Question 2

Every business owner needs to understand their customer. The consumer-buying

decision process is an important way to strengthen your company's sales function
as well as develop a sales and business development strategy that will continue to
keep your pipeline of prospects full. Simply put, understanding your consumer-
buyer behavior process will help you hone in on your customer's journey from the
interest in your product or service to purchasing.
A Five-Stage Consumer Buying Decision Process
Introduced by philosopher and psychologist John Dewey in 1910, the five stages framework
remains a good way to evaluate a customer's purchase-decision process.

Identifying the Pain Point

Identifying the pain point is often recognized as the first and most important step in the
buyer decision-making process. A customer must need to fill a gap or some other sort of
need for them to make a purchase. The need may be triggered by internal stimuli such as
hunger or thirst or external stimuli such as advertising or word-of-mouth.

Research, Research, Research

Once the customer or prospect recognizes they have a problem or an unmet need, the next
step is researching to find a solution. The buyer may use a Google search online, read
product or service reviews, seek word-of-mouth recommendations and ask friends or family
for their input. Buyers search internal and external business environments to identify and
evaluate information to support their central buying decision.

Evaluating the Best Options

Once a buyer gathers all the information she needs, she evaluates it. The buyer will ask
questions and decide which products, brands or service providers will deliver what she
needs most efficiently. A factor that influences this stage in the buying process is the buyer's
attitude. If the buyer has a positive attitude and is engaged and enjoying the research
process, it is likely she will have a large selection of products to choose from. If she is
disengaged and views the purchase-decision process as a chore, it is likely only one
company or brand will be evaluated.

Making the Decision

The decision-making process ends with the buyer making her decision. At this stage, the
research is done and choices evaluated – now it's time to make a buying decision. According
to Philip Kotler, a well-known marketing consultant, the final purchase decision may be
"disrupted" by two factors: negative feedback from other customers and the level of
motivation to accept the feedback. For example, having gone through the previous three
stages, a customer chooses to buy a new telescope. However, because his good friend, a
keen astronomer, gives him negative feedback, he may change his mind. Furthermore, the
decision may be disrupted due to unforeseen situations such as a sudden job loss or
relocation.
Post-Purchase Behavior
In this last stage, customers will decide if their decision holds up to their expectations. They
will either be satisfied or dissatisfied. This is critical for a company because if a customer is
satisfied this will result in brand loyalty, which will keep the customer coming back and
spreading good reviews about what they purchased.
Understanding how people make decisions will allow you to develop evidence-based
strategies and make data-driven design choices. You may be tempted to rely on anecdotal
evidence, but you'll get better results by employing surveys, focus groups, panels and other
unbiased research methods to find the right direction for your sales strategies.
It's crucial that consumers feel they are in control of the buyer decision-making process for
them to follow through and make a purchase. Businesses need to develop design, sales and
marketing strategies that ensure their customers feel not only in control of the buying
decision, but also that they have made the right choice.

Rational Consumer Decisions

When consumers are buying items, they rely on two primary forms of reasoning: rational
and emotional. Rational forms of reasoning can dictate why people go shopping in general.
For example, if you need a new pair of shoes, you may choose to go to a mall or shopping
center instead of a specific shoe store. However, the need is what prompted you to go
shopping.
Rational choices are typically the catalyst for someone doing in-depth shopping. Another
example is home shopping. You know your needs, but other details aren’t solidified by your
logical reasoning. You, as a marketer, cannot control what the consumer feels that they
need.
The rational behavior of your consumer, therefore, needs to be the starting point of your
research. What prompts your customer to go shopping in the first place, and what makes
them shop at your location? Knowing these things can help you make better choices than
going in blind. Once you know what customers are thinking, you can then move on to what
many consider to be the bulk of research in advertising.

Emotional Consumer Decisions

Humans make thousands of choices every day, and many of those don’t involve any rational
behavior. If a consumer is thirsty, they may not go to the nearest location for a drink, in
most cases. They will go to get the item that they know they want. You cannot dictate when
a customer is thirsty, but you can use marketing tactics to sway them to get a drink your
beverage.
Emotional choices are as different and varied as the individuals who make them. Some of
these emotional choices are based upon a quick emotional decision. These high-level
emotional choices are powerful and include things like seeing an advertisement for a boot
and thinking, “She looks great in those boots. I will look great in those boots.” These high-
level choices are usually very basic and are made more as a spur of the moment thought.
Role of a Marketer
Your job as a marketer is to know how your specific consumer demographic shops and to
market directly towards their values, style and rational way of thinking. How do you, as a
marketer, ensure that you are doing everything that you can to reach your customers? You
first must understand how the consumer makes their choices. This requires an
understanding of the consumer decision-making process model.

Consumer Behavior and Decision Making

The consumer makes both rational and emotional choices when they are shopping, but that
isn’t their entire decision-making process. To truly understand how to market, you must
have a firm understanding of where your consumer’s thought process lies. Your marketing
materials, therefore, should represent not just the basic steps of consumer choices, but play
to your target demographic’s thought process.

Problem Recognition in Marketing

Once again, the catalyst for most consumers is need — but this does not correspond to the
hierarchy of needs. Instead, it is what your customer perceives as a need. What one person
“needs” and another one “needs” may be completely different. For example, someone who
loves cars may feel that they “need” a newer car than someone who is uninterested in the
culture surrounding automobiles.
Almost all decision-making begins with the realization of a problem. As a marketer, your job
is to make a consumer feel a need for your product. As mentioned above, the need doesn’t
have to be an actual need for living.
People become accustomed to a certain lifestyle, and they are also creatures of extreme
habit. Once a certain lifestyle has become a default, it is extremely difficult to change it. This
creates the illusion of need to a consumer, and the drive to correct it is exactly the same as
if they were attempting to resolve a physical need.

Solution Searching in Marketing

For a marketer, solution searching is the period of the buying process during which you
want to make an impact on the consumer. Your consumer will be looking through search
engines, their own shopping applications and considering things they have heard via word of
mouth. They could also be looking at catalogs, print ads or billboards. Effective ads will stop
a consumer in their tracks, so your ads should be designed to stop the search process and
flip into an emotional thought process about your product.

Evaluating Solutions in Marketing

Many consumers tend to look at a selection of options that they have narrowed down
before they make a choice. The higher the value they perceive in an item, the more likely
they are to purchase it. Customers are always looking for the best deal; however, what is a
“deal” isn’t only based on money. It’s value to the consumer against the cost of the item.

Selection in Marketing
When it comes to selection, the consumer has a variety of choices they can make. Once
they’ve weighed the value to them against the cost, a consumer then needs to choose how
they will purchase the item that they want. They will typically look for trusted sellers, either
online or in physical space. Once they are certain that they have found what they want, the
consumer will purchase.
During this process, the customer will be in a continual loop of evaluation. After they feel a
desire or need, they will look to their social circle and their lifestyle to evaluate that need. If
they have a variety of purchasing choices, they will also likely ask their circles if anyone has
experience buying a similar item. While many forms of marketing and purchasing have
changed, one of the most valuable assets you have in marketing remains unchanged: word
of mouth.
Consumers will likely ask their network ahead of some purchases if they are new to dealing
with a particular company. Every marketing expert wants to draw in lifetime customers, so
this is where the focus of a good marketer turns to customer support. A bad interaction with
a customer could lose you not only that customer, but customers in their sphere of
influence. The opposite is also true; consumers who rave about a brand or experience can
draw more customers to your company.

Marketing Implications of Consumers Decisions

Once you know how consumers make choices, how does that apply to your marketing
efforts? The answer is multifaceted. You need to know how your core demographic makes
these choices, not the general process that consumers go through. The most effective
answer to your questions involves marketing research.
There is a wide variety of available marketing research strategies, including:

 Online surveys
 Proctored testing
 Diary studies
 Focus groups

Online Surveys in Marketing

Online surveys are the easiest and cheapest way to get customer data quickly. To properly
create a survey, you must focus on one major task at a time. You won’t get clear data if you
aren’t focused on an online survey, and your questions need to be easy to read and should
be able to be answered simply.

Proctored Testing in Marketing

In this case, proctored testing isn’t the same as the testing done by schools. Instead, it
focuses on having a researcher present while the customer is testing out a feature or
product. For example, if you want to know how your online application is functioning, you
should watch customers shopping on their phones.
What is most important in this scenario is the ability to get customer feedback in real-time.
Encourage your participants to think aloud while they are working through whatever task
you choose to give them. Your customer’s thought process is debatably more valuable to
you as a marketer than how the tested application or product performs.
Diary Studies in Marketing
While much more time-consuming and intricate than either surveys or proctored testing,
diary studies can be invaluable to a marketer. Your participants will either do a video daily
or record specific tasks related to your product during a given timeframe. Typically a week is
a reasonable request for participant time; more than that will increase your risk of drop-off
significantly.

Focus Groups in Marketing

Focus groups used to be a major part of any marketing research; however, they are
extremely ineffective and shouldn’t be used often. There have been numerous tests on the
effectiveness of focus groups. One such test used a pair of jeans as the item being discussed.
The researcher brought out a pair of jeans and asked for them to be passed around and
checked out, and then the participants were invited to discuss.
After they had finished with the first pair of jeans, the researcher took the pants out of the
room, waited a bit and then returned with the same pair of jeans. Almost immediately, it
became apparent that at least one participant knew that they were the same pair, but they
didn’t vocalize that opinion because everyone else was agreeing with either the first or the
most self-assured participant.
Focus groups also tend to skew in the way that a company "wants” them to. This isn’t true
research because of the confirmation bias. To get a true understanding of how to study
consumers, you must talk to them individually to avoid the cult of personality.
Question 3
The process of creating an image of a product in the minds of the consumers is called as positioning. Positioning
helps to create first impression of brands in the minds of target audience. In simpler words positioning helps in
creating a perception of a product or service amongst the consumers.

Example

The brand “Bisleri” stands for purity.

The brand “Ceat Tyre” stands for better grip.

Steps to product Positioning

Marketers with the positioning process try to create a unique identity of a product amongst the customers.

1. Know your target audience well

2. It is essential for the marketers to first identify the target audience and then understand their needs and
preferences. Every individual has varied interests, needs and preferences. No two individuals can think on
the same lines.

3. Know what your customers expect out of you.

4. The products must fulfill the demands of the individuals.

5. Identify the product features

6. The marketers themselves must be well aware of the features and benefits of the products. It is rightly said
you can’t sell something unless and until you yourself are convinced of it.
 7. A marketer selling Nokia phones should himself also use a Nokia handset for the customers to believe him.

8. Unique selling Propositions

9. Every product should have USPs; at least some features which are unique. The organizations must create
USPs of their brands and effectively communicate the same to the target audience.

10. The marketers must themselves know what best their product can do.

11. Find out how the products can be useful to the end-users ?

12. Why do people use “Anti Dandruff Shampoo?”

13. Anti Dandruff Shampoos are meant to get rid of dandruff. This is how the product is positioned in the
minds of the individuals.

14. Individuals purchase “Dabur Chyawanprash “to strengthen their body’s internal defense mechanism and
fight against germs, infections and stress. That’s the image of Dabur Chyawanprash in the minds of
consumers.

15. USP of a Nokia Handset - Better battery backup.

16. USP of Horlicks Foodles - Healthy snack

17. Communicate the USPs to the target audience through effective ways of advertising. Use banners, slogans,
inserts and hoardings.

18. Let individuals know what your brand offers for them to decide what is best for them.

19. Know your competitors

 A marketer must be aware of the competitor’s offerings. Let the individuals know how your
product is better than the competitors?
 Never underestimate your competitors.
 Let the target audience know how your product is better than others.
 The marketers must always strive hard to have an edge over their competitors.
20. Ways to promote brands
 Choose the right theme for the advertisement.
 Use catchy taglines.
 The advertisement must not confuse people.
 The marketer must highlight the benefits of the products.
21. Maintain the position of the brand
 For an effective positioning it is essential for the marketers to continue to live up to the
expectations of the end - users.
 Never compromise on quality.
 Don’t drastically reduce the price of your products.
 A Mercedes car would not be the same if its price is reduced below a certain level.
 A Rado watch would lose its charm if its price is equal to a Sonata or a Maxima Watch.

PRODUCT POSTIONING STRATEGIES

Using product positioning strategy will help you understand:

A. Where your product is today
B. Where it would be ideally
Product positioning strategy is what gets your product position from A to B.
Product positioning strategies are numerous, and the selection of one over another is crucial to how your
company will market its products or services. Selecting the wrong strategy can cost lost time and a scarce
marketing budget. The ramifications of a wrong choice will also probably adversely affect your business's
bottom line. Taking a logical approach in selecting a positioning strategy can ensure a good choice.

Positioning strategies can be conceived and developed in a variety of ways. It can

be derived from the object attributes, competition, application, the types of
consumers involved, or the characteristics of the product class. All these
attributes represent a different approach in developing positioning strategies,
even though all of them have the common objective of projecting a favorable
image in the minds of the consumers or audience. There are seven approaches to
positioning strategies:
1) Using Product characteristics or Customer Benefits as a positioning strategy
This strategy basically focuses upon the characteristics of the product or customer
benefits. For example if I say Imported items it basically tell or illustrate a variety of
product characteristics such as durability, economy or reliability etc. Lets take an
example of motorbikes some are emphasizing on fuel economy, some on power,
looks and others stress on their durability. Hero Cycles Ltd. positions first,
emphasizing durability and style for its cycle.
At time even you would have noticed that a product is positioned along two or
more product characteristics at the same time. You would have seen this in the
case of toothpaste market, most toothpaste insists on ‘freshness’ and ‘cavity
fighter’ as the product characteristics. It is always tempting to try to position along
several product characteristics, as it is frustrating to have some good characteristics
that are not communicated.
2) Pricing as a positioning strategy
Quality Approach or Positioning by Price-Quality – Lets take an example and
understand this approach just suppose you have to go and buy a pair ofjeans, as
soon as you enter in the shop you will find different price rage jeans in the
showroom say price ranging from 350 rupees to 2000 rupees. As soon as look at
the jeans of 350 Rupees you say that it is not good in quality.
Why? Basically because of perception, as most of us perceive that if a product is
expensive will be a quality product where as product that is cheap is lower in
quality. If we look at this Price – quality approach it is important and is largely used
in product positioning. In many product categories, there are brands that
deliberately attempt to offer more in terms of service, features or performance.
They charge more, partly to cover higher costs and partly to let the consumers
believe that the product is, certainly of higher quality.
3) Positioning strategy based on Use or Application
Lets understand this with the help of an example like Nescafe Coffee for many years
positioned it self as a winter product and advertised mainly in winter but the
introduction of cold coffee has developed a positioning strategy for the summer
months also.
Basically this type of positioning-by-use represents a second or third position for
the brand, such type of positioning is done deliberately to expand the brand’s
market. If you are introducing new uses of the product that will automatically
expand the brand’s market.
4) Positioning strategy based on Product Process
Another positioning approach is to associate the product with its users or a class of
users. Makes of casual clothing like jeans have introduced ‘designer labels’ to
develop a fashion image. In this case the expectation is that the model or
personality will influence the product’s image by reflecting the characteristics and
image of the model or personality communicated as a product user.
Lets not forget that Johnson and Johnson repositioned its shampoo from one used
for babies to one used by people who wash their hair frequently and therefore
need a mild people who wash their hair frequently and therefore need a mild
shampoo. This repositioning resulted in a market share.
5) Positioning strategy based on Product Class
In some product class we have to make sure critical positioning decisions For
example, freeze dried coffee needed to positions itself with respect to regular and
instant coffee and similarly in case of dried milk makers came out with instant
breakfast positioned as a breakfast substitute and virtually identical product
positioned as a dietary meal substitute.
6) Positioning strategy based on Cultural Symbols
In today’s world many advertisers are using deeply entrenched cultural symbols to
differentiate their brands from that of competitors. The essential task is to identify
something that is very meaningful to people that other competitors are not using
and associate this brand with that symbol.
Air India uses maharaja as its logo, by this they are trying to show that we welcome
guest and give them royal treatment with lot of respect and it also highlights Indian
tradition. Using and popularizing trademarks generally follow this type of
positioning.
7) Positioning strategy based on Competitors
In this type of positioning strategies, an implicit or explicit frame of reference is one
or more competitors. In some cases, reference competitor(s) can be the dominant
aspect of the positioning strategies of the firm, the firm either uses the same of
similar positioning strategies as used by the competitors or the advertiser uses a
new strategy taking the competitors’ strategy as the base.
A good example of this would be Colgate and Pepsodent. Colgate when entered
into the market focused on to family protection but when Pepsodent entered into
the market with focus on 24 hour protection and basically for kids, Colgate changed
its focus from family protection to kids teeth protection which was a positioning
strategy adopted because of competition.
Question 4

Promotion Mix
Definition: The Promotion Mix refers to the blend of several promotional tools used by
the business to create, maintain and increase the demand for goods and services.
The fourth element of the 4 P’s of Marketing Mix is the promotion; that focuses on
creating the awareness and persuading the customers to initiate the purchase. The
several tools that facilitate the promotion objective of a firm are collectively known as
the Promotion Mix.
The Promotion Mix is the integration of Advertising, Personal Selling, Sales Promotion,
Public Relations and Direct Marketing. The marketers need to view the following
questions in order to have a balanced blend of these promotional tools.

 What is the most effective way to inform the customers?

 Which marketing methods to be used?
 To whom the promotion efforts be directed?
 What is the marketing budget? How is it to be allocated to the promotional
tools?
The management must consider the following factors in determining the promotion mix,
these are:

1. Nature of Product: The different type of product requires different promotional

tools. Such as, for the industrial products Viz. Machinery, equipment or land
personal selling is more appropriate as a great deal of pre-sale and after-sale
services is required to sell and install such products. On the other hand,
advertising and publicity are more suitable for the consumer goods, especially
the convenience goods.
2. Nature of Market: The number and location of customers greatly influence the
promotion mix. In case the group of potential customers is small and are
concentrated in a particular locality, then personal selling is more likely to be
effective. Whereas, if the customer base is large and widespread, then the blend
of advertising, personal selling, and the sales promotion is required to sell the
product.
3. Also, the type of customers influences the managerial decisions of the promotion
mix. The type of promotion for the urban, educated and institutional customers
would be different as compared to the rural, illiterate and household customers.
4. Stage of Product’s Life: The promotion mix changes as the product moves along
its life cycle. During the introduction stage, the principal objective of the
promotion is to create the primary demand by emphasizing the product’s
features, utility, etc. therefore, the blend of advertising and publicity is required.
As the product reaches its maturity stage the advertising and personal selling is
required to maintain the demand of the customers.
5. And finally, during the decline stage the expenses on other promotional activities
are cut, and more emphasis is laid on sales promotion with the intent to push up
the declining sales.
6. Availability of Funds: The marketing budget also decides the promotion mix. If
the funds available for the promotion are large, then the blend of promotional
tools can be used, whereas in the case the funds are limited then the
management must choose the promotional tool wisely.
7. Nature of Technique: Each element of the promotional mix has unique features
that significantly influences the purpose of promotion. Such as, the advertising is
an impersonal mode of communication that reaches a large group of customers.
Its expression can be amplified with the use of colors and sound that helps in
developing the long lasting brand image in the minds of the customer.
8. The Personal selling involves face to face interaction that helps in developing
cordial and personal relations with the customers. Likewise, the sales promotion
is short-term incentives given to the customers with the intent to boost sales for
a shorter period of time.
9. Promotional Strategy: The promotion mix largely depends on the company’s
promotional strategy, i.e. whether it accepts the Push Strategy or a Pull
Strategy. In a Push strategy, the manufacturer forces the dealers to carry the
product and promote it to the customer, i.e. convince the potential buyers to buy
it. Here, personal selling and trade promotion are likely to be more effective.
10. In the case of a Pull Strategy, the consumers ask the dealers to carry the product,
i.e. customers themselves purchase the product. Here, advertising and consumer
promotion are more appropriate.
 11. Readiness of Buyer: Different promotional tools are required at different stages
of buyer readiness. Such as, at the comprehension stage, the blend of advertising
and personal selling plays a vital role. Whereas at the conviction stage, personal
selling is more effective. At the time of sales closure, the blend of sales
promotion and personal selling is likely to be more effective.
Hence, the advertising and publicity are more effective at the early stages of buying
decision process while the sales promotion and personal selling are more effective
during the later stages.

Top 5 Elements of Promotion Mix (With

Diagram)
Elements of promotional mix are also called as tools, means, or
components. Basically, there are five elements involved in
promotional mix. Some authors have considered more elements,
too. However, we will consider five elements as shown in Figure 1.

1. Advertising:

Advertising is defined as any paid form of non-personal

presentation and promotion of ideas, goods, and services by an
identified sponsor. It is a way of mass communication. It is the most
popular and widely practiced tool of market promotion. Major part
of promotional budget is consumed for advertising alone. Various
advertising media – television, radio, newspapers, magazines,
outdoor means and so forth – are used for advertising the product.

ADVERTISEMENTS:

Characteristics of advertising are as follow:

i. Adverting is non-personal or mass communication. Personal

contact is not possible.

ii. It is a paid form of communication.

iii. It is a one-way communication.

ADVERTISEMENTS:

iv. Identifiable entity/sponsor-company or person gives advertising.

v. It is costly option to promote the sales.

vi. It can be reproduced frequently as per need.

vii. Per contact cost is the lowest.

viii. Various audio-visual, print, and outdoor media can be used for
advertising purpose.

ix. It is a widely used and highly popular tool of market promotion.

2. Sales Promotion:
Sales promotion covers those marketing activities other than
advertising, publicity, and personal selling that stimulate consumer
purchasing and dealer effectiveness. Sales promotion mainly
involves short-term and non-routine incentives, offered to dealers
as well consumers. The popular methods used for sales promotion
are demonstration, trade show, exhibition, exchange offer, seasonal
discount, free service, gifts, contests, etc.

Characteristics of sales promotion are as follows:

i. The primary purpose of sales promotion is to induce customers

for immediate buying or dealer effectiveness or both.

ii. Excessive use of sale promotion may affect sales and reputation
of a company adversely.

iii. It is taken as supplementary to advertising and personal selling

efforts.
iv. It involves all the promotional efforts other than advertising,
personal selling, and publicity.

v. It consists of short-term incentives, schemes, or plans offered to

buyers, salesmen, and/ or dealers.

vi. It involves non-routine selling efforts.

3. Personal Selling:
Personal selling includes face-to-face personal communication and
presentation with prospects (potential and actual customers) for the
purpose of selling the products. It involves personal conversation
and presentation of products with customers. It is considered as a
highly effective and costly tool of market promotion.

Characteristics of personal have been listed below:

i. Personal selling is an oral, face-to-face, and personal presentation

with consumers.

ii. Basic purpose is to promote products or increase sales.

iii. It involves two-way communication.

iv. Immediate feedback can be measured.

v. It is an ability of salesmen to persuade or influence buyers.

vi. It is more flexible way of market communication.

vii. Per contact cost is higher than advertising.

viii. It involves teaching, educating, and assisting people to buy.

4. Publicity:
Publicity is also a way of mass communication. It is not a paid form
of mass communication that involves getting favourable response of
buyers by placing commercially significant news in mass media.
William J. Stanton defines: “Publicity is any promotional
communication regarding an organisation and/or its products
where the message is not paid for by the organisation benefiting
from it.”

It is the traditional form of public relations. Publicity is not paid for

by the organisation. Publicity comes from reporters, columnists,
and journalists. It can be considered as a part of public relations.
Publicity involves giving public speeches, giving interviews,
conducting seminars, charitable donations, inauguration by film
actor, cricketer, politician or popular personalities, stage show, etc.,
that attract mass media to publish the news about them.

Main characteristic of publicity include:

i. Publicity involves obtaining favourable presentation about

company or company’s offers upon radio, television, or stage that is
not paid for by the sponsor.

ii. It is a non-paid form of market promotion. However, several

indirect costs are involved in publicity.

iii. It may include promotion of new product, pollution control

efforts, special achievements of employees, publicizing new policies,
etc., for increasing sales. It is primarily concerns with publishing or
highlighting company’s activities and products. It is targeted to
build company’s image.

iv. Mostly, publicity can be carried via newspapers, magazines,

radio or television.

v. Company has no control over publicity in terms of message, time,

frequency, information, and medium.
vi. It has a high degree of credibility. Publicity message is more
likely to be read and reacted by audience.

vii. Publicity can be done at a much lower cost than advertising.

Company needs to spend a little amount to get the event or activity
publicized.

viii. Frequency or repetition of publicity in mass media depends

upon its social significance or the values for news. Mostly, it appears
only once.
5. Public Relations:
The public relations is comprehensive term that includes
maintaining constructive relations not only with customers,
suppliers, and middlemen, but also with a large set of interested
publics. Note that public relations include publicity, i.e., publicity is
the part of public relations.

William Stanton defines:

“Public relations activities typically are designed to build or

maintain a favourable image for an organisation and a favourable
relationship with the organization’s various publics. These publics
may be customers, stockholders, employees, unions,
environmentalists, the government, and people in local community,
or some other groups in society.” Thus, public relations include
organization’s broad and overall communication efforts intended to
influence various groups’ attitudes toward the organisation. Some
experts have stated that the public relations are an extension of
publicity.

Main characteristic of publicity are as under:

i. Public relations is a paid form of market promotion. Company has
to incur expenses.

ii. Public relations activities are designed to build and maintain a

favourable image for an organisation and a favourable relationship
with the organization’s various publics.

iii. It is an integral part of managerial function. Many companies

operate a special department for the purpose, known as the public
relations department.

iv. It involves a number of interactions, such as contacting, inviting,

informing, clarifying, responding, interpreting, dealing, transacting,
and so forth.

v. Public relations covers a number of publics – formal and informal

groups. These publics may be customers, stockholders, employees,
unions, environmentalists, the government, people of local
community, or some other groups in society.

vi. Public relations activities are undertaken continuously. It is a

part of routine activities.

vii. All the officials, from top level to supervisory level, perform
public relations activities.

viii. In relation to modern management practices, the public

relations is treated as the profession.

Thus, there are five major elements or promotion mix. Each

tool/element has its advantages, limitations, and applicability.
Depending upon company’s internal and external situations, one or
more tools are used. Mostly, company’s promotional programme
involves more elements, each element supplements others.
Question 5
A distribution channel is the route through which goods or services move from the company
to the customer or the transfer of payment happens from the customer to the company.
Distribution channels can mean selling of products directly or selling through wholesalers,
retailers etc. The same applies for payment transfer from customers to company; it can move
through a path or can be sent directly to the company.

Functions of Distribution Channels

Distribution channels basically function to deliver goods from the manufacturer to the
customer.
The following are the functions of distribution channels −

 Facilitate selling by being physically close to customers

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

Objectives of Distribution Channels

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

 To ensure availability of products at the point of sale

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

Major Channels of Distribution

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

 Manufacturer → Consumer
 Manufacturer → Retailer → Customer
 Manufacturer → Wholesaler → Customer
 Manufacturer → Wholesaler → Retailer → Customer
  Manufacturer → Agent → Retailer → Customer
 Manufacturer → Agent → Wholesaler → Customer
 Manufacturer → Agent → Wholesaler → Retailer → Customer
Profit distribution decreases as the channel length increases.

Designing Distribution Channels

We have seen what a distribution channel is. Let us now see the designing process of a
distribution channel.
The following steps are involved in the designing of a channel system −

 Formulating the channel objectives

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

Distribution channel for cosmetics brand in India

Cosmetic products are manufactured by using chemicals, minerals, and some natural
ingredients. Technological advancement in the manufacturing of cosmetic products is
one of the driving factors for the cosmetic products market. The economic
development in the emerging countries has further increased the utilization of cosmetic
products, as consumers have more disposable income.
Cosmetic products are segmented into skin care products, hair care products, color
cosmetics, fragrances, etc. These products are used to enhance the beauty of the
consumers by rejuvenating skin, giving shine to the hair, and so on. Distribution
channels such as supermarkets, department stores, etc., offer a wide array of
cosmetic products and provide a convenient medium for selection of the desired
product.
The cosmetics products market is segmented on the basis of types, distribution
channels, and geography in terms of value ($Billion). The market segments, by type,
include skin care, hair care, color cosmetics, fragrance & deodorants, personal
hygiene, oral hygiene, soap, bath & shower, sun care, and others.
On the basis of distribution channel Commented [GG1]: QUESTION 5 SECOND PART - The
answer is not available on internet.
 Supermarkets http://www.iscd.it/files/DISTRIBUTION-CHANNELS-OF-
COSMETIC-PRODUCTS-IN-ITALY.pdf
 Pharmacy & drug stores The link has some points. If its right I will add information
 Department stores from it.
 Direct selling
 Specialty stores
 Beauty salons
 Internet retailing
 Others (shopping club, retail shops, etc.)