a different focus and approach, and choosing the right philosophy
depends on the company's goals, values, and market environment. Companies that can balance the various
marketing philosophies and create a customer-centric culture are more likely to succeed in the long run.

CONCEPT OF CUSTOMER VALUE AND CUSTOMER SATISFACTION

Customer value and customer satisfaction are two important concepts in marketing and business that help
organizations to understand and meet the needs of their customers. While they are related, they are distinct
concepts that are important to understand.

Customer value refers to the perceived benefit that a customer receives from a product or service in relation to its
cost. It is the difference between the benefits the customer receives and the cost they incur. Benefits can be
functional, such as the product’s features and performance, or emotional, such as the feeling of prestige or status
associated with using the product. Costs can include not just the monetary price of the product or service, but also
the time, effort, and inconvenience required to obtain and use it. In general, customers are willing to pay more for
products and services that provide greater value to them.

Customer satisfaction, on the other hand, refers to the extent to which a customer’s expectations have been met or
exceeded by a product or service. It is a measure of how well a product or service has performed relative to the
customer’s expectations. If a product or service meets or exceeds the customer’s expectations, they are likely to be
satisfied. If it falls short of their expectations, they are likely to be dissatisfied.

While customer value and customer satisfaction are related, they are not the same thing. A product or service can
provide a high level of customer value but still fail to satisfy a customer if it does not meet their specific needs or
expectations. Similarly, a product or service can meet a customer’s expectations but not provide a high level of value
if it is priced too high or does not offer features or benefits that the customer values.

In summary, customer value and customer satisfaction are both important concepts in marketing and business that
help organizations understand and meet the needs of their customers. Customer value refers to the perceived
benefit that a customer receives from a product or service in relation to its cost, while customer satisfaction refers to
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the extent to which a product or service meets or exceeds a customer’s expectations. By focusing on both customer
value and customer satisfaction, organizations can build long-term relationships with their customers and increase
customer loyalty and retention.

MARKETING MANAGEMENT PROCESS

Marketing management is the process of planning, organizing, implementing, and controlling marketing activities to
achieve the organization's objectives. The marketing management process consists of five key steps, which are as
follows:

1. Understanding Customer Needs and Wants: The first step in the marketing management process is to identify
and understand customer needs and wants. This involves conducting market research to gather information
about customer preferences, behavior, and attitudes. Market research can take many forms, such as surveys,
focus groups, and online analytics. By understanding customer needs and wants, organizations can develop
products and services that meet those needs and wants.

2. Developing Marketing Strategy: Once customer needs and wants have been identified, the next step is to
develop a marketing strategy. This involves developing a marketing mix, which consists of the product, price,
place, and promotion. The marketing mix is the combination of factors that a company can control to influence
customers to purchase its products or services. The product refers to the actual product or service that is being
offered, the price is the amount that the customer pays for the product, the place refers to the channels through
which the product is distributed, and the promotion includes all the methods used to promote the product to
the target market.

3. Implementing the Marketing Strategy: Once the marketing strategy has been developed, the next step is to
implement it. This involves putting the marketing mix into action by launching the product, setting the price,
distributing it through the chosen channels, and promoting it to the target market. Implementation involves
coordinating the efforts of different departments within the organization, such as production, finance, and sales.

4. Monitoring and Evaluating Performance: Once the marketing strategy has been implemented, the next step is to
monitor and evaluate its performance. This involves tracking sales, market share, customer feedback, and other
key performance indicators (KPIs) to determine if the marketing strategy is achieving its objectives. This
information is then used to make adjustments to the marketing mix as needed.

5. Adjusting the Marketing Strategy: The final step in the marketing management process is to adjust the marketing
strategy based on the performance data that has been collected. If the marketing mix is not achieving the
desired results, adjustments may need to be made to the product, price, place, or promotion. This process is
ongoing, as organizations need to continually adapt to changes in the market, customer preferences, and
competitive pressures.

In summary, the marketing management process is a continuous cycle of understanding customer needs and wants,
developing a marketing strategy, implementing the strategy, monitoring and evaluating performance, and adjusting

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the strategy as needed. By following this process, organizations can develop effective marketing strategies that help
them achieve their objectives and build long-term relationships with their customers.

CONCEPT OF MARKETING MIX

The marketing mix is a framework used by businesses to develop and implement effective marketing strategies. It is
a set of controllable tactical marketing tools that a company uses to promote its product or service to its target
audience. The marketing mix consists of four key elements, which are often referred to as the "4 Ps" of marketing:

1. Product: The product refers to the goods or services that a company offers to its customers. This includes the
design, features, quality, packaging, and branding of the product. The product must meet the needs and wants
of the target market and offer unique value to customers.

2. Price: The price is the amount that a customer pays for the product or service. It must be set at a level that is
both attractive to customers and profitable for the company. Factors that affect pricing include production costs,
competition, and customer demand.

3. Place (Distribution): Place refers to the channels through which the product or service is sold and delivered to
the customer. This includes the physical location of the business, as well as online and offline channels. The goal
is to make the product or service easily accessible to customers in the most efficient and effective way possible.

4. Promotion: Promotion refers to the communication tools that a company uses to promote its product or service
to its target market. This includes advertising, personal selling, sales promotion, public relations, and direct
marketing. The goal is to create awareness of the product or service and persuade customers to purchase it.

The marketing mix is an important tool for businesses to use when developing their marketing strategies. By
carefully considering each element of the mix, businesses can develop a comprehensive plan that effectively targets
their desired audience and achieves their marketing objectives. The marketing mix is not static and may need to be
adjusted over time based on changes in the market, competition, and customer preferences.

MARKETING ENVIRONMENT

The marketing environment is the sum total of all the factors that influence the marketing activities of a business.
These factors can be broadly classified into two categories – the microenvironment and the macroenvironment.

The Microenvironment

The microenvironment comprises the factors that are closely related to the operations of the business and over
which it has a degree of control. These factors include the company’s internal environment, suppliers,
intermediaries, competitors, customers, and publics.
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1. Company’s internal environment: The company’s internal environment includes the company’s vision, mission,
objectives, and resources. The company’s culture, structure, and management style also affect its marketing
activities. The marketing department must work closely with other departments in the company to ensure that
marketing strategies are aligned with the overall goals of the organization.

2. Suppliers: Suppliers provide the raw materials and other resources necessary for the production of goods and
services. The quality, availability, and price of these resources can have a significant impact on a company’s
marketing activities.

3. Intermediaries: Intermediaries are the middlemen who help to connect the company with its customers. These
include wholesalers, retailers, and distributors. The company must work closely with these intermediaries to
ensure that its products are available to customers in the most efficient and effective way possible.

4. Competitors: Competitors are other companies in the same industry that are vying for the same customers. The
marketing department must be aware of the activities of its competitors and develop strategies to differentiate
its products and services from those of its competitors.

5. Customers: Customers are the ultimate consumers of the company’s products and services. The marketing
department must understand the needs and preferences of its customers and develop products and services
that meet those needs.

6. Publics: Publics include all the groups that have an interest in or impact on the company’s activities. These
include the media, government agencies, and special interest groups. The marketing department must be aware
of the concerns and interests of these groups and develop strategies to address them.

The Macro environment

The macro environment comprises the factors that are beyond the control of the business but which have a
significant impact on its marketing activities. These factors include economic, political, legal, technological, social,
and cultural factors.

1. Economic factors: Economic factors include the overall economic conditions, such as inflation, recession, and
consumer confidence. These factors can impact consumer spending and purchasing power, which in turn affects
a company’s marketing activities.

2. Political and legal factors: Political and legal factors include government regulations and laws that affect how a
company conducts its business and markets its products. These regulations can include laws related to product
safety, labeling, and advertising.

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3. Technological factors: Technological factors include advancements in digital technology and other areas that can
create new opportunities for marketing and impact how customers interact with brands.

4. Social and cultural factors: Social and cultural factors include changing demographics and values that can impact
consumer behavior and preferences. For example, the increasing concern for the environment has led to a
growing demand for sustainable and eco-friendly products.

5. Competition: Competition within the industry can also impact the marketing environment, as companies
compete for market share and customer loyalty. The level of competition in the industry can be affected by
various factors, such as the entry of new competitors, changes in customer preferences, and advancements in
technology.

Conclusion

The marketing environment is a complex and dynamic system of factors that can influence a company’s marketing
activities. Businesses need to be aware of the various factors that make up the marketing environment and adjust
their marketing strategies accordingly. By understanding the marketing environment, businesses can develop
effective marketing strategies that take into account the needs and preferences of their customers and respond to
changes in the market.

CUNSUMER BUYER BEHAVIOUR

Consumer buyer behavior is the study of how individuals make decisions to buy, use, and dispose of products and
services. It involves understanding the psychological, social, and cultural factors that influence consumer behavior.
The process of consumer buyer behavior can be broken down into several stages, which are discussed below.

1. Problem recognition: The first stage of consumer buyer behavior is when the consumer recognizes a problem or
need. This can be triggered by an internal or external stimulus. For example, a consumer may realize that they
are running out of toothpaste and need to buy more.

2. Information search: Once the consumer recognizes a problem, they begin to search for information about
possible solutions. This can be done through personal experience, seeking advice from friends and family, or
through external sources such as advertisements or online reviews.

3. Evaluation of alternatives: After gathering information, the consumer evaluates the available options and weighs
the pros and cons of each alternative. This evaluation may involve considering factors such as price, quality, and
brand reputation.

4. Purchase decision: Once the consumer has evaluated the available options, they make a purchase decision. This
decision may be influenced by various factors such as availability, price, and convenience.

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5. Post-purchase evaluation: After making a purchase, the consumer evaluates their decision and experience with
the product or service. This evaluation can be influenced by factors such as satisfaction with the product or
service, post-purchase dissonance, and the influence of other people's opinions.

There are several factors that can influence consumer buyer behavior, including:

1. Psychological factors: These include the individual's personality, motivation, perception, learning, and attitudes.
These factors can influence the way a consumer perceives and responds to marketing messages.

2. Social factors: These include the consumer's social environment, such as family, friends, and social class. Social
factors can influence the consumer's purchasing decisions and behavior.

3. Cultural factors: These include the consumer's cultural background, values, beliefs, and customs. Cultural factors
can affect the way a consumer perceives and responds to marketing messages, as well as their purchasing
behavior.

4. Situational factors: These include the consumer's immediate physical environment and the context in which the
purchase is being made. Situational factors can influence the consumer's purchasing behavior, such as impulse
buying or buying based on convenience.

In summary, consumer buyer behavior is the study of how individuals make decisions to buy, use, and dispose of
products and services. It involves understanding the psychological, social, and cultural factors that influence
consumer behavior, as well as the stages involved in the decision-making process. By understanding consumer buyer
behavior, marketers can develop effective strategies to target and influence consumer behavior.

STP MODEL
The STP Model, also known as the Segmentation, Targeting, and Positioning model, is a marketing framework used
to identify and analyze a target market, and develop effective marketing strategies to reach that market. The STP
Model consists of three key stages, which are explained in detail below:

Segmentation:

Segmentation involves dividing the market into smaller, more homogeneous groups of consumers with similar
needs, wants, or characteristics. The aim of segmentation is to identify different groups of consumers with similar
needs, so that marketers can develop targeted marketing strategies for each group. There are several methods of
segmentation, including:

1. Geographic segmentation: Dividing the market based on geographic location, such as country, region, city, or
climate.
2. Demographic segmentation: Dividing the market based on demographic factors, such as age, gender, income,
education, or family status.
3. Psychographic segmentation: Dividing the market based on lifestyle, personality, values, or attitudes.

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4. Behavioral segmentation: Dividing the market based on consumer behavior, such as usage rate, brand loyalty, or
purchase occasion.

Targeting:

Targeting involves selecting one or more segments to focus on, based on the attractiveness and fit of each segment
with the company's goals, resources, and capabilities. The aim of targeting is to select the most profitable and viable
segments to focus on, and to develop tailored marketing strategies for each segment. There are several factors to
consider when selecting target segments, including:

Size: The size of the segment should be large enough to justify investment in marketing efforts.
Growth potential: The segment should have growth potential, so that the company can benefit from long-term
profitability.
Profitability: The segment should be profitable, so that the company can generate sufficient revenue to cover its
costs.
Accessibility: The segment should be accessible, so that the company can effectively reach and communicate
with its target customers.
Compatibility: The segment should be compatible with the company's goals, resources, and capabilities, so that
the company can effectively serve the needs of its target customers.

Positioning:

Positioning involves developing a unique and compelling brand identity and value proposition for the target
segment, based on the company's strengths, competitive advantages, and the needs and preferences of the target
customers. The aim of positioning is to differentiate the company's brand from competitors, and to create a strong
and memorable image in the minds of target customers. There are several steps involved in positioning, including:

 Identifying the key benefits and features of the product or service.

 Identifying the key needs and preferences of the target customers.
 Identifying the key competitors and their strengths and weaknesses.
 Developing a unique and compelling value proposition that differentiates the company's brand from competitors
and meets the needs of the target customers.
 Communicating the value proposition effectively through marketing messages, brand identity, and customer
experience.

In summary, the STP Model is a marketing framework used to identify and analyze a target market, and develop
effective marketing strategies to reach that market. The STP Model consists of three key stages: Segmentation,
Targeting, and Positioning. Segmentation involves dividing the market into smaller, more homogeneous groups of
consumers with similar needs, Targeting involves selecting one or more segments to focus on, based on the
attractiveness and fit of each segment with the company's goals, resources, and capabilities. Positioning involves
developing a unique and compelling brand identity and value proposition for the target segment, based on the
company's strengths, competitive advantages, and the needs and preferences of the target customers.

COMPETITITIVE MARKETING STRATEGY

Competitive marketing strategy is the set of actions and techniques a company uses to position itself effectively
against its competitors in the market. The aim of competitive marketing strategy is to gain a competitive advantage
over rivals, increase market share, and ultimately maximize profitability. There are various competitive marketing
strategies that companies can use, some of which are explained below:
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1. Cost leadership strategy:

This strategy involves focusing on producing goods or services at the lowest cost possible, while maintaining
acceptable levels of quality. By minimizing costs, a company can offer its products at lower prices than its
competitors, which can attract price-sensitive customers. This strategy is effective for companies with high
production volumes, standardized products, and efficient operations. Examples of companies that have used this
strategy include Walmart and Southwest Airlines.

2. Differentiation strategy:

This strategy involves creating a unique and desirable product or service that is differentiated from those of
competitors in the market. The aim is to create a perceived value among customers that makes them willing to pay a
premium price. Differentiation can be achieved through superior product quality, customer service, design, or
branding. This strategy is effective for companies that can create strong brand loyalty and customer preferences.
Examples of companies that have used this strategy include Apple and Mercedes-Benz.

3. Focus strategy:

This strategy involves targeting a specific market segment or niche, and tailoring products or services to meet the
needs and preferences of that segment. The aim is to create a competitive advantage by serving a particular
customer group better than competitors. This strategy is effective for companies with limited resources or expertise,
as it allows them to focus on a narrow market and develop specialized expertise. Examples of companies that have
used this strategy include Porsche and Rolex.

4. Innovation strategy:

This strategy involves developing new products, services, or processes that offer superior benefits to customers, and
are not currently available in the market. The aim is to create a competitive advantage through innovation and
creativity. This strategy is effective for companies that can invest in research and development, and have a culture of
experimentation and risk-taking. Examples of companies that have used this strategy include Google and Tesla.

5. Coopetition strategy:

This strategy involves collaborating with competitors to achieve common goals, while also competing with them in
the market. The aim is to create a mutually beneficial relationship that allows companies to leverage each other's
strengths and resources, while also maintaining their own competitive positions. This strategy is effective for
companies that operate in complex and dynamic markets, where collaboration and agility are essential for success.
Examples of companies that have used this strategy include Microsoft and Intel.

In conclusion, competitive marketing strategy is a critical aspect of a company's success in the market. The choice of
strategy depends on factors such as the company's resources, market position, customer needs, and competitive
landscape. By choosing and implementing the right competitive marketing strategy, a company can gain a
competitive advantage over its rivals, increase market share, and ultimately maximize profitability.

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UNIT 2
EXPLAIN PRODUCT
A product is anything that can be offered to a market for attention, acquisition, use, or consumption and that might
satisfy a want or need. Products can be tangible physical goods, such as clothes, cars, or food, or intangible services,
such as education, healthcare, or banking.

Products can also be categorized based on their level of tangibility, which refers to the extent to which customers
can physically touch, see, and feel the product. Tangible products are physical goods that customers can see, touch,
and feel, while intangible products are services that customers cannot touch, but rather experience or receive.

In marketing, a product can be further defined as a bundle of benefits that meet the needs or wants of customers.
These benefits can include features, functions, quality, reliability, design, packaging, branding, and more. For
example, a car is not just a mode of transportation, but it also provides features such as comfort, safety, speed, style,
and convenience.

Products can be designed and developed to serve a specific market segment or target audience. For example, a
luxury brand might design products for high-end consumers who value exclusivity and premium quality, while a
budget brand might focus on affordability and accessibility for the mass market.

In summary, a product is a bundle of benefits that satisfies customers' needs or wants and can be offered in the form
of tangible goods or intangible services. Products can be categorized based on their level of tangibility and can be
designed to meet the needs of specific market segments or target audiences.

PRODUCT CLASSIFICATION
Product classification is the process of grouping products based on their similarities and differences. This
classification is important as it helps businesses to develop effective marketing strategies, make informed decisions
about product development, pricing, promotion, and distribution, and better understand the needs and behavior of
their target customers.

1. Convenience Products - These are products that customers buy frequently and with minimal effort, usually
because they are readily available in most stores. Examples of convenience products include food items like
bread, milk, and snacks, as well as cleaning products like soap and toothpaste.

2. Shopping Products - These are products that customers buy less frequently, usually after some research and
comparison. Shopping products typically have a higher price point than convenience products, and customers are
willing to spend more time researching and evaluating their options. Examples of shopping products include clothing,
appliances, and electronics.

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3. Specialty Products - These are products that customers are willing to search for extensively, and they are willing to
pay a premium price for them. Specialty products are often unique or have a distinct quality that sets them apart
from other products in their category. Examples of specialty products include luxury watches, high-end fashion, and
rare collectibles.

4. Unsought Products - These are products that customers either do not know about or do not actively seek out, such
as life insurance or funeral services. Businesses must employ aggressive marketing strategies to raise awareness and
create demand for these products.

5. Materials and Parts - These are products that businesses purchase to use in the production of other products.
Examples of materials and parts include raw materials like lumber and steel, as well as components like microchips
and engines.

6. Capital Items - These are long-term investments that businesses make to improve their operations or increase
productivity. Examples of capital items include machinery, vehicles, and buildings.

7. Supplies and Services - These are products that businesses purchase to support their operations, such as office
supplies, maintenance services, and consulting services.

8. Durability - Products can be classified as durable or non-durable. Durable products are those that can be used
repeatedly over an extended period of time, while non-durable products are those that are consumed or used up
quickly. Examples of durable products include cars, furniture, and appliances, while non-durable products include
food, cleaning supplies, and paper products.

9. Tangibility - Products can be classified as tangible or intangible. Tangible products are those that customers can
physically touch, see, and feel, while intangible products are those that customers cannot touch, but rather
experience or receive. Examples of tangible products include clothing, books, and electronics, while examples of
intangible products include insurance, banking, and consulting services.

10. Product Use - Products can also be classified based on their intended use or purpose. Examples of product use
categories include personal care products, household products, automotive products, or electronic products.
Product use categories can be further broken down into subcategories based on specific use cases, such as
skincare products, kitchen appliances, or computer accessories.

11. Price - Products can be classified based on their price range. Examples of price categories include premium, mid-
range, or budget products. Premium products are those that are priced higher

PRODUCT LEVEL
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Product level refers to the level of complexity and customization involved in the production of a product. There are
several levels of products, each of which offers varying levels of customization and complexity. Understanding the
different product levels is crucial for businesses to effectively develop and market their products. In this article, we
will discuss the different levels of products in detail.

1. Core Product

The core product is the most basic level of a product, and it represents the primary benefit that the customer derives
from using the product. For example, the core product of a car is transportation from one place to another. The core
product is the starting point for product development and serves as the foundation for the other levels of the
product.

2. Basic Product

The basic product is the second level of a product, and it represents the features and attributes that are necessary to
fulfill the core product's purpose. For example, the basic product of a car includes the engine, transmission, and
wheels, which are necessary to transport the user from one place to another. The basic product is essential for the
product to be functional and serves as the minimum viable product for customers.

3. Expected Product

The expected product is the third level of a product, and it represents the features and attributes that customers
expect from a product in a particular category. For example, when customers buy a car, they expect it to have
features such as air conditioning, power windows, and a stereo system. The expected product represents the
standard features that are necessary for the product to meet customer expectations.

4. Augmented Product

The augmented product is the fourth level of a product, and it represents the additional features and attributes that
are not essential but enhance the customer's experience. For example, the augmented product of a car includes
features such as a navigation system, heated seats, and a sunroof. The augmented product serves as a way for
businesses to differentiate their product from competitors and provide additional value to customers.

5. Potential Product

The potential product is the fifth level of a product, and it represents the future features and attributes that
businesses plan to add to the product. The potential product may include features that are not yet possible to
produce or that are still in the research and development phase. The potential product serves as a way for
businesses to stay ahead of the competition and provide innovative solutions to customer problems.

Businesses must understand the different levels of products and their customers' needs to effectively develop and
market their products. By offering a range of product levels, businesses can cater to different customer segments
and provide value at different price points. Additionally, understanding the potential product level allows businesses
to innovate and stay ahead of the competition

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PRODUCT DIFFERENTITATION
Product differentiation is a marketing strategy used by businesses to make their products stand out from those of
their competitors. This strategy involves creating a unique product that offers superior features, quality, or benefits
that set it apart from similar products in the market. The aim of product differentiation is to create a perceived value
in the minds of customers and make the product more attractive, resulting in increased sales and revenue.

Here are some ways businesses can differentiate their products:

Quality

Quality is an essential factor in product differentiation. Businesses can differentiate their products by offering higher
quality materials, superior craftsmanship, and advanced technology. For example, a smartphone company can
differentiate its product by using premium materials and advanced features, resulting in a higher price point.

Design

Design is an essential aspect of product differentiation. Businesses can differentiate their products by creating
unique and attractive designs that stand out from their competitors. For example, a furniture company can
differentiate its products by offering unique and modern designs that cater to a specific customer segment.

Features

Product features are another way businesses can differentiate their products. By offering unique and innovative
features, businesses can provide a better user experience for customers. For example, a car manufacturer can
differentiate its products by offering advanced safety features, fuel efficiency, and entertainment systems.

Branding

Branding is a powerful tool for product differentiation. By creating a strong brand identity, businesses can
differentiate their products from competitors. A strong brand identity can create a perceived value in the minds of
customers and result in higher brand loyalty. For example, Apple is a brand that has successfully differentiated its
products through branding.

Customer Service

Customer service is an essential factor in product differentiation. By offering excellent customer service, businesses
can create a positive experience for customers and differentiate their products from competitors. For example, a
retail store can differentiate its products by offering personalized customer service and easy returns.

In conclusion, product differentiation is a crucial marketing strategy that businesses can use to make their products
stand out from their competitors. By focusing on quality, design, features, branding, and customer service,
businesses can differentiate their products and create a perceived value in the minds of customers. By implementing
these strategies, businesses can increase sales, revenue, and brand loyalty.

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PRODUCT MIX
Product mix refers to the combination of all the products that a business offers for sale to its customers. It includes
all the product lines and individual products that a business sells. The product mix is an essential component of a
business's marketing strategy as it determines the range and depth of products that a business offers to meet its
customers' needs. The different elements of the product mix in detail.

1. Product Line

A product line is a group of related products that a business offers for sale. For example, a clothing company may
have a product line for men, another for women, and another for children. The product line is designed to
appeal to different customer segments and offers a range of products at different price points.

2. Product Width

Product width refers to the number of different product lines that a business offers. A business can have a
narrow or wide product width, depending on its resources and market demand. For example, a business that
specializes in clothing may have a narrow product width, while a department store may have a wide product
width, offering products in many different categories.

3. Product Depth

Product depth refers to the number of individual products within each product line. A business can have a
shallow or deep product depth, depending on its resources and market demand. For example, a clothing
company may have a deep product depth within its women's clothing line, offering dresses, pants, skirts, and
tops in many different styles and colors.

4. Product Mix Consistency

Product mix consistency refers to how closely related the different product lines are to each other. A business
can have a consistent or inconsistent product mix, depending on how related its products are. For example, a
business that sells clothing and accessories may have a consistent product mix, while a business that sells both
clothing and hardware may have an inconsistent product mix.

5. Product Mix Width

Product mix width refers to the number of product lines that a business offers. A business can have a narrow or
broad product mix, depending on its resources and market demand. For example, a business that specializes in
outdoor gear may have a narrow product mix, while a department store may have a broad product mix, offering
products in many different categories.

In conclusion, the product mix is an essential component of a business's marketing strategy. It includes the product
line, product width, product depth, product mix consistency, and product mix width. By understanding these
elements, businesses can create a product mix that meets their customers' needs, maximizes their resources, and
increases their revenue.

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PRODUCT LINE DECISION

Product line decisions refer to the strategic choices made by businesses regarding the range of products they offer
within a particular product line. These decisions are critical because they directly impact a business's sales,
profitability, and customer loyalty. Factors that businesses should consider when making product line decisions.

Product Line Length

Product line length refers to the number of different products that a business offers within a particular product line.
A business can have a short or long product line length, depending on its resources and market demand. A short
product line may appeal to niche markets, while a long product line may appeal to broader customer segments.

Product Line Width

Product line width refers to the number of different product lines that a business offers. A business can have a
narrow or broad product line width, depending on its resources and market demand. A narrow product line width
may appeal to specific customer segments, while a broad product line width may appeal to a broader range of
customers.

Product Line Depth

Product line depth refers to the variations of a particular product that a business offers within a particular product
line. A business can have a shallow or deep product line depth, depending on its resources and market demand. A
shallow product line depth may offer limited variations of a product, while a deep product line depth may offer a
broader range of variations of a product.

Product Line Consistency

Product line consistency refers to how closely related the different products within a product line are to each other.
A business can have a consistent or inconsistent product line, depending on how related its products are. A
consistent product line may appeal to a specific customer segment, while an inconsistent product line may appeal to
a broader range of customers.

Product Line Pruning

Product line pruning refers to the process of removing unprofitable or low-performing products from a product line.
This process is critical to maintaining profitability and ensuring that a business's resources are used efficiently. By
removing unprofitable products, a business can focus on its profitable products, improve customer satisfaction, and
increase its revenue.

In conclusion, product line decisions are critical to a business's success. By considering product line length, width,
depth, consistency, and pruning, businesses can create a product line that meets their customers' needs, maximizes
their resources, and increases their profitability. Product line decisions require careful planning and research, and
businesses should regularly review their product lines to ensure they are meeting their customers' needs and
maximizing their profits.

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PRODUCT LIFE CYCLE CONCEPT AND STRATEGIES

The product life cycle (PLC) is a concept that describes the stages that a product goes through during its lifetime in
the market. These stages are introduction, growth, maturity, and decline. Each stage presents different challenges
and opportunities for businesses, and requires different marketing strategies to maximize the product's potential. In
this article, we will discuss the concept of the product life cycle and the marketing strategies that businesses can use
to navigate each stage.

1. Introduction Stage

The introduction stage is the initial phase of a product's life cycle. During this stage, the product is launched in
the market, and businesses focus on creating awareness and generating interest among consumers. Marketing
strategies for this stage include advertising, public relations, and promotions to create product awareness and
generate trial purchases. Pricing strategies may include setting a premium price to emphasize the product's
exclusivity and quality, or setting a low price to encourage trial purchases.

2. Growth Stage

The growth stage is the phase in which a product experiences rapid sales growth. During this stage, businesses
focus on expanding their market share, building brand loyalty, and differentiating their product from
competitors. Marketing strategies for this stage include increasing advertising and promotion efforts, launching
new product variations and product line extensions, and introducing loyalty programs to retain customers.
Pricing strategies may include maintaining or lowering prices to remain competitive and attract new customers.

3. Maturity Stage

The maturity stage is the phase in which a product's sales growth slows down, and the market becomes
saturated. During this stage, businesses focus on maintaining market share and maximizing profits. Marketing
strategies for this stage include emphasizing product quality, customer service, and differentiating the product
from competitors. Pricing strategies may include offering discounts, bundling products, or adjusting prices to
reflect changes in market demand.

4. Decline Stage

The decline stage is the phase in which a product's sales start to decline due to changes in market demand,
competition, or product obsolescence. During this stage, businesses focus on reducing costs, liquidating
inventory, and phasing out the product. Marketing strategies for this stage include discontinuing advertising and
promotion efforts, offering discounts and clearance sales to sell remaining inventory, and considering product
redesign or rebranding to revive sales.

In conclusion, the product life cycle is a useful concept for businesses to understand and navigate their product's
lifecycle. By recognizing the different stages of the product life cycle, businesses can develop effective marketing
strategies that align with their product's lifecycle stage. Effective marketing strategies can help businesses maximize
their profits, build brand loyalty, and stay ahead of their competitors.

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BRAND AND BRANDING STARTEGIES

Brand and branding strategies play a crucial role in the success of a business. A brand is a set of perceptions and
associations that a customer has with a product or service. Branding is the process of creating and managing a brand
to establish a unique identity and create a competitive advantage.

Brand and branding strategies.

1. Brand Identity

Brand identity is the collection of visual and non-visual elements that define a brand. These include the brand name,
logo, colors, packaging, and messaging. The goal of brand identity is to create a consistent look and feel across all
brand touchpoints, including advertising, packaging, and in-store displays.

2. Brand Positioning

Brand positioning is the process of establishing a unique position for a brand in the market. It involves identifying the
target audience, understanding their needs and preferences, and differentiating the brand from competitors. Brand
positioning should be based on the brand's unique value proposition, which is the promise of value that the brand
delivers to customers.

3. Brand Awareness

Brand awareness is the level of recognition and familiarity that a brand has with its target audience. It is the first step
in the process of building brand loyalty. Brand awareness can be achieved through advertising, public relations, and
other promotional activities.

4. Brand Loyalty

Brand loyalty is the degree to which customers are committed to a brand and its products. It is the ultimate goal of
branding, as loyal customers are more likely to make repeat purchases, recommend the brand to others, and be less
price-sensitive. Brand loyalty can be built through consistent brand experiences, superior product quality, and
exceptional customer service.

5. Brand Extension

Brand extension is the process of leveraging an established brand to launch new products or services. It is a popular
strategy for businesses looking to expand their product lines while leveraging the equity of their existing brands.
Successful brand extensions are based on a deep understanding of the target audience and the brand's unique value
proposition.

6. Co-Branding

Co-branding is the process of two or more brands collaborating on a product or service. It is a strategy used to
leverage the equity of two or more brands to create a stronger brand identity and increase brand awareness.
Successful co-branding partnerships are based on a strong fit between the two brands and a shared target audience.

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7. Rebranding

Rebranding is the process of changing the visual and/or non-visual elements of a brand to create a new brand
identity. It is a strategy used to address changes in the market or to update the brand's image. Successful rebranding
requires a deep understanding of the target audience and the brand's unique value proposition.

In conclusion, branding is a critical aspect of a business's success. By establishing a strong brand identity, positioning
the brand in the market, building brand awareness, and creating brand loyalty, businesses can create a competitive
advantage and drive growth. Other strategies like brand extensions, co-branding, and rebranding can be used to
leverage the equity of an existing brand and create new opportunities for growth.

NEW PRODUCT DEVELOPMENT PROCESS

New product development (NPD) is the process of bringing a new product to the market. It is a complex and multi-
stage process that involves multiple teams and departments within a company. In this article, we will discuss the
new product development process in detail.

1. Idea Generation

The first stage in the NPD process is idea generation. This involves identifying potential new product ideas. Ideas
can come from a variety of sources, including customers, employees, competitors, market research, and
brainstorming sessions.

2. Idea Screening

Once a list of potential product ideas has been generated, the next step is to screen them to determine which
ideas are worth pursuing. This involves evaluating each idea based on a set of criteria, such as market size,
competition, technical feasibility, and profitability.

3. Concept Development

In this stage, the selected ideas are developed into product concepts. This involves defining the product's
features, benefits, and target market. A concept statement is created that outlines the product's value
proposition and the benefits it offers to the target market.

4. Concept Testing

Concept testing is the process of evaluating the product concepts with potential customers to determine their
level of interest and acceptance. This can be done through surveys, focus groups, or other market research
methods.

5. Business Analysis

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In this stage, a detailed business case is developed for the new product. This includes an analysis of the product's
costs, revenues, profitability, and return on investment (ROI). The business case is used to determine whether
the product is financially viable and worth pursuing.

6. Product Development

Once the business case is approved, the product development process begins. This involves designing and
developing the product, creating prototypes, testing the product for quality and safety, and making any
necessary modifications.

7. Test Marketing

Test marketing involves introducing the product to a limited market to evaluate its performance and acceptance.
This can help identify any issues with the product or marketing strategy before a full launch.

8. Commercialization

If the product performs well in test marketing, the final step is to launch it commercially. This involves
developing a marketing strategy, setting prices, and rolling out the product to the target market. Ongoing
monitoring and evaluation are important to ensure the product's success and identify opportunities for
improvement.

In conclusion, the new product development process is a complex and multi-stage process that involves a variety of
teams and departments within a company. By following a structured process, companies can increase the chances of
success for new product launches and maximize their return on investment. The process should be flexible and
adaptable to changing market conditions and customer needs.

PRICE AND PRICING OBJECTIVES

Pricing is an essential component of any business strategy, as it directly impacts the profitability of a product or
service.

Pricing objectives are the specific goals that a business hopes to achieve through its pricing strategy. These
objectives can vary depending on the nature of the business, the market conditions, and the competition. The
following are some common pricing objectives that businesses may adopt:

1. Profit maximization: One of the most common pricing objectives is to maximize profits. In this approach, a
business sets the price to generate the maximum amount of profit possible. This is often achieved by setting
a higher price than the cost of production.

2. Sales growth: A business may set a pricing objective to increase sales revenue by attracting more customers
through a lower price point. This strategy is known as market penetration pricing. This approach may help
businesses gain market share and increase their customer base.

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3. Market leadership: Another pricing objective is to become a market leader by setting a price that is lower
than the competition. This strategy is known as competitive pricing. In this approach, a business may set a
price that is equal to or slightly lower than the price of its competitors.

4. Skimming: In some cases, a business may set a high price for a new or unique product to take advantage of
demand from early adopters. This strategy is known as price skimming. The idea is to set a high price initially
and then lower it gradually over time.

5. Survival: In challenging economic conditions, a business may set a pricing objective of survival. In this
approach, a business sets a price that is just enough to cover the cost of production and keep the business
afloat.

6. Brand equity: A business may set a pricing objective to enhance its brand equity by setting a higher price
than its competitors. This strategy is often used by luxury brands that are associated with quality and
exclusivity.

7. Customer loyalty: A business may set a pricing objective to build customer loyalty by offering discounts or
promotions to repeat customers. This strategy is known as loyalty pricing.

In conclusion, pricing objectives are an important aspect of a business's pricing strategy. These objectives can vary
depending on the nature of the business, the market conditions, and the competition. By setting clear pricing
objectives, businesses can develop a pricing strategy that helps them achieve their goals and increase their
profitability.

DETERMINANTS OF PRICE
Determining the price of a product or service is a complex process that involves several factors that can influence the
final price. The following are some of the key determinants of price that businesses should consider:

1. Costs: The cost of producing a product or providing a service is a critical factor in determining the price.
Businesses need to cover their costs and make a profit to remain sustainable. The cost of production includes
direct costs such as raw materials, labor, and overhead costs such as rent and utilities.

2. Competition: The competitive environment is an important factor in determining price. In a competitive market,
businesses must consider the prices of their competitors to ensure they remain competitive. Businesses may set
their prices higher or lower depending on their competitive position.

3. Customer demand: Customer demand is a critical factor in determining price. Businesses must understand the
needs and preferences of their customers to set a price that reflects the perceived value of the product or
service. The higher the demand for a product, the higher the price can be.
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4. Value proposition: The value proposition of a product or service is the perceived value that customers receive
from using it. Businesses must understand the unique benefits that their product or service offers and set a price
that reflects the value that customers receive.

5. Market segmentation: Market segmentation involves dividing the market into smaller groups based on
characteristics such as age, gender, income, and location. Businesses may set different prices for different
segments of the market based on their willingness to pay.

6. Brand image: Brand image is the perception that customers have of a brand. A strong brand image can help a
business set higher prices as customers are willing to pay more for a brand they trust and respect.

7. Legal and ethical considerations: Businesses must consider legal and ethical considerations when setting prices.
Price discrimination, price fixing, and other anticompetitive practices are illegal and can result in fines and legal
penalties.

In conclusion, determining the price of a product or service is a complex process that involves several factors.
Businesses must consider costs, competition, customer demand, value proposition, market segmentation, brand
image, and legal and ethical considerations when setting prices. By carefully considering these factors, businesses
can set a price that is competitive, profitable, and meets the needs and preferences of their customers.

PRICING METHODS AND STRATEGIES

Pricing is a crucial aspect of any business, as it determines the revenue generated from sales. Pricing methods and
strategies refer to the approaches businesses use to determine the price of their products or services. The choice of
pricing method and strategy can significantly affect a business's profitability, customer perception, and competitive
position in the market. In this answer, I will discuss the various pricing methods and strategies that businesses use to
set prices.

Pricing Methods:

1. Cost-plus pricing: This method involves calculating the total cost of producing a product or delivering a
service and then adding a markup to arrive at the selling price. The markup covers the business's profit and
other costs like overheads.
2. Value-based pricing: This method involves setting the price based on the perceived value of the product or
service to the customer. The business determines the value that the customer derives from the product or
service and sets the price accordingly.
3. Competition-based pricing: This method involves setting the price based on the prices of competitors. The
business either matches or sets its price slightly lower or higher than the competitor's price.
4. Dynamic pricing: This method involves setting the price based on real-time demand and supply conditions.
The business adjusts the price based on the time of day, day of the week, season, or other factors that affect
demand.

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5. Psychological pricing: This method involves setting prices that appeal to customers' emotions and
perceptions. For example, setting a price at 9.99 instead of 10 creates the perception of a lower price.
6. Markup pricing: This method involves adding a fixed percentage markup to the cost of a product or service
to arrive at the selling price.
7. Contribution margin pricing: This method involves setting the price based on the contribution margin, which
is the difference between the selling price and the variable cost per unit.
8. Penetration pricing: This method involves setting a low price initially to enter a new market and gain market
share. Once the business has established itself in the market, it may raise prices.
9. Skimming pricing: This method involves setting a high price initially for a new product or service to maximize
profits from early adopters. As competition increases, the business may lower prices.
10. Bundle pricing: This method involves offering two or more products or services as a package at a discounted
price. For example, a restaurant may offer a meal deal that includes an entree, side, and drink at a lower
price than if each item were purchased separately.

Pricing Strategies:

1. Penetration pricing: In this strategy, the business sets a low price initially to gain market share and attract new
customers. The business may raise prices later once it has established a customer base.

2. Skimming pricing: In this strategy, the business sets a high price initially for a new product or service to maximize
revenue from early adopters who are willing to pay a premium. The business may lower prices later to attract
more price-sensitive customers.

3. Price bundling: In this strategy, the business offers two or more products or services together as a package at a
lower price than if purchased separately. This strategy is effective for selling complementary products or
services.

4. Psychological pricing: This strategy involves setting prices that appeal to customers' emotions and perceptions.
For example, setting a price at 99 instead of 100 creates the perception of a lower price.

5. Premium pricing: In this strategy, the business sets a high price to create a perception of high quality, luxury, or
exclusivity. This strategy works for businesses that target high-end customers.

6. Loss leader pricing: In this strategy, the business sets a very low price for one product or service to attract
customers to the store. The business may make up for the loss on the discounted item through sales of other
products or services.

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UNIT 3
CONCEPT OF INTEGRATED MARKETING COMMUNICATION
Integrated Marketing Communication (IMC) is a marketing strategy that involves coordinating all aspects of
marketing communication, such as advertising, sales promotion, public relations, direct marketing, personal
selling, and digital marketing, to achieve a consistent and seamless message to the target audience.

The goal of IMC is to create a cohesive and comprehensive communication plan that delivers a consistent
message across all channels and touchpoints to the target audience. This is done by developing a unified
message, coordinating communication across channels, and utilizing different communication tools and tactics
to ensure the message is received by the intended audience.

IMC recognizes that customers interact with brands across multiple touchpoints, and that each touchpoint
should contribute to the overall brand message. By integrating all marketing communication channels, IMC helps
to create a stronger brand identity, increase brand awareness, and build stronger customer relationships.

Overall, IMC aims to create a unified and consistent brand message across all channels and touchpoints, which
can help to increase the effectiveness of marketing communication and ultimately drive business success.

PROMOTION MIX
The promotion mix is a combination of various marketing communication tools used to promote a product or
service to the target audience. The four key elements of the promotion mix are:

Advertising: Advertising involves the use of paid media such as print, radio, television, outdoor, and digital
media to communicate a message about a product or service to potential customers. Advertising helps to create
brand awareness and promote sales.

Types of Advertising:
Print Advertising: Advertising in newspapers, magazines, and other printed materials.
Broadcast Advertising: Advertising on radio and television.
Outdoor Advertising: Advertising on billboards, posters, and other outdoor signage.
Digital Advertising: Advertising on the internet, including search engines, social media, and display ads.

Sales Promotion: Sales promotion involves short-term incentives that are designed to encourage customers to
purchase a product or service. Sales promotion techniques include coupons, discounts, contests, and free
samples. Sales promotion can help to increase sales and create customer loyalty.

Types of Sales Promotion:

Discounts and Coupons: Offering discounts on the price of the product or providing coupons to customers.
Contests and Sweepstakes: Encouraging customers to participate in a contest or sweepstakes to win prizes.
Samples and Free Trials: Providing free samples or free trials of the product or service to encourage
customers to try it.
Loyalty Programs: Rewarding customers for their loyalty by offering discounts, points, or other incentives.

Public Relations: Public relations involves managing the communication between a company and its
stakeholders, including customers, investors, and the media. Public relations activities can help to build a
positive image for the company and enhance its reputation.

Types of Public Relations:

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Media Relations: Engaging with journalists and media outlets to get positive coverage for the company
and its products or services.
Crisis Communications: Managing the company's communication during a crisis or negative event to
minimize damage to the company's reputation.
Community Relations: Engaging with the local community to build relationships and support for the
company.
Corporate Social Responsibility: Demonstrating the company's commitment to social responsibility and
ethical behavior.

Personal Selling: Personal selling involves one-on-one communication between a salesperson and a potential
customer. Personal selling can help to build relationships with customers and promote the benefits of the
product or service.

Types of Personal Selling:

Retail Sales: Selling products or services directly to customers in a retail setting.
Business-to-Business Sales: Selling products or services to other businesses.
Direct Sales: Selling products or services directly to consumers, typically through door-to-door sales or home
parties.
Telemarketing: Selling products or services over the phone.

Publicity : Publicity is a marketing communication tool that involves generating media coverage and attention for a
product, service, or company without directly paying for it.

There are several types of publicity, including:

Product Publicity: This involves generating media coverage for a specific product or line of products. It can be
used to promote new product launches, highlight product features and benefits, and generate excitement
around a product.
Corporate Publicity: This involves generating media coverage for a company as a whole. It can be used to
build brand awareness, promote the company's mission and values, and showcase the company's
accomplishments.
Crisis Publicity: This involves generating media coverage during a crisis situation, such as a product recall or
negative press coverage. It can be used to address the situation, provide transparency and honesty, and
rebuild the company's reputation.
Event Publicity: This involves generating media coverage for a specific event, such as a charity fundraiser,
grand opening, or conference. It can be used to generate excitement and attendance for the event,
showcase the event's purpose and goals, and promote the company's involvement
Cause Publicity: This involves generating media coverage for a specific social cause or issue that a company
supports. It can be used to showcase the company's values and commitment to social responsibility,
generate awareness and support for the cause, and build a positive reputation for the company.

CHHANELS OF DISTRIBUTION
Channels of distribution refer to the various routes through which goods and services move from manufacturers
or producers to the final customers. In simple terms, it refers to the network of intermediaries involved in the
process of delivering goods or services to the end-users. Here are the different channels of distribution:

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1. Direct Distribution Channel: This channel involves selling directly to the end-users without the
involvement of intermediaries. This method is usually employed by small businesses or startups that are
trying to establish their brand and maintain a direct connection with their customers.

2. Indirect Distribution Channel: This channel involves the use of intermediaries such as wholesalers,
distributors, retailers, or agents to reach the end-users. The intermediaries buy products in bulk from the
manufacturers or producers and sell them to the end-users at a profit.

3. Dual Distribution Channel: This channel involves the use of both direct and indirect channels to reach the
end-users. It is usually employed by businesses that want to have direct contact with some customers
while using intermediaries to reach others.

4. Reverse Distribution Channel: This channel involves the movement of products from the end-users to
the manufacturers or producers. This is usually done for products that need to be repaired, recycled, or
refurbished.

5. Online Distribution Channel: This channel involves the use of online platforms such as e-commerce
websites, social media platforms, and mobile apps to sell products and services directly to the end-users.
Online distribution channels are becoming increasingly popular due to their convenience, accessibility,
and cost-effectiveness.

Choosing the right distribution channel depends on various factors such as the type of product, the target
market, and the business's resources and capabilities. A well-designed distribution channel can help businesses
to reach a wider customer base, improve their brand image, and increase their profits.

FUNCTIONS OF INTERMEDIARIES
Intermediaries play a crucial role in the distribution process of goods and services from manufacturers to end-
users. They act as middlemen between producers and consumers and perform various functions that help in
making products available to the end-users. Here are some of the primary functions of intermediaries in
distribution:

1. Distribution: Intermediaries help in moving products from manufacturers to the end-users. They perform
the task of storing, transporting, and delivering products to various locations. This function is critical in
ensuring that the products reach the customers at the right time and place.

2. Financing: Intermediaries provide financing to manufacturers by buying products in bulk and making
payments at a later date. They also provide credit facilities to end-users, which helps in increasing sales
and building customer loyalty.

3. Risk-taking: Intermediaries take on various risks associated with the distribution process such as theft,
damage, and obsolescence of products. They also take on the risk of fluctuations in demand and supply,
changes in market trends, and competition.

4. Marketing Information: Intermediaries provide valuable market information to manufacturers about

customer preferences, buying habits, and trends. This information helps manufacturers to develop
better products and marketing strategies.

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5. Promotion: Intermediaries play a vital role in promoting products to end-users. They use various
advertising and sales promotion techniques to create awareness and generate demand for products.

6. Negotiation: Intermediaries negotiate with both manufacturers and end-users to arrive at a mutually
beneficial agreement. They negotiate on pricing, terms of sale, delivery schedules, and other terms and
conditions.

Overall, intermediaries are critical in facilitating the distribution process and ensuring that products reach the end-
users efficiently and effectively. They perform various functions that help in reducing costs, improving efficiency, and
building strong relationships between manufacturers and end-users.

CHHANEL DESIGN DECISION

Channel design, also known as channel management or channel strategy, refers to the process of developing a
distribution channel that effectively connects manufacturers with their target customers. A well-designed channel
should be able to meet the needs and expectations of customers while generating profits for the manufacturers.
Here are some of the key factors that need to be considered when designing a distribution channel:

1. Target Market: The first step in designing a channel is to identify the target market for the product or service.
This involves understanding the demographics, psychographics, and buying behavior of the target customers.

2. Product Characteristics: The nature of the product or service being offered has a significant impact on the type
of distribution channel that is most appropriate. For example, perishable goods require a fast and efficient
distribution channel, while luxury items may require a more exclusive and personalized approach.

3. Competition: The level of competition in the market is an important factor to consider when designing a channel.
A highly competitive market may require a more extensive distribution network to ensure that the product is
readily available to customers.

4. Cost: The cost of distributing the product is an important factor to consider when designing a channel. It is
essential to balance the cost of distribution with the potential revenue generated from the product.

5. Intermediaries: The choice of intermediaries such as wholesalers, retailers, agents, and brokers is an important
factor to consider when designing a distribution channel. Each intermediary has its own strengths and
weaknesses, and the choice of intermediaries will depend on the product characteristics, target market, and
competition.

6. Logistics: The logistics of distribution, including transportation, storage, and inventory management, are crucial
in ensuring that the product is delivered to customers in a timely and efficient manner.

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7. Control: The level of control that manufacturers want to maintain over the distribution process is an important
factor to consider. Some manufacturers prefer to have a direct relationship with customers, while others prefer
to rely on intermediaries.

Overall, channel design is a critical aspect of distribution management. A well-designed channel can help
manufacturers to reach their target customers, increase their market share, and generate profits.

SELECTING CHHANEL MEMBER

Selecting channel members is a crucial step in designing an effective distribution channel. Channel members such as
wholesalers, retailers, agents, and brokers play a critical role in ensuring that the products are delivered to the end-
users efficiently and effectively. Here are some factors to consider when selecting channel members:

1. Market Coverage: The first step in selecting channel members is to identify the level of market coverage
required for the product. If the product has a broad customer base, a larger number of channel members may be
required to ensure that the product is available in all the required locations.

2. Customer Characteristics: The characteristics of the target customers are also important in selecting channel
members. For example, if the target customers are high-income individuals, then the distribution channel should
include high-end retailers or exclusive agents.

3. Expertise and Experience: The expertise and experience of channel members in handling similar products is also
an important consideration. Experienced channel members are more likely to have established relationships
with customers and to be able to provide better service.

4. Reputation: The reputation of channel members is also important in ensuring that the product is perceived
positively by customers. Channel members with a good reputation are likely to be trusted by customers, which
can help to increase sales.

5. Cost: The cost of using channel members is an important consideration, as it affects the overall cost of
distribution. It is essential to balance the cost of using channel members with the benefits they provide in terms
of market coverage and customer service.

6. Control: The level of control that manufacturers want to maintain over the distribution process is also an
important consideration. Some manufacturers prefer to have a direct relationship with customers, while others
prefer to rely on intermediaries.

7. Compatibility: The compatibility of the manufacturer's product with the channel member's existing product
portfolio is also an important consideration. The channel member should have a product portfolio that
complements the manufacturer's product, which can help to increase sales.
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Overall, selecting channel members requires a careful consideration of various factors. A well-designed distribution
channel that includes the right mix of channel members can help manufacturers to reach their target customers
more efficiently and effectively, leading to increased sales and profits.

CHHANNEL MANAGEMENT
Channel management refers to the process of overseeing and optimizing the distribution channel that connects
manufacturers with their target customers. Effective channel management is critical to the success of any business,
as it helps to ensure that products are delivered to customers in a timely and efficient manner. Here are some of the
key components of channel management:

1. Channel Strategy: The first step in channel management is to develop a channel strategy that outlines the
objectives, target customers, and distribution channels that will be used to reach them. The strategy should be
aligned with the overall marketing plan and should take into account the product characteristics, competition,
and market conditions.

2. Channel Selection: The next step is to select the appropriate channel members such as wholesalers, retailers,
agents, and brokers. The selection process should take into account factors such as market coverage, customer
characteristics, expertise and experience, reputation, cost, control, and compatibility.

3. Channel Relationships: The relationship between the manufacturer and the channel members is critical to the
success of the distribution channel. Manufacturers need to establish strong relationships with their channel
members based on trust, communication, and mutual benefit. Regular communication, training, and incentives
can help to maintain these relationships.

4. Channel Performance: Channel performance needs to be monitored regularly to ensure that the channel is
meeting its objectives. This involves tracking key performance indicators such as sales volume, market share,
customer satisfaction, and profitability. Any issues or bottlenecks in the distribution channel should be identified
and addressed promptly.

5. Channel Optimization: The final component of channel management is channel optimization, which involves
making changes to the channel strategy and structure to improve performance. This may involve adding or
removing channel members, changing the product offering, or adjusting the pricing or promotional strategy.

Effective channel management is critical to the success of any business, as it ensures that the products are delivered
to customers in a timely and efficient manner. By developing a strong channel strategy, selecting the appropriate
channel members, building strong relationships, monitoring performance, and optimizing the channel,
manufacturers can ensure that their products are delivered to customers in the most effective and efficient way
possible.

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EMERGING CHHANELS OF DISTRIBUTION

The emergence of new technologies and changing consumer behavior has led to the development of new channels
of distribution. Here are some of the emerging channels of distribution:

1. E-commerce: E-commerce refers to the buying and selling of goods and services over the internet. E-commerce
platforms such as Amazon, Alibaba, and eBay have revolutionized the way consumers shop, offering a wide
range of products, convenient payment options, and fast delivery. E-commerce has become a popular channel
for retailers and manufacturers, as it allows them to reach a global audience and reduce the costs associated
with traditional retail channels.

2. Direct-to-Consumer (DTC): Direct-to-consumer refers to a business model where manufacturers sell their
products directly to consumers, bypassing traditional retail channels. This model allows manufacturers to have
greater control over their brand and customer experience, and to capture more profit margins. DTC channels are
often used by manufacturers of niche or premium products, such as cosmetics, apparel, and furniture.

3. Subscription-Based Services: Subscription-based services have become increasingly popular in recent years, with
companies such as Netflix, Spotify, and Dollar Shave Club leading the way. These services offer consumers a
regular supply of products or content for a monthly or annual fee, providing a convenient and cost-effective way
to access products or services.

4. Mobile Commerce: Mobile commerce refers to the buying and selling of goods and services through mobile
devices such as smartphones and tablets. Mobile commerce has become a popular channel for retailers and
manufacturers, as it allows them to reach consumers who are always on the go and to provide a personalized
shopping experience.

5. Social Commerce: Social commerce refers to the buying and selling of goods and services through social media
platforms such as Facebook, Instagram, and Pinterest. Social commerce allows retailers and manufacturers to
leverage the power of social media to reach a wider audience, and to provide a personalized and engaging
shopping experience.

6. On-Demand Delivery Services: On-demand delivery services such as UberEATS and Postmates have
revolutionized the way consumers receive goods and services. These services offer a fast and convenient way to
receive products, and are often used by retailers and manufacturers to offer same-day delivery options to
customers.

Overall, the emergence of new channels of distribution is driven by changing consumer behavior and the
development of new technologies. Retailers and manufacturers need to stay up-to-date with these emerging
channels and adapt their distribution strategies accordingly to remain competitive and meet the evolving needs of
their customers.

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UNIT 4
CONSUMER ADOPTION OF INNOVATION
Consumer adoption of innovation refers to the process by which consumers learn about and accept new products,
services, or technologies. This process is influenced by a variety of factors, including the characteristics of the
innovation itself, the consumer's individual characteristics, and external factors such as marketing and social
influence.

The consumer adoption process can be broken down into five stages:

1. Awareness: In this stage, the consumer becomes aware of the innovation's existence, but does not yet have a
full understanding of its potential benefits or drawbacks. This may occur through advertising, word-of-mouth, or
other forms of marketing.
2. Interest: In this stage, the consumer becomes interested in the innovation and begins to seek out more
information about it. This may involve conducting research online, asking friends and family for their opinions, or
visiting a store to see the innovation in person.
3. Evaluation: In this stage, the consumer begins to evaluate the innovation based on its perceived benefits and
drawbacks. This may involve weighing the innovation's cost against its potential benefits, or comparing it to
existing alternatives.
4. Trial: In this stage, the consumer tries the innovation for the first time. This may involve purchasing the
innovation, or trying it out through a free trial or sample.
5. Adoption: In this final stage, the consumer decides to fully adopt the innovation and integrate it into their life.
This may involve continued use of the innovation, recommending it to others, or becoming a brand advocate.

Several factors influence the consumer adoption process. These include:

1. Relative Advantage: Consumers are more likely to adopt an innovation if they perceive it to be superior to
existing alternatives in terms of its benefits and performance.
2. Compatibility: Consumers are more likely to adopt an innovation if it is compatible with their existing beliefs,
values, and behaviors.
3. Complexity: Consumers are more likely to adopt an innovation if it is easy to understand and use.
4. Trialability: Consumers are more likely to adopt an innovation if they are able to try it out before making a full
commitment.
5. Observability: Consumers are more likely to adopt an innovation if they can observe others using it and perceive
it as socially desirable.

Overall, the consumer adoption process is complex and influenced by a variety of factors. Understanding these
factors and tailoring marketing and product development efforts accordingly can help increase the likelihood of
successful adoption and integration of new innovations into the marketplace.

RURAL MARKETING
Rural marketing refers to the process of promoting and selling products or services in rural areas, which are typically
characterized by low population density, limited infrastructure, and lower levels of income and education. In recent

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years, rural marketing has gained increasing importance in developing countries, as a large portion of the population
resides in rural areas and represents a significant market opportunity for businesses.

Rural marketing is different from urban marketing in several ways, and requires a unique set of strategies to be
successful.

Here are some key considerations for businesses looking to enter or expand into rural markets:

1. Understanding the rural consumer: Rural consumers have unique needs and preferences that may differ from
urban consumers. It is important to conduct market research to gain insights into their purchasing behavior,
brand preferences, and the factors that influence their purchasing decisions.

2. Developing appropriate products and services: Products and services must be tailored to the needs and
preferences of rural consumers. For example, products may need to be available in smaller sizes or packaging to
accommodate lower purchasing power, and services may need to be offered at times that are convenient for
rural consumers who may have limited access to transportation.

3. Distribution: Distribution channels in rural areas may be limited, and may require businesses to invest in new
distribution networks such as mobile sales vans or partnering with local retail outlets.

4. Pricing: Pricing strategies in rural areas must be tailored to accommodate lower purchasing power, while also
ensuring that businesses can maintain profitability.

5. Promotions: Promotions must be tailored to the specific needs and preferences of rural consumers. For example,
promoting products through local fairs and festivals may be more effective than traditional advertising channels.

6. Building trust and relationships: In rural areas, personal relationships and trust play a significant role in business
interactions. Businesses should invest in building relationships with local communities, and establishing
themselves as reliable and trustworthy partners.

In addition to these considerations, there are several challenges that businesses may face when entering rural
markets, including limited infrastructure, low levels of education and awareness, and the need to adapt to local
customs and traditions. However, with the right strategies and investments, businesses can successfully tap into the
significant market opportunity presented by rural areas, while also contributing to economic development in these
regions.

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