CONCEPT OF PRODUCT:

Definition:
In marketing, a product is an object or system made available for consumer use; it is
anything that can be offered to a market to satisfy the desire or need of a customer. A product
is anything that can be offered to a market that might satisfy a want or need. It is more than
physical products; includes services, places, persons, and ideas. To create successful new
products, the company must: – understand it’s customers, markets and competitors – develop
products that deliver superior value to customers.
A product may be defined as a set of tangible, intangible and associate attributes capable of
being exchanged for a value with the ability to satisfy consumers and business needs.
According to Philip Kotler: “A product is anything that can be offered to a market for
attention, acquisition, use or consumption. It includes physical objects, services, personalities,
place, organizations and ideas.”
A product is the item offered for sale. A product can be a service or an item. It can be
physical or in virtual or cyber form. Every product is made at a cost and each is sold at a
price. The price that can be charged depends on the market, the quality, the marketing and the
segment that is targeted. Each product has a useful life after which it needs replacement, and
a life cycle after which it has to be re-invented. In FMCG parlance, a brand can be revamped,
re-launched or extended to make it more relevant to the segment and times, often keeping the
product almost the same.

Product mix
Product mix, also known as product assortment, refers to the total number of product lines a
company offers to its customers. A product mix is the group of everything a company sells.
However, the product line is a subset of the product mix. A product line refers to a unique
product a company offers. For example, Patanjali deals in different categories of products
which include shampoo, flour, toothpaste, etc. These different products are different product
lines for the company and together constitute the mix of the company. According to Davar,
product mix must be considered as a part of overall marketing planning so that resources are
better utilised, all costs are pruned, existing products are improved, obsolete products are
dropped, competitors’ policies and industry trend are taken note of, and the marketing
strategy is reviewed to ensure that the company’s resources match with the environmental
changes. The four dimensions to a company's product mix include width, length, depth and
consistency.
Product Mix Example
Coca-Cola has product brands like Minute Maid, Sprite, Fanta, Thumbs up, etc. under its
name. These constitute the width of the product mix. There are a total of 3500 products
handled by the Coca-Cola brand. These constitute the length. Minute Maid juice has different
variants like apple juice, mixed fruit, etc. They constitute the depth of the product
line ‘Minute Maid’. Coca-Cola deals majorly with drinking beverage products and hence has
more product mix consistency.
Product Mix depends on many factors like
  Company Age
 Financial Standing
 Area of Operation
 Brand identity, etc.
Many new companies start with a limited width, length, depth and high consistency of the
product mix, while companies with good financial standing have wide, long, deep and less
consistency of the product mix. Area of operation and brand identity also affects its product
mix.

Width: Number of Product Lines

The width, or breadth, of a company's product mix pertains to the number of product lines the
company sells. For e.g., if a company produce only soft drinks and juices, this means its mix
is two products wide. Coca-Cola deals in juices, soft drinks, and mineral water and hence the
product mix of Coca-Cola is three products wide.
Small and upstart businesses will usually not have a wide product mix. It is more practical to
start with some basic products and build market share. Later on, the company's technology
may allow the company to diversify into other industries and build the width of the product
mix.
Length: Total Products
The product mix length is the total number of products or items in your company's product
mix. That is if a company has 5 product lines and 10 products each under those product lines,
the length of the mix will be 50 [5 x 10].
Depth: Product Variations
Depth of a product mix pertains to the total number of variations for each product. Variations
can include size, flavour and any other distinguishing characteristic. For example, if your
company sells three sizes and two flavours of toothpaste, that particular line of toothpaste has
a depth of six. Colgate has different variants under the same product line like Colgate
advanced, Colgate active salt, etc.
Consistency is Relationship
Product mix consistency describes how closely related product lines are to one another – in
terms of use, production and distribution. Your company's product mix may be consistent in
distribution but vastly different in use. For example, a dairy company has two product lines
milk and yogurt. Both the lines have same users and distribution channels. Due to low
product variation and high product mix consistency. Take another example of Philips
Electronics with 7 product lines having high production mix variation and low consistency.

Factors Influencing Product Mix:

The following factors are generally considered before deciding on product mix:
(1) Marketing strategy and corporate strategy. Does a product fit these strategy.
(2) Resources and strengths of a company. Does the product fit them?
(3) Competitor’s strategy. Does the product match the competitor s strategy?
(4) Overall impact of profit. Does the product improve the profit of the company?
(5) Effect on other products. Does the product adversely affect the sales of other products?
(6) Management competence. Does the product get the necessary management competence
and experience?
(7) Cost of production. Can a by-product or other allied systems or products be developed at
a low cost of production?
(8) Quantity of production. Does the addition of one more item to the existing product line
offer economics of large scale production?
(9) Full utilisation of marketing network. Does the addition of a product contribute towards
reducing the marketing cost by fuller utilisation of marketing personnel?

Product Mix Decision

Product mix decision refers to the decisions regarding adding a new or eliminating any
existing product from the product mix, adding a new product line, lengthening any existing
line, or bringing new variants of a brand to expand the business and to increase the
profitability.

 Product Line Decision - Product line managers takes product line decisions
considering the sales and profit of each items in the line and comparing their product
line with the competitors' product lines in the same markets. Marketing managers
have to decide the optimal length of the product line by adding new items or dropping
existing items from the line.
 Line Stretching Decision - Line stretching means lengthening a product line beyond
its current range. An organisation can stretch its product line downward, upward, or
both way.
1. Downward Stretching means adding low-end items in the product line,
for example in Indian car market, watching the success of Maruti-Suzuki in small car
segment, Toyota and Honda also entered the segment.
2. Upward Stretching means adding high-end items in the product line,
for example Maruti-Suzuki initially entered small car segment, but later entered
higher end segment.
3. Two-way Stretching means stretching the line in both directions if an organisation is
in the middle range of the market.
 Line Filling Decision - It means adding more items within the present range of the
product line. Line filling can be done to reach for incremental profits, or to utilise
excess capacity.
PRODUCT MIX STRATEGY
Small companies usually start out with a product mix limited in width, depth and length; and
have a high level of consistency. However, over time, the company may want to differentiate
products or acquire new ones to enter new markets. They may also add to their lines similar
products that are of higher or lower quality to offer different choices and price points.
This is called stretching the product line. When you add higher quality, more expensive
products, it's called upward stretching. If you add lesser quality, lower priced items, it's called
downward stretching.
1. Expansion of Product Mix:
Expansion of product mix implies increasing the number of product lines. New lines may be
related or unrelated to the present products. For example, Bajaj Company adds car (unrelated
expansion) in its product mix or may add new varieties in two wheelers and three wheelers.
When company finds it difficult to stand in market with existing product lines, it may decide
to expand its product mix.
For example, Hindustan Unilever Limited has various products in its product mix such as:
(1) Toilet soaps, detergent cakes, washing powders, etc.
(2) Cosmetic products,
(3) Edible items,
(4) Shaving creams and blades,
(5) Pesticides, etc.
If company adds soft drink as a new product line, it is the example of expansion of product
mix.
2. Contraction of Product Mix:
Sometimes, a company contracts its product mix. Contraction consists of dropping or
eliminating one or more product lines or product items. Here, fat product lines are made thin.
Some models or varieties, which are not profitable, are eliminated. This strategy results into
more profits from fewer products. If Hindustan Unilever Limited decides to eliminate
particular brand of toilet shop from the toilet shop product line, it is example of contraction.
3. Deepening Product Mix Depth:
Here, a company will not add new product lines, but expands one or more excising product
lines. Here, some product lines become fat from thin. For example, Hindustan Unilever
Limited offering ten varieties in its editable items decides to add four more varieties.
4. Alteration or Changes in Existing Products:
Instead of developing completely a new product, marketer may improve one or more
established products. Improvement or alteration can be more profitable and less risky
compared to completely a new product. For example, Maruti Udyog Limited decides to
improve fuel efficiency of existing models. Modification is in forms of improvement of
qualities or features or both.
5. Developing New Uses of Existing Products:
This product mix strategy concerns with finding and communicating new uses of products.
No attempts are made to disturb product lines and product items. It is possible in terms of
more occasions, more quantity at a time, or more varied uses of existing product. For
example, Coca Cola may convince to use its soft drink along with lunch.
6. Trading Up:
Trading up consists of adding the high-price-prestige products in its existing product line.
The new product is intended to strengthen the prestige and goodwill of the company. New
prestigious product increases popularity of company and improves image in the mind of
customers. By trading up product mix strategy, demand of its cheap and ordinary products
can be encouraged.
7. Trading Down:
The trading down product mix strategy is quite opposite to trading up strategy. A company
producing and selling costly, prestigious, and premium quality products decides to add lower-
priced items in its costly and prestigious product lines.
Those who cannot afford the original high-priced products can buy less expensive products of
the same company. Trading down strategy leads to attract price-sensitive customers.
Consumers can buy the high status products of famous company at a low price.
8. Product Differentiation:
This is a unique product mix strategy. This strategy involves no change in price, qualities,
features, or varieties. In short, products are not undergone any change. Product differentiation
involves establishing superiority of products over the competitors.
By using rigorous advertising, effective salesmanship, strong sales promotion techniques,
and/or publicity, the company tries to convince consumers that its products can offer more
benefits, services, and superior performance. Company can communicate the people the
distinct benefits of its products.
PRODUCT INNOVATION
The development and market introduction of a new, redesigned or substantially improved
good or service. Examples of product innovation by a business might include a new product's
invention; technical specification and quality improvements made to a product; or the
inclusion of new components, materials or desirable functions into an existing product.
Product innovation involves creating new products or improved versions of existing products
that increase their uses. This innovation can be in the product's own functionality, or it can
take the form of new technology. Think about how often cell phone manufacturers and car
manufacturers make new versions of their products. For example, car manufacturers make
one new car each year. Cell phone manufacturers tend to release a new version of their
phones every few years. In doing so, the manufacturer tries to introduce something unique.
Product innovation is all about improving upon what you have.
Reasons for Product Innovation
1. Business Growth
Product innovation is a tonic for the growth of a business and industrial enterprise.
It has been the experience that only those Enterprises have been successful in achieving the
marketing objectives which have adopted product innovation.
2. Competition
Competition is perhaps the most important reasons for product innovation.
Every business and industrial Enterprise wants to capture the market and to defeat its
competitors in the market, For achieving this object the enterprise must represent its product
to the consumers in a new and improved style so that the consumers may be affected and the
demand of product may be increased.
3. Market Changes
Conditions and atmosphere of a market keep on changing from time to time.
The habits, taste, nature, and attitudes of consumers change at a very fast rate. these changes
make it necessary for an enterprise that necessary changes must be made in its product
specifications so that these changes may be effectively met.
4. Technological Changes
Scientific and technological developments are taking place in every country, and it becomes
necessary, for every Enterprise to adopt product innovation because these scientific and
technological development create a situation in which no enterprise can maintain demand for
its existing products. reasons and importance of product innovation.
5. To Minimise Risk
Every product has a life cycle and passes through different stages in its life cycle.
When a product of an enterprise reaches the stage of saturation or decline, it becomes
necessary for the Enterprise to innovate it.
6. Maximum Utilisation of Resources
Every enterprise wants to make maximum possible utilization of its physical and human
resources. For example, a new product may be produced by using the wastage and scrap.
7. Other Reasons
There may be some other is also for product innovation.
These reasons may be – 1. To write the standard of living of consumers. 2. To impress the
consumers 3. To impress the channels of distribution, 4. To complete the product line, 5. To
make the marketing program of the enterprise more effective.
NEW PRODUCT DEVELOPMENT
New product development (NPD) is the process of bringing a new product to the
marketplace. Your business may need to engage in this process due to changes in consumer
preferences, increasing competition and advances in technology or to capitalise on a new
opportunity. Innovative businesses thrive by understanding what their market wants, making
smart product improvements, and developing new products that meet and exceed their
customers' expectations.
'New products' can be:
 products that your business has never made or sold before but have been taken to
market by others
 product innovations created and brought to the market for the first time. They may be
completely original products, or existing products that you have modified and
improved.
NPD is not limited to existing businesses. New businesses, sole traders or even freelancers
can forge a place in the market by researching, developing and introducing new or even one-
off products. Similarly, you don't need to be an inventor to master NPD. You can also
consider purchasing new products through licensing or copyright acquisition.

PRODUCT PLANNING AND DEVELOPMENT

Product planning and development embraces all activities which start with the idea
generation and ends with its full-scale commercialisation in the market, or modification of
existing products to add stability. The seven main steps in product planning and development
are: 1. Generation of New Product Ideas 2. Screening of Ideas 3. Product Concept
Development 4. Commercial Feasibility 5. Product Development 6. Test Marketing 7.
Commercialisation.
Step # 1. Generation of New Product Ideas:
The first step in product planning and development is generation of ideas for the development
of new/innovative products.
Ideas may come from internal sources like company’s own Research and Development
(R&D) department, managers, sales-force personnel etc.; or from external sources like,
customers, dealers, competitors, consultants, scientists etc.
At this stage, the intention of management is to generate more and more new and better
product ideas; so that the most practical and profitable ideas may be screened subsequently.
Step # 2. Screening of Ideas:
Screening of ideas means a close and detailed examination of ideas, to determine which of
the ideas have potential and are capable of making significant contribution to marketing
objectives. In fact, generation of ideas is not that significant as the system for screening the
generated ideas.
The ideas should be screened properly; as any idea passing this stage would cost the firm in
terms of time, money and efforts, at subsequent stages in product planning and development.
Step # 3. Product Concept Development:
Those product ideas which clear the screening stage must be developed into a product
concept – identifying physical features, benefits, price etc. of the product. At this stage
product idea is transformed into a product concept i.e. a product which target market will
accept.
Step # 4. Commercial Feasibility:
At this stage, the purpose is to determine whether the proposed product idea is commercially
feasible, in terms of demand potential and the costs of production and marketing.
Management must also ensure that product concept is compatible with the resources of the
organization technological, human and financial.
Step # 5. Product Development:
Product development encompasses the technical activities of engineering and design. At this
stage, the engineering department converts the product concept into a concert form of product
in view of the required size, shape, design, weight, colour etc. of the product concept.
A model or prototype of the product is manufactured on a limited scale. Decisions are also
made with regard to packaging, brand name, label etc. of the product.
Step # 6. Test Marketing:
A sample of the product is tested in a well-chosen and authentic sales environment; to find
out consumers’ reaction. In view of consumers’ reactions, the product may be improved
further.
# 7. Commercialisation:
After the management is satisfied with the results of test marketing, steps are taken to launch
a full-fledged programme for the production, promotion and marketing of the product. It is
the stage where the new product is born; and it enters it life cycle process.
PPD becomes necessary for the following circumstances:
(1) To replace the short-lived products,
(2) To arrest a fall in the rate of firm’s growth,
(3) To utilise surplus funds or surplus capacity, and
(4) To modify or improve the existing products with a view to adding stability to them.
(5) To stay ahead of changing customer requirements and preferences,
(6) To keep pace with fast-moving technology, and
(7) To match the new product entries of competitors.
Essential Elements of PPD:
The essential elements or prerequisites to PPD can be summarised as follows:
(1) Research and Design:
These include market research, product research, and analysis of the alternative designs and
characteristics for finalising the one that would meet the customer requirements and be able
to capture mass market.
(2) Production Technique:
This requires examination of the alternative techniques of production, and choosing the right
one that would necessarily add such attributes to a product which match the customers’
needs.
(3) Modification and Improvement:
These include in-depth analysis and final decision-making for modifying and improving the
existing products in terms of specification, quality, novelty, packaging, etc.
(4) Product Elimination:
This requires a decision to drop the unprofitable products from the firm’s range of products
so as to divert the resources to profitable products.
(5) Product Pricing:
This involves a decision on a price to be fixed based on either the competitor’s price or the
cost of production or the market forces of supply and demand.
(6) Co-Ordination:
This requires constant monitoring and information feedback on the aspects of finance,
accounting, engineering, manufacturing, marketing research and technology.
(7) Commercialisation:
This involves determination of marketing outlets and integrating the new product into the
firm’s normal operations for satisfactory volume of sales.
Main Causes for the Failure of a New Product:
The main causes or reasons that lead to the failure of a new product are:
(i) Substandard design or quality;
(ii) Cut-throat competition;
(iii) Higher costs of production and distribution;
(iv) Inadequate market and marketing research;
(v) Defective systems of physical distribution;
(vi) Inadequacy of marketing efforts like poor advertising, improper promotional methods,
inexperienced sales personnel, weak channels of distribution;
(vii) Absence of top-flight, outstanding managers in the areas of R&D, and marketing
functions;
(viii) Resultant product not commercially viable;
(ix) Failure of production techniques to apply technology; and
(x) Ill-timing of the products i.e. products are far ahead of the current practice to secure
acceptance.
PRODUCT PACKAGING
Packaging refers to the process of designing the package such as containers, wrappers etc. It
plays a very significant role in the marketing success or failure of many products especially
for non-durable consumer products.
It not only provides protection to the product but also acts as a promotional tool. Sometimes,
customers assess the quality of the product from its packaging. Packaging has played an
important role in the success of many products like Colgate Toothpaste, Taj Mahal Tea, Lays
Wafers etc. It has been described as silent salesman.
Levels of Packaging:
Following are the three levels of Packaging:
1. Primary Package:
Primary package refers to the product’s immediate package. In certain cases, such package is
retained till the consumer is ready to use the product. For example, plastic packet for socks
while in some other cases such package is used throughout the life of the product such as the
bottle carrying jam or tomato sauce etc.
2. Secondary Packaging:
Secondary packaging is the additional packing given to a product to protect it. Such packing
is retained till the consumer wants to start using the product. For example. Pears Soap usually
comes in a card board box. Consumer first throws the box when he desires to use it & than
discards plastic wrapper too to get hold of the soap.
3. Transportation Packaging:
It refers to packages essential for storing, identifying or transporting. For example, use of
corrugated boxes, wooden crates etc.
Functions of Packaging:
Following are the main functions performed by packaging:
1. Product Identification:
Packaging ensures easy identification of a product. For example, Taj Mahal Tea can be easily
identified from a distance due to its blue colour box.
2. Product Protection:
The most important function of packaging is to ensure protection of a product from spoilage,
leakage, breakage etc. It also ensures effective protection during storage and transportation of
a product.
3. Facilitating Use of the Product:
Packaging helps the customers to easily handle and use the product. For example, tubes of
tooth pastes, bottles of cold drinks etc.
4. Product Promotion:
Packaging acts as an important promotional tool. The attractive color scheme or photograph
used in packing helps in attracting the attention of the people and inducing them to purchase
the product. Therefore, it plays the role of silent salesman.
Importance of Packaging:
The importance of packaging is as follows:
1. Rising Standards of Health and Sanitation:
Rising standards of living in the country have resulted in more use of packed goods and this
also reduces the chances of adulteration.
2. Self Service Outlets:
At present, packaging has occupied a place of silent salesmanship especially at self service
outlets.
3. Innovational Opportunity:
Various innovative packing ideas especially in the field of medicines, soft drinks, milk etc.
has increased the scope of marketing of these products. Now, pasteurized milk come in packs
which can be stored for few days even.
4. Product Differentiation:
Packaging helps in product differentiation. The colour, size, material etc. of package help the
customer to assess the quality of the product. For example, potato wafers of local brand &
branded companies give different impact on the minds of the customers, all because of
difference in their packing.
BRANDING
Branding is a process which involves creating a specific name, logo, and an image of a
particular product, service or company. This is done to attract customers. It is usually done
through advertising with a consistent theme.
Branding aims to establish a significant and differentiated presence in the market that attracts
and retains loyal customers. A brand is a name, term, symbol, or other feature that
distinguishes an organization or product from its rivals in the eyes of the customer. Brands
are used in business, marketing, and advertising.
Features of Branding
Targetability
Branding should be planned according to the targeted audience. No business firm can target
the entire population. Business owners should identify the type of people who are buying
their products and services. Research should be done on the basis of age, gender, income, the
lifestyle of their customers, etc.
Awareness
The percentage of people who are aware of a brand is known as brand awareness. Well
established companies have the benefit of a high level of brand awareness. Brand awareness
can be increased with the help of advertisement on TV, radio, newspaper or social media
marketing and advertising. Logos also help companies build brand awareness, as people often
recognize brands by these symbols or diagrams.
Loyalty
Brand loyalty is the highest achievement or apex of any company. A customer who buys the
product of a particular company extensively is known as a brand loyalist. Many consumers
prefer using certain brands of clothing, deodorants or tubes of toothpaste, for example. They
like how these brands benefit them. Brand loyalty can be built by staying in touch with the
customers, asking them for their reviews.
Consistency
Consistency is necessary for a brand. A brand must remain consistent. Small businesses make
numerous promises in commercials and ads about their brands, and consumers expect
companies to continue living up to these promises. Their products should also be effective
Branding is not just about getting your target market to select you over the competition. It's
also about getting your prospects to see you as the sole provider of a solution to their problem
or need. In its essence, branding is a problem-solver. A good brand will:
 Clearly deliver a message
 Confirm the brand's credibility in the marketplace
 Emotionally connect target prospects with a product or service
 Motivate the buyer to make a purchase
 Create user loyalty

Brand Architecture:
Brand architecture defines the different levels within your brand and provides a hierarchy that
explains the relationships between the different products, services, and components that make
up the retailer’s portfolio of offerings. This architecture captures and reflects retailer’s
existing brand structure so that employees and customers understand the value of and
relationship between its different parts and components.
It also creates a roadmap for journey that guides how your brand can scale in the future.
Hence, brand architecture is nothing but the logical, strategic, and relational structure for your
brands, or put another way, it is the entity’s “family tree” of brands, sub-brands, and named
products.
As organizations grow through mergers and acquisitions, they are faced with many key
decisions regarding brand architecture, including how many brands should be managed.
THREE TYPES OF BRANDING
Corporate Brand
The overall parent company must have its own brand that people recognize for quality and its
good reputation. This is useful when launching new product brands or product lines. If you
can associate the new product brand with the already well-known corporate brand, it has a
better chance of being well received (or poorly received if people don’t trust your corporate
brand).
Example: Coca-Cola Global has many product lines that are individually branded.
Product Brand
Individual products or product lines must have their own established brands. This is useful
when a corporation or organization has multiple services, including services that at the
surface may not seem to have a lot in common.
Example: Diet Coke is clearly a part of the dark Coca-Cola soft drinks with similar colours
(silver and red vs. white and red). Sprite is also owned by Coca-Cola, however, and has a
completely different look, taste and target audience.
Personal Brand
Developing a personal brand can be as important for an individual as it is for a company or
product line. Personal branding is vital for salesmen, job seekers or anyone who wants to deal
with the business world. It’s your reputation (how others view you) and to some degree, your
identity (what people associate you with). Reputation could be good or bad; identity refers to
the idea of someone associating you with your given profession, belief system, hobby, etc.
Example: Salesman for any kind of product

Advantages of Branding:
The marketers draw the following benefits from branding:
(i) Distinctiveness or Product Differentiation:
A brand name creates a distinctive impression among the customers. For instance, different
brands of soap such as ‘Cinthol’, ‘O.K.’, ‘Lux’, ‘Pears’, ‘Vigil’, etc. create different
impressions upon the users, though the article is the same, i.e., soap. Thus, a branded product
enjoy distinct or separate identity.
(ii) Market Segmentation:
Branding helps segmentation of the market on the basis of benefit-sought and provided to the
customers. For example, Videocon has its name in the electronic industry in providing value
for money for the economy class. In 1995, it introduced Bazooka version of TV for the
middle level segment of the consumers.
(iii) Promotion and Advertising:
A brand name enables its holder to advertise his product without any difficulty. Once a brand
name becomes popular, people remember it for long.
(iv) Wide Market:
Branded products are quite popular and have wide market. The wholesalers and retailers
readily handle the branded products which are advertised.
(v) Customer Loyalty:
Branding ensures better quality at competitive prices. Branded products are available in all
parts of the country at uniform prices. This tends to create brand loyalty on the part of
customers. They ask for the goods by their brand names such as Taj Mahal (tea leaves),
Nescafe (Coffee), Tata (Iodised Salt), Natraj (Pencils), etc.
(vi) Protection against Imitation:
A registered brand name and mark is a protection against imitation by the other
manufacturers.
(vii) Control Over Prices:
A manufacturer can easily control the prices of the branded products. He can fix the prices
and print them on the packets containing the branded products. The retailers can’t exploit the
customers by over-changing.
(viii) Check on Adulteration:
Branded products are duly packed and sealed which prevents adulteration by the traders.
Thus, consumers are assured of better quality products.
Branding is also advantageous from the point of view of customers as discussed below:

(i) Product Identification:

Branding helps the customers in identifying the products. For example, if a person is satisfied
with a particular brand of a product, say Taj Mahal tea leaves or Lux beauty soap, he need not
take a close inspection every time he has to buy that product. Thus, branding facilitates repeat
purchase of the products.
(ii) Ensures Quality:
Branding ensures a particular level of quality of the product. Thus, customers can buy
branded goods with confidence about their quality.
(iii) Easy Shopping:
Branding makes shopping easier because the consumer knows what product to buy. For
example, if a person wants to buy Sony Television, he can go to Sony authorised dealer and
buy the model of his choice.
(iv) Psychological Satisfaction:
Consumer buying differentiated brands feel satisfied not only with the physical product or
service, but also psychologically. For example, if someone has already used BPL washing
machine without any trouble or problem, then buying a three door refrigerator with BPL
Brand will enhance his psychological satisfaction.
(v) Status Symbol:
Some brand names are advertised heavily and they create some sort of status consciousness
among the consumers. The status conscious consumers get higher satisfaction from highly
advertised branded products.
(vi) Uniform Price:
The retail price of a branded product is written on its packet. Thus, consumers cannot be
cheated by the unscrupulous traders. Moreover, its price is same at every retail outlet.
(vii) Packaging:
The branded goods are generally packed in suitable wrappers or containers which facilitate
easy handling by the customers. Moreover, packing also protects the goods from heat,
moisture, etc.
BRAND NAME
In its simplest form, a brand name is a form of a signature that gives credit to the creator of a
particular work or service and sets it apart from those created by others. Two of the main
purposes of brand names are:
 Identification: To differentiate a particular product or service from other like or
similar brands.
 Verification: To authenticate that a product or service is the genuine or desired article
(as opposed to a generic or knock-off).
Brand name is one of the brand elements which helps the customers to identify and
differentiate one product from another. It should be chosen very carefully as it captures the
key theme of a product in an efficient and economical manner. It can easily be noticed and its
meaning can be stored and triggered in the memory instantly.
Features of a Good Brand Name
A good brand name should have following characteristics:
1. It should be unique / distinctive (for instance- Kodak, Mustang)
2. It should be extendable.
3. It should be easy to pronounce, identified and memorized. (For instance-Tide)
4. It should give an idea about product’s qualities and benefits (For instance- Swift,
Quickfix, Lipguard).
5. It should be easily convertible into foreign languages.
6. It should be capable of legal protection and registration.
7. It should suggest product/service category (For instance Newsweek).
8. It should indicate concrete qualities (For instance Firebird).
9. It should not portray bad/wrong meanings in other categories. (For instance NOVA is
a poor name for a car to be sold in Spanish country, because in Spanish it means
“doesn’t go”).

Advantages of Brand Name

There are endless benefits of building and maintaining a strong brand. Here are five of the
major benefits you can expect to see when you have a strong brand:

1. Customer recognition. Having a strong brand works to build customer recognition.

This means when a customer is shopping for a particular product or considering a
company to perform a service, they recognize your company in the running.
Consumers are far more likely to choose a brand that they recognize over something
unfamiliar, even if they don’t know a great deal about your company at the time.

2. Competitive edge in market. Your brand is what differentiates you in the

marketplace. When customers recognize and back your brand, it helps lend a
competitive edge to your company. The more recognition you receive and the more
you build your brand, the more you will find that your brand elevates and is
competitive with other well-known brands.

3. Easy introduction of new products. When you already have a strong brand and loyal
customers, it is often easier and less expensive to introduce new products or test them
out before you further invest in them. If you have a loyal brand following, your
customers will often be interested in your new products and even anticipate them
being released.

4. Customer loyalty and shared values. The recognition and elevation that a strong
brand builds upon all lend to greater customer loyalty. Customers are attracted to
brands that they share values with. When you build a strong brand, you need to
convey these values to build an emotional connection with customers. Brand loyalty
often lasts a lifetime and even transfers to future generations.

5. Enhanced credibility and ease of purchase. Having a strong, well-known brand

enhances your credibility with customers, your industry, and the marketplace as a
whole. As you build your credibility, you also build recognition, loyalty, and
competitiveness. Everything goes hand-in-hand, and you’ll find that your credibility
has a direct connection to customers ease of purchase. We want to buy from
companies we like, know, and trust. If your brand is credible, you’re far more likely
to get the sale.

BRAND ATTRIBUTES
A strong brand must have following attributes:
1. Relevancy- A strong brand must be relevant. It must meet people’s expectations and
should perform the way they want it to. A good job must be done to persuade
consumers to buy the product; else inspite of your product being unique, people will
not buy it.
2. Consistency- A consistent brand signifies what the brand stands for and builds
customers trust in brand. A consistent brand is where the company communicates
message in a way that does not deviate from the core brand proposition.
3. Proper positioning- A strong brand should be positioned so that it makes a place in
target audience mind and they prefer it over other brands.
 4. Sustainable- A strong brand makes a business competitive. A sustainable brand drives
an organization towards innovation and success. Example of sustainable brand is
Marks and Spencer’s.
5. Credibility- A strong brand should do what it promises. The way you communicate
your brand to the audience/ customers should be realistic. It should not fail to deliver
what it promises. Do not exaggerate as customers want to believe in the promises you
make to them.
6. Inspirational- A strong brand should transcend/ inspire the category it is famous for.
For example- Nike transcendent Jersey Polo Shirt.
7. Uniqueness- A strong brand should be different and unique. It should set you apart
from other competitors in market.
8. Appealing- A strong brand should be attractive. Customers should be attracted by the
promise you make and by the value you deliver.
BRAND POSITIONING

Brand Positioning can be defined as an activity of creating a brand offer in such a manner
that it occupies a distinctive place and value in the target customer’s mind. For instance-
Kotak Mahindra positions itself in the customer’s mind as one entity- “Kotak ”- which can
provide customized and one-stop solution for all their financial services needs. It has an
unaided top of mind recall. It intends to stay with the proposition of “Think Investments,
Think Kotak”. The positioning you choose for your brand will be influenced by the
competitive stance you want to adopt.

Brand Positioning involves identifying and determining points of similarity and difference to
ascertain the right brand identity and to create a proper brand image. Brand Positioning is the
key of marketing strategy. A strong brand positioning directs marketing strategy by
explaining the brand details, the uniqueness of brand and it’s similarity with the competitive
brands, as well as the reasons for buying and using that specific brand. Positioning is the base
for developing and increasing the required knowledge and perceptions of the customers. It is
the single feature that sets your service apart from your competitors. For instance- Kingfisher
stands for youth and excitement. It represents brand in full flight.

There are various positioning errors, such as-

1. Under positioning- This is a scenario in which the customer’s have a blurred and
unclear idea of the brand.
2. Over positioning- This is a scenario in which the customers have too limited a
awareness of the brand.
3. Confused positioning- This is a scenario in which the customers have a confused
opinion of the brand.
4. Double Positioning- This is a scenario in which customers do not accept the claims
of a brand.

BRAND IDENTITY

A brand is unique due to its identity. Brand identity includes following elements - Brand
vision, brand culture, positioning, personality, relationships, and presentations. Brand identity
is the noticeable elements of a brand (for instance - Trademark colour, logo, name, symbol)
that identify and differentiates a brand in target audience mind. It is a crucial means to grow
your company’s brand.

Brand identity is the aggregation of what all you (i.e. an organization) do. It is an
organization’s mission, personality, promise to the consumers and competitive advantages. It
includes the thinking, feelings and expectations of the target market/consumers. It is a means
of identifying and distinguishing an organization from another. An organization having
unique brand identity have improved brand awareness, motivated team of employees who
feel proud working in a well branded organization, active buyers, and corporate style.

Brand identity leads to brand loyalty, brand preference, high credibility, good prices and good
financial returns. It helps the organization to express to the customers and the target market
the kind of organization it is. It assures the customers again that you are who you say you are.
It establishes an immediate connection between the organization and consumers.

BRAND IMAGE
Brand image is the overall impression in consumers’ mind that is formed from all sources.
Consumers develop various associations with the brand. Based on these associations, they
form brand image. Eg. Volvo is associated with safety. Toyota is associated with reliability.
The idea behind brand image is that the consumer is not purchasing just the product/service
but also the image associated with that product/service. Brand images should be positive,
unique and instant. Brand images can be strengthened using brand communications like
advertising, packaging, word of mouth publicity, other promotional tools, etc.
Brand image has not to be created, but is automatically formed. The brand image includes
products' appeal, ease of use, functionality, fame, and overall value. Positive brand image is
exceeding the customers’ expectations. Positive brand image enhances the goodwill and
brand value of an organization.
BRAND PERSONALITY
Brand personality is the way a brand speaks and behaves. It means assigning human
personality traits/characteristics to a brand so as to achieve differentiation. These
characteristics signify brand behaviour through both individuals representing the brand (i.e.
it’s employees) as well as through advertising, packaging, etc. When brand image or brand
identity is expressed in terms of human traits, it is called brand personality. For instance
- Allen Solley brand speaks the personality and makes the individual who wears it stand apart
from the crowd. Infosys represents uniqueness, value, and intellectualism.
Brand personality is nothing but personification of brand. A brand is expressed either as a
personality who embodies these personality traits (For instance - Shahrukh Khan and Airtel,
John Abraham and Castrol) or distinct personality traits (For instance - Dove as honest,
feminist and optimist; Hewlett Packard brand represents accomplishment, competency and
influence). Brand personality is the result of all the consumer’s experiences with the brand. It
is unique and long lasting.
BRAND LOYALTY
Brand Loyalty is a scenario where the consumer fears purchasing and consuming product
from another brand which he does not trust. It is measured through methods like word of
mouth publicity, repetitive buying, price sensitivity, commitment, brand trust, customer
satisfaction, etc. Brand loyalty is the extent to which a consumer constantly buys the same
brand within a product category. The consumers remain loyal to a specific brand as long as it
is available. They do not buy from other suppliers within the product category. Brand loyalty
exists when the consumer feels that the brand consists of right product characteristics and
quality at right price. Even if the other brands are available at cheaper price or superior
quality, the brand loyal consumer will stick to his brand.
Brand loyalty can be developed through various measures such as quick service, ensuring
quality products, continuous improvement, wide distribution network, etc. When consumers
are brand loyal they love “you” for being “you”, and they will minutely consider any other
alternative brand as a replacement. Examples of brand loyalty can be seen in US where true
Apple customers have the brand's logo tattooed onto their bodies. Similarly in Finland, Nokia
customers remained loyal to Nokia because they admired the design of the handsets or
because of user- friendly menu system used by Nokia phones.

BRAND EQUITY
Brand Equity is the value and strength of the Brand that decides its worth. Brand Equity
exists as a function of consumer choice in the market place. The concept of Brand Equity
comes into existence when consumer makes a choice of a product or a service. It occurs when
the consumer is familiar with the brand and holds some favourable positive strong and
distinctive brand associations in the memory. Brand equity is a marketing term that describes
a brand’s value. That value is determined by consumer perception of and experiences with
the brand. If people think highly of a brand, it has positive brand equity. When a brand
consistently under-delivers and disappoints to the point where people recommend that others
avoid it, it has negative brand equity. Apple, ranked by one organization as “the world’s most
popular brand” in 2015, is a classic example of a brand with positive equity. Financial brand
Goldman Sachs lost brand value when the public learned of its role in the 2008 financial
crisis, automaker Toyota lost significant brand equity in 2009 when it had to recall more than
8 million vehicles because of unintended acceleration.
Positive brand equity has value:
 Companies can charge more for a product with a great deal of brand equity.
 That equity can be transferred to line extensions – products related to the brand that
include the brand name – so a business can make more money from the brand.
 It can help boost a company’s stock price.

CO-BRANDING
Co-branding is the utilization of two or more brands to name a new product. The ingredient
brands help each other to achieve their aims. The overall synchronization between the brand
pair and the new product has to be kept in mind. Example of co-branding - Citibank co-
branded with MTV to launch a co-branded debit card. This card is beneficial to customers
who can avail benefits at specific outlets called MTV Citibank club.
Advantages and Disadvantages of Co-branding
Co-branding has various advantages, such as - risk-sharing, generation of royalty income,
more sales income, greater customer trust on the product, wide scope due to joint advertising,
technological benefits, better product image by association with another renowned brand, and
greater access to new sources of finance. But co-branding is not free from limitations. Co-
branding may fail when the two products have different market and are entirely different. If
there is difference in visions and missions of the two companies, then also composite
branding may fail. Co-branding may affect partner brands in adverse manner. If the
customers associate any adverse experience with a constituent brand, then it may damage the
total brand equity.
TRADE MARK
A trademark is a recognizable insignia, phrase, word, or symbol that denotes a specific
product and legally differentiates it from all other products of its kind. A trademark
exclusively identifies a product as belonging to a specific company and recognizes the
company's ownership of the brand. Trademark is a form of intellectual property protection.
Certain symbols, names, words, or devices that are used in connection with a good or service
can be protected under trademark laws. Trademarks allow your company to indicate the
source of your goods or services and distinguish them from others providing similar goods or
services. Trademarks are generally considered a form of intellectual property.
Understanding Trademarks
A trademark can be a corporate logo, a slogan, a brand, or simply the name of a product. For
example, few would think of bottling a beverage and naming it Coca Cola or of using the
famous wave from its logo. It is clear by now that the name "Coca Cola," and its logo belong
to The Coca-Cola Company (NYSE: KO).
Trademarking, however, does contain some fuzzy boundaries because it prohibits any marks
that have a “likelihood of confusion” with an existing one. A business cannot thus use a
symbol or brand name if it looks similar, sounds similar, or has a similar meaning to one
that’s already on the books—especially if the products or services are related.
Trademarks, Patents, and Copyrights
A trademark protects words and design elements that identify the source, owner, or developer
of a product or service. Different than a trademark, a patent safeguards an original invention
for a certain period of time, and there can be many different types of patents. Unlike patents,
copyrights protect “works of authorship,” such as writing, art, architecture, and music.
Why Use a Trademark?
Individuals and companies have products or services trademarked to protect the product from
being used without the permission of the source company. Most countries have patent laws
that are designed to protect against copyright infringement. In the United States, the United
States Patent and Trademark Office (USPTO) serves this function.
Although most countries have agencies through which businesses can have their products
trademarked, international copyright regulation is more complicated than in the U.S., as there
exists no universally recognized patent office, rules, or consistency.
More About Trademarks
A company or individual does not need to register a trademark to receive protection rights,
but there are certain legal benefits to registering the mark with the USPTO. Trademark and
copyright law rarely overlap, but it can happen—for instance, when a graphic illustration is
used as a logo, the design may be protected both under copyright and trademark law.
Trademarks can be bought and sold. Famously, Nike, Inc. (NYSE: NKE) purchased the
instantly recognizable Swoosh logo in 1971 from a graphic arts student for a one-time price
of $35. Trademarks also can be licensed to other companies for an agreed-upon time or under
certain conditions, which can result in crossover brands.
AFTER SALES SERVICE
After sales service refers to various processes which make sure customers are satisfied with
the products and services of the organization. The needs and demands of the customers must
be fulfilled for them to spread a positive word of mouth. In the current scenario, positive
word of mouth plays an important role in promoting brands and products. After sales service
makes sure products and services meet or surpass the expectations of the customers. After
sales service includes various activities to find out whether the customer is happy with the
products or not? After sales service is a crucial aspect of sales management and must not be
ignored.
Why After Sales Service ?
After sales service plays an important role in customer satisfaction and customer retention. It
generates loyal customers. Customers start believing in the brand and get associated with the
organization for a longer duration. They speak good about the organization and its products.
A satisfied and happy customer brings more individuals and eventually more revenues for the
organization. After sales service plays a pivotal role in strengthening the bond between the
organization and customers.
After Sales Service Techniques
 Sales Professionals need to stay in touch with the customers even after the deal. Never
ignore their calls.
 Call them once in a while to exchange pleasantries.
 Give them the necessary support. Help them install, maintain or operate a particular
product. Sales professionals selling laptops must ensure windows are configured in
the system and customers are able to use net without any difficulty.
 Any product found broken or in a damaged condition must be exchanged immediately
by the sales professional. Don’t harass the customers. Listen to their grievances and
make them feel comfortable.
  Create a section in your organization’s website where the customers can register their
complaints. Every organization should have a toll free number where the customers
can call and discuss their queries. The customer service officers should take a prompt
action on the customer’s queries. The problems must be resolved immediately.
 Take feedback of the products and services from the customers. Feedback helps the
organization to know the customers better and incorporate the necessary changes for
better customer satisfaction.
 Ask the customers to sign Annual Maintenance Contract (AMC) with your
organization. AMC is an agreement signed between the organization and the customer
where the organization promises to provide after sales services to the second party for
a certain duration at nominal costs.
 The exchange policies must be transparent and in favour of the customer. The
customer who comes for an exchange should be given the same treatment as was
given to him when he came for the first time. Speak to him properly and suggest him
the best alternative.
PRODUCT LIFE CYCLE
Product Life Cycle Stages

As consumers, we buy millions of products every year. And just like us, these products have
a life cycle. Older, long-established products eventually become less popular, while in
contrast, the demand for new, more modern goods usually increases quite rapidly after they
are launched. Because most companies understand the different product life cycle stages, and
that the products they sell all have a limited lifespan, the majority of them will invest heavily
in new product development in order to make sure that their businesses continue to grow.
The product life cycle is an important concept in marketing. It describes the stages a product
goes through from when it was first thought of until it finally is removed from the market.
Not all products reach this final stage. Some continue to grow and others rise and fall. The
product life cycle has 4 very clearly defined stages, each with its own characteristics that
mean different things for business that are trying to manage the life cycle of their particular
products.
Introduction Stage – This stage of the cycle could be the most expensive for a company
launching a new product. The size of the market for the product is small, which means sales
are low, although they will be increasing. On the other hand, the cost of things like research
and development, consumer testing, and the marketing needed to launch the product can be
very high, especially if it’s a competitive sector.
Growth Stage – The growth stage is typically characterized by a strong growth in sales and
profits, and because the company can start to benefit from economies of scale in production,
the profit margins, as well as the overall amount of profit, will increase. This makes it
possible for businesses to invest more money in the promotional activity to maximize the
potential of this growth stage.
Maturity Stage – During the maturity stage, the product is established and the aim for the
manufacturer is now to maintain the market share they have built up. This is probably the
most competitive time for most products and businesses need to invest wisely in any
marketing they undertake. They also need to consider any product modifications or
improvements to the production process which might give them a competitive advantage.
Decline Stage – Eventually, the market for a product will start to shrink, and this is what’s
known as the decline stage. This shrinkage could be due to the market becoming saturated
(i.e. all the customers who will buy the product have already purchased it), or because the
consumers are switching to a different type of product. While this decline may be inevitable,
it may still be possible for companies to make some profit by switching to less-expensive
production methods and cheaper markets.
The theory of a product life cycle was first introduced in the 1950s to explain the expected
life cycle of a typical product from design to obsolescence, a period divided into the phases
of product introduction, product growth, maturity, and decline. The goal of managing a
product's life cycle is to maximize its value and profitability at each stage. Life cycle is
primarily associated with marketing theory.
INTRODUCTION
In the introduction phase, sales may be slow as the company builds awareness of its product
among potential customers. Advertising is crucial at this stage, so the marketing budget is
often substantial. The type of advertising depends on the product. If the product is intended to
reach a mass audience, than an advertising campaign built around one theme may be in order.
If a product is specialized, or if a company's resources are limited, then smaller advertising
campaigns can be used that target very specific audiences. As a product matures, the
advertising budget associated with it will most likely shrink since audiences are already
aware of the product. Techniques used to exploit early stages make use of penetration pricing
(low pricing for rapid establishment) as well as "skimming," pricing high initially and then
lowering price after the "early acceptors" have been lured in.
GROWTH
The growth phase occurs when a product has survived its introduction and is beginning to be
noticed in the marketplace. At this stage, a company can decide if it wants to go for increased
market share or increased profitability. This is the boom time for any product. Production
increases, leading to lower unit costs. Sales momentum builds as advertising campaigns
target mass media audiences instead of specialized markets (if the product merits this).
Competition grows as awareness of the product builds. Minor changes are made as more
feedback is gathered or as new markets are targeted. The goal for any company is to stay in
this phase as long as possible.
It is possible that the product will not succeed at this stage and move immediately past
decline and straight to cancellation. That is a call the marketing staff has to make. It needs to
evaluate just what costs the company can bear and what the product's chances for survival
are. Tough choices need to be made—sticking with a losing product can be disastrous.
If the product is doing well and killing it is out of the question, then the marketing department
has other responsibilities. Instead of just building awareness of the product, the goal is to
build brand loyalty by adding first-time buyers and retaining repeat buyers. Sales, discounts,
and advertising all play an important role in that process. For products that are well-
established and further along in the growth phase, marketing options include creating
variations of the initial product that appeal to additional audiences.
MATURITY
At the maturity stage, sales growth has started to slow and is approaching the point where the
inevitable decline will begin. Defending market share becomes the chief concern, as
marketing staffs have to spend more and more on promotion to entice customers to buy the
product. Additionally, more competitors have stepped forward to challenge the product at this
stage, some of which may offer a higher-quality version of the product at a lower price. This
can touch off price wars, and lower prices mean lower profits, which will cause some
companies to drop out of the market for that product altogether. The maturity stage is usually
the longest of the four life cycle stages, and it is not uncommon for a product to be in the
mature stage for several decades.
A savvy company will seek to lower unit costs as much as possible at the maturity stage so
that profits can be maximized. The money earned from the mature products should then be
used in research and development to come up with new product ideas to replace the maturing
products. Operations should be streamlined, cost efficiencies sought, and hard decisions
made.
There are two primary marketing strategies to utilize at this stage—offensive and defensive.
Defensive strategies consist of special sales, promotions, cosmetic product changes, and other
means of shoring up market share. It can also mean quite literally defending the quality and
integrity of your product versus your competition. Marketing offensively means looking
beyond current markets and attempting to gain brand new-buyers. Re-launching the product
is one option. Other offensive tactics include changing the price of a product (either higher or
lower) to appeal to an entirely new audience or finding new applications for a product.
DECLINE
This occurs when the product peaks in the maturity stage and then begins a downward slide
in sales. Eventually, revenues will drop to the point where it is no longer economically
feasible to continue making the product. Investment is minimized. The product can simply be
discontinued, or it can be sold to another company. A third option that combines those
elements is also sometimes seen as viable, but comes to fruition only rarely. Under this
scenario, the product is discontinued and stock is allowed to dwindle to zero, but the
company sells the rights to supporting the product to another company, which then becomes
responsible for servicing and maintaining the product.
PROBLEMS WITH THE PRODUCT LIFE CYCLE THEORY
While the product life cycle theory is widely accepted, it does have critics who say that the
theory has so many exceptions and so few rules that it is meaningless. Among the holes in the
theory that these critics highlight:
 There is no set amount of time that a product must stay in any stage; each product is
different and moves through the stages at different times. Also, the four stages are not
the same time period in length, which is often overlooked.
 There is no real proof that all products must die. Some products have been seen to go
from maturity back to a period of rapid growth thanks to some improvement or
redesign.
 The theory can lead to an over-emphasis on new product releases at the expense of
mature products, when in fact the greater profits could possibly be derived from the
mature product if a little work was done on revamping the product.
 The theory emphasizes individual products instead of taking larger brands into
account.
 The theory does not adequately account for product redesign and/or reinvention.

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?
Elements of Promotion Mix
1. ADVERTISING: The advertising is any paid form of non-personal presentation and
promotion of goods and services by the identified sponsor in the exchange of a fee.
Through advertising, the marketer tries to build a pull strategy; wherein the customer is
instigated to try the product at least once. The complete information along with the
attractive graphics of the product or service can be shown to the customers that grab their
attention and influences the purchase decision. Advertisement can be defined as the “paid
form of non-personal presentation and promotion of idea, goods or services by an
identified sponsor”. It is an impersonal presentation where a standard or common
message regarding the merits, price and availability of product or service is given by the
producer or marketer. The advertisement builds pull effect as advertising tries to pull the
product by directly appealing to customer to buy it. The three distinct features of
advertising are:
i. Paid Form:
The sponsor has to pay for advertising he has to bear a cost to communicate with
customers.
ii. Impersonality:
There is no face to face contact between customers and advertiser. It creates a monologue
and not a dialogue.
iii. Identified Sponsor:
Advertisement is given by an identified company or firm or individual.
Features of Advertising and Advantages/Merits of Advertisement:
(i) Reach:
Advertising can reach a large market. As through various media of advertising there is
benefit of mass reach for example, any message given on All India Radio or TV can reach
in different corners of the country wherever TV and Radio network is available.
(ii) Choice:
There is wide variety of media available for advertising for video, audio, visual audio,
print media etc. Under each category large variety is available for example, in print media
we can select from magazines, newspaper, banner etc. This variety or choice helps the
marketer to select the media, keeping in mind the target customer.
(iii) Legitimacy:
In advertisement the messages regarding the product or service are given publicly to
customers so there is always a proof for it and customers believe that publicly the
company will not give false information of the product. The customer feels comfortable
to buy a product which is widely advertised.
(iv) Expressiveness:
Advertising provides enough opportunities to marketers to dramatize the message with
the help of drawings, colours, pictures, music, dance
etc. They can easily express the use of product through various techniques, and can add
multimedia effect also.
(v) Economy:
It is always felt that advertising increases the cost of product or service but advertising is
considered economical as compared to other promotional techniques because it reaches
masses and if we calculate cost per customer it is very low or nominal.
(vi) Enhancing Customer Satisfaction and Confidence:
Customer feel more assured about quality and feel more comfortable if sponsors claim
these benefits in advertising.
Disadvantages of Advertising:
(i) It is an Impersonal Communication/Less Forceful:
In advertising there is no direct communication between the customer and marketer. The
marketer assumes that the message is communicated but the audience or customers do not
pay any attention to impersonal messages conveyed through advertising. The response of
customer cannot be known in advertising.
(ii) Advertising is less effective:
In advertising there is only one way communication i. e., communication from seller
only, but two way communication is always more effective as in two way communication
the customer gets chance to clarify his or her queries. Sometimes customers have many
doubts regarding the use of product, these doubts can be clarified only when there is two
way communication.
(iii) Difficulty in Media Choice:
In advertising various media are available. Each media have its own advantages and
disadvantages. So the effectiveness of advertisement depends to a great extent on the right
choice of media. When choice of media is faulty or wrong no matter how good the
advertisement is it will not reach the target customer.
 (iv) Inflexibility:
It is very difficult to change advertisement as companies use standardised messages
which cannot be changed according to the need of customers.
(v) Lack of Feedback:
The evaluation of effectiveness of advertisement is very difficult as there is no immediate
and accurate feedback given by the customers.

2 PERSONAL SELLING: This is one of the traditional forms of promotional tool

wherein the salesman interacts with the customer directly by visiting them. It is a face to face
interaction between the company representative and the customer with the objective to
influence the customer to purchase the product or services. Personal selling means selling
personally. This involves face to face interaction between seller and buyer for the purpose of
sale.
The personal selling does not mean getting the prospects to desire what seller wants but the
concept of personal selling is also based on customer satisfaction.
Features of Personal Selling:
(i) Personal Interaction:
In personal selling the buyers and sellers have face to face interaction. This closeness allows
both the parties to observe each other’s action closely.
(ii) Two Way Communication:
In personal selling the sellers give information about the product, at the same time the buyer
get a chance to clarify his doubts. It is suitable for sale of complex products where buyer
wants to interact with the manufacturer.
(iii) Better Response:
When seller is personally explaining the utilities of product to the customers then customer
do pay some attention and listen to the information.
(iv) Relationship:
When the seller and buyer come together this may improve relation between the customer
and seller. Salespersons normally make friendly relations with the customers.
(v) Better Convincing:
Personal selling is most effective form of promotion because with this the sales person can
convince the buyer by demonstrating the use of product and making changes in the product
according to the need of customer.
Qualities of a Good Salesman:
The qualities which are commonly found among effective salesman are described below:
1. Physical Qualities:
A salesman must have good health and pleasing personality. He must be well built and free
from physical defects. A pleasing and charming personality boosts self-confidence. Good
grooming, appropriate dress, clean and tidy appearance and a good posture will go a long
way in creating a first impression. More importantly, a salesman must always have a cheerful
smile on his face.
2. Social Qualities:
A salesman must have good manners, courtesy in dealing with customers. The practice of
greeting and thanking customers, using polite expression are necessary for success in
personal selling. He should not be shy or reserved but an extrovert and a good listener. He
must have the ability to say the proper things and do the right thing without offending others.
3. Mental Qualities:
A good salesman must have a high degree of intelligence, initiative and foresight. He must be
intelligent and imaginative enough to understand the customer quickly and read his mind
accurately.
Salesman must have two basic qualities i.e., empathy and ego drive. Empathy means he must
have ability to understand the problem from customer’s point of view. Ego drive means
salesman must pursue sale not just for money but for recognition and personal success. A
good salesman must have presence of mind and good common sense.
4. Technical Quality:
The salesman must have full technical knowledge about the product.
5. Other Qualities:
Other qualities, a salesman must possess, are:
(i) A salesman must have a good power of memory and observation.
(ii) A salesman must be honest and should not try to win the customer through false and
misleading representation.
(iii) A salesman must be a man of sound character, loyal and dependable. He must perform
his duties sincerely.
(iv) The salesman must have wide knowledge about the product he is selling and company he
is representing.
(v) He must have capacity to inspire trust.
Role of Personal Selling:
Personal selling plays a very important role in marketing of goods and services. It is
important tool for businessmen, customers and society.
1. Importance to Businessmen:
Personal selling is an important tool to increase the sale. It is important for businessman due
to following reasons:
(i) Effective Promotion Tool:
Personal selling is an effective tool to increase the sale of product. Salesmen explain the
merits of products to customers.
(ii) Flexible Tool:
Personal selling efforts can be changed according to the type of customer salesmen are
attending. They may change the offer in varying purchase situations.
(iii) Minimum Wastage of Efforts:
As compared to other methods of promotion in personal selling the wastage of efforts is
minimum.
(iv) Consumer Attention:
Through personal selling it is easy to get the attention of customer as there is face to face
interaction between salesman and customers.
(v) Relationship:
Personal selling helps to create lasting relationship between customers and sales-persons
which help in increasing sale.
(vi) Personal Support:
Through personal selling salesmen can create personal support with the customers. This can
improve competitive strength of organisation.
(vii) Very Effective to Introduce New Product:
Personal selling is very effective to introduce a new product as salesman can explain the
merits, show the demonstration and clarify the doubts of customers.
(iv) Importance to Customers:
Personal selling is very important from customer’s point of view, as customers can get
required information about the product from customers. Customers are benefits by personal
selling in the following ways:
1. Helps in Identifying Needs:
Salesmen help the customers to discover their needs and wants and they also help customers
to know how these needs and wants can be satisfied.
2. Latest Market Information:
In personal selling salesmen provide information regarding the new products available in
market, uses of those products etc.
3. Expert Advice:
Customers can get expert advice and guidance in purchasing various goods and services.
4. Induces Customers:
Personal selling induces customers to buy products for satisfying their needs.
(v) Importance to Society:
Personal selling brings following positive effects for society
1. Converts Latest Demand into Effective Demand:
Personal selling creates effective demand which results in increasing sale and more income.
With more income there will be more products and services which in turn bring economic
growth.
2. Employment Opportunities:
Unemployed youth can work as salesman and earn their livelihood.
3. Career Opportunities:
Personal selling offers attractive career with job satisfaction and security.
4. Mobility of Sales Persons:
Sales people move from one place to other, this promotes travel and tourism industry.
5. Product Standardisation:
With the help of personal selling there can be uniformity of consumption by supplying
standardised products.

3 SALES PROMOTION: The sales promotion is the short term incentives given to the
customers to have an increased sale for a given period. Generally, the sales promotion
schemes are floated in the market at the time of festivals or the end of the season. Discounts,
Coupons, Payback offers, Freebies, etc. are some of the sales promotion schemes.With the
sales promotion, the company focuses on the increased short-term profits, by attracting both
the existing and the new customers. Sales promotion refers to short term use of incentives or
other promotional activities that stimulate the customer to buy the product. Sales promotion
techniques are very useful because they bring:
(a) Short and immediate effect on sale.
(b) Stock clearance is possible with sales promotion.
(c) Sales promotion techniques induce customers as well as distribution channels.
(d) Sales promotion techniques help to win over the competitor.
Sales Promotion Techniques for Customers:
Some of the sales promotion activities commonly used by the marketer to increase the
sale are:
(i) Rebate:
It refers to selling product at a special price which is less than the original price for a
limited period of time. This offer is given to clear off the stock or excessive inventory for
example; coke announced 2 liter bottles at Rs 35 only.
(ii) Discounts:
This refers to reduction of certain percentage of price from list price for a limited period
of time. The discounts induce the customers to buy and to buy more. Generally at the end
of season big companies offer their products at discounted price to clear off the stock e.g.,
season’s sale at Snow-White Jain Sons, Paul Garments, Bhuvan Garments, etc.
(iii) Refunds:
This refers to refund or part of price paid by customer on presenting the proof of purchase
for example, Rs 2 off on presentation of empty pack of Ruffle Lays.
(iv) Premiums or Gifts/or Product Combination:
These are most popular and commonly used promotion tool. It refers to giving a free gift
on purchase of the product. Generally the free gift is related to product but it is not
necessary for example, Mug free with Bourn vita, Shaker free with Coffee, Toothbrush
free with Toothpaste, etc.
(v) Quantity Deals:
It refers to offer of extra quantity in a special package at less price or on extra purchase
some quantity free for example, buy three get one free e.g., this scheme of buy three get
one free scheme is available on soaps.
(vi) Samples:
It refers to distribution of free samples of product to the customers. These are distributed
when the seller wants the customer must try the product. Generally when a new product is
launched for example, when Hindustan Level launched Surf Excel it distributed the
samples as it wanted the customers to try it.
(vii) Contests:
 It refers to participation of consumers in competitive events organised by the firm and
winners are given some reward for example, Camlin Company organizes painting
competition, Bourn vita quiz contest and some companies organise contest of writing
slogans and best slogan is awarded prize.
(viii) Instant Draws and Assigned Gifts:
It includes the offers like ‘scratch a card’ and win instantly a refrigerator, car, T-shirt,
computer etc.
ix) Lucky Draw:
In this draws are taken out by including the bill number or names of customers who have
purchased the goods and lucky winner gets free car, computer, A.C., T.V., etc. Draw can
be taken out daily, weekly, monthly, etc.
(x) Usable Benefits:
This includes offers like ‘Purchase goods worth Rs 5000 and get a holiday package’
or get a discount voucher, etc.
(xi) Full Finance @ 0%:
Many marketers offer 0% interest on financing of consumer durable goods like washing
machine, T.V. etc. e.g., 24 easy installments 6 paid as front payment and remaining 18
with post-dated cheques. In these types of scheme customers should be careful about the
file charges etc.
(xii) Packaged Premium:
In this type of sales promotion the free gift is kept inside the pack. The gift is kept in
limited products but the excitement of getting the gift induces the customer to buy the
product for example, gold pendant in soap, gold coin in Tata tea etc.
(xiii) Container Premium:
This refers to use of special container or boxes to pack the products which could be
reused by the customer for example, Pet Bottles for Cold Drinks. This bottles can be
used for Steering Water, Plastic Jars for Bourn vita, Maltova, etc. which can be reused
by the housewives in kitchen.
Merits of Sales Promotion:
1. Attention Value:
The incentives offered in sales promotion attract attention of the people.
2. Useful in New Product Launch:
The sales promotion techniques are very helpful in introducing the new product as it induces
people to try new products as they are available at low price or sometimes as free sample.
3. Synergy in Total Promotion Efforts:
Sales promotion activities supplement advertising and personal selling efforts of the
company. Sales promotion adds to the effectiveness of advertisement efforts.
4. Aid to other Promotion Tools:
Sales promotion technique makes other promotion techniques more effective. Salesmen find
it easy to sell products on which incentives are available.
Demerits of Sales Promotion:
1. Reflect Crisis:
If firm is offering sales promotion techniques again and again it indicates that there is no
demand of product which can create crisis situation.
2. Spoil Product Image:
Use of sales promotion tool may affect the image of product as buyer feel that product is of
low quality that is why firm is offering incentives.

4. PUBLIC RELATIONS: The marketers try to build a favourable image in the market
by creating relations with the general public. The companies carry out several public relations
campaigns with the objective to have a support of all the people associated with it either
directly or indirectly. The public comprises of the customers, employees, suppliers,
distributors, shareholders, government and the society as a whole. The publicity is one of the
form of public relations that the company may use with the intention to bring newsworthy
information to the public. By maintaining public relations, companies create goodwill. Public
relations evaluate public attitudes; identify the policies and procedures of an organisation
with the public interest to earn public understanding and acceptance.
Public does not mean only customers, but it includes shareholders, suppliers, intermediaries,
customers etc. The firm’s success and achievement depends upon the support of these parties
for example, firm needs active support of middle men to survive in market, it must have good
relations with existing shareholders who provide capital. The consumers’ group is the most
important part of public as success of business depends upon the support and demand of
customers only.

Role, Significance, advantages of public relations:

Public relations are significant in the following ways:
1. Help to convey the policies and programmes of the organisation.
2. Help to collect information about public opinion about the organisation, management
activities etc.
3. To overcome the complaints and dislikes of public.
4. To mould people’s attitude in favour of organisation.
5. To maintain goodwill and understanding between organisation and public.
 6. To build an image of the organisation.
Ways/Methods and Tools of Public Relations:
The companies can use the following tools to improve their relations with public:
1. News:
Sometimes companies get involved in such kind of activities or make such policies so that
they get some positive coverage in news. For example, a company’s name may be covered in
news for reservation of jobs for women or for introducing new technology etc.
2. Speeches:
The speeches given by the leaders of corporate sectors influence various members of public
specially banks, shareholders etc. Public relations department creates occasion when the
speeches are delivered by the leader of company.
3. Events:
Events refer to organizing press conferences, multimedia presentation, matches, stage shows
etc.
4. Written Materials:
Sometimes written materials such as Balance Sheet, Annual Reports, Special documents,
Brochures etc. are circulated to various parties to improve and maintain public image of the
company.
5. Public Service Activities:
Big business houses often associate themselves with various social service projects such as
women welfare programmes, charity shows, up-keeping of parks, planting trees on road side,
training schools, running schools, colleges, hospitals etc.
5. DIRECT MARKETING: It is a form of niche-oriented advertising, rather, just like public
relations, the advertising in this case is not targeted towards a mass audience, but a particular
group of people. It involves extensive marketing via the internet, television, mobile, print
media, etc. Furthermore, it involves the usage of online ads, mobile messaging, websites,
social media platforms, outdoor events, special promotions, bulletins, etc. With the intent of
technology, companies reach customers directly without any intermediaries or any paid
medium. The e-mails, text messages, Fax, are some of the tools of direct marketing. The
companies can send emails and messages to the customers if they need to be informed about
the new offerings or the sales promotion schemes. Its forte is direct communication with the
customer, by answering customer inquiries and satisfying other queries.
Examples
 Publishing your product on the internet.
 Holding outdoor events and speaking about your product.
 Sending messages via mobile to a mass customer base, about stationery items.
 The Shopperstop send SMS to its members informing about the season end sales and extra
benefits to the golden card holders.
Thus, the companies can use any tool of the promotion mix depending on the nature of a
product as well as the overall objective of the firm.

Factors Influencing Promotion Mix

Main factors influencing promotion mix has been briefly discussed as under:
1. Type of Product:
Type of product plays an important role in deciding on promotion mix. Product can be
categorized in terms of branded products, non-branded products, necessity products, luxury
products, new products, etc. All these types of products need different promotional tools. For
example, advertising is suitable for the branded and popular products. Personal selling may
be fit for non-branded products. Advertising, personal selling, sales promotion and publicity
– all four tools – are used for a newly launched product to get a rapid consumer acceptance.
2. Use of Product:
Product may be industrial product, consumable and necessity product, or may be luxurious
product that affects selection of promotion tools and media. For example, advertising and
sales promotion techniques are widely used for consumer goods while personal selling is
used for industrial goods.
3. Complexity of Product:
Product complexity affects selection of promotional tools. Personal selling is more effective
for complex, technical, risky, and newly developed products as they need personal
explanation and observation. On the other end, advertising is more suitable for simple and
easy-handled products.
4. Purchase Quantity and Frequency:
Company should also consider purchase frequency and purchase quantity while deciding on
promotion mix. Generally, for frequently purchase product, advertising is used, and for
infrequently purchase product, personal selling and sales promotion are preferred. Personal
selling and advertising are used for heavy users and light users respectively.
5. Fund Available for Market Promotion:
Financial capacity of company is a vital factor affecting promotion mix. Advertising through
television, radio, newspapers and magazines is too costly to bear by financially poor
companies while personal selling and sales promotion are comparatively cheaper tools. Even,
the company may opt for publicity by highlighting certain commercially significant events.
6. Type of Market:
Type of market or consumer characteristics determine the form of promotion mix. Education,
location, income, personality characteristics, knowledge, bargaining capacity, profession,
age, sex, etc., are the important factors that affect company’s promotion strategy.
7. Size of Market:
Naturally, in case of a limited market, personal selling is more effective. When market is
wide with a large number of buyers, advertising is preferable. Place is also an important
issue. Type of message, language of message, type of sales promotion tools, etc., depend on
geographical areas.
8. Stage of Product Life Cycle:
Product passes through four stages of its life cycle. Each stage poses different threats and
opportunities. Each stage needs separate marketing strategies. Each of the promotional tools
has got different degree of suitability with stages of product life cycle.
It can be concluded that, in normal situations:
(1) Advertising, personal selling, and, even, sales promotion are used during the introduction
stage. However, advertising is given more priority,
(2) More intensive advertising and sales promotional techniques are used during the second
stage,
(3) More rigorous advertising along with personal selling are followed in the third stage, and
(4) Company prefers to curb the expenses in forth stage, and promotional efforts are reduced.
9. Level of Competition:
Promotional efforts are designed according to type and intensity of competition. All
promotional tools are aimed at protecting company’s interest against competition. Level of
promotional efforts and selection of promotional tools depend on level of competition.
10. Promotional Objectives:
It is the prime factor affecting promotional mix. Different objectives can be achieved by
using different tools of promotional mix. If company’s objective is to inform a large number
of buyers, advertising is advisable. If company wants to convince limited consumers, it may
go for personal selling. Even, when company wants to influence buyers during specific
season or occasion, the sales promotion can be used. Some companies use publicity to create
or improve brand image and goodwill in the market.
11. Other Factors:
Over and above these factors, there are certain minor factors that affect promotion mix.
These factors may include:
i. Price of Product
ii. Type of Marketing Channel
iii. Degree of Product Differentiation
iv. Desire for Market Penetration, etc.
The list of factors stated above is not complete. There may be more factors. Promotional
strategy should be formulated only after considering the relevant factors. Marketing manager
must be aware of these variables. Note that these factors affect different firms in varying
degree depending upon its internal and external marketing environment.
Advantages of Promotional Mix
 These elements are excellent for building a positive corporate image.
 They build up awareness about a firm’s products and help establish loyalty and trust.
 They reach a wider audience, and hence, are highly effective.
 The exposure for personal selling and direct marketing are very high.
 Some strategies are highly interactive and excellent for communicating detailed
information to the public.
 If the right sources are used, with a little persuasion, public relations could be the
cheapest element of all the five, since it reaches many people through a credible
independent source.
 Using the sales tactic can help to quickly increase profits on particular items.
 The tools also helps build long-term business relationships and important contacts.
Disadvantages of Promotional Mix
 Some of the promotional events and activities may involve heavy spending.
 Some advertising strategies do not completely satisfy the customer queries.
 Impersonal communication activities leave consumers confused.
 Over-promotion and cheap tactics may destroy the corporate image.
 Some strategies do not reach a large audience, and hence, their effectiveness is
reduced.
 The cost is very high wherever personal marketing is necessary.
Comparison
 You would be wondering why all the elements described in the paragraphs above
practically match each other in terms of strategies and methods.
 The fact is, there is a thin line of difference between every element. The reason why
they all seem similar to one another is due to the use of digital media platforms and
other forms of promotional activities.
 For instance, press releases and public appearances come completely under public
relations, while using a celebrity to endorse a product via television comes under
advertising.
 Similarly, while speaking at public events qualify as personal selling, mobile
messaging and online bulletins fall under marketing.
 Thus, even though there is a pattern of similarity among the tools, the way they are
used and executed differentiate them from one another.
Understanding the significance of promotional mix elements is very important to be able to
start a new venture or run an existing business. Marketing is a very vital phase in
entrepreneurship, and its tools are powerful enough to provide the fame your company needs.
Customer trust and satisfaction is very important; if you lose that, you have nothing, which is
why you need to use these strategies effectively in order to gain public confidence. Once the
reputation of a company is well-established through events and word-of-mouth, its products
will continue to flourish even if a little risk and experimentation in their working mechanism
is undertaken. If you intend to start your own venture, do keep the above points in mind.
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