Marketing Management

Explain the "STP Plus the marketing mix" approach ( Importance of Marketing Mix)

The marketing mix is the combination of elements necessary to the planning and execution of the total marketing operation. The total marketing operation mainly consists of three processes : Analyzing the situation of companies, STP, Marketing mix. Marketing managers first analyzes the situation of the company and then conduct STP : Segmentation, Targeting, Positioning. In STP, they segment the market, choose the target market in which the company can have competitive advantages and determine what is to be their products' position in the market, and then they design the marketing mix. In the process, marketing managers should design an internally consistent and mutually supportive marketing mix. It was specifically divided into the 4Ps : Product, Place, Price and Promotion by E.Jerome McCarthy in 1960, and from then it has been dealt with various variables. These variables include not only goods and services but usage, value, image and so on futher we need to study what excatly s.t.p means S means segmentation T means targeting P means poistioning Segmentation, targeting, and positioning together comprise a three stage process. We first (1) determine which kinds of customers exist, then (2) select which ones we are best off trying to serve and, finally, (3) implement our segmentation by optimizing our products/services for that segment and communicating that we have made the choice to distinguish ourselves that way

importance of marketing mix
attracting customer: to attract customer by introducing 7ps as tools so that customer are served
in a better way; and to hold customer and to make them brand loyal

better use of resource: it anables to use resources in better ways by knowing the excat needs of

customer their wants and focusing their attention to that part or by a proper blend of policy

percision: means accuracy
it provides percision to the study of marketing ,it helps in understanding its important task

balanced approach: it is an effective tool for solving the problems .it keeps the marketing a significance of marketing mix : it lies in the mix or blend . the components of marketing mix
are individual important but their significance lies in the mix

application to buisness: applicable to buisness as well as non buisness organisation
such as club colleges

What are different levels of product along with their features and example. (explain generic, branded, differentiated, customized, augmented, potential) ? For many a product is simply the tangible, physical entity that they may be buying or selling. You buy a new car and that's the product - simple! Or maybe not. When you buy a car, is the product more complex than you first thought? In order to actively explore the nature of a product further, lets consider it as three different products - the CORE product, the ACTUAL product, and finally the AUGMENTED product. These are known as the 'Three Levels of a Product.' So what is the difference between the three products, or more precisely 'levels?'

The CORE product is NOT the tangible, physical product. You can't touch it. That's because the core product is the BENEFIT of the product that makes it valuable to you. So with the car example, the benefit is convenience i.e. the ease at which you can go where you like, when you want to. Another core benefit is speed since you can travel around relatively quickly. The AUGMENTED product is the non-physical part of the product. It usually consists of lots of added value, for which you may or may not pay a premium. So when you buy a car, part of the augmented product would be the warranty, the customer service support offered by the car's manufacture, and any after-sales service. . The generic product 2. The branded product 3. The differentiated product 4. The customized product 5. The augmented product 6. The potential product The generic product: The Generic product is the unbranded and undifferentiated commodity like rice, bread, flour, or cloth. Here, the product does not have an identity through a name and is not linked to any one maker or owner. The branded Product: The branded product gets an identity through a µname¶. Lalkhila Basmati rice, Modern bread, and Annapurna atta are branded products. The differentiated Product: The differentiated product enjoys further distinction from other similar products / brands in the market. The marketer endows his brand with some special attributes / qualities and claims uniqueness for his offer. The differentiation claimed may be µtangible¶ with a distinction on ingredient, quality, utility or service. It may also be intangible or µpsychological¶ highlighted by subtle sales appeals. Maggi noodles, and Dettol soap examples of differentiated products with tangible differentiation. Maggi claims a tangible distinction over other brands of noodles. It is ready in two minutes and involves very little cooking. It is available with different µtaste makers¶ for the vegetarian and the non-vegetarian users. The differentiation is tangible and rests on the planks of convenience and variety. Among bath soaps Dettol is differentiated on the basis of its ability to provide total protection from germs. The scope for differentiation is immense and to win over customers firms seek higher levels of differentiation through customizing and augmenting of the product. The customized Product: A product that is adapted to the requirements of the individual customer is a customized product. Today, many products coming from the IT and telecom industries have large degree of customization built into them. For example, the telephone µknows¶ which language a given user would like to use while calling a long distance operator. It will also allow him to create a distinctive ring so that his best friend knows that he is calling. And, it can also recognize his most frequently called numbers, not just by numbers, but by name as well.

The Augmented Product: The augmented product is the result of voluntary improvements brought about by the manufacturer in order to enhance the value of the product. The firm goes beyond all expectations of the consumers. It finds out through market research how the value of its product can be enhanced. Using the insights so gathered the firm augments the product by adding extra features and functions to it. Examples off augmented products: Titan, added protective packing to its alarm clocks and claims ³Here is a travel clock with a protective shutter. Available in 3 dial options and 4 elegant colors´. Aristocrat introduced suitcases with wheels. The wheel was an extra facility an augmentation to the luggage. Instead of lifting and carrying the suitcase the user could now pull it on its wheels. Hindustan Motors augmented its Ambassador car and offered the Ambassador 1800 ISZ, incorporating into the car, the 1817 cc, 74 HP, Isuzu engine, 5 synchromesh gears with an overdrive, power assisted brakes progressive suspension diaphragm clutch, a new dash board and bucket seats. The augmentation translated into faster pick up, greater speed, sure stopping and greater comfort. Companies resorting to the product development route in their marketing strategy are basically in the game of continuous augmentation of products. The potential Product: The potential product is µtomorrow¶s product¶ carrying all the improvement and finesse that is possible under the given technological economic and competitive conditions. For example, today, a robot available for domestic help can be considered a potential product. In actual practice, development of potential products is the forte of big companies since heavy resources are required for this task. What are the diffferent task available in product management ? What is product and What are its componenets?
Classify Consumer Goods

Consumer Goods are final goods that are brought from retail stores to satify the needs and wants of human being. The consumer goods come in wide variety of product range includes: Household Items Personal Care Products Consumer Electronics Utensils Nano Technology Devices Foods Clothing Products Stationary Gift Articles

Convenience Goods

Staple Convenience Consumer Goods

Shopping Consumer Goods Consumer Goods

Impulse Convenience Consumer Goods

Specialty Consumer Goods Non Sought Consumer Goods Durable Consumer Goods

Types of Consumer Goods Buying habits such as convenience goods, shopping goods, and specialty goods and Durability such durable goods, semi-durable goods, and non-durable goods. Convenience Goods: Goods which are easily available to consumer, without any extra effort are convenience goods. Mostly, convenience goods come in the category of nondurable goods such as like fast foods, confectionaries, and cigarettes, with low value. The goods are mostly sold by wholesalers to make them available to the consumers in good volume. Further, convenience goods can be subcategorized into: Staple Convenience Consumer Goods Impulse Convenience Consumer Goods Staple Convenience Consumer Goods: Goods which come under the basic demands of human beings are called staple convenience goods. For eg: milk, bread, sugar etc. Impulse Convenience Consumer Goods:

Goods which are brought without any prior planning or which are brought impulsively are called impulse convenience goods. For eg: potato wafers, candies, ice creams, cold drinks, all household product, soap, drugs and medicines etc. Shopping Consumer Goods: In shopping consumer goods, consumer do lot of selection and comparison based on various parameters such as cost, brand, style, comfort etc, before buying an item. They are costlier than convenience goods and are durable nature. Consumer goods companies usually try to set up their shops and show rooms in active shopping area to attract customer attention and their main focus is to do lots of advertising and marketing to become popular. Goods like Clothing Items Televisions Radio Foot Wears Home Furnishing Jewelleries All these come under the category of shopping goods. Specialty Consumer Goods: Goods which are very unique, unusual, and luxurious in nature are called specialty goods. Specialty goods are mostly purchased by upper-class of society as they are expensive in nature. The goods don't come under the category of necessity rather they are purchased on the basis personal preference or desire. Brand name and unique and special features of an item are major attributes which attract customer attraction in buying them. Examples of Specialty Products are: Antiques jewelry wedding dresses cars designer watches Non Sought Consumer Goods: Goods or Services like insurance which are available in the market but customer is not really interested in buying them are called non-sought goods. Durable Consumer Goods: Goods which have long life span and usage period are called durable goods. Examples: Furniture Kitchenware

Consumer Electronics Semi-Durable Consumer Goods: Goods which have limited life span or usage period are called semi-durable goods. Examples: Clothes Foot Wears Artificial Jewellery Home Furnishing Non Durable Consumer Goods: Goods have a very short life span and are perishable in nature are called non-durable goods. Examples: Milk Bread Classify Business Goods Explain Goods-Services Continuum Define Service . Explain the Features of Services Explain the product mix and product line along with examples There are 2 ways of incresing the line length,Explain both ( Line Streching and Line Filling) Write a Short note on Line Pruning Explain the dfferent decisions regarding Packaging ( Packaging ,Materials,Asthetics,Convinience,Package Size Explain the four distinct stages in PLC
Product life cycle management (or PLCM) is the succession of strategies used by business management as a product goes through its life cycle. The conditions in which a product is sold (advertising, saturation) changes over time and must be managed as it moves through its succession of stages.

Product life cycle (PLC)
Like human beings, products also have life-cycle. From birth to death human beings pass through various stages e.g. birth, growth, maturity, decline and death. A similar life-cycle is seen in the case of products. The product life cycle goes through multiple phases, involves many professional disciplines, and requires many skills, tools and processes. Product life cycle (PLC)

has to do with the life of a product in the market with respect to business/commercial costs and sales measures. To say that a product has a life cycle is to assert four things:
y y y y

that products have a limited life, product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller, profits rise and fall at different stages of product life cycle, and products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life cycle stage.

The four main stages of a product's life cycle and the accompanying characteristics are: 1.Market Introduction Stage 1. 2. 3. 4. 5. 6. costs are very high slow sales volumes to start little or no competition demand has to be created customers have to be prompted to try the product makes no money at this stage

2.Growth Stage 1. costs reduced due to economies of scale 2. sales volume increases significantly 3. profitability begins to rise 4. public awareness increases 5. competition begins to increase with a few new players in establishing market 6. increased competition leads to price decreases 3.Maturity Stage 1. costs are lowered as a result of production volumes increasing and experience curve effects 2. sales volume peaks and market saturation is reached 3. increase in competitors entering the market 4. prices tend to drop due to the proliferation of competing products 5. brand differentiation and feature diversification is emphasized to maintain or increase market share 6. Industrial profits go down 4.Saturation and Decline Stage 1. costs become counter-optimal 2. sales volume decline or stabilize 3. prices, profitability diminish 4. profit becomes more a challenge of production/distribution efficiency than increased

sales Explain the benefits of PLC concept
A life cycle approach can help us make choices. It implies that everyone in the whole chain of a product's life cycle, from cradle to grave, has a responsibility and a role to play, taking into account all the relevant impacts on the economy, the environment and the society. The impacts of all life cycle stages need to be considered comprehensively by the citizens, the companies and the governments, when they make decisions on consumption and production patterns, policies and management strategies. A life cycle approach enables product designers, service providers, government agents and individuals to make choices for the longer term and with consideration of all environmental media. Life cycle approaches avoid shifting problems from one life cycle stage to another, from one geographic area to another and from one environmental medium (for example air quality) to another (for example water or land). Many decisions in practice are already based on the life cycle approach, for instance... ... Consumer purchasing decisions via ecolabels, or company reports on environmental and social issues. ... Business design of products and services via Life Cycle Assessments studies, Design for Environment, Total Cost of Ownership calculations, or management systems that are orientated toward products or facilities. ... Government policy making by involving a wide range of stakeholders (e.g. via Product Panels) or through Integrated Product Policy (IPP) approaches. All in all, life cycle approaches can bring several benefits: For Industries By integrating the life cycle perspective in overall management and bringing product and process development in a more sustainable direction, the organisation can harvest the benefits of environmental, occupational health and safety, risk and quality management, as well as developing and applying cleaner process and product options. Incorporating life cycle and sustainability management will improve image and brand value for both world market players as well as smaller suppliers and producers. For Governments Governmental initiatives will not only secure and strengthen the position of the industrial and service sectors in regional and global markets, but also ensure overall environmental benefits to society (balanced with economic and social aspects). By engaging in supportive programmes and initiatives tç promote the implementation of life-cycle approaches, governments can show global responsibility and governance by sharing and disseminating sustainability options world- wide.

For Consumers Life cycle approaches will help point consumption in a more sustainable direction by offering better information for purchasing, transport systems, energy sources, to guide consumers. It offers a platform for multi-stakeholder dialogue and public involvement with industries and governments, going from local agenda to national and international strategies for sustainable development.

Explain the product differentiation on basis of tangible and intangible attributes Product Positioning and product diff are the central themes of marketing strategy of a firm
Product Positioning and Product Product Positioning and Product Differentiation are central themes in the Differentiation are central themes in the Marketing strategy of a firm . When the firm is through with the When the firm is through with the positioning and differentiation strategy for a positioning and differentiation strategy for a given product it completes one significant given product it completes one significant part of marketing strategy formulation for part of marketing strategy formulation for the product .

the product .
Write a Short note on Product Positioning and brand positioning ,Repositioning Define Brand and Explain characteristics of Strong & Successful Brands Explain tasks involved in developing and managing the brands Explain different options In Branding ( Individual Branding,Family branding,Umbrella branding ) Why do firms introduce new products ? Classification of new product Explain the stages in new product development Write Short note on: Different methods of Market Test Explain the process of Innovation Diffusion and New product Adoption Why do new products fail in Market
The most optimistic success rate I have run across for new product ideas is about 3%. In other words, 97% of product ideas never successfully enter the market. There are lots of reasons for this low level of performance, but there is a consistency around a few common mistakes that routinely present themselves with inventors and new product marketers. These are not the only reasons, but if you can avoid these mistakes, you can greatly improve your chances for success.

The Product: The single biggest shortcoming in new product introductions is not fully understanding
the product, its usage and the target market. A dead give away to this problem is when I ask inventors to define the target market and they tell me, "Everybody." If your target market is everybody, you are doomed to failure. It is like shooting a gun at a bull¶s eye. You will most likely never hit the bull¶s eye if you are aiming at the whole target.

The Opportunity: One of the most difficult questions to answer in preparing a new product for market is defining the opportunity. Sadly, there is not enough information available about most product categories and if you have something that is entirely new, there are no reference points, but this is critical information for the decision-makers you will be dealing with. You must have some verifiable estimate for the potential of this product.

The Channels: With most products, there are going to be intermediate steps between you and the end user of your product. What Channel or Channels will you choose? What are their expectations? Can you provide what they require? What do they require? Are there any trends that could affect your successful launch?

Your Circumstances: There are usually three factors that each inventor / marketer must
understand about themselves before they go to market. Do you know what those 3 factors are and what options are available to best match your circumstances?

Research: Many people think they are marketing their new product idea or invention. The truth is you are also marketing actionable information and knowledge, but where do you go to get that information and knowledge? Once you do get it, how do you put it together?

The Fuzzy Front End: The people you are trying to sell your new product or invention to have a
perspective that is different than yours. Do you understand their perspective and can you provide answers to their questions both asked and unasked?

Your Offering: Successful new product introductions require more than just the product. If we all just bought products, we would all be driving the same make and model of automobile. People don't just buy products, they buy features and benefits and image and status. How are you going to package your product for success?

Infomercials: Sadly there are a great many people in the market eager to take your money to produce an infomercial to help you sell your product before you have answers to the above questions. Far too many inventors produce products and invest in an infomercial before they have answered the previous questions. Then they find themselves with all their resources tied up in inventory and an infomercial. They are then without the resources to go back and do the work they should have done in the beginning.

Ex. 1) Pepsi - Crystal Pepsi
Why it failed: Similar to New Coke, there was no real need for Crystal Pepsi. Despite
the shifting tides in early 90¶s marketing towards healthiness and purity, people just didn¶t get excited about a clear caffeine-free Pepsi. Not really a surprise- those who were that concerned with the health and color of their beverage probably would not be Pepsi drinkers to begin with.

2) McDonalds - Arch Deluxe Burger

Why it failed: The goal of the Deluxe line was to market McDonald¶s fine cuisine to
the adult demographic. Unfortunately, adults weren¶t interested in paying significantly more for slightly different burgers.

3) Ford ± Edsel.
Why it failed: A small army worth of factors came together to curse the Edsel. A
name that didn¶t resonate with the crowd, a bizarre pricing strategy, and a national recession have all been cited as factors by those who use the Edsel as an example of how not to market a product.

Explain the role and importance of pricing Explain the internal and external factors affecting the pricing

EKTA KHATRI ROLL NO 28

Price:

Sacrifice made by buyer to avail benefits provided by product. Determine revenues that a firm generates in conjunction with units sold.

PRICE= Quantity of money received by the seller Quantity of goods and services received by the buyer

Price Decision Framework

Demand
Corporate Objective

B ased on these, strate gies could be:

Governme nt Policy

Price
Barriers in industry- like Technology -Exit Barrier Costs Competit or Reactions

PRICE

PRICE HIGH MEDIUM LOW

H I G H M E D I LO
W

1. PREMIUM STRATEGY

2. HIGH VALUE STRATEGY

3. SUPER VALUE STRATEGY

PRODUCT QUALITY MEDIUM

4. OVER CHANGING STRATEGY

5. MEDIUM VALUE STRATEGY

6. GOOD VALUE STRATEGY

7. RIP OFF STRATEGY

8. FALSE ECONOMY STRATEGY

9. ECONOMY

Factors influencing Pricing

The marketing executives set the product prices between an upper and the lower limits. Upper limit is the highest value, that the customer is likely to put on the product or services at a given point of time. However , the lower limit is the cost of producing, promoting, distributing and includes reasonable margin. It is essential to consider these internal and external factors.

INTERNAL FACTORS Organisational factors Marketing mix Product differentiation Product costs Product Life Cycle Pricing Objectives Functional Position

EXTERNAL FACTORS Product Demand Compentation Economic Conditions Government Regulation Ethical Considerations Suppliers The Buyers Behaviour

I.INTERNAL FACTORS: Internal and controllable factors affecting the price decision are organizational factors, marketing mix, product differentiation, costs, product lifecycle and the objectives.

1. Organizational factors: Organizational factors refer to the internal arrangement or mechanism for decision making its implementation. These arrangements differ widely from firm on different occasions in an organization. Pricing can be centralized or decentralized decision. Thus, it is the nature and the make-up of organizational relations that have impact on pricing decisions.

2. Marketing mix: Price is an essential components of marketing mix, other components cannot be discarded. Any shift or change in any one of the elements has an immediate effect on the other three elements. In number of cases, mere price changes have brought in disastrous doom.

3. Product differentiation: The techniques of product differentiation give much Iee-way to the firm in setting prices for the product if done better than the competitors. Product differentiation is the ability of a manufacturer to make his product distinctive from others in the market. E.G. Package design, smell, colour, shape, advertising theme, or the brand name that product can be differentiated.

4. Product costs: Price of a product or a service is determined by costs solely, i.e. price is cost plus plan. Cost have relevance if market demand and competition are considered i.e. production costs merely determine the business existence but it is demand and the competition that determine the price.

5. Product life cycle: The pricing policy followed is to be commensurate with the age of the product i.e. in what stage of the life-cycle the product is, that is going to decide the pricing policy to be followed. Thus, it is the stage of the product life-cycle in which the product is trading through that determines the exact nature of price policy.

6. Pricing objectives: A price policy is the means to attain the price goals so set. Hence, the nature of pricing policy is decided by the objectives or set of objectives to be attained as set by the top management.

7. Functional Position: Functional position of the manufacturing, wholesaler and retailer has its own impact on firm s pricing policy. However, a sound channel management can bring reduction in costs. There is need for co-ordination functioning of these manufacturers and middlemen.

II. EXTERNAL FACTORS The internal controllable factors affecting the pricing policies, there are equal number of external uncontrollable factors which are to be carefully analyzed, interpreted correctly which control the firm. 1. Product demand: Demand is the single most factors having great impact on price, pricing policy and strategy followed by the firm. It is the nature and the magnitude of the demand that are more relevant to product pricing. The pricing decision will differ depending on the exact nature and the exact of elasticity. 2. Competition: Knowing one s competitor is critical to successful marketing planning. The firm should continuously compare its products, prices, channels and promotion with those of competitors. The company is suppose to know as to details of competitors, their objectives, their strength etc. 3. Economic conditions: The economic conditions prevailing in the country or a region are having decisive impact on pricing policy of the firm.If the economic climate is good, and invigorating, then the demand for and sales of a product or products increases.

4. Government Regulation: The government of the nations influences the pricing policies in many ways. Government is the largest employer and the buyer in the economy e.g., in defence industry, car industry, locomotives, electronics, it is the single largest buyer that influences the prices.

5. Ethical Considerations: Business principles and ethics hardly go together. Ethical norms says that pricing should be such that the firm makes reasonable profit, it maintains quality, standards, time and place dimensions of supply. These considerations of supply. These considerations are sure to improve the company image. 6. Suppliers: Suppliers of inputs such as the raw-materials and fabricated parts can have effect on the price of a product. Thus a textile manufacturer is considered the prevailing market price of cotton or man-made fibers as the major input. Any increase in these will increase the cost of manufacturers. 7. The Buyer Behaviour: Buyers, means both business buyers and final users. The compositions of these buyers and theirs behaviour have definite impact on the pricing decision of the firm. Thus the decision makers have to be aware of both controllable and uncontrollable factors, that have great impact on the price decision of the firm.

What are the different objectives firms seek in pricing Explain the broad categories of pricing methods/Pricing strategies
Pricing or a strategy means that route taken by a firm in fixing a price. Methods must be appropriate for aching desired pricing objectives. Broad categories of pricing method 1: cost based pricing 2: Demand based pricing 3: competition oriented pricing 4: value pricing 5: product line oriented pricing 6: Tender pricing 7: Affordability based pricing 8: Differentiated based pricing Let s see all the pricing method in detail

1: cost based pricing

Cost-plus pricing is the simplest pricing method. The firm calculates the cost of producing the product and adds on a percentage (profit) to that price to give the selling price. This method although simple has two flaws; it takes no account of demand and there is no way of determining if potential customers will purchase the product at the calculated price. This appears in 2 forms, Full cost pricing which takes into consideration both variable and fixed costs and adds a % markup. The other is Direct cost pricing which is variable costs plus a % markup, the latter is only used in periods of high competition as this method usually leads to a loss in the long run.
2: Demand based pricing

Selling a product at a high price, sacrificing high sales to gain a high profit, therefore µskimming¶ the market. Usually employed to reimburse the cost of investment of the original research into the product ± commonly used in electronic markets when a new range, such as DVD players, are firstly dispatched into the market at a high price. This strategy is often used to target "early adopters" of a product or service. These early adopters are relatively less price-sensitive because either their need for the product is more than others or they understand the value of the product better than others. This strategy is employed only for a limited duration to recover most of investment made to build the product. To gain further market share, a seller must use other pricing tactics such as economy or penetration. This method can come with some setbacks as it could leave the product at a high price to competitors
3: competition oriented pricing

Setting the price based upon prices of the similar competitor products. Competitive pricing is based on three types of competitive product:
y

y y

Products have lasting distinctiveness from competitor's product. Here we can assume o The product has low price elasticity. o The product has low cross elasticity. o The demand of the product will rise. Products have perishable distinctiveness from competitor's product, assuming the product features are medium distinctiveness. Products have little distinctiveness from competitor's product. assuming that: o The product has high price elasticity. o The product has some cross elasticity. o No expectation that demand of the product will rise.

4: value pricing Pricing a product based on the perceived value and not on any other factor. pricing based on the demand for a specific product would have a likely change in the market place

5: product line oriented pricing In product line oriented pricing a variety of product are grouped into suitable product lines,a special possiblity in product arises.as a product in given procuct line are related to each other,sales of one influences the sales of other.they also have inter related cost of manufacturing and distribution. 6: Tender pricing Business firm often required to fix the prices of their product on a tender basis.tender pricing is of special types.though it is competition oriented method .it is more applicable to industrial productpurchased by institutional customer. 7:Affordability based pricing: The affordibility based pricing method is relevant in respect of essential commodities which need the basic need of section of people.the idea here is set a price in such a way that all the people from different section are able to buy the perticular product. 8: Differentiated based pricing: Some firm charge different charges for the same product in different zone or area of the market sometimes differentiation takes place on the basis of class of customer rather than making territory.sometimesthe differentiation is on the basis of volume of purchase which is most commonly used method in this category. Explain the distinction between the Distribution Logistics and Supply Chain Management
Logistics management is that part of the Supply Chain Management process that plans, implements, and controls the efficient, effective forward and reverses flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers' requirements. Logistics includes physical distribution, warehousing, freight transportation (inbound and outbound from manufacturing plants and in some industries customer service (sales order processing, inventory planning and production planning.Logistics was traditionally the activity of

supplying products from the manufacturing plant or supplier to the final customer. It is now included in the "Supply Chain Management" or SCM concept which objective is to optimize the physical, administrative and information flows management along the logistic chain from the supplier s supplier up to the customer s customer. It is present at all company s levels; at operational level for the products physical flows management at the tactics level organizations definitions and medium-term flows management and at a strategic level long-term orientations definition. Logistics Management is the management of physical material flow processes and the information flows that directly affect these procedures. This can include, but is not limited to the oversight of transportation policies, transportation routing and scheduling, shipment preparation, warehousing/distribution center scheduling, design and mapping, inbound/outbound design and mapping, material handling procedures including picking, packaging, deconsolidation and

reconsolidation methods, as well as maintenance, labor and indirect material needs. From a cost perspective, Logistics Management considers the cost in each of these areas, to minimize the additional cost and time physical material flow processes add to the product.
supply chain management The Definition of Supply Chain Management Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all Logistics Management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, Supply Chain Management integrates supply and demand management within and across companies. Supply Chain Management takes into account the design of physical material flow process overseen by Logistics Management, but also looks in depth at the entire system and organization of material, information and I would argue, financial flows. This includes, but is not limited to the oversight of supplier selection and development, raw material and work-in-process material selection, demand and procurement planning, capacity scheduling and design, production planning, order processing, raw material, work-in-process, finished goods and in-transit inventory, replenishment scheduling, quality control monitoring, as well as logistics selection and development. Supply Chain Management importantly considers the entire system of processes that govern material, information and financial flows, considering the where, what and how of each process in complete architecture. From a cost perspective, Supply Chain Management minimizes the cost effects and time of the entire material, information and financial flow design to maximize the profit generation for each product Supply chain (for a manufacturer)includes the logistics business functions above, and also includes purchasing, sourcing, procurement, buying, manufacturing operations, production scheduling and inventory control and materials management, facilities location planning, the information technology to coordinate between suppliers, the company, and customers (wholesalers and retailers and end users. In a retail and wholesale company, the manufacturing company would be the suppliers or sometimes the wholesalers for a retail company.

Supply Chain is neither a company s function, nor a 3PL contracted logistics service or an IT application, it is simply a process which purpose is to assure a management and a synchronization of all processes which allows a company and its suppliers (tiers 1, , n) to take into account and to answer final customers expectations. Supply Chain contains all the activities associated products flows and transformations, from raw materials up to the finished product delivered to the final customer, as well as the associated administrative and information flows. The SCM or "Supply Chain Management" is then the integration of these activities. It represents a competitive advantage for the company by placing the customer s satisfaction into the system s core.

Explain the important roles of Distribution Logistics /Physical Distribution Write Short notes on Warehousing,inventory management,Transportation

ANS. 1.INVENTORY MANAGEMENT
Inventory management is primarily about specifying the size and placement of stocked goods. Inventory management is required at different locations within a facility or within multiple locations of a supply network to protect the regular and planned course of production against the random disturbance of running out of materials or goods. The scope of inventory management also concerns the fine lines between replenishment lead time, carrying costs of inventory, asset management, inventory forecasting, inventory valuation, inventory visibility, future inventory price forecasting, physical inventory, available physical space for inventory, quality management, replenishment, returns and defective goods and demand forecasting. Balancing these competing requirements leads to optimal inventory levels, which is an on-going process as the business needs shift and react to the wider environment. Inventory management involves a retailer seeking to acquire and maintain a proper merchandise assortment while ordering, shipping, handling, and related costs are kept in check. Systems and processes that identify inventory requirements, set targets, provide replenishment techniques and report actual and projected inventory status. Handles all functions related to the tracking and management of material. This would include the monitoring of material moved into and out of stockroom locations and the reconciling of the inventory balances. Also may include ABC analysis, lot tracking, cycle counting support etc. Management of the inventories, with the primary objective of determining/controlling stock levels within the physical distribution function to balance the need for product availability against the need for minimizing stock holding and handling costs. See inventory proportionality. 2.WAREHOUSING

Warehousing Services
1. WAREHOUSING is a procedure whereby a company gradually builds up a holding of shares in a company it wishes to takeover in the future. The process of storing goods within a storage facility. 2.The acquiring company "warehouses" small lots of shares by holding them under the name of a nominee. Companies use the warehousing technique of share acquisition when they wish to remain anonymous or are unable to make a public tender offer. A warehouse, also known as a godown in Indian English, is a commercial building for storage of goods. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial areas of cities and towns. They usually have loading docks to load and unload goods from trucks. Sometimes warehouses load and unload goods directly from railways, airports, or seaports. They often have cranes and forklifts for moving goods, which are usually placed on ISO standard pallets loaded into pallet racks.

Types of warehouse storage systems
Some of the most common warehouse storage systems are:
y y y y y

Pallet rack including selective, drive-in, drive-thru, double-deep, pushback, and gravity flow Mezzanine including structural, roll formed, rack supported, and shelf supported Cantilever Rack including structural and roll formed Industrial Shelving including metal, steel, wire, and catwalk Automated Storage and Retrieval System (ASRS) including vertical carousels, vertical lift modules, horizontal carousels, robotics, mini loads, and compact 3D

Major warehousing processes include:
y y y y y

Receiving Put away Order preparation / picking Shipping Inventory management (cycle counting, addressing...)

Warehouses frequently provide services, such as:
y y y

Co-packing Kitting Repair

A piece pick, also known as broken case pick, split-case pick, each pick, over-pack or pick/pack, is a type of order selection process where product is picked and handled in individual units and placed in an outer carton, tote or other container before shipping. Catalog companies and internet retailers are examples of predominantly piece-pick operations. Their customers rarely order in pallet or case quantities; instead, they typically order just one or two pieces of one or two items. Material direction and tracking in a warehouse can be coordinated by a Warehouse Management System (WMS), a database driven computer program. Logistics personnel use the WMS to improve warehouse efficiency by directing putaways and to maintain accurate inventory by recording warehouse transactions. 3.TRANSPORTATION Transport or transportation is the movement of people and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline, and space. The field can be divided into infrastructure, vehicles, and operations. Transport infrastructure consists of the fixed installations necessary for transport, and may be roads, railways, airways, waterways, canals and pipelines, and terminals such as airports, railway

stations, bus stations, warehouses, trucking terminals, refueling depots (including fueling docks and fuel stations), and seaports. Terminals may be used both for interchange of passengers and cargo and for maintenance. Vehicles traveling on these networks may include automobiles, bicycles, buses, trains, trucks, people, helicopters, and aircraft. Operations deal with the way the vehicles are operated, and the procedures set for this purpose including financing, legalities and policies. In the transport industry, operations and ownership of infrastructure can be either public or private, depending on the country and mode. Passenger transport may be public, where operators provide scheduled services, or private. Freight transport has become focused on containerization, although bulk transport is used for large volumes of durable items. Transport plays an important part in economic growth and globalization, but most types cause air pollution and use large amounts of land. While it is heavily subsidized by governments, good planning of transport is essential to make traffic flow, and restrain urban sprawl. Explain diff types of marketing channels.Explain the different functions performed by marketing channels Explain the different types of marketing intermediaries There are several possible ways to connect to customers. It is therefore obvious that there will be several possible pat terns of channels and many types rof intermediaries. Marketing intermediaries are of countless types. The simplest form of marketing channel is the one where the product is taken to the consumer with just one tier of intermediaries in between, and which uses just one type of intermediaries. The other forms are progressively more complex and involve two or more tiers and two or more types of intermediaries.

Types and characteristics of intermediaries. The different types of marketing intermediaries differ significantly in their roles, capabilities, territories, level and size of operations, remunerations and amenability for control by the principal. Sole selling agent/or marketer: When a manufacturer prefers to keep himself out of the marketing and distribution task, he appoints a suitable agency, usually a big distribution firm, as his sole selling agent/or marketer and entrusts his marketing job with the agency. The agency usually will have not only large resources bat extensive territory of operation as well. It will be having its own distribution network. It takes care of most of the marketing and distribution functions on behalf of the manufacturer. Obviously, it will earn a large margin compared to other types of intermediaries.

A manufacturer can have one or more marketers; but when it is the sole selling agent, it will be just one agent. C & F agent: In many cases, manufacturers employ carrying and forwarding agents, referred to as C & F agents, or CFAs. The CFAs can be described as super category wholesalers. They supply stocks on behalf of the manufacturer to the wholesale and retail sectors. Their function is distribution. In essence, they are the manufacturers branches. Wholesaler: A wholesaler or stockiest or distributor is also a large operator but not on a level comparable with the marketer or sole selling agent, in size, resources, and territory of operation. Semi-wholesaler: Semi-wholesalers are intermediaries who buy products in bulk from producers or wholesalers, break the bulk, and sell the goods to retailers in assortments needed by them. Like the wholesalers, semi-wholesalers too perform the various wholesaling functions that are part of the distribution process. In some cases, they also perform the retailing functions. Their strength is specialization by region. They assist the producer in reaching a large number of retailers efficiently. They spread the distribution cost over the products of several producers, as they usually handle the products of a number of producers. Retailer/dealer: Retailers sell directly to the household/ultimate consumers. They are the bottom of the distribution hierarchy, working under wholesalers/stockists/distributors/semi-wholesalers,as the case may be. In cases where the company operates a single-tier distribution system, they operate directly under the company. The retailers are also, sometimes, referred to as dealers or authorized representatives. They operate in a relatively smaller territory or at a specific location; they do not normally perform stock holding and sub-distribution functions. The stocks they keep are operational stocks, necessary for immediate sale at the retail outlet. Retailers buy assorted products in suitable lotsand resell them to household-consumers in small quantities-as and when they need them. They cater to the needs of a large number of households, located in a limited geographical area, competing with other retailers as a general rule. Explain the different channels depending on Channel intensity
The different patterns of channels are as follows: y Zero Level Channel: Zero level channel is also known as the Direct Marketing Channel. This type of channel has no intermediaries in-between the producer and consumer.

The goods and services are distributed or marketed by the producer directly to the consumer. The company uses its own sales force to sell product to the end consumers.

Producer

Consumer

Through this type of zero level channel of distribution, the company has full control on product movement, distribution and costs involved. e.g.: Eureka Forbes, Dell computers y One Level Channel: In one level channel of distribution only one intermediary is present between the producer and the end consumer. This intermediary may be a retailer or distributor. If intermediary is a distributor, this type of channel is used for specialty products like refrigerators, washing Producer

Retailer

Consumer machines etc. y Two Level Channel: When two intermediaries like the wholesaler and retailer exist between the producer and consumer it is called the two level channel of distribution.

Producer

Wholesaler

Retailer

Consumer

y

Three Level Channel: In this type of channel there are three intermediaries between the producer and consumer, namely distributor, wholesaler and retailer. Convenience goods are distributed through this type of . Producer

Distributor

Wholesaler

Retailer

Consumer

y

Four Level Channel:

The company dealing with fast moving consumer goods adopts a multi-level channel of distribution to ensure strong availability of their product in the target market. This four level or multi-level channel enables the firm to follow and implement intensive distribution strategy.

Producer

Agent

Distributor

Wholesaler

Retailer

Consumer

In addition to above mentioned channels, different combinations of channels are also possible depending upon the type of product, location of customer, product travel distance, consumption rate etc. Explain the different types of Non store retailing of different forms

Non Store Retailing:The selling of goods or services outside the confines of a retail facility. Retailing done without conventional store-based locations is non-store base retailing. Nonstore retailing includes such services as vending machines, direct- to-home selling, telemarketing, catalog sales, mail order, and television marketing programs. The non-store retailers are known by medium they use to communicate with their customers, such as direct marketing, direct selling and vending machines or e-tailing.

Non store retailing is patronized to time conscious consumers and consumers who can't easily go to stores, or compulsive buyers. Industries in the Nonstore Retailers subsector retail merchandise using methods such as the broadcasting of infomercials, the broadcasting and publishing of direct-response advertising, the publishing of paper and electronic catalogs, door-to-door solicitation, in-home demonstration, selling from portable stalls and distribution through vending machines. Establishments in this subsector include mail-order houses, vending machine operators, home delivery sales, door-to- door sales, party plan sales, electronic shopping, and sales through portable stalls (e.g., street vendors, except food). Establishments engaged in the direct sale (i.e., nonstore) of products, such as home heating oil dealers and newspaper delivery are included in this subsector. Most non-store retailers offer consumers the convenience of buying 24 hours a day seven days a week and delivery at location and time of their choice. Non-store sales are now growing at a higher rate than sales in retail stores. The high growth rate is primarily due to the growth of electronic retailing. The growth of catalogue retail sales and sales in other non-store retailing formats such as TV home shopping, direct selling, and vending machines. Through the web portal, Future Bazaar, the company offers its customers various products at daily discounted prices. The format is a web store, which aims at providing customers with a streamlined, efficient and world class personalized hopping experience, which is supported with the best technology platform. The target audience would include all individuals who have access to the internet and are looking for good bargains The product range include a wide range of products including apparel, books, cameras, consumer durables, home and décor, laptops, kitchen appliances toys and games etc. Future Bazaar leverages the offline brand equity and brick and mortar presence of the group via multi channel integration to benefit on economy of scales, economy of scope in promotion and distribution and by utilizing the offline learning into online and vice versa to grow at a faster pace.

Non-Store Sellers

± A fast growing method used by retailers to sell products is through methods that do not have customers physically visiting a retail outlet. In fact, in many cases customers make their purchase from within their own homes

y

Direct selling:

Direct selling involves making a personal contact with the end consumer at home or at the place of work. Cosmetics, jewelry, food and nutritional products, home appliances and educational materials are some of the products sold in this manner. An interesting aspect of direct selling in India is that women comprise up to 70 per cent of all sales people in India, couples for 20 per cent and males account for 10 per cent. The number of men is expected to go up, because companies like Modicare, Amway and Herbalife have been encouraging men in their sales force. Direct selling may follow the party plan or the multi level net work. In the party plan, the host invites friends and neighbors for a party. The merchandise is displayed and demonstrated in the party atmosphere and buying and selling takes place. In the multi level network, customers act like master distributors. They appoint other people to work with them as distributors. The master distributor earns a commission on the basis of the products sold and distributed by the distributors. y Direct response marketing:

Direct response marketing includes various non-personal forms of communication with the consumer and this includes: 1) Catalogue retailing or Mail Order 2) Television retailing 3) E-tailing 4) Mail order Retailing / Catalogue retailing: This form of retailing eliminates personal selling and store operations. Appropriate for specialty products the key is suing customer databases o develop targeted catalogues that appeal to narrow target markets. The basic characteristic of this form of retailing is convenience. 5) Television shopping: Asian Sky Shop was among the first to introduce television shopping in India. In this form of retailing, the product is advertised on television deals about the product features, price, and tings like guarantee /warranty are explained. Phone numbers are provided for each city, where the buyer can call in and place the order for the product. The products are then home delivered. 6) Electronic shopping: It allows the customers to evaluate and purchase the products from the comfort of their home. The success of this form of retailing largely depends on the products that are offered and the ability of the retail organizations to deliver the product on time to the customer. Strong supply chain and delivery mechanisms need to

be in place for this to be a success. Retailers are opting for click and mortar, where while having a brick and mortar retail store, they also sell some of their products or ranges on the internet. Though most off the large retail organizations in the world have already adopted this model, it is yet to catch on in India. Information Kiosks have emerged in the western markets as a new type of electronic retailing. These kiosks comprising of computer terminals housed inside and a touch screen on the outside provide customers with product and company information and may actually aid the customer in making a purchase. A large number of international cosmetic companies have used this technology to an advantage. The terminals also serve as a market research tool for the retailers. A large amount of information about the people who have interacted with the system can be collected programs and products developed accordingly.

y Online Sellers ± The fastest growing retail distribution method allows consumer to purchase products via the Internet. In most cases delivery is then handled by a third-party shipping service. y Vending ± While purchasing through vending machines does require the consumer to physically visit a location, this type of retailing isconsidered as non-store retailing as the vending operations are not located at the vending company¶s place of business.

Non store Retail companies(Globally):
1) The Home Depot, Inc. 2) Dollar Tree, Inc. 3) Forever 21, Inc. 4) The Bon-Ton Stores, Inc

5) Costco Wholesale Corporation 6) J. Crew Group, Inc. 7) Army and Air Force Exchange Service 8) Bass Pro Shops, Inc. 9) Amazon.com, Inc. 10) AutoZone, Inc

ADVANTAGES OF NON STORE RETAILING

1) Its freedom from a physical retail presence.

2) The high fixed costs of operating retail outlets are eliminated.

3) The breadth of customer coverage is considerably wider than is possible with an individual retail location. 4)Companies do not have to spend large sums or dilute stock building new locations, or acquiring them This truly gives the non-store retailer a global market from a cheap, centralized location. DIS-ADVANTAGES OF NON STORE RETAILING:

1)There is also the fear of credit card abuse and mail fraud, both related to the sense of detachment that not holding a prospective purchase brings. 2)And since most of us do not have the luxury of a pricey T1 Internet connection, we must still deal with painfully slow connections Explain main activities involved in Retailing Explain modern retail formats ( like Factory outlet,Discount chain,supermarket) Write short note on : Franchising

Franchising - Part of Vertical Marketing System. Franchising is the practice of using another firm's successful business model. The word 'franchise' is of AngloFrench derivation - from franc- meaning free, and is used both as a noun and as a (transitive) verb. For the franchisor, the franchise is an alternative to building 'chain stores' to distribute goods and avoid investment and liability over a chain. The franchisor's success is the success of the franchisees. The franchisee is said to have a greater incentive than a direct employee because he or she has a direct stake in the business. Businesses for which franchising works best have the following characteristics:
y

Businesses with a good track record of profitability.

y

Businesses which are easily duplicated.

As practiced in retailing, franchising offers franchisees the advantage of starting up quickly based on a proven trademark, and the tooling and infrastructure as opposed to developing them. Two important payments are made to a franchisor: (a) A royalty for the trade-mark and (B) Reimbursement for the training and advisory services given to the franchisee. These two fees may be combined in a single 'management' fee. A fee for "Disclosure" is separate and is always a "front-end fee".

FRANCHISING IN INDIA Franchising of goods and services, foreign to India, is in its infancy. The first International Exhibition was only held in 2009 India is, however, one of the biggest franchising markets because of its large middle-class of 300 million who are not reticent on spending and because the population is entrepreneurial in character. In a highly diversified society, McDonalds is a success story despite its fare differing from the rest of the world. So far, franchise agreements are covered under two standard commercial laws: the Contract Act 1872 and the Specific Relief Act 1963, which provide for both specific enforcement of covenants in a contract and remedies in the form of damages for breach of contract. Franchisee-Advantages: Brand Name Marketing Support

Plans and Systems Contracts Reservation systemsCustomers Franchisee Disadvantages: n Value of brand name determined by franchiser n Introduction of new products determined by franchiser n Your reliability tied to the rest of the system Example of Franchises:
1. Subway (Sandwiches and Salads | Startup costs $84,300 ± $258,300 (22000 partners worldwide in 2004). 2. McDonald's | Startup costs in 2010, $995,900 ± $1,842,700 (30,300 partners in 2004)

3. 7-Eleven Inc. (Convenience Stores) |Startup Costs $40,500- 775,300 in 2010,(28,200 partners in 2004) 4. Hampton Inns & Suites (Mid price Hotels) |Startup costs $3,716,000 ± $13,148,800 in 2010 5. Great Clips (Hair Salons) | Startup Costs $109,000 - $203,000 in 2010 6. H&R Block (Tax Preparation and e-Filing)| Startup Costs $26,427 - $84,094 (11,200 partners in 2004) 7. Dunkin Donuts | Startup Costs $537,750 - $1,765,300 in 2010 8. Jani-King (Commercial Cleaning | Startup Costs $11,400 - $35,050, (11,000 partners worldwide in 2004) 9. Servo-Pro (Insurance and Disaster Restoration and Cleaning) | Startup Costs $102,250 - $161,150 in 2010

10. Minimarkets (Convenience Store and Gas Station) | Startup Costs $1,835,823 $7,615,065 in 2010 Explain difference between the conventional marketing and Direct Marketing Direct marketing :Direct marketing is a sub-discipline and type of marketing. There are two main definitional characteristics which distinguish it from other types of marketing. The first is that it attempts to send its messages directly to consumers, without the use of intervening media. This involves commercial communication (direct mail, e-mail, telemarketing) with consumers or businesses, usually unsolicited. The second characteristic is that it is focused on driving purchases that can be attributed to a specific "call-to-action." This aspect of direct marketing involves an emphasis on trackable, measurable positive (but not negative) responses from consumers (known simply as "response" in the industry) regardless of medium.

Conventional marketing :Conventional marketing channel have been loose connections of independent companies, each showing little concern for overall channel performance. They have lacked strong leadership and have been troubled by damaging conflict and poor performance. A conventional marketing channel consists of one or more independent producers, wholesalers and retailers. Each is a separated business seeking to maximise its own profits, even at the expense of profits for the network as a whole. No channel members has much control over the other members, and no formal means exist for assigning roles and resolving channel conflict. Vertical marketing network VMN A distribution channel structure in which producers, wholesalers and retailers act as a unified network - either one channel member owns the others, has contracts with them, or wield so much power that they all cooperate. Explain the diffenent forms of Direct Marketing ( Catalogue marketing,web marketing,Telemarketing,Telemarketing,Mobile marketing,Database marketing) Explain the nature and importance of advertising .Explain the diffent types of advertising Explain the nature and importance of Sales Promotion . Sales promotion is different promotion, Sales promotion refers to those marketing activities othe than personal selling, advertisement and publicity, which stimulate consumer purchasing and dealereffectiveness, such as displays, shows and expositions, demonstrations and various nonrecurrent selling efforts not in the ordinary routine. Its purpose is to increase the desire of salesman, distributors anddealers to sell a certain brand and to make consumers more eager to buy that brand. This includes salesactivities which supplement both personal selling and advertising.Sales promotion is only a part of promotion. Promotion includes sales promotion, advertising, personalselling etc. Promotion helps to make all other marketing activities more effective and efficient, but salespromotion helps only to sales activity. Sales promotion may be

done with the help of tools like displays,exhibitions, free sample coupons, premium etc. Sales promotion acts as a link between advertisementand personal selling.

Meaning: Sales promotion consists of all promotional activities other thanadvertising, personal selling and publicity that help to increase sales Business Studiesthrough non repetitive and one time communication. In other words, itincludes marketing activities other than personal selling, advertising,and publicity, that stimulate consumer purchasing and dealereffectiveness, such as point of purchase displays, shows and exhibitions,demonstrations and various non-recurring selling efforts not in theordinary routine. Purpose: The ultimate aim or purpose of sales promotion is that of increasthe volume of sales and profits but it differs from advertisingpersonal selling both in approach and techniques. Personal sellinginvolve face to face contact with specific individuals, while advertisingis directed at a large number of potential customers. Sales promotionserves as a link between two by focussing selling efforts on selected small groups of people. Sales promotion usually involves nonrecurring and no-routine methods, in contrast with the routine and recurring natureof advertising and personal selling. Under advertising, the media is no owned and controlled by the advertiser except in direct mail advertisings. But sales promotion methods are controlled by the advertiser.

Nature of Sales Promotion
Encompasses all promotional activities and materials other than personal selling, advertising and publicity. Grown dramatically in the last ten years due to short term focus on profits. Funds are usually earmarked for advertising are transferred to sales promotion. Often used in conjunction with other promotional efforts.

Importance of sales promotion
323 billion coupons were distributed 1993 nationally annually (3,200/household), only 2.3% are redeemed 9000 trade shows containing 10 exhibits or more/year. New York auto show attracts more than a million people per year $15-20 billion/year spent on point of purchase material in stores. Why? companies are looking to get a competitive edge quick returns are possible for short term profit more consumers are looking for promotions before purchase channel members putting pressure on mf. for promotions advances in tech. make SP easier (ie coupon redemption) 3Promotions exist at all levels of the product chain Manufacturer ± Retailer

Consumer 3Examples Manufacturer can provide the retailer with display promotions Manufacturer can promote a contest directly to consumer Retailer can directly promote product to consumers Explain the diffent types of Sales Promotion and Explain the diff tools/vehicles used in consumer promotion and business promotion In the Sales Promotion tutorial we saw that promotions can be classified into three main areas:
y y y

Consumer Market-Directed Trade Market-Directed Business-to-Business Market-Directed.

In this tutorial we look more deeply into each of these classifications by examining the different types of promotions that fall into each. As we will see much of what is covered is very familiar to even those who are new to marketing as it involves promotional methods consumers are exposed to nearly every day. For marketers, it is important to understand the value each type of sales promotion holds for helping them meet their promotional objectives. Types of Sales Promotion
y

Marketing Tutorials o Types of Sales Promotion  Consumer Sales Promotions  Coupons  Rebates  Promotional Pricing  Trade-In  Loyalty Programs  Samples, Free Product and Premiums  Contests and Sweepstakes  Demonstrations and Personal Appearances  Trade Sales Promotions  Point of Purchase Displays  Advertising Support Programs  Trade Allowances  Sales Incentives or Push Money  Promotional Products  Trade Shows  Business-to-Business Sales Promotions

Consumer Sales Promotions

Consumer sales promotions encompass a variety of short-term promotional techniques designed to induce customers to respond in some way. The most popular consumer sales promotions are directly associated with product purchasing. These promotions are intended to enhance the value of a product purchase by either reducing the overall cost of the product (i.e., get same product but for less money) or by adding more benefit to the regular purchase price (i.e., get more for the money). While tying a promotion to an immediate purchase is a major use of consumer sales promotion, it is not the only one. As we noted above, promotion techniques can be used to achieve other objectives such as building brand loyalty or creating product awareness. Consequently, a marketer¶s promotional toolbox contains a large variety of consumer promotions. Next we discuss the following 11 types of consumer sales promotions: 1. Coupons 2. Rebates 3. Promotional Pricing 4. Trade-In 5. Loyalty Programs 6. Sampling and Free Trials 7. Free Product 8. Premiums 9. Contests and Sweepstakes 10. Demonstrations 11. Personal Appearances

Trade Sales Promotions As note in the Promotion Decisions tutorial, certain promotions can help "push" a product through the channel by encouraging channel members to purchase and also promote the product to their customers. For instance, a trade promotion aimed at retailers may encourage retailers to instruct their employees to promote a marketer¶s brand over competitors¶ offerings. With thousands of products competing for limited shelf space, spending on trade promotion is nearly equal that spent on consumer promotions. Many sales promotions aimed at building relationships with channel partners follow similar designs as those directed to consumers including promotional pricing, contests and free product. In addition to these, several other promotional approaches are specifically designed to appeal to trade partners. These approaches include: 1. 2. 3. 4. 5. Point-of-Purchase Displays Advertising Support Programs Short Term Allowances Sales Incentives or Push Money Promotional Products

6. Trade Shows Business-to-Business Sales Promotions The use of sales promotion is not limited to consumer products marketing. In business-tobusiness markets sales promotions are also used as a means of moving customers to action. However, the promotional choices available to the B-to-B marketer are not as extensive as those found in the consumer or trade markets. For example, most B-to-B marketers do not use coupons as a vehicle for sales promotion with the exception of companies that sell to both consumer and business customers (e.g., products sold through office supply retailers). Rather, the techniques more likely to be utilized include:
y y y y y

price-reductions free product trade-in promotional products trade shows

Of the promotions listed, trade shows are by far the mostly widely used sales promotion for B-toB marketers. Consumer sales promotion techniques
y y y y y y y y y y y y

Price deal: A temporary reduction in the price, such as happy hour Loyal Reward Program: Consumers collect points, miles, or credits for purchases and redeem them for rewards. Two famous examples are Pepsi Stuff and AAdvantage. Cents-off deal: Offers a brand at a lower price. Price reduction may be a percentage marked on the package. Price-pack deal: The packaging offers a consumer a certain percentage more of the product for the same price (for example, 25 percent extra). Coupons: coupons have become a standard mechanism for sales promotions. Loss leader: the price of a popular product is temporarily reduced in order to stimulate other profitable sales Free-standing insert (FSI): A coupon booklet is inserted into the local newspaper for delivery. On-shelf couponing: Coupons are present at the shelf where the product is available. Checkout dispensers: On checkout the customer is given a coupon based on products purchased. On-line couponing: Coupons are available online. Consumers print them out and take them to the store. Mobile couponing: Coupons are available on a mobile phone. Consumers show the offer on a mobile phone to a salesperson for redemption. Online interactive promotion game: Consumers play an interactive game associated with the promoted product. See an example of the Interactive Internet Ad for tomato ketchup.

Example Ad For Online Games 7'UP Dancing Allu Arjun.

y y y

Rebates: Consumers are offered money back if the receipt and barcode are mailed to the producer. Contests/sweepstakes/games: The consumer is automatically entered into the event by purchasing the product. Point-of-sale displays:-

tools used in consumer promotion Consumer sales promotions are steered toward the ultimate product users²typically individual shoppers in the local market²but the same techniques can be used to promote products sold by one business to another, such as computer systems, cleaning supplies, and machinery. In contrast, trade sales promotions target resellers²wholesalers and retailers²who carry the marketer's product. Following are some of the key techniques used in consumer-oriented sales promotions

PRICE DEALS. A consumer price deal saves the buyer money when a product is purchased. The main types of price deals include discounts, bonus pack deals, refunds or rebates, and coupons. Price deals are usually intended to encourage trial use of a new product or line extension, to recruit new buyers for a mature product, or to convince existing customers to increase their purchases, accelerate their use, or purchase multiple units. Price deals work most effectively when price is the consumer's foremost criterion or when brand loyalty is low. CONTESTS/SWEEPSTAKES. The main difference between contests and sweepstakes is that contests require entrants to perform a task or demonstrate a skill that is judged in order to be deemed a winner, while sweepstakes involve a random drawing or chance contest that may or may not have an entry requirement. At one time, contests were more commonly used as sales promotions, mostly due to legal restrictions on gambling that many marketers feared might apply to sweepstakes. But the use of sweepstakes as a promotional tactic has grown dramatically in recent decades, partly because of legal changes and partly because of their lower cost SPECIAL EVENTS. According to the consulting firm International Events Group (IEG), businesses spend over $2 billion annually to link their products with everything from jazz festivals to golf tournaments to stock car races. In fact, large companies like RJR Nabisco and Anheuser-Busch have special divisions that handle nothing but special events. Special events marketing offers a number of advantages. First, events tend to attract a homogeneous audience that is very appreciative of the sponsors PREMIUMS. A premium is tangible compensation that is given as incentive for performing a particular act²usually buying a product. The premium may be given for free, or may be offered to consumers for a significantly reduced price. Some examples of premiums include receiving a prize in a cereal box or a free garden tool for visiting the grand opening of a hardware store. Incentives that are given for free at the time of purchase are called direct premiums. These offers provide instant gratification, plus there is no confusion about returning coupons or box tops, or

saving bar codes or proofs of purchase CONTINUITY PROGRAMS. Continuity programs retain brand users over a long time period by offering ongoing motivation or incentives. Continuity programs demand that consumers keep buying the product in order to get the premium in the future. Trading stamps, popularized in the 1950s and 1960s, are prime examples. Consumers usually received one stamp for every dime spent at a participating store. The stamp company provided redemption centers where the stamps were traded for merchandise. A catalog listing the quantity of stamps required for each item was available at the participating stores. Today, airlines' frequent-flyer clubs, hotels' frequent-traveler plans, retailers' frequent-shopper programs, and bonus-paying credit cards are common continuity programs. When competing brands have reached parity in terms of price and service, continuity programs sometimes prove a deciding factor among those competitors. By rewarding long-standing customers for their loyalty, continuity programs also reduce the threat of new competitors entering a market SAMPLING. A sign of a successful marketer is getting the product into the hands of the consumer. Sometimes, particularly when a product is new or is not a market leader, an effective strategy is giving a sample product to the consumer, either free or for a small fee. But in order for sampling to change people's future purchase decisions, the product must have benefits or features that will be obvious during the trial Trade Promotions A trade sales promotion is targeted at resellers²wholesalers and retailers²who distribute manufacturers' products to the ultimate consumers. The objectives of sales promotions aimed at the trade are different from those directed at consumers. In general, trade sales promotions hope to accomplish four goals: 1) Develop in-store merchandising support, as strong support at the retail store level is the key to closing the loop between the customer and the sale. 2) Control inventory by increasing or depleting inventory levels, thus helping to eliminate seasonal peaks and valleys. 3) Expand or improve distribution by opening up new sales areas (trade promotions are also sometimes used to distribute a new size of the product). 4) Generate excitement about the product among those responsible for selling it. Some of the most common forms of trade promotions²profiled below²include point-of-purchase displays, trade shows, sales meetings, sales contests, push money, deal loaders, and promotional allowances Trade sales promotion techniques
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Trade allowances: short term incentive offered to induce a retailer to stock up on a product. Dealer loader: An incentive given to induce a retailer to purchase and display a product. Trade contest: A contest to reward retailers that sell the most product. Point-of-purchase displays: Extra sales tools given to retailers to boost sales.

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Explain the nature and importance of Personal selling and Personal selling process in short Write short notes on direct marketing and Sales force management Explain the different media's used in marketing communication along with their benefits and drawback. As the term suggests, marketing communication functions within a marketing framework. Traditionally known as the promotional element of the four Ps of marketing (product, place, price, and promotion), the primary goal of marketing communication is to reach a defined audience to affect its behavior by informing, persuading, and reminding. Marketing communication acquires new customers for brands by building awareness and encouraging trial. Marketing communication also maintains a brand's current customer base by reinforcing their purchase behavior by providing additional information about the brand's benefits. A secondary goal of marketing communication is building and reinforcing relationships with customers, prospects, retailers, and other important stakeholders. Successful marketing communication relies on a combination of options called the promotional mix. These options include advertising, sales promotion, public relations, direct marketing, and personal selling. The Internet has also become a powerful tool for reaching certain important audiences. The role each element takes in a marketing communication program relies in part on whether a company employs a push strategy or a pull strategy. A pull strategy relies more on consumer demand than personal selling for the product to travel from the manufacturer to the end user. The demand generated by advertising, public relations, and sales promotion "pulls" the good or service through the channels of distribution. A push strategy, on the other hand, emphasizes personal selling to push the product through these channels.

Figure 1 Elements of Marketing Communication For marketing communication to be successful, however, sound management decisions must be made in the other three areas of the marketing mix: the product, service or idea itself; the price at which the brand will be offered; and the places at or through which customers may purchase the brand. The best promotion cannot overcome poor product quality, inordinately high prices, or insufficient retail distribution. Likewise, successful marketing communication relies on sound management decisions regarding the coordination of the various elements of the promotional mix. To this end, a new way of viewing marketing communication emerged in the 1990s. Called integrated marketing communication, this perspective seeks to orchestrate the use of all forms of the promotional mix to reach customers at different levels in new and better ways.

Types of Communication Medium We divide the different types of communication medium into two different categories: 1. Physical media 2. Mechanical media (everything that is not No. 1) Physical media With physical media we mean channels where the person who is talking can be seen and heard by the audience. The whole point here is to be able to not only hear the messages but also to see the body language and feel the climate in the room. This does not need to be two-way channels. In certain situations the receiver expects physical communication. This is the case especially when dealing with high concern messages, e.g. organizational change or downsizing. If a message is perceived as important to the receiver they expect to hear it live from their manager.
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Large meetings, town hall meetings Department meetings (weekly meetings) Up close and personal (exclusive meetings) Video conferences Viral communication or word of mouth

Large meetings

Large meetings have got great symbolic value and should be used only at special occasions. This channel works very well when you need to get across strategic and important messages to a large group of people at the same time, creating a wide attention, get engagement or communicate a sense of belonging. Large meetings are excellent when you want to present a new vision or strategy, inform about reorganization or share new values. The opportunity for dialogue is limited at large meeting, of course but you can create smaller groups where dialogue can be performed. Weekly departmental meetings In the weekly meetings you and your group communicate daily operative issues, give status reports and solve problems. Weekly meetings are also used to follow up on information from large meetings, management team meetings etc from a ³what¶s-in-it-for-us-perspective´. This type of smaller group meetings gives good opportunities for dialogue. This channel is often the most important channel you have as a manager, because that¶s where you have the opportunity to build the big picture, you can prepare for change, you can create ownership of important strategies and goals etc. This is a favorite among the types of communication medium. Up close and personal This is a form of meetings where, often, a senior manager meets with a ³random´ selection of employees to discuss and answer questions. Some managers use this as a ongoing activities on a monthly basis. It can also be used in specific projects or campaigns e.g. launching new strategies. Viral communication Or viral marketing as it is also called works external as well as internal and refer to marketing techniques that use pre-existing social networks to produce increases in awareness or knowledge through self-replicating viral processes. It can be word-of-mouth delivered or enhanced by the network effects of social media. Mechanical media The second of the two types of communication medium is mechanical media. With mechanical media we mean written or electronic channels. These channels can be used as archives for messages or for giving the big picture and a deeper knowledge. But they can also be very fast. Typically though, because it is written, it is always interpret by the reader based on his or her mental condition. Irony or even humor rarely travels well in mechanical channels.
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E-mail Weekly letters or newsletters Personal letters Billboards Intranet Magazines or papers Sms

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Social media

E-mail E-mail is a good channel for the daily communication to specific target groups. It is suitable mainly for up-to-date and ³simple´ messages and where there is no risk of misunderstanding; Email is an important supplement to weekly meetings and the intranet. Invitation to and agenda for meetings can with advantage be sent out with e-mail before the meeting, while background facts and minutes from meetings is well suited to be stored on the intranet. Benefits: Using an e-mail to deliver an advertisement affords marketers the advantage of low distribution cost and potentially high reach. Weekly letters Managers that have large groups of employees and who has difficulties in meeting all of them often choose to publish a personally weekly letter. It is sort of a short summary of news with personally reflections. Many employees often appreciate it because it has the potential to give the ³what¶s-in-it-for-us´ angle. They can also contain summaries and status in tasks, projects or issues ± yesterday, today and tomorrow. Personal letters At special occasions it can be justified to send a personal letter to employees in order to get attention to a specific issue. E.g. pat on the back letter after extra ordinary achievements. Or it can be a letter with your personal commentary on an ongoing reorganization that affects many employees. One other example is a letter that summarizes the past year and wishes all the best for the holidays. Signs and Billboard The use of signs to communicate a marketer¶s message places advertising in geographically identified areas in order to capture customer attention. The most obvious method of using signs is through billboards which are generally located in high traffic areas. One of the most forgotten types of communication medium is clearly the billboard. Especially today, when everything is about social media. But the good thing with the billboard is that you can use billboards to inform people who do not have computers and/or access to the intranet or to reach people that work part time and does not attend weekly meetings.
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News summary Weekly letters Minutes from meetings Schedules Holiday lists

You can also use the billboard to gather ideas e.g. for items for upcoming meetings. Outdoor billboards come in many sizes, though the most well-known are large structures located near the transportation points intending to attract the interest of people travelling on roads or public transportation. Indoor billboards are often smaller than outdoor and are designed to attract the attention of foot traffic (i.e. those moving past the sign). For example: smaller signs at airports, train terminals and large commercial office spaces fit this category. Intranet The intranet is of course one of the most used types of communication medium and a very important communication channel and work tool for you as a manager, but it is also your job to help your employees priorities and pick out the information on the intranet, as well as translating messages into local consequences. Ask yourself: what information concerns you employees? In what way are they concerned? How do I best communicate this to my employees? Weekly meeting or your weekly letter can be a suitable channel to discuss or inform of information found on the intranet. Employee magazine A Magazine offers the opportunity to deepen a specific issue, explain context, describing consequences or tell a story. It also has the opportunity to reach many employees. If you want to create a broad internal understanding of strategic messages the magazine can be a good vehicle to use e.g. by writing an article based on an interview with you. As were the case with the intranet you also have to ³translate´ the information in the magazine to your employees. You can ask yourself: What does the content in a specific article mean to us? How shall I best communicate it to the employees? Mobile Device Handheld devices, such as cell-phones, personal digital assistants (PDAs) and other wireless devices, make up the growing mobile device market. Such devices allow the customers to stay informed, gather information and communicate with others without being tied to a physical location. With geographic positioning features included in the new mobile devices medium has the potential to provide marketers with the ability to target customers based on their geographic location. y Sms

Or text messaging to the mobile phone is one of the new types of communication medium and not a very widely used channel but where it is used it is proven very effective. Some companies use it as an alert system e.g. for giving managers a head start when something important will be published on the Intranet. The advantage with Sms is that it is fast. But it should be used rarely as an exclusive channel. Some companies use it as a subscription tool where you can subscribe to e.g press releases.

Social media Wikipedia describe social media as ³Media designed to be disseminated through social interaction, created using highly accessible and scalable publishing techniques. Social media supports the human need for social interaction, using Internet- and web-based technologies to transform broadcast media monologues (one to many) into social media dialogues (many to many). It supports the democratization of knowledge and information, transforming people from content consumers into content producers. Businesses also refer to social media as usergenerated content (UGC) or consumer-generated media (CGM).´ More and more companies are using social media in their external marketing, setting up twitter and Facebook accounts etc. But these channels are also used internal where managers become ³friends´ on Facebook with their employees or where managers use blog and twitter targeting their employees. Push or Pull You can also divide the different types of communication medium in Push or Pull channels. Push channels are channels where the senders are pushing the message to the receiver. Meaning it is up to the sender to control the communication.
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E-mail Newsletters and letters (if sent out) Magazines (if sent out) Meetings Telephone Sms

Pull channels on the other hand is when the receiver is pulling the message from the sender. It is up to the receiver when he or she wants to take in the message.
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Intranet Billboards New letters and letters (if not sent out) Magazines (if not sent out) Social media

Push channels are often regarded as having higher reliability than pull channels because of the fact that it is more active in the communication. Television It offers the benefit of reaching a large number of customers in a single exposure. Yet because it is a mass media capable of being seen by nearly anyone, television lacks the ability to deliver an advertisement to highly targeted customers as compared to the other media channels. Television

is an option that is best for products that target a broad market. The geographic scope of television as a media ranges from advertising within a localized geographic area using fee-based services, such as cable and fibre optic services, to national coverage using broadcast programming. Now-a-days television facing numerous challenges from alternative media (for e.g.- internet) and the attack of the technological devices, such as digital video recorders, that have empowered customers to be more selective about the advertisements that they view. Additionally, television lacks effective response tracking which has led many marketers to investigate other media that offers stronger tracking options. Radio Radio is also one of the media of communication. It is mostly local to the broadcast range of a radio station, however, at least three options exist that offer national and potentially international coverage. In many countries there are radio networks that use many geographically distinct stations to broadcast simultaneously. In United States such networks as Disney (children¶s programming) and ESPN (sports programming) broadcast nationally, either through a group of company-owned stations or through a syndication arrangement (i.e. business agreement) with the partner stations. The radio suffers the same problem as television, namely, a mass medium that is not highly targeted and offers little opportunity to track responses. But unlike television, radio presents the additional disadvantage of limiting advertisers to audio-only. Print Publication Print publications such as magazines, newspapers and special issue publications offer at all geographic levels. Magazines, especially those that target specific niche or specialized interest areas, are more narrowly targeted as compared to broadcast media. Additionally, magazines offer the option of allowing marketers to present their message using high quality imagery (for e.g. full color) and can also offer touch and scent experiences (for e.g. perfume). Newspapers have also incorporated color advertisements, though their main advantage rests with their ability to target local markets. Special issue publication can offer very selective targeting since these often focus on extremely narrow topics (for e.g. auto-buying guide, tour guide, college and university ratings etc) Internet The fastest growing media channel for advertising. Compared to spending in other media, the rate of spending for internet is experiencing tremendous growth. Through websites and emails the communication can be made. Direct Mail This medium includes postcards, letters, brochures, catalogues and flyers, to a physical address of the targeted customers. Direct mail is most effective when it is designed in a way that makes it appear to be special to the customer. For example, a marketer using direct mail can personalize

mailing by including the message recipient¶s name on the address label or by inserting the name within the content of the marketer¶s message. Direct mail can be very cost-effective, especially if mailing contains printed material. Direct mail can be seen as offering the benefit of a low cost per contact, the actual cost per impression can be quite high as large numbers of customers may discard the mailing before reading it. This has led many to refer to direct mail as ³junk mail´ and due to the name, some marketers view the approach as ineffective. These are the different types of media¶s used in marketing communication. Explain the public relations and publicity in detail Public relations (PR) is a field concerned with maintaining a public image for businesses, nonprofit organizations or high-profile people, such as celebrities and politicians. An earlier definition of public relations, by The first World Assembly of Public Relations Associations held in Mexico City in August 1978, was "the art and social science of analyzing trends, predicting their consequences, counseling organizational leaders, and implementing planned programs of action, which will serve both the organization and the public interest." Others define it as the practice of managing communication between an organization and its publics. Public relations provides an organization or individual exposure to their audiences using topics of public interest and news items that provide a third-party endorsement and do not direct payment. Once common activities include speaking at conferences, working with the media, crisis communications, social media engagement, and employee communication. The European view of public relations notes that besides a relational form of interactivity there is also a reflective paradigm that is concerned with publics and the public sphere; not only with relational, which can in principle be private, but also with public consequences of organizational behaviour. A much broader view of interactive communication using the Internet, as outlined by Phillips and Young in Online Public Relations Second Edition (2009), describes the form and nature of Internet-mediated public relations. It encompasses social media and other channels for communication and many platforms for communication such as personal computers (PCs), mobile phones and video game consoles with Internet access. Public relations is used to build rapport with employees, customers, investors, voters, or the general public. Almost any organization that has a stake in how it is portrayed in the public arena employs some level of public relations. There are a number of public relations disciplines falling under the banner of corporate communications, such as analyst relations, media relations, investor relations, internal communications and labor relations.

Other public relations disciplines include:

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Financial public relations - providing information mainly to business reporters Consumer/lifestyle public relations - gaining publicity for a particular product or service, rather than using advertising Crisis public relations - responding to negative accusations or information Industry relations - providing information to trade bodies Government relations - engaging government departments to influence policymaking

The main goal of a public relations department is to enhance a company¶s reputation. Staff that work in public relations, or as it is commonly known, PR, are skilled publicists. They are able to present a company or individual to the world in the best light. The role of a public relations department can be seen as a reputation protector. The business world of today is extremely competitive. Companies need to have an edge that makes them stand out from the crowd, something that makes them more appealing and interesting to both the public and the media. The public are the buyers of the product and the media are responsible for selling it. Public relations provide a service for the company by helping to give the public and the media a better understanding of how the company works. Within a company, public relations can also come under the title of public information or customer relations. These departments assist customers if they have any problems with the company. They are usually the most helpful departments, as they exist to show the company at their best. PR also helps the company to achieve its full potential. They provide feedback to the company from the public. This usually takes the form of research regarding what areas the public is most happy and unhappy with. People often have the perception of public relations as a group of people who spin everything. Spin can mean to turn around a bad situation to the company¶s advantage. It is true that part of the purpose of public relations is to show the company in a positive light no matter what. There are certain PR experts that a company can turn to for this particular skill. The public often think of PR as a glamorous job. Public relations people seem to have been tarred with the image of constant partying and networking to find new contacts. The reality is usually long hours and hard work for anyone involved in public relations. There are certain skills necessary to work in the world of PR. These include a very high level of communication skills, written and verbal. The PR person must also be very adept at multitasking and time management. He or she may also have some form of media background or training in order to understand how the media and advertising work. Organizational and planning skills are also important in public relations. The PR worker must also be able to cope very well under pressure. He or she must have the ability to cope with a barrage of questions from the media and the public. If a company comes under critical attack, it is the PR department who must take control of the situation. They must effectively answer the criticism and turn it around in order to protect the company¶s reputation.

Tools : There are various tools that can be used in the practice of public relations. Traditional tools include press releases and media kits which are sent out to generate positive press on behalf of the organization. Other widely-used tools include brochures, newsletters and annual reports. Increasingly, companies are utilizing interactive social media outlets, such as
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Blogs, Twitter and Facebook,

as tools in their public relations campaigns. Unlike the traditional tools which allowed for only one-way communication, social media outlets allow the organization to engage in two-way communication, and receive immediate feedback from their various stakeholders and publics. Targeting publics : A fundamental technique used in public relations is to identify the target audience, and to tailor every message to appeal to that audience. It can be a general, nationwide or worldwide audience, but it is more often a segment of a population. A good elevator pitch can help tailor messaging to each target audience. Marketers often refer to socio-economically-driven "demographics", such as "black males 18-49". However, in public relations an audience is more fluid, being whoever someone wants to reach. Sometimes the interests of differing audiences and stakeholders common to a public relations effort necessitate the creation of several distinct but complementary messages. This is not always easy to do, and sometimes, especially in politics, a spokesperson or client says something to one audience that creates dissonance with another audience or group of stakeholders. Explain the unique features of Services

Unique Features Of Services as follows:-

1. Intangibility
Services are intangible and insubstantial: they cannot be touched, gripped, handled, looked at, smelled, tasted or heard. Thus, there is neither potential nor need for transport, storage or stocking of services. Furthermore, a service cannot be (re)sold or owned by somebody, neither can it be turned over from the service provider to the service consumer nor returned from the service consumer to the service provider. Solely, the service delivery can be commissioned to a service provider who must generate and render the service at the distinct request of an authorized service consumer.

2. Perishability
Services are perishable in two regards
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The service relevant resources, processes and systems are assigned for service delivery during a definite period in time. If the designated or scheduled service consumer does not request and consume the service during this period, the service cannot be performed for him. From the perspective of the service provider, this is a lost business opportunity as he cannot charge any service delivery; potentially, he can assign the resources, processes and systems to another service consumer who requests a service. Examples: The hair dresser serves another client when the scheduled starting time or time slot is over. An empty seat on a plane never can be utilized and charged after departure. When the service has been completely rendered to the requesting service consumer, this particular service irreversibly vanishes as it has been consumed by the service consumer. Example: the passenger has been transported to the destination and cannot be transported again to this location at this point in time.

3. Inseparability
The service provider is indispensable for service delivery as he must promptly generate and render the service to the requesting service consumer. In many cases the service delivery is executed automatically but the service provider must preparatorily assign resources and systems and actively keep up appropriate service delivery readiness and capabilities. Additionally, the service consumer is inseparable from service delivery because he is involved in it from requesting it up to consuming the rendered benefits. Examples: The service consumer must sit in the hair dresser's shop & chair or in the plane & seat; correspondingly, the hair dresser or the pilot must be in the same shop or plane, respectively, for delivering the service.

4. Simultaneity
Services are rendered and consumed during the same period of time. As soon as the service consumer has requested the service (delivery), the particular service must be generated from scratch without any delay and friction and the service consumer instantaneously consumes the rendered benefits for executing his upcoming activity or task.

5. Variability
Each service is unique. It is one-time generated, rendered and consumed and can never be exactly repeated as the point in time, location, circumstances, conditions, current configurations and/or assigned resources are different for the next delivery, even if the same service consumer requests the same service. Many services are regarded as heterogeneous or lacking homogeneity and are typically modified for each service consumer or each new situation (consumerised). Example: The taxi service which transports the service consumer from his home to the opera is

different from the taxi service which transports the same service consumer from the opera to his home - another point in time, the other direction, maybe another route, probably another taxi driver and cab. Each of these characteristics is retractable per se and their inevitable coincidence complicates the consistent service conception and make service delivery a challenge in each and every case. Proper service marketing requires creative visualization to effectively evoke a concrete image in the service consumer's mind. From the service consumer's point of view, these characteristics make it difficult, or even impossible, to evaluate or compare services prior to experiencing the service delivery. Mass generation and delivery of services is very difficult. This can be seen as a problem of inconsistent service quality. Both inputs and outputs to the processes involved providing services are highly variable, as are the relationships between these processes, making it difficult to maintain consistent service quality. For many services there is labor intensity as services usually involve considerable human activity, rather than a precisely determined process; exceptions include utilities. Human resource management is important. The human factor is often the key success factor in service economies. It is difficult to achieve economies of scale or gain dominant market share. There are demand fluctuations and it can be difficult to forecast demand. Demand can vary by season, time of day, business cycle, etc. There is consumer involvement as most service provision requires a high degree of interaction between service consumer and service provider. There is a customer-based relationship based on creating long-term business relationships. Accountants, attorneys, and financial advisers maintain long-term relationships with their clientes for decades. These repeat consumers refer friends and family, helping to create a client-based relationship Explain the" People " in detail ( Selection of personnel,motivation,training ) Explain the " Physical Evidence " in detail. Physical Evidence is the material part of a service. Strictly speaking there are no physical attributes to a service, so a consumer tends to rely on material cues. Where of the service provision which will have an impact on the organisations is the service being delivered? Physical Evidence is the element of the service mix which allows the consumer again to make judgments on the organisation. If you walk into a restaurant your expectations are of a clean, friendly environment. On an aircraft if you travel first class you expect enough room to be able to lay down! on their Physical evidence is an essential ingredient of the service mix, consumers will make perceptions based sight perceptual plan of the service.

There are many examples of physical evidence, including some of the following:

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Packaging. Internet/web pages. Paperwork (such as invoices, tickets and despatch notes). Brochures. Furnishings. Signage (such as those on aircraft and vehicles). Uniforms. Business cards. The building itself (such as prestigious offices or scenic headquarters).

A sporting event is packed full of physical evidence. Your tickets have your team's logos printed on them, and players are wearing uniforms. The stadium itself could be impressive and have an electrifying atmosphere. You travelled there and parked quickly nearby, and your seats are comfortable and close to restrooms and store. All you need now is for your team to win!

Some organisations depend heavily upon physical evidence as a means of marketing communications, for example tourism attractions and resorts (e.g. Disney World), parcel and mail services (e.g. UPS trucks), and large banks and insurance companies (e.g. Lloyds of London).

Explain the " Process" in detail. How the services are differentiated? (On which basis) Explain the ServQual Model (Services Gap Model) Explain the BCG Matrix Explain the GE Matrix

tool for analysing a product portfolio, plotting industry attractiveness against business position for each product, resulting in a nine-cell matrix.

GE Matrix or McKinsey Matrix is a strategic tool for portfolio analysis. It is similar to the BCG Matrix and actually the GE / McKinsey Matrix is an extension of the BCG Matrix - multifactor portfolio analysis tool. This tool compares different businesses on "Business Strength" and "Market Attractiveness" variables, plus the size of the bubbles represents the market size instead of business sales used in the BCG Matrix, and the share of the market or business sales vs. market size is represented as pie chart inside the bubbles. This allows the business user to compare business strength, market attractiveness, market size, and market share for different strategic business units (SBUs) or different product offerings. This strategic portfolio analysis tool has been initially developed by GE and McKinsey.

GE Matrix Positions and Strategy The GE / McKinsey Matrix is divided into nine cells - nine alternatives for positioning of any SBU or product offering. Based on the strength of the business and its market attractiveness each SBU will have a different position in the matrix. Further, the market size and the current sales will distinguish each SBU. Based on clear understanding of all of these factors decision makers are able to develop effective strategies. The nine cells in the matrix can be grouped into three major segments: Segment 1: This is the best segment. The business is strong and the market is attractive. The company should allocate resources in this business and focus on growing the business and increase market share.

Segment 2: The business is either strong but the market is not attractive or the market is strong and the business is not strong enough to pursue potential opportunities. Decision makers should make judgment on how to further deal with these SBUs. Some of them may consume to much resources and are not promising while others may need additional resources and better strategy for growth.

Segment 3: This is the worst segment. Businesses in this segment are weak and their market is not attractive. Decision makers should consider either repositioning these SBUs into a different market segment, develop better cost-effective offering, or get rid of these SBUs and invest the resources into more promising and attractive SBUs.
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