Unit 2
Unit 2
Unit 2
Students should understand the meaning of the term Marketing. Simply stated the
meaning of the term Marketing is ―performance of business activities that direct the
flow of goods from producers to consumers or users‘‘. It may be said that marketing
includes all those activities which effect changes in the ownership and possession of
goods and services.
• WHAT IS SALES:-
Sales is a vital sub-system of marketing management. Both sales and marketing
are used together as they need to work together. But in fact, they are two very
different functions and require very different skills. In simple and general terms,
sales is 1) A transaction between two parties where the buyer receives goods
(tangible or intangible goods), services and/or assets in exchange for money. 2)
An agreement between a buyer and seller on the price of a security.
Sales Marketing
Definition
Approach
Strategy adopted
Target audience
Individuals and companies Target audience for marketing is the
public in general
Tenure
Short-term Long-term
Primary Objective
Influence the target audience to become Identify customer requirements and make
buyers of the product products that fulfills their requirements
Scope
Scope of sales is limited only towards Scope of marketing is varied and includes
product selling. advertisement, customer support, after
sales service etc.
➢ Market Segmentation:-
It is the process of dividing the target market into smaller groups. These
segments enable companies to get a better understanding of their target
audience. They can be segmented on similar characteristics such as
interests, needs, location, demographics, priorities, and personality traits.
This exercise helps brands create marketing strategies, advertising, and
sales, and further optimize their products.
2. Geographic Segmentation
3. Behavioral Segmentation
This relies on the customer’s reaction, purchasing process, and decision-making. Here
customers are grouped based on their market interaction to develop personalized,
targeted strategies.
4. Psychographic Segmentation
This process segments groups based on the customers’ lifestyle, political opinions,
personal values, aspirations, and psychological characteristics. Data for this
segmentation can be hard to identify; however, it produces excellent results.
5. Firmographic Segmentation
➢ Geographic:-
A business can choose which market to focus on based on the location and type of
products and services it provides. This target market segmentation considers that
different consumer groups in a geographic area may require specific products or
services.
For example, if a company makes waterproof paint that keeps home exteriors safe
during the monsoons, locations witnessing heavy rainfall throughout the year would
be the best place to market it. Companies can find appropriate locations using the
country code, postal code, area code, city, province, state, etc.
➢ Demographic:-
A business must research the population before deciding on the ideal consumer
group to target. It will allow the company to make well-informed decisions based on
correct data. As a result, they can correctly define their markets and target customers
of the appropriate age, gender, economic level, race, religion, education, marital
status, etc.
For example, if a company sells beer, it should plan its target market strategy for
people aging 18 to 50.
➢ Psychographic:-
For example, a company planning to launch a pet product knows that its target
customers will primarily be upper- and upper-middle-class people. As a result, its
marketing efforts would focus on those people as their key clients.
➢ Behavioral:-
A business must be aware of facts to determine how well its product would perform in a
specific demographic or social setting. Understanding buying habits will let companies
know how their products can meet consumer needs, both in terms of features and
usability, which are the most critical issues in buying.
➢ Marketing Mix:-
The marketing mix is defined by the use of a marketing tool that combines a
number of components in order to become harden and solidify a product’s
brand and to help in selling the product or service. Product based companies
have to come up with strategies to sell their products, and coming up with a
marketing mix is one of them.
The job of the marketer is to define the product and its qualities and introduce it to
the consumer.
Defining the product also is key to its distribution. Marketers need to understand
the life cycle of a product, and business executives need to have a plan for dealing
with products at every stage of the life cycle.
The type of product also dictates in part how much it will cost, where it should be
placed, and how it should be promoted.
Many of the most successful products have been the first in their category. For
example, Apple was the first to create a touchscreen smartphone that could play
music, browse the internet, and make phone calls. Apple reported total sales of the
iPhone for FY 2022 at $205.4 billion.3 In 2021, it hit the milestone of 2 billion
iPhones sold.4
2. Price:-
Price is the amount that consumers will be willing to pay for a product. Marketers
must link the price to the product's real and perceived value, while also considering
supply costs, seasonal discounts, competitors' prices, and retail markup.
In some cases, business decision-makers may raise the price of a product to give it
the appearance of luxury or exclusivity. Or, they may lower the price so more
consumers will try it.
Marketers also need to determine when and if discounting is appropriate. A discount
can draw in more customers, but it can also give the impression that the product is
less desirable than it was.
What makes UNIQLO unique is that its products are innovative and high-quality.
It accomplishes this by purchasing fabric in large volumes, continually seeking the
highest-quality and lowest-cost materials in the world. The company also directly
negotiates with its manufacturers and has built strategic partnerships with
innovative Japanese manufacturers.
UNIQLO also outsources its production to partner factories. That gives it the
flexibility to change production partners as its needs change.
Finally, the company employs a team of skilled textile artisans that it sends to its
partner factories all over the world for quality control. Production managers visit
factories once a week to resolve quality problems.5
3. Place:-
The decision is key: The makers of a luxury cosmetic product would want to be
displayed in Sephora and Neiman Marcus, not in Walmart or Family Dollar. The
goal of business executives is always to get their products in front of the consumers
who are the most likely to buy them.
That means placing a product only in certain stores and getting it displayed to the
best advantage.
The term placement also refers to advertising the product in the right media to get
the attention of target consumers.
For example, the 1995 movie GoldenEye was the 17th installment in the James
Bond movie franchise and the first that did not feature an Aston Martin car. Instead,
Bond actor Pierce Brosnan got into a BMW Z3. Although the Z3 was not released
until months after the film had left theaters, BMW received 9,000 orders for the car
the month after the movie opened.
4. Promotion:-
The goal of promotion is to communicate to consumers that they need this product
and that it is priced appropriately. Promotion encompasses advertising, public
relations, and the overall media strategy for introducing a product.
Marketers tend to tie together promotion and placement elements to reach their core
audiences. For example, In the digital age, the "place" and "promotion" factors are
as much online as offline. Specifically, where a product appears on a company's
web page or social media, as well as which types of search functions will trigger
targeted ads for the product.
A distribution channel is a path or route decided by the company to deliver its good
or service to the customers. The route can be as short as a direct interaction between
the company and the customer or can include several interconnected intermediaries
like wholesalers, distributors, retailers, etc.
2. Indirect Channels
One level channel means that there is only one intermediary involved between
the manufacturer and the customer to sell the goods. This intermediary is known
as a retailer. In simple terms, under one level channel, the organisations supply
their products to the retailers who sell them to the customers directly. For
example, goods like clothes, shoes, accessories, etc., are sold by companies with
the help of a retailer.
ii) Two-Level Channel
Three level channel means that there are three intermediaries involved between
the manufacturer and the customer for the sale of products. The three
intermediaries involved are Agent Distribution, Wholesalers, and Retailers. It
is usually used when the goods are distributed across the country and for that
different distributors are appointed for different areas. For example, wholesalers
purchase goods from different distributors, like North India Distributors and then
pass the goods to the retailers, who ultimately sell the goods to customers.
With the advent of the internet and other communications methods, personal sales
isn’t limited to just face-to-face meetings. Salespersons now use video calls, phone
calls, IM, and even emails, along with in-person interactions to develop a
relationship with prospective customers.
Personal selling differentiates itself from other sales and promotional techniques
by possessing the following characteristics:
Personal selling is an essential sales tool in selling complex and technical offerings
that require human contact, personalisation, persuasion, and quick communication.
Usually, high priced items use personal selling as it helps the business inform and
persuade the customer using personalised selling methods to gain more trust.
Generally, personal selling can be categorised into three types based on the sales
activity and salesperson involved. These are:
• Order Takers: Order takers receive requests and queries from the
customers. In simple terms, the customer approaches these salespersons.
They usually hold positions like retail sales assistant or telemarketer and
focus mainly on determining customer needs and pointing to inventory that
meets such needs.
• Order Getters: Order getters reach out to new prospects and persuade them
to make a direct purchase. These are in-field salespersons who bring in new
clients to the business.
• Order Creators: Order creators don’t close the deal, but persuade the
customers to promote the business’s offering, leading to sales eventually.
For example, a pharmaceutical company reaching out to a doctor to persuade
him to prescribe the company’s medicine.
➢ Define Branding:-
Branding is the process where a business makes itself known to the
public and differentiates itself from competitors. Branding typically
includes a phrase, design or idea that makes it easily identifiable to the
public.
➢ Types of Branding:-
1. Personal Brand
Personal brands are those individual brands people build around them. However,
most experts don’t believe these should be called brands at all, as more often than
not, they’re not related to a specific business model. Nevertheless, a personal brand
is how we market ourselves via media, social networks and other means so as to
improve our image and possibly gain more career opportunities.
2. Product Brand
In order to sell goods and commodities, businesses have to work on their product
brands. These are brands that consist of emotions and ideas that can be associated
with a product. Thus, the associations exceed the functional capability of the
product and rely more on the public impression of it. FMCG, or fast-moving
consumer goods brands, are an example of product brands.
3. Service Brand
Service brands are quite similar to the previously mentioned product brands. The
main difference is that they focus on service rather than products themselves,
which means they are harder to develop. Services are less tangible than products,
so most of the time, these brands have to associate positive emotions with
themselves in order to succeed. Nevertheless, building a service brand allows
marketers to avoid skill vs skill comparisons, which are always difficult to prove.
There are also new online service brands, for example, subscription brands, which
have influenced changes in loyalty and technology expectations. In essence, they
now rely on the user experience and perceived value to promote their services, as
these traits are very sought-after among consumers.
4. Corporate Brand
We also call these brands organisational brands, as they are closely related to the
organisations that stand behind them. Fundamentally, these brands define those
organisations and reassure the consumers in the quality and the service of the
companies. Most often, corporate brands have all the necessary capabilities and
assets, as well as values and priorities to meet the needs of the consumers.
Moreover, they have a global or a local frame of reference, performance records
and citizenship programmes, as well as a rich heritage that speaks volumes about
the company behind the corporate brand.
5. Investor Brand
If an investor brand is powerful, it will deliver share price resilience and show a
knowledgeable understanding of value. These brands are most often publicly listed
brands, which are seen not only as investments but also as performance stocks.
Thus, in order for these brands to succeed, investors have to blend their strategic
and financial knowledge, as well as work on their purpose and value proposition.
Moreover, they should achieve a wider reputation through CSR.
7. Public Brand
We also refer to these brands as government brands. Basically, these are brands
related to the way the government is acting towards citizens and entities. Even
though we cannot associate consumer choice with these brands, they do still exists
and are vital for boosting people’s trust in the way government does its business.
However, most are on the fence when it comes to their existence. Some people
actually believe public entities should focus on developing trustmarks rather than
using brand strategies to develop public brands. Moreover, some brands are not
public by nature but have become so present in our lives that we almost assume
they are a part of public services. Such brands are Google and Facebook, which we
can also call embedded brands.
8. Activist Brand
These brands come with a purpose that’s always related to some social cause.
However, they promote their purpose so well that, more often than not, their
consumers opt for them because they’ve distinguished themselves in their minds.
A good example is Body Shop, which is completely anti-animal cruelty, and
Benetton. Benetton has been fighting global issues and bigotry throughout its
existence. Nevertheless, not everyone favours these brands; even Benetton has a
few haters.
9. Place Brand
In order to attract tourists, residents, investors and even businesses, destinations
and cities can build a brand around themselves. They build it so as to associate the
locations with positive ideas rather than facilities. That way, they can show people
just how many choices they’ll have if they relocate to a particular city or decide to
visit it. However, in order for these brands to be successful, service providers and
citizens have to play their part. A good example of a place brand would be Las
Vegas, as it’s become well known due to the saying “What happens in Vegas, stays
in Vegas”.
Advertising
Advertising is one of the most effective ways of brand promotion. Advertising helps
organizations reach a wider audience within the shortest possible time frame.
Advertisements in newspaper, television, Radio, billboards help end-users to believe in
your brand and also motivate them to buy the same and remain loyal towards the brand.
Advertisements not only increase the consumption of a particular product/service but
also create brand awareness among customers. Marketers need to ensure that the right
message reaches the right customers at the right time. Be careful about the content of
the advertisement, after all you are paying for every second.
Sales Promotion
Brands (Products and services) can also be promoted through discount coupons, loyalty
clubs, membership coupons, incentives, lucrative schemes, attractive packages for loyal
customers, specially designed deals and so on. Brands can also be promoted
effectively through newspaper inserts, danglers, banners at the right place, glorifiers,
wobblers etc.
Direct Marketing
Direct marketing enables organizations to communicate directly with the end-users.
Various tools for direct marketing are emails, text messages, catalogues, brochures,
promotional letters and so on. Through direct marketing, messages reach end-users
directly.
Personal Selling
Personal selling is also one of the most effective tools for integrated marketing
communication. Personal selling takes place when marketer or sales representative
sells products or services to clients. Personal selling goes a long way in strengthening
the relationship between the organization and the end-users.
Personal selling involves the following steps:
1. Prospecting - Prospecting helps you find the right and potential contact.
2. Making first contact - Marketers need to establish first contact with their
prospective clients through emails, telephone calls etc. An appointment is
essential and make sure you reach on time for the meeting.
3. The sales call - Never ever lie to your customers. Share what all unique your
brand has to offer to customers. As a marketer, you yourself should be convinced
with your products and services if you expect your customers to invest in your
brand.
4. Objection handling - Be ready to answer any of the client’s queries.
5. Closing the sale - Do not leave unless and until you successfully close the deal.
There is no harm in giving customers some time to think and decide accordingly.
Do not be after their life.
Public Relation Activities
Public relation activities help promote a brand through press releases, news, events,
public appearances etc.The role of public relations officer is to present the organization
in the best light.