PRINCIPLES OF MARKETING

Prepared by: Muhammad

Shoaib

Notes of Important Questions for University BBA and MBA Students

Contents
Marketing...........................................................................................................................2

Marketing MIX: “4 P’s of Marketing”.................................................................................2

Product..........................................................................................................................2

Price...............................................................................................................................3

Place (Placement)........................................................................................................3

Promotion.....................................................................................................................4

A Summary Table of the Marketing Mix.............................................................................4

Types, Classification of Product........................................................................................6

Convenience Goods.......................................................................................................6

Shopping Goods............................................................................................................6

Specialty Products.........................................................................................................7

Unsought Goods............................................................................................................7

Industrial Goods.........................................................................................................7

Levels of Product...............................................................................................................8

Product Life Cycle..............................................................................................................9

Development Stage..................................................................................................10

Growth Stage............................................................................................................11

Maturity Stage...........................................................................................................11

Decline Stage...........................................................................................................11

The 8 steps in the New Product Development Process..................................................12

1. Idea generation – The New Product Development Process..............................12

2. Idea screening – The New Product Development Process...............................12

3. Concept development and Testing – The New Product Development Process 13

4. Marketing strategy development – The New Product Development Process. . .14

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 5. Business analysis – The New Product Development Process..........................14

6. Product development – The New Product Development Process.....................14

7. Test marketing – The New Product Development Process...............................15

8. Commercialization..............................................................................................15

Pricing Strategy...............................................................................................................16

Price adjustment strategies.............................................................................................17

STP (Segmentation, Targeting and Positioning).............................................................19

1. Demographics..........................................................................................................19

2. Psychographics........................................................................................................20

3. Geography...............................................................................................................20

4. Behavioral Segmentation.........................................................................................20

Market targeting........................................................................................................20

Product positioning..........................................................................................................21

Types of Retailers............................................................................................................21

TYPES OF WHOLESALERS..........................................................................................22

MERCHANT WHOLESALERS....................................................................................22

AGENTS, BROKERS, AND COMMISSIONMERCHANTS.........................................23

MANUFACTURERS' SALES BRANCHES AND OFFICES.........................................23

Introduction of importance of recruitment and selection of sales people........................24

Definition of recruitment and selection.........................................................................24

Importance of sales people..........................................................................................24

Recruitment Process:...................................................................................................24

Advertisement..................................................................................................................25

DIFFERENT TYPES OF ADVERTISING........................................................................25

Print Advertising – Newspapers, Magazines, Brochures, Flyers.................................25

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 Outdoor Advertising – Billboards, Kiosks, Tradeshows and Events............................25

Broadcast advertising - Television, Radio and the Internet.........................................25

Covert Advertising - Advertising in Movies...................................................................26

Surrogate Advertising- Advertising Indirectly...............................................................26

Public Service Advertising- Advertising for Social Causes..........................................26

Celebrity Advertising....................................................................................................26

Logistics...........................................................................................................................27

Role importance of Logistics in Marketing.......................................................................27

Reduced Delivery Time................................................................................................27

Pinpointing Customer Issues.......................................................................................27

Quality Control.............................................................................................................27

Extra Services..............................................................................................................27

Personal Selling...............................................................................................................28

The Seven Steps of Selling..........................................................................................28

Step 1: Prospecting and Qualifying.............................................................................28

Step 2: Pre-Approach...................................................................................................29

Step 3: Approach..........................................................................................................29

Step 4: Presentation.....................................................................................................29

Step 5: Handling Objections........................................................................................30

Step 6: Closing the Sale..............................................................................................30

Step 7: Following Up....................................................................................................30

Branding...........................................................................................................................31

Brand Identity...................................................................................................................31

Brand Image....................................................................................................................31

Brand Equity....................................................................................................................32

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Co-branding.....................................................................................................................32

Brand Strategies..............................................................................................................32

Product line extension..................................................................................................32

Multi brand...................................................................................................................33

Brand extension...........................................................................................................33

New brand....................................................................................................................34

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Marketing
It is a Social and managerial process in which needs, wan are identified and demand is
generated by offering product or services against the value in return.
Marketing MIX: “4 P’s of Marketing”
These marketing tools under four broad categories:
1. Product
2. Price
3. Place
4. Promotion
These four elements are the basic components of a marketing plan and are collectively
called 4 P’s of marketing. 4 P’s pattern more to physical products than services. Below
is an illustration for marketing mix.

The important thing to note is that all these four P’s (variable) are controllable, subject to
internal and external constraints of marketing environment. Marketers, using different
blends of these variables, can target different group of customers having different
needs. So, a customer may call marketing mix “the offering”.

Product
Product is the actual offering by the company to its targeted customers which also
includes value added stuff. Product may be tangible (goods) or intangible (services).

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While formulating the marketing strategy, product decisions include:
 What to offer?
 Brand name
 Packaging
 Quality
 Appearance
 Functionality
 Accessories
 Installation
 After sale services
 Warranty

Price
Price includes the pricing strategy of the company for its products. How much customer
should pay for a product? Pricing strategy not only related to the profit margins but also
helps in finding target customers. Pricing decision also influence the choice of marketing
channels. Price decisions include:
 Pricing Strategy (Penetration, Skim, etc)
 List Price
 payment period
 Discounts
 Financing
 Credit terms
Using price as a weapon for rivals is as old as mankind. but it’s risky too. Consumers
are often sensitive for price, discounts and additional offers. Another aspect of pricing is
that expensive products are considered of good quality.

Place (Placement)
It not only includes the place where the product is placed, all those activities
performed by the company to ensure the availability of the product tot he targeted

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customers. Availability of the product at the right place, at the right time and in the right
quantity is crucial in placement decisions.
Placement decisions include:
 Placement
 Distribution channels
 Logistics
 Inventory
 Order processing
 Market coverage
 selection of channel members

Promotion
Promotion includes all communication and selling activities to persuade future prospects
to buy the product. Promotion decisions include:
 Advertising
 Media Types
 Message
 Budgets
 Sales promotion
 Personal selling
 Public relations
 Direct marketing
As these costs are huge as compared to product price, So it’s good to perform a break-
even analysis before allocating the budget. It helps in determining whether the new
customers are worth of promotion cost or not. It often takes time and requires market
research to develop a successful marketing mix. You should not depend on one mix
always try new mixes. While designing the mix, make changes to all mixes in such a
way that all conveys the same message. Don’t confuse your customers by just changing
one variable and keeping the rest same.

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A Summary Table of the Marketing Mix
The following table summarizes the marketing mix decisions, including a list of some of
the aspects of each of the 4Ps.
Summary of Marketing Mix Decisions

Product Price Place Promotion

Functionality List price Channel members Advertising
Appearance Discounts Channel motivation Personal selling
Quality Allowances Market coverage Public relations
Packaging Financing Locations Message
Brand Leasing options Logistics Media
Warranty Service levels Budget
Service/Support

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Types, Classification of Product
Product classifications help marketers focus their efforts using consumers’ buying behavior. Your
business can use these buying habits to design your marketing efforts for a clearly defined target
audience. Consumer products are often classified as convenience goods, shopping goods, specialty
products or unsought goods. Although these classifications are named as types of products,
focusing on how your customers buy these goods is equally important as you classify products and
develop your marketing campaigns.

Convenience Goods
Those products your customers buy often and without much thought or planning are classified as
convenience goods. Soap, condiments and toothpaste are common examples of convenience
goods. Consumers typically make a choice once on their brand preference for these products and
repeat that choice over many purchases. Making your convenience goods available for impulse or
emergency purchases can be particularly effective. You’ll see this marketing tactic in the placement
of candy near the cash register of your grocery store for impulse buys. Another version is to place
umbrellas, boots or snow shovels near a store exit when sudden weather changes call for them.

Shopping Goods
Buying decisions are detailed considerations of price, quality and value for products classified as
shopping goods. Think about the amount of time you put into picking out a clothing purchase, a car
or appliances. Successful marketing of your shopping goods can come from positioning as a better
buy than your competitors -- for example, presenting better value with higher quality for the price or
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vice versa. Products in the shopping goods classification tend to rely on heavy advertising and even
trained salespeople to influence consumer choices.

Specialty Products
Goods in the specialty products classification tend to promote very strong brand identities, often
resulting in strong brand loyalty among consumers. Examples include stereos, computers, cameras
and the most high-end brands of cars and clothing. While used cars are classified as shopping
goods, a brand-new Mercedes is classified as a specialty good. Buyers for your specialty goods
generally spend more time seeking the product they want than on comparing brands or products to
make a value decision. Your marketing of specialty goods can be successful by promoting what you
have on hand and where your costumers can find it.

Unsought Goods
The products classified as unsought goods are those that your consumers don’t put much thought
into and generally don’t have compelling impulse to buy. Examples include batteries or life
insurance. Your consumers essentially buy unsought goods when they have to, almost as an
inconvenience rather than the newest, latest, greatest product they can’t wait to purchase. Marketing
your unsought goods will likely be most effective with lots of advertising and salespeople promoting
the idea of unresolved need for your unsought products.

Industrial Goods
Industrial goods are based on the demand for the consumer goods they help to
produce. Industrial goods are classified as either production goods or support
goods. Production goods are used in the production of a final consumer good or
product, while support goods help in the production process of consumer goods
such as machinery and equipment.
Unlike consumer goods, which are purchased by the general public, there are
very specific buyers of industrial goods. They include component part buyers
such as car manufacturers, those who purchase and install machinery, and
distributors or anyone else who buys for resale.
 Raw Material
 Capital Items
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  Supplies

Levels of Product
Consumers often think that a product is simply the physical item that he or she buys. In
order to actively explore the nature of a product further, let’s consider it as three different
products – the CORE product, the ACTUAL product, and finally the AUGMENTED product.
This concept is known as the Three Levels of a Product.

Three Levels of a Product

The CORE product is NOT the tangible physical product. You can’t touch it. That’s because
the core product is the BENEFIT of the product that makes it valuable to you. So with the
car example, the benefit is convenience i.e. the ease at which you can go where you like,
when you want to. Another core benefit is speed since you can travel around relatively
quickly.

The ACTUAL product is the tangible, physical product. You can get some use out of it.
Again with the car, it is the vehicle that you test drive, buy and then collect. You can touch it.
The actual product is what the average person would think of under the generic banner of
product.

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The AUGMENTED product is the non-physical part of the product. It usually consists of lots
of added value, for which you may or may not pay a premium. So when you buy a car, part
of the augmented product would be the warranty, the customer service support offered by
the car’s manufacturer and any after-sales service. The augmented product is an important
way to tailor the core or actual product to the needs of an individual customer. The features
of augmented products can be converted in to benefits for individuals.

Product Life Cycle

The life story of most successful products is a history of their passing through certain
recognizable stages. These are shown in Exhibit I and occur in the following order:

Exhibit I Product Life Cycle—Entire Industry

Stage 1. Market Development
This is when a new product is first brought to market, before there is a proved demand
for it, and often before it has been fully proved out technically in all respects. Sales are
low and creep along slowly.

Stage 2. Market Growth

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Demand begins to accelerate and the size of the total market expands rapidly. It might
also be called the “Takeoff Stage.”

Stage 3. Market Maturity

Demand levels off and grows, for the most part, only at the replacement and new family-
formation rate.

Stage 4. Market Decline

The product begins to lose consumer appeal and sales drift downward, such as when
buggy whips lost out with the advent of automobiles and when silk lost out to nylon.
Three operating questions will quickly occur to the alert executive:
 Given a proposed new product or service, how and to what extent can the shape
and duration of each stage be predicted?
 Given an existing product, how can one determine what stage it is in?
 Given all this knowledge, how can it be effectively used?
A brief further elaboration of each stage will be useful before dealing with these
questions in detail.

Development Stage
Bringing a new product to market is fraught with unknowns, uncertainties, and
frequently unknowable risks. Generally, demand has to be “created” during the product’s
initial market development stage. How long this takes depends on the product’s
complexity, its degree of newness, its fit into consumer needs, and the presence of
competitive substitutes of one form or another. A proved cancer cure would require
virtually no market development; it would get immediate massive support. An alleged
superior substitute for the lost-wax process of sculpture casting would take lots longer.

Growth Stage
The usual characteristic of a successful new product is a gradual rise in its sales curve
during the market development stage. At some point in this rise a marked increase in

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consumer demand occurs and sales take off. The boom is on. This is the beginning of
Stage 2—the market growth stage. At this point potential competitors who have been
watching developments during Stage I jump into the fray. The first ones to get in are
generally those with an exceptionally effective “used apple policy.” Some enter the
market with carbon-copies of the originator’s product. Others make functional and
design improvements. And at this point product and brand differentiation begin to
develop.

Maturity Stage
Typically, the market maturity stage forces the producer to concentrate on holding his
distribution outlets, retaining his shelf space, and, in the end, trying to secure even more
intensive distribution. Whereas during the market development stage the originator
depended heavily on the positive efforts of his retailers and distributors to help sell his
product, retailers and distributors will now frequently have been reduced largely to being
merchandise-displayers and order-takers. In the case of branded products in particular,
the originator must now, more than ever, communicate directly with the consumer.

Decline Stage
When market maturity tapers off and consequently comes to an end, the product enters
Stage 4—market decline. In all cases of maturity and decline the industry is
transformed. Few companies are able to weather the competitive storm. As demand
declines, the overcapacity that was already apparent during the period of maturity now
becomes endemic. Some producers see the handwriting implacably on the wall but feel
that with proper management and cunning they will be one of the survivors after the
industry-wide deluge they so clearly foresee. To hasten their competitors’ eclipse
directly, or to frighten them into early voluntary withdrawal from the industry, they initiate
a variety of aggressively depressive tactics, propose mergers or buy-outs, and generally
engage in activities that make life thanklessly burdensome for all firms, and make death
the inevitable consequence for most of them. A few companies do indeed weather the
storm, sustaining life through the constant descent that now clearly characterizes the

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 industry. Production gets concentrated into fewer hands. Prices and margins get
depressed. Consumers get bored. The only cases where there is any relief from this
boredom and gradual euthanasia are where styling and fashion play some constantly
revivifying role.

The 8 steps in the New Product Development Process

1. Idea generation – The New Product Development Process

The new product development process starts with idea generation. Idea generation refers to the
systematic search for new-product ideas. Typically, a company generates hundreds of ideas, maybe
even thousands, to find a handful of good ones in the end. Two sources of new ideas can be
identified:
 Internal idea sources: the company finds new ideas internally. That means R&D, but also
contributions from employees.
 External idea sources: the company finds new ideas externally. This refers to all kinds of
external sources, e.g. distributors and suppliers, but also competitors. The most important external
source are customers, because the new product development process should focus on creating
customer value.

2. Idea screening – The New Product Development Process

The next step in the new product development process is idea screening. Idea screening means
nothing else than filtering the ideas to pick out good ones. In other words, all ideas generated are
screened to spot good ones and drop poor ones as soon as possible. While the purpose of idea
generation was to create a large number of ideas, the purpose of the succeeding stages is to reduce
that number. The reason is that product development costs rise greatly in later stages. Therefore, the
company would like to go ahead only with those product ideas that will turn into profitable products.
Dropping the poor ideas as soon as possible is, consequently, of crucial importance.

3. Concept development and Testing – The New Product

Development Process
To go on in the new product development process, attractive ideas must be developed into a product
concept. A product concept is a detailed version of the new-product idea stated in meaningful
consumer terms. You should distinguish
 A product idea à an idea for a possible product
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 A product concept à a detailed version of the idea stated in meaningful consumer terms
 A product image à the way consumers perceive an actual or potential product.
Let’s investigate the two parts of this stage in more detail.

Concept development
Imagine a car manufacturer that has developed an all-electric car. The idea has passed the idea
screening and must now be developed into a concept. The marketer’s task is to develop this new
product into alternative product concepts. Then, the company can find out how attractive each
concept is to customers and choose the best one. Possible product concepts for this electric car
could be:
 Concept 1: an affordably priced mid-size car designed as a second family car to be used
around town for visiting friends and doing shopping.
 Concept 2: a mid-priced sporty compact car appealing to young singles and couples.
 Concept 3: a high-end midsize utility vehicle appealing to those who like the space SUVs
provide but also want an economical car.
As you can see, these concepts need to be quite precise in order to be meaningful. In the next sub-
stage, each concept is tested.

Concept testing
New product concepts, such as those given above, need to be tested with groups of target
consumers. The concepts can be presented to consumers either symbolically or physically. The
question is always: does the particular concept have strong consumer appeal? For some concept
tests, a word or picture description might be sufficient. However, to increase the reliability of the test,
a more concrete and physical presentation of the product concept may be needed. After exposing
the concept to the group of target consumers, they will be asked to answer questions in order to find
out the consumer appeal and customer value of each concept.

4. Marketing strategy development – The New Product

Development Process
The next step in the new product development process is the marketing strategy development.
When a promising concept has been developed and tested, it is time to design an initial marketing
strategy for the new product based on the product concept for introducing this new product to the
market.
The marketing strategy statement consists of three parts and should be formulated carefully:

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 A description of the target market, the planned value proposition, and the sales, market
share and profit goals for the first few years
 An outline of the product’s planned price, distribution and marketing budget for the first year
 The planned long-term sales, profit goals and the marketing mix strategy.

5. Business analysis – The New Product Development Process

Once decided upon a product concept and marketing strategy, management can evaluate the
business attractiveness of the proposed new product. The fifth step in the new product development
process involves a review of the sales, costs and profit projections for the new product to find out
whether these factors satisfy the company’s objectives. If they do, the product can be moved on to
the product development stage.
In order to estimate sales, the company could look at the sales history of similar products and
conduct market surveys. Then, it should be able to estimate minimum and maximum sales to assess
the range of risk. When the sales forecast is prepared, the firm can estimate the expected costs and
profits for a product, including marketing, R&D, operations etc. All the sales and costs figures
together can eventually be used to analyse the new product’s financial attractiveness.

6. Product development – The New Product Development

Process
The new product development process goes on with the actual product development. Up to this
point, for many new product concepts, there may exist only a word description, a drawing or perhaps
a rough prototype. But if the product concept passes the business test, it must be developed into a
physical product to ensure that the product idea can be turned into a workable market offering. The
problem is, though, that at this stage, R&D and engineering costs cause a huge jump in investment.
The R&D department will develop and test one or more physical versions of the product concept.
Developing a successful prototype, however, can take days, weeks, months or even years,
depending on the product and prototype methods. Also, products often undergo tests to make sure
they perform safely and effectively. This can be done by the firm itself or outsourced. In many cases,
marketers involve actual customers in product testing. Consumers can evaluate prototypes and work
with pre-release products. Their experiences may be very useful in the product development stage.

7. Test marketing – The New Product Development Process

The last stage before commercialization in the new product development process is test marketing.
In this stage of the new product development process, the product and its proposed marketing

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 programme are tested in realistic market settings. Therefore, test marketing gives the marketer
experience with marketing the product before going to the great expense of full introduction. In fact,
it allows the company to test the product and its entire marketing programme, including targeting and
positioning strategy, advertising, distributions, packaging etc. before the full investment is made.
The amount of test marketing necessary varies with each new product. Especially when introducing
a new product requiring a large investment, when the risks are high, or when the firm is not sure of
the product or its marketing programme, a lot of test marketing may be carried out.

8. Commercialization
Test marketing has given management the information needed to make the final decision: launch or
do not launch the new product. The final stage in the new product development process is
commercialization. Commercialization means nothing else than introducing a new product into the
market. At this point, the highest costs are incurred: the company may need to build or rent a
manufacturing facility. Large amounts may be spent on advertising, sales promotion and other
marketing efforts in the first year.
Some factors should be considered before the product is commercialized:
 Introduction timing. For instance, if the economy is down, it might be wise to wait until the
following year to launch the product. However, if competitors are ready to introduce their own
products, the company should push to introduce the new product sooner.
 Introduction place. Where to launch the new product? Should it be launched in a single
location, a region, the national market, or the international market? Normally, companies don’t have
the confidence, capital and capacity to launch new products into full national or international
distribution from the start. Instead, they usually develop a planned market rollout over time.
In all of these steps of the new product development process, the most important focus is on
creating superior customer value. Only then, the product can become a success in the market. Only
very few products actually get the chance to become a success. The risks and costs are simply too
high to allow every product to pass every stage of the new product development process.

Pricing Strategy
Your pricing strategy should reflect your product’s positioning in the market and the
resulting price should cover the cost per item and the profit margin. The amount should not
project your business as timid or greedy.
Low pricing hinders your business’ growth while high pricing kicks you out of the
competition.

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There are a number of pricing strategies that you can follow. Some strategies may call for
complex computation methods and others are intuitive decisions. Select a pricing
strategy that’s based on the product itself, competitive environment, customer demand,
and other products that you offer.

Cost Plus
Cost Plus is taking the production cost and adding a certain profit percentage. The resulting
amount will be the product’s price. You need to consider variable and fixed production costs
for this pricing method.

Value Based
Instead of using the production cost as your basis, you consider the customer’s perception
of the product’s value. The perception of the buyer is dependent on the product’s quality, the
company’s reputation, and healthfulness, aside from the cost factors.

Competitive
You take a survey of the pricing implemented by your competitors on a similar product that
you are trying to market and then decide whether to price your product lower, the same, or
higher. You should also monitor their prices and be able to respond to changes.

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Price adjustment strategies

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STP (Segmentation, Targeting and Positioning)
Today, Segmentation, Targeting and Positioning (STP) is a familiar strategic approach in
Modern Marketing. It is one of the most commonly applied marketing models in practice.
In our poll asking about the most popular marketing model it is the second most
popular, only beaten by the venerable SWOT / TOWs matrix. This popularity is relatively
recent since previously, marketing approaches were based more around products rather
than customers. In the 1950s, for example, the main marketing strategy was 'product
differentiation'. The STP model is useful when creating marketing communications plans
since it helps marketers to prioritise propositions and then develop and deliver
personalised and relevant messages to engage with different audiences.

1. Demographics
Breakdown by any combination: age, gender, income, education, ethnicity, marital
status, education, household (or business), size, length of residence, type of residence
or even profession/Occupation. An example is Firefox who sell 'coolest things', aimed

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at younger male audience. Though, Moshi Monsters, however, is targeted to parents
with fun, safe and educational space for younger audience.

2. Psychographics
This refers to 'personality and emotions' based on behaviour, linked to purchase
choices, including attitudes, lifestyle, hobbies, risk aversion, personality and leadership
traits. magazines read and TV. While demographics explain 'who' your buyer is,
psychographics inform you 'why' your customer buys.

3. Geography
Drill down by Country, region, area, metropolitan or rural location, population density or
even climate. An example is Neiman Marcus, the upmarket department store chain in
the USA now delivers to the UK.

4. Behavioral Segmentation
Refers to the nature of the purchase, brand loyalty, usage level, benefits sought,
distribution channels used, reaction to marketing factors. In a B2B environment, the
benefits sought are often about ‘how soon can it be delivered?’ which includes the ‘last
minute’ segment - the planning in advance segment. An example is
Parcelmonkey.co.uk who offer same day, next day and international parcel deliveries.

Market targeting
The list below refers to what’s needed to evaluate the potential and commercial
attractiveness of each segment.
Criteria Size: The market must be large enough to justify segmenting. If the market is
small, it may make it smaller.
Difference: Measurable differences must exist between segments.
Money: Anticipated profits must exceed the costs of additional marketing plans and
other changes.

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Accessible: Each segment must be accessible to your team and the segment must
be able to receive your marketing messages
Focus on different benefits: Different segments must need different benefits.

Product positioning
Positioning maps are the last element of the STP process. For this to work, you need
two variables to illustrate the market overview. In the example here, I’ve taken some
cars available in the UK. This isn’t a detailed product position map, more of an
illustration. If there were no cars in one segment it could indicate a market opportunity.

Types of Retailers
Department Stores
A department store is a set-up which offers wide range of products to the end-users
under one roof. In a department store, the consumers can get almost all the products
they aspire to shop at one place only. Department stores provide a wide range of
options to the consumers and thus fulfill all their shopping needs.
Discount Stores
Discount stores also offer a huge range of products to the end-users but at a discounted
rate. The discount stores generally offer a limited range and the quality in certain cases
might be a little inferior as compared to the department stores.
Wal-Mart currently operates more than 1300 discount stores in United States. In India
Vishal Mega Mart comes under discount store.
Supermarket
A retail store which generally sells food products and household items, properly placed
and arranged in specific departments is called a supermarket. A supermarket is an
advanced form of the small grocery stores and caters to the household needs of the
consumer. The various food products (meat, vegetables, dairy products, juices etc) are
all properly displayed at their respective departments to catch the attention of the
customers and for them to pick any merchandise depending on their choice and need.
Warehouse Stores

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A retail format which sells limited stock in bulk at a discounted rate is called as
warehouse store. Warehouse stores do not bother much about the interiors of the store
and the products are not properly displayed.
Specialty Stores
As the name suggests, Speciality store would specialize in a particular product and
would not sell anything else apart from the specific range.Speciality stores sell only
selective items of one particular brand to the consumers and primarily focus on high
customer satisfaction.
Example -You will find only Reebok merchandise at Reebok store and nothing else, thus
making it a speciality store. You can never find Adidas shoes at a Reebok outlet.
Malls
Many retail stores operating at one place form a mall. A mall would consist of several
retail outlets each selling their own merchandise but at a common platform.
E Tailers
Now a days the customers have the option of shopping while sitting at their homes.
They can place their order through internet, pay with the help of debit or credit cards
and the products are delivered at their homes only. However, there are chances that the
products ordered might not reach in the same condition as they were ordered. This kind
of shopping is convenient for those who have a hectic schedule and are reluctant to go
to retail outlets. In this kind of shopping; the transportation charges are borne by the
consumer itself.

TYPES OF WHOLESALERS
Although there are a number of ways to classify wholesalers, the categories used by the
Census of Wholesale Trade are employed most often. The three types of wholesalers
are 1) merchant wholesalers; 2) agents, brokers, and commission merchants; and 3)
manufacturers' sales branches and offices.

MERCHANT WHOLESALERS
Merchant wholesalers are firms engaged primarily in buying, taking title to, storing, and
physically handling products in relatively large quantities and reselling the products in

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smaller quantities to retailers; industrial, commercial, or institutional concerns; and other
wholesalers. These types of wholesaling agents are known by several different names,
including wholesaler, jobber, distributor, industrial distributor, supply house, assembler,
importer, and exporter, depending on their services.
According to E. Jerome McCarthy and William D. Perreault Jr., authors of Basic
Marketing, merchant wholesalers account for the large majority of whole-saling
establishments and wholesale sales. "As you might guess based on the large number of
merchant wholesalers, they often specialize by certain types of products or customers,"
added McCarthy and Perreault. "They also tend to service relatively small geographic
areas…. Merchant wholesalers also differin how many of the wholesaling functions they
provide. There are two basic kinds of merchant wholesalers: 1) service (sometimes
called full-service wholesalers) and 2) limited-function or limited-service wholesalers."
The latter category of wholesalers, which itself is divided up into little niches, offer
varying levels of service in such areas as product delivery, credit bestowal, inventory
storage, provision of market or advisory information, and sales.

AGENTS, BROKERS, AND COMMISSIONMERCHANTS

Agents, brokers, and commission merchants are also independent middlemen who do
not (for the most part) take title to the goods in which they deal, but instead are actively
involved in negotiating and other functions of buying and selling while acting on behalf
of their clients (commission merchants typically are limited to agricultural goods). They
are usually compensated in the form of commissions on sales or purchases. Agents,
brokers, and commission merchants usually represent the non-competing products of a
number of manufacturers to several retailers. This category of wholesaler is particularly
popular with producers with limited capital who can not afford to maintain their own
sales forces.

MANUFACTURERS' SALES BRANCHES AND OFFICES

Manufacturers' sales branches and offices are owned and operated by manufacturers
but are physically separated from manufacturing plants. They are used primarily for the
purpose of distributing the manufacturers' own products at the wholesale level. Some
have warehousing facilities where inventories are maintained, while others are merely

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sales offices. Some of them also wholesale allied and supplementary products
purchased from other manufacturers

Introduction of importance of recruitment and selection of sales

people

Definition of recruitment and selection

Recruitment involves seeking and attracting a pool of people from which qualified
candidates for job vacancies can be chosen. The objective of the selection process is to
choose the individual who can successfully perform the job from the pool of qualified
candidates. Recruitment and selection of employees is a significant and fundamental
process in the human resource management. It satisfies the talent needs of a company
and can ensure high-quality staff. The role of human resource recruitment is to build a
supply of potential new hires that the organization can draw on if the need arises.
“Which company can win? Not to depend on the feature of products, not to depend on
the cost. In the constantly changing business environment urged by high technology,
the key of competition is to find and retain talented employees.”

Importance of sales people

Sales people tend to create the benefit that supports the company’s normal operating
costs and provides fund for the next step in the development of company. Any product is
to achieve the final destination that is sold and becomes a real commodity. Sales people
are the suitable person to realize the product’s value. And at the same time they will
bring profit that produced in the sales process. From this point, sales people are
indispensable and irreplaceable in the normal operation of an enterprise.

Recruitment Process:
 Attracting by Ads
 Pool of job applications
o Cover letter CVs
o Experiences and educational Certificates
 Tests IQ
 Interviews
 Selection

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  Hiring
 Staffing
o Orientation
 Induction

Advertisement
DIFFERENT TYPES OF ADVERTISING

Print Advertising – Newspapers, Magazines, Brochures, Flyers

The print media have always been a popular advertising medium.
Advertising products via newspapers or magazines is a common practice

Outdoor Advertising – Billboards, Kiosks, Tradeshows and Events

Outdoor advertising is also a very popular form of advertising, which makes useof
several tools and techniques to attract the customers outdoors.
The billboard advertising is very popular however has to be really terse andcatchy in
order to grab the attention of the passers by. The kiosks not only provide an easy outlet
for the company products but alsomake for an effective advertising tool to promote the
company’s products.

Broadcast advertising - Television, Radio and the Internet

Broadcast advertising is a very popular advertising medium that constitutes of several
branches like television, radio or the Internet. Television advertisements have been very
popular ever since they have been introduced. The cost of television advertising often
depends on the duration of the advertisement, the time of broadcast (prime time/peak
time), and of course the popularity of the television channel on which the advertisement
is going to be broadcasted. The radio might have lost its charm owing to the new age
media however the radio remains to be the choice of small-scale advertisers. The radio
jingles have been very popular advertising media and have a large impact on the
audience.

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Covert Advertising - Advertising in Movies
Covert advertising is a unique kind of advertising in which a product or a particular
brand is incorporated in some entertainment and media channels like movies, television
shows or even sports. There is no commercial in the entertainment but the brand or the
product is subtly( or sometimes evidently) showcased in the entertainment show.
Some of the famous examples for this sort of advertising have to be the appearance of
brand Nokia which is displayed on Tom Cruise’s phone in the movie Minority Report, or
the use of Cadillac cars in the movie Matrix Reloaded.

Surrogate Advertising- Advertising Indirectly

Surrogate advertising is prominently seen in cases where advertising a particular
product is banned by law. Advertisements for products like cigarettes or alcohol which
are injurious to heath are prohibited by law in several countries and hence these
companies have to come up with several other products that might have the same
brand name and indirectly remind people.
Public Service Advertising- Advertising for Social Causes
Public service advertising is a technique that makes use of advertising as an effective
communication medium to convey socially relevant messaged about important matters
and social welfare causes.
Celebrity Advertising
Although the audience is getting smarter and smarter and the modern day consumer
getting immune to the exaggerated claims made in a majority of advertisements,
thereexist a section of advertisers that still bank upon celebrities and their popularity for
advertising their products. Using celebrities for advertising involves signing upcelebrities
for advertising campaigns, which consist of all sorts of advertising including,television
ads or even print advertisements.

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Logistics
Logistical efficiency refers to how effectively a business conducts its operations. Logistics typically
concerns the movement of physical objects and vital information. A business with good logistics can
keep track of product shipments and move products or information quickly to the correct locations.
This has several important impacts on marketing, and marketing is often connected with logistics
strategies.

Role importance of Logistics in Marketing

Reduced Delivery Time

Reduced delivery time refers to a shortening of the period between a customer ordering a product
and that customer receiving the product. When companies need to ship inventory (as e-commerce
businesses do), delivery time is a vital concern of both logistics and marketing. By shortening
delivery time, businesses can impress customers and create loyalty while adding more value to their
processes than competitors have.

Pinpointing Customer Issues

With a highly efficient logistics strategy, companies can easily track product orders and product
shipment data. This allows a business to spot exactly where a product has gone, what product was
originally ordered and shipped and what needs to happen to fix problems with the order. With such
expert tracking and communication procedures, a business can easily placate an irate customer and
turn a bad situation into a good marketing opportunity.

Quality Control
Logistics is also important to manufacturers, because it allows for a high level of control over
production processes and immediate adaptations. A company does not want to produce flawed
products that have inherent problems -- few things are as damaging to a business's reputation. With
efficient logistics, a manufacturer can spot problems immediately and quickly narrow down the issue
to find the source and correct it.

Extra Services
Many businesses offer extra services as part of their marketing strategy; these allow them to impress
customers through advanced customer service techniques. With modern logistics, companies can
offer advanced tracking options for product shipments that customers can track at any time. Good
logistics also allows for greater product customization and tools for customers to use themselves.

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Personal Selling

The Seven Steps of Selling

Compare the B2B and B2C examples you just read about. Do you notice a pattern? Although the
products and customers were quite different, both salespeople adapted to the situation and the
customer’s needs, but followed the same seven steps to successfully complete their sales. In fact,
you’ve probably used a version of these seven steps yourself before without even realizing it. Take a
look at some real-world selling examples below and how of each of the steps is used.

Step 1: Prospecting and Qualifying

Before planning a sale, a salesperson conducts research to identify the people or
companies that might be interested in her product. In the B2B example, before the
salesperson called the company, she had to find the company’s information somewhere
—probably in a local business directory. This step is called prospecting, and it’s the
foundational step for the rest of the sales process. A lead is a potential buyer.
A prospect is a lead that is qualified or determined to be ready, willing, and able to buy.
The prospecting and qualifying step relates to the needs awareness step in the buying
process described in Chapter 6 "Why and How People Buy: The Power of
Understanding the Customer". In other words, in a perfect world, you are identifying
customers who are in the process of or have already identified a need.
Undoubtedly, when the salesperson called the target customer to discuss his ovens (in
the example, you were the customer), she asked some questions to qualify him as a
prospect, or determine whether he has the desire and ability to buy the product or
service. This is the other component to step one. What happens if the customer is not
interested in the salesperson’s product, or he’s interested but his business is struggling
financially and doesn’t have the resources for a big purchase? Perhaps he is only an
employee, not the manager, and he doesn’t have the authority to make the purchasing
decision. In this case, he is no longer a prospect, and the salesperson will move on to
another lead. Salespeople qualify their prospects so they can focus their sales efforts on
the people who are most likely to buy. After all, spending an hour discussing the
capabilities of your company’s ovens with a lead that is about to go out of business

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would be a waste of time. It’s much more fruitful to invest your time with a qualified
prospect, one who has the desire or ability to buy the product or service.

Step 2: Pre-Approach
The preapproach is the “doing your homework” part of the process. A good salesperson
researches his prospect, familiarizing himself with the customer’s needs and learning all
the relevant background info he can about the individual or business. Remember that in
the B2B example, the salesperson knew important information about the restaurant
beforehand. She came prepared with a specific idea as to how her service could help
the prospect and gave a tailored presentation.

Step 3: Approach
First impressions (e.g., the first few minutes of a sales call) are crucial to building the
client’s trust.Michael T. Bosworth, Solution Selling: Creating Buyers in Difficult Selling
Markets (New York: McGraw-Hill, 1995), 106. If you’ve ever asked someone on a first
date (yes, this is a selling situation), chances are you didn’t call the person and start the
conversation off with the question, “Hey, do you want to go out on Saturday night?”
Such an abrupt method would turn most people away, and you probably would not
score the date you were hoping for. Similarly, as a professional salesperson, you would
almost never make a pitch right away; instead, you’d work to establish a rapport with the
customer first.

Step 4: Presentation
There’s a good deal of preparation involved before a salesperson ever makes her pitch
or presentation, but the presentation is where the research pays off and her idea for the
prospect comes alive. By the time she presents her product, she will understand her
customer’s needs well enough to be sure she’s offering a solution the customer could
use. If you’re a real estate agent selling a house and your customers are an older,
retired couple, you won’t take them to see a house with many bedrooms, several flights
of stairs to climb, and a huge yard to keep up—nor will you show them around a trendy
loft in a busy part of town. The presentation should be tailored to the customer,
explaining how the product meets that person or company’s needs. It might involve a

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tour (as in this real estate example), a product demonstration, videos, PowerPoint
presentations, or letting the customer actually look at or interact with the product. At this
point, the customer is using the information that is being shared as part of his evaluation
of possible solutions.

Step 5: Handling Objections

After you’ve made your sales presentation, it’s natural for your customer to have some
hesitations or concerns called objections. Good salespeople look at objections
as opportunities to further understand and respond to customers’ needs.William C.
Moncreif and Greg W. Marshall, “The Evolution of the Seven Steps,” Industrial
Marketing Management 34, no. 1 (2005): 14, 15. For instance, maybe you’re trying to
convince a friend to come camping with you.
“I’d like to go” your friend says, “but I’ve got a big project I need to finish at work, and I
was planning to spend some time at the office this weekend.”
“That’s no problem,” you tell him. “I’m free next weekend, too. Why don’t we plan to go
then, once your project’s out of the way?”

Step 6: Closing the Sale

Eventually, if your customer is convinced your product will meet her needs, you close by
agreeing on the terms of the sale and finishing up the transaction.

Step 7: Following Up
The follow-up is an important part of assuring customer satisfaction, retaining
customers, and prospecting for new customers. This might mean sending a thank-you
note, calling the customer to make sure a product was received in satisfactory condition,
or checking in to make sure a service is meeting the customer’s expectations. This is
the follow-up e-mail you get from Netflix every time you return a movie by mail. It’s
Amazon’s invitation to “rate your transaction” after you receive your Amazon order.
Follow-up also includes logistical details like signing contracts, setting up delivery or
installation dates, and drawing up a timeline. From the buyer’s perspective, the follow-
up is the implementation step in the buying process. Good follow-up helps ensure
additional sales, customer referrals, and positive reviews.

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Branding
The American Marketing Association (1960, pp. 9-10), stated one of the first definitions
of a brand. They stated that a brand was “a name, term, sign, symbol or design, or a
combination of them, intended to identify the goods or services of one seller or group of
sellers and to differentiate them from those of competitors” (AMA, 1960, pp. 9-10).

Brand Identity
A company should be have a clear, defined strategy on what their brand identity is
meant to be. Kapferer (2012, p. 156) provides an excellent framework that allows a
company to measure and decide on their brand identity. It measures brand identity on
six levels, these are;
 Physique
 Relationship
 Reflection
 Personalit
 Culture
 Self-Image

Brand Image
A company’s brand image can be measured through a variety of channels. One of these
channels is in a literal sense, and is through the use of a logo. The American Marketing
Association defines a logo as (AMA, 2015) “a graphic design that is used as a
continuing symbol for a company, organization, or brand. It is often in the form of an
adaptation of the company name or brand name or used in conjunction with the name”.
Furthermore, Budelmann, et al., (2010, p. 7) define a logo as “a graphic representation
of a brand…a logo is a picture that represents the collection of experiences that forms a
perception in the mind of those who encounter an organization”. A logo can be used to
portray a brands identity through the use of imagery, and allow a company to spread
their brand awareness via a constant icon.

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Brand Equity
A company’s brand equity can be measured through a variety of methods. Feldwick
(1996) identifies three main factors on how a company can measure their brand equity.
These are; stating the total brand as a separable asset on the balance sheet, the level
of strength of a consumer’s attachment to a brand and a description of the beliefs the
consumer has about a brand. Different companies will measure their brand equity in
different ways. Activision Blizzard value the goodwill of their company at approximately
£7bn, which will include how much they believe their brand equity to be.

Co-branding
Co-Branding is a relatively recent branding strategy, with its original formation thought to
be in the 1990s. One of the first research studies to be conducted on co-branding was
by Norris (1992) who investigated brand alliance within the field of brand ingredients. A
co-branding strategy “represents a long-term brand alliance strategy in which one
product is branded and identified simultaneously by two brands”.

Brand Strategies

Product line extension

A product line extension is introducing a new product – that is similar to what the
company already offers (that is, within an existing product line/category) that is targeting
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an existing market by using the current brand name. This is a very common approach in
marketing. This is because the existing brand name has a customer following, and new
products/variations will tend to be relatively well received by these loyal customers. We
frequently see this approach with product sold through supermarkets channels, where
you variations of tastes/flavors and packaging sizes have some appeal with the
marketplace.

Multi brand
A variation of the product line extension above, is to run a multiple brand strategy within
the same market. As you can see from the matrix, a multi-brand strategy involves
having more than one brand competing in the same product category. Again this is a
relatively common approach for large companies. For example, a manufacturer of
frozen vegetables may have multiple brands – that to the consumer appeared to
compete against each other – but have the same corporate ownership. The main
reasons for this is that these brands can have different positioning in the market,
dominate the overall shelf space, and reduce opportunities for competitors to enter the
market or to win market share. The disadvantage of this multi brand strategy (as
opposed to a product line extension strategy) is the cost and time of developing a new
brand name successfully in the marketplace.

Brand extension
A brand extension involves broadening the market’s understanding of the brand. This is
achieved by offering more products (of a different nature/category) under the existing
brand name. An example of this in recent years would be McDonald’s competing in the
gourmet coffee product category – effectively broadening the positioning of McDonald’s
from fast food only to being perceived as also competing against Starbucks to some
extent. Brand extensions they usually approached with care, as the market may not fully
accept the brand’s expertise in another product category. As a hypothetical example,
consider if the Coca-Cola brand was extended to shampoos and detergents – the
market would see little connection and the overall brand would be damaged. Therefore,
brand extensions work best if the new product category has some relationship to the
brand’s existing product category and perceived area of expertise.

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New brand
The final brand development strategy is a new brand. A new brand occurs when the firm
is expanding is offering – by developing a new product line that they haven’t not offered
before and as a result, need to build a new brand.

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