33 Important Definitions of Marketing (All Units)

1. Marketing

The process of identifying or creating needs and fulfilling them profitably.

2. Marketing Management

The planning and organisation of all the processes of meeting customers needs profitably.

3. Marketing Environment

The sumtotal of all the various factors that influence the Marketing of a company.

4. Consumer Behaviour

The combination of various factors: knowledge, exposure, peer influence, etc; that affect a consumer's purchase decision.

5. Market

A place where buyers and sellers meet and exchange products against a price.

6. Consumer Market

A market where products are sold to individual consumers in smaller quantities or numbers.

7. Industrial Market

A market where products are sold to businesses like colleges, govt departments, etc. Here products are sold in bulk.

8. FMCG
Fast Moving Consumer Goods

Those consumer goods which are sold to individuals in smaller units or quantities but are sold frequently, for example, Shampoo, Bread, etc.

9. Consumer Durables

Those products which are sold to individuals but are big and complicated products and aren't bought frequently, for example, Car, Refrigerator, etc.

10. Industry

A group of all companies offering a same type of product, for example, Automobile Industry.

11. Market Potential

The unmet demand for a particular product in a particular market at a particular time is called the Market Potential.

12. Market Share

The total sales percentage achieved by a company out of the total sales by all companies in a particular market for a particular time period.

13. Sales Potential

The numerical difference between Market Potential and Market Share is called Sales Potential.

14. Professional Services

It's an industry of technical or unique function performed by independent contractors or consultants whose occupation is the rendering of services.

15. Segmentation

It's the process of dividing the heterogenous market into segments which are homogenous so as to target one or more segments effectively.

16. Market Targeting

It's the process of targeting one segment, already selected, by a certain mix of Marketing Communication plan.

17. Positioning

Positioning is defined as the way by which the marketers attempt to create a distinct impression in the customer's mind.

18. Product Differentiation

Development or incorporation of attributes (such as benefits, price, quality, styling, service , etc.) that a product's intended customers perceive to be different and desirable.

19. Marketing Mix

It's the perfect blend among various attributes of Product, Place, Promotion and Price of an offering. In services, the mix extends to other 3 Ps: Physical Evidence, People and Process.

20. Brand

It's the identity of a product which can be made up of words, colours, images, logos, icons, etc etc.

21. Branding

Branding is the activity of creating such a Brand which stands out amongst others and displays a distinct identity of a product.

22. Price

Price is the monetary exchange value of a product.

23. Marketing Communication

It's the aggregate of various tools (Advertising, Sales Promotion, Personal Selling, Direct Marketing) used to convey the right message to a large number of intended audience.

24. Advertising

Advertising includes all messages a business pays to deliver through a medium to reach a targeted audience.

25. Sales Promotion

Sales promotions are the set ofmarketing activities undertaken to boost sales of the product or service.

26. Direct Marketing

It's the process of reaching out to a market on a personal basis or mass media basis.

27. Marketing Channels

A marketing channel is a set of practices or activities necessary to transfer the ownership of goods, and to move goods, from the point of production to the point of consumption.

28. Channel Motivation

It's the process of impressing the channel members so that they may promote a company's products with some efforts.

29. Product Mix

The variety of products offered by a company.

30. Product Line

Various varieties of one single kind or class of a product, for example, different varieties of Shampoo.

31. Product Breadth or Width

The total number of different product classes offered by a company, for example, Shampoo, Soap, Cream, Toothpaste.

32. Product Mix Length or Depth

It's the total number of different kinds or varieties of products offered in a single product line, for example, in Shampoo Line, a company offers Protein Shampoo, Herbal Shampoo and Anti Dandruff Shampoo.

33. Consistency

It means how closely the different products of a Product Mix are related to one another, how similar the products are.

Quality Improvement Tools

Introduction:
Most of the organizations use
quality tools for various purposes
related to controlling and assuring
quality.
Although there are a good number
of quality tools specific to certain
domains, fields, and practices,
some of the quality tools can be
used across such domains. These
quality tools are quite generic and
can be applied to any condition.
There are seven basic quality tools
used in organizations. These tools
can provide much information
about problems in the
organization assisting to derive
solutions for the same.
A number of these quality tools
come with a price tag. A brief
training, mostly a self-training, is
sufficient for someone to start
using the tools.
Let's have a look at the seven
basic quality tools in brief.
1. Flow Charts
This is one of the basic quality
tools that can be used for
analyzing a sequence of events.
The tool maps out a sequence of
events that take place sequentially
or in parallel. The flow chart can
be used to understand a complex
process in order to find the
relationships and dependencies
between events.
You can also get a brief idea about
the critical path of the process
and the events involved in the
critical path.
Flow charts can be used for any
field and to illustrate events
involving processes of any
complexity. There are specific
software tools developed for
drawing flow charts, such as MS
Visio.
You will be able to freely download
some of the open source flow
chart tools developed by the open
source community.
2. Histogram
Histogram is used for illustrating
the frequency and the extent in
the context of two variables.
Histogram is a chart with
columns. This represents the
distribution by mean. If the
histogram is normal, the graph
takes the shape of a bell curve.
If it is not normal, it may take
different shapes based on the
condition of the distribution.
Histogram can be used to
measure something against
another thing. Always, it should be
two variables.
Consider the following example:
The following histogram shows
morning attendance of a class.
The .x. axis is the number of
students and the .y. axis the time
of the day.
3. Cause and Effect Diagram
Cause and effect diagrams
(Ishikawa Diagram) are used for
understanding organizational or
business problem causes.
Organizations face problems
everyday and it is required to
understand the causes of these
problems in order to solve them
effectively. Cause and effect
diagrams exercise is usually a
team work.
A brainstorming session is
required in order to come up with
an effective cause and effect
diagram.
All the main components of a
problem area are listed and
possible causes from each area is
listed.
Then, most likely causes of the
problems are identified to carry
out further analysis.
4. Check Sheet
A check sheet can be introduced
as the most basic tool for quality.
A check sheet is basically used for
gathering and organizing data.
When this is done with the help of
software packages such as
Microsoft Excel, you can derive
further analysis graphs and
automate through macros
available.
Therefore, it is always a good idea
to use a software check sheet for
information gathering and
organizing needs.
One can always use a paper based
check sheet when the information
gathered is only used for backup
or storing purposes other than
further processing.
5. Scatter Diagram
When it comes to the values of
two variables, scatter diagrams
are the best way to present.
Scatter diagrams present the
relationship between two variables
and illustrate the results on a
Cartesian plain.
Then, further analysis, such as
trend analysis can be performed
on the values.
In these diagrams, one variable
denotes one axis and another
variable denotes the other axis.
6. Control Charts
Control chart is the best tool for
monitoring the performance of a
process. These types of charts can
be used for monitoring any
processes related to function of
the organization.
These charts allow you to identify
the following conditions related to
the process that has been
monitored.
Stability of the process
Predictability of the process
Identification common cause
of variation
Special conditions where the
monitoring party needs to
react
7. Pareto Charts
Pareto charts are used for
identifying a set of priorities. You
can chart any number of issues/
variables related to a specific
concern and record the number of
occurrences.
This way you can figure out the
parameters that have the highest
impact on the specific concern.
This helps you to work on the
propriety issues in order to get
the condition under control.
Conclusion
Above seven basic quality tools
help you to address different
concerns in an organization.
Therefore, use of such tools
should be a basic practice in the
organization in order to enhance
the efficiency.
Trainings on these tools should be
included in the organizational
orientation program, so all the
staff members get to learn these
basic tools.

Quality, Quality Management: Meaning and Concepts, Quality characteristics of Products and Services

Definition of 'Quality Management'

The act of overseeing all activities and tasks
needed to maintain a desired level of
excellence. This includes creating and
implementing quality planning and assurance,
as well as quality control and quality
improvement. It is also referred to as total
quality management (TQM).

quality

Quality is important to businesses but can be
quite hard to define. A good definition of
quality is:
“Quality is about meeting the needs and
expectations of customers”
Customers want quality that is appropriate to
the price that they are prepared to pay and the
level of competition in the market.
Key aspects of quality for the customer
include:
Good design – looks and style
Good functionality – it does the job well
Reliable – acceptable level of breakdowns or
failure
Consistency
Durable – lasts as long as it should
Good after sales service
Value for money
‘Value for money’ is especially important,
because in most markets there is room for
products of different overall levels of quality,
and the customer must be satisfied that the
price fairly reflects the quality.

In manufacturing, a measure of excellence or a
state of being free from defects, deficiencies
and significant variations . It is brought about
by strict and consistent commitment to certain
standards that achieve uniformity of a product
in order to satisfy specific customer or user
requirements . ISO 8402-1986 standard defines
quality as "the totality of features and
characteristics of a product or service that
bears its ability to satisfy stated or implied
needs."

Drivers of Quality:

1-Customers.
In a customer-driven organization, quality
is established with a focus on satisfying or
exceeding the requirements, expectations,
needs, and preferences of customers.
Customer-driven quality is a common
culture within many organizations.
2-Products / Services:
A culture of product / service-driven
quality was popular in the early stages of
quality improvement. Conformance to
requirements and zero defect concepts
have roots in producing a product /
service that meets stated or documented
requirements.
In some cases, product / service
requirements originate from customer
requirements, thereby creating a common
link to customer-driven quality, but the
focus of the culture is on the quality of
the product/ service.
If the customer requirements is
accurately stated and designed into the
production / service delivery process,
then as long as the product / service meet
the requirements, the customer should be
satisfied. This approach is common in
supporting the ISO 9001-based quality
management system.
3- Employee Satisfaction:
This concept is that an organization takes
care of employee’s needs so that they can
be free to worry only about the customer.
Employee satisfaction is a primary
measure of success for this type of
organization.
4- Organizational focus:
Some organizations tend to focus on total
organizational quality while others are
quite successful at using a segmented
approach to implementing quality.

Why quality is important to a growing
business?

Good quality helps determine a firm’s success
in a number of ways:
Customer loyalty – they return, make
repeat purchases and recommend the
product or service to others.
Strong brand reputation for quality
Retailers want to stock the product
As the product is perceived to be better
value for money, it may command a
premium price and will become more price
inelastic
Fewer returns and replacements lead to
reduced costs
Attracting and retaining good staff

Concepts/Elements in Quality Management
Or
Quality Mgmt Plan

Quality Planning
Quality Assurance
Quality Control

Quality planning allows quality to be designed
into the deliverables of the project before the
first task has begun. It is therefore done
during the development phase of the project
life cycle. It may involve identifying standards
or best practices. Design of experiments is one
tool that identifies which variables will have
the most influence on the final quality of a
product.
Quality planning for GIS projects may include
several important aspects, some of which
overlap with those identified for information
technology projects, and some of which are
unique to GIS. For example, functionality is an
important aspect of many IT projects. If you
are customizing an mapping interface, you will
need to address similar questions of
functionality. If, however, you are creating
paper copies of maps for botanists to use as
they collect samples, functionality of how the
map will be used remains important.
Quality assurance is what must be done
during the actual tasks to ensure that the
standards identified during quality planning
are met. It is therefore done during the
implementation phase of the project life cycle.
There are several tools available for a project
manager to assure the quality of products. One
is quality audits , a structured review of
quality with an eye towards improving
performance. Another is benchmarking,
comparing methods or products with others of
recognized quality. Thus, a benchmark is not
something created in the project, but
something recognized by the project and used
for comparison with products or methods in
the project. Sometimes, benchmarks may be
recognized throughout an industry. Other
times, they may be identified uniquely for use
in one particular project.
Quality control is used to improve the quality
of products or methods by focusing on such
outputs as rework decisions, acceptance
decisions, and adjustment of processes. It is
also done during the implementation phase of
the project life cycle. Rework means that a
product does not meet standards, cannot be
provided to the end user as a deliverable, and
must have additional work done to it to bring
it up to standards. Acceptance means that the
product does meet standards and can be
provided to the end user as a deliverable.
Process adjustments are made to corrective
actions taken to the methodology in efforts to
increase acceptance and decrease rework.

Quality Characteristics of Goods and Services

Functionality, how well does it work.

Appearance, how is its look, feel, design, colour, etc

Reliability, how trustworthy is it.

Recovery, how well and how quickly may defects be rectified.

Durability - the total useful life of the product or service.

Examples of Quality Characteristics
For Products
Performance
Serviceability
Reliable
Reasonable Price
Ease of Use
Maintainability
Durability
Simplicity of Design
Aesthetics
Available
Safe
Ease of Disposal
For Service
Responsiveness
Credibility
Available
Reliable
Safe
Security
Competence
Understand the Customer
Accuracy
Completeness
Timeliness
Communication

OB and its Nature

Organizational behavior-Definition &
Nature
Organizational behavior- it is made out of
two words “organization” and “behavior.”
What is an organization?
Organization as two or more individuals who
are interacting with each other within a
deliberately structured set up and working in
an interdependent way to achieve some
common objective/s. Organizations play a
major role in pur lives. We possibly cannot
think of a single moment in our lives when we
are not depending on rganizations in some
form or the other. Right from the public
transport that you use to come to your
institute, the institutes itself, the class you are
attending at this moment, are all examples of
organizations.
What is Behavior?
It is the behavior of the people working in an
organization to achieve common goals or
objectives. Organization comprises of people
with different attitudes, cultures, beliefs,
norms and values.
So let us understand organizational behavior
and what it exactly it means. “Organizational
Behavior” cam be defined as the study of what
people think, feel, and do in and around
organizations. The study of Organizational
Behavior facilitates the process of explaining,
understanding) predicting, maintaining, and
changing employee behavior in an
organizational setting. The value of
organizational behavior is that: it isolates
important aspects of the
manager’s job and offers specific perspective
on the human side of management:
• People as organizations,
• People as resources,
• People as people
In other words, it involves the understanding,
prediction and control of human behavior and
factors affecting their performance and
interaction among the organizational members.
And because organizational behavior is
concerned specifically with employment –
related situations, you should not be surprised
to find that it emphasizes behavior as related-
to concerns such as jobs, work, absenteeism,
employment turnover, productivity, human
performance and management
Nature of Organizational Behavior (OB)
Organizational behavior is an applied
behavioral science that is built on
contributions from a number of behavioral
disciplines such as psychology, sociology,
social psychology, anthropology and
economics.
Psychology
Psychology is the study of human behavior
which tries to identify the characteristics of
individuals and provides an understanding why
an individual behaves in a particular way. This
thus provides us with useful insight into areas
such as human motivation, perceptual
processes or personality characteristics.
Sociology
Sociology is the study of social behavior,
relationships among social groups and
societies, and the maintenance of social order.
The main focus of attention is on the social
system.
This helps us to appreciate the functioning of
individuals within the organization which is
essentially a socio-technical entity.
Social psychology
Social psychology is the study of human
behavior in the context of social situations.
This essentially addresses the problem of
understanding the typical behavioral patterns
to be expected from an individual when he
takes part in a group.
Anthropology
Anthropology is the science of mankind and
the study of human behavior as a whole. The
main focus of attention is on the cultural
system, beliefs, customs, ideas and values
within a group or society and the comparison
of behavior among different cultures. In the
context of today’s organizational scenario. It is
very important to appreciate the differences
that exist among people coming from different
cultural backgrounds as people are often found
to work with others from the other side of the
globe.
Economics
Any organization to survive and sustain must
be aware of the economic viability of their
effort. This applies even to the non-profit and
voluntary organizations as well.
Political Science
Although frequently overlooked, the
contributions of political scientists are
significant to the understand arrangement in
organizations. It studies individuals and groups
within specific conditions concerning the
power dynamics. Important topics under here
include structuring of conflict, allocation of
power and how people manipulate power for
individual self-interest etc.

Introduction to ORGANISATIONAL BEHAVIOR (OB)

Organisational Behavior

OB is the study and application of knowledge about the human behavior in order to obtain organisational effectiveness.

As we know that many people come together at the workplace. They come from diverse backgrounds, diverse religions, diverse regions. Different people have different values, beliefs, tastes and ideas. All these factors make up a structure that shapes the behavior of the people. OB strives to understand this structure. OB strives to understand these factors. OB strives to know what makes up a particular behavior in an individual level and how beneficial or detrimental is that behavior to the organisation. OB studies about the behavior of individuals in order to change them favourably. Hence, OB is the study of the various factors that make up the behaviour of individuals and then the application of the knowledge obtained in order to mould their behavior in such a way so as to make it beneficial to the organisational effectiveness.

OB also studies how people behave differently at their individual level and at the workplace or organisational level. OB understands all causes.

OB is a subject that consists of studies varying from Anthropology, Psychology, Industrial Relations, History, Sociology, etc. The roots of OB lie as back as the advent of Scientific Management and Human Relations Movement of 1940. Today, OB is studied at colleges and universities as a full-fledged subject and is practically applied at organisations.

Channel Management

Product distribution (or place) is one of the
four elements of the marketing mix .
Distribution is the process of making a product
or service available for use or consumption by
a consumer or business user, using direct
means, or using indirect means with
intermediaries.
The other three parts of the marketing mix are
product , pricing and promotion.
Channels and intermediaries
Distribution of products takes place by means
of channels. Channels are sets of
interdependent organizations (called
intermediaries) involved in making the product
available for consumption.[1] Merchants are
intermediaries that buy and resell products.
Agents and brokers are intermediaries that act
on behalf of the producer but do not take title
to the products.
↑Jump back a section
Channel design
A firm can design any number of channels.
Channels are classified by the number of
intermediaries between producer and
consumer. [1] A level zero channel has no
intermediaries. This is typical of direct
marketing . A level one channel has a single
intermediary. This flow is typically from
manufacturer to retailer to consumer.
Types
Category
Definition
Intensive distribution
the producer's products are stocked in the
majority of outlets. [1] This strategy is
common for basic supplies, snack foods,
magazines and soft drink beverages.
Selective distribution
means that the producer relies on a few
intermediaries to carry their product. [1] This
strategy is commonly observed for more
specialised goods that are carried through
specialist dealers, for example, brands of
craft tools, or large appliances.
Exclusive distribution
means that the producer selects only very few
intermediaries. [1] Exclusive distribution is
often characterised by exclusive dealing where
the reseller carries only that producer's
products to the exclusion of all others. This
strategy is typical of luxury goods retailers
such as Gucci.
↑Jump back a section
Channel mix
In practice, many organizations use a mix of
different channels; in particular, they may
complement a direct sales-force, calling on the
larger accounts, with agents, covering the
smaller customers and prospects. In addition,
online retailing or e-commerce is leading to
disintermediation. Retailing via smartphone or
m-commerce is also a growing area.
↑Jump back a section
Managing channels
The firm's marketing department needs to
design the most suitable channels for the
firm's products, then select appropriate
channel members or intermediaries. The firm
needs to train staff of intermediaries and
motivate the intermediary to sell the firm's
products. The firm should monitor the
channel's performance over time and modify
the channel to enhance performance.
Channel motivation
To motivate intermediaries the firm can use
positive actions, such as offering higher
margins to the intermediary, special deals,
premiums and allowances for advertising or
display.[1] On the other hand, negative actions
may be necessary, such as threatening to cut
back on margin, or hold back delivery of
product.
Channel conflict
Channel conflict can arise when one
intermediary's actions prevent another
intermediary from achieving their objectives.
[1] Vertical channel conflict occurs between
the levels within a channel and horizontal
channel conflict occurs between intermediaries
at the same level within a channel.

Functions of Channel Members

Functions of channel Members

There are numerous functions performed by
channel members. All of these function utilize
scarce resources of the organization.
Furthermore, these functions can be better
performed through specialization in the
function or through expertise of the function.
And on top of it each function can be
transferred within the various channel
members.
Main functions of channel members in channel
distribution are
1. Risk taking – Assuming the risk connected
with carrying out channel work or being
a part of a channel
2. Financing – Acquiring funds to finance
for inventories
3. Physical distribution of goods – Storage
and movement of physical goods
4. Negotiations – Reaching an agreement on
pricing and other terms which may be a
part of the transaction
5. Matching – Placing order with the
manufacturers and matching the orders
to the actual requirement.
6. Contacts – Maintaining contacts with
existing customers as well establishing
contacts with potential customers and
maintaining the same with the regulatory
bodies
7. Promotions – Carrying out effective
communications to stimulate purchasing
8. Information – Gathering information
about potential customers, competition
as well as tracking the environmental
factors
As we can see, the more specialized a channel
member is, the better he will perform in any
of the above given functions. Also the
functions are such that they can be shifted
within various channel members.

Distribution Channels and its Kinds

Marketing channels are the ways that goods
and services are made available for use by the
consumers. All goods go through channels of
distribution, and your marketing will depend
on the way your goods are distributed. The
route that the product takes on its way from
production to the consumer is important
because a marketer must decide which route
or channel is best for his particular product.
Manufacturer to Customer
Manufacturer makes the goods and sells them
to the consumer directly with no intermediary,
such as a wholesaler, agent or retailer. Goods
come from the manufacturer to the user
without an intermediary. For example, a
farmer may sell some produce directly to
customers. For example, a bakery may sell
cakes and pies directly to customers.
Manufacturer to Retailer to Consumer
Purchases are made by the retailer from the
manufacturer and then the retailer sells the
merchandise to the consumer. This channel is
used by manufacturers that specialize in
producing shopping goods. For example,
clothes, shoes, furniture and fine china. This
merchandise may not be needed immediately
and the consumer may take her time and try
on the items before making a buying decision.
Manufacturers that specialize in producing
shopping goods prefer this method of
distribution.
Manufacturer to Wholesaler to Customer
Consumer’s can buy directly from the
wholesaler. The wholesaler breaks down bulk
packages for resale to the consumer. The
wholesaler reduces some of the cost to the
consumer such as service cost or sales force
cost, which makes the purchase price cheaper
for the consumer. For example, shopping at
some of the warehouse clubs, the customer
may have to buy a membership in order to buy
directly from the wholesaler.
Manufacturer to Agent to Wholesaler to
Retailer to Customer
Distribution that involves more than one
intermediary involves an agent called in to be
the middleman and assist with the sale of the
goods. An agent receives a commission from
the producer. Agents are useful when goods
need to move quickly into the market soon
after the order is placed. For example, a
fishery makes a large catch of seafood; since
fish is perishable it must be disposed of
quickly. It is time consuming for the fishery to
contact many wholesalers all over the country
so he contacts an agent. The agent distributes
the fish to the wholesalers. The wholesalers
sell to retailers and then retailers sell to
consumers.

Personal Selling

Personal selling is where businesses use people
(the “sales force”) to sell the product after
meeting face-to- face with the customer.
The sellers promote the product through their
attitude, appearance and specialist product
knowledge. They aim to inform and encourage
the customer to buy, or at least trial the
product.
A good example of personal selling is found in
department stores on the perfume and
cosmetic counters.
A customer can get advice on how to apply the
product and can try different products.
Products with relatively high prices, or with
complex features, are often sold using
personal selling. Great examples include cars,
office equipment (e.g. photocopiers) and many
products that are sold by businesses to other
industrial customers.
The main advantages and disadvantages of
personal selling can be summarised as follows:
Advantages
Disadvantages
High customer attention
Message is customised
Interactivity
Persuasive impact
Potential for development of relationship
Adaptable
Opportunity to close the sale
High cost
Labour intensive
Expensive
Can only reach a limited number of customers
Point-of-sale merchandising can be said to be a
specialist form of personal selling. POS
merchandising involves face-to-face contact
between sales representatives of producers and
the retail trade.
A merchandiser will visit a range of suitable
retail premises in his/her area and encourage
the retailer to stock products from a range.
The visit also provides the opportunity for the
merchandiser to check on stock levels and to
check whether the product is being displayed
optimally.

Direct Marketing

Direct marketing is a staple for businesses -
especially for nonprofits. If you have ever
been called during the dinner hour by a
telemarketer you have been the target of direct
marketing.
Often considered annoying and invasive by
consumers, direct marketing is an aggressive
form of marketing that only works when
carefully planned and implemented.
1. What is Direct Marketing?
Direct marketing is just what it sounds like -
directly reaching a market (customers and
potential customers) on a personal (phone
calls, private mailings) basis, or mass-media
basis (infomercials, magazine ads, etc.).
Direct marketing is often distinguished by
aggressive tactics that attempt to reach new
customers usually by means of unsolicited
direct communications. But it can also reach
out to existing or past customers. A key factor
in direct marketing is a "call to action." That
is, direct marketing campaigns should offer an
incentive or enticing message to get consumers
to respond (act).
Direct marketing involves the business
attempting to locate, contact, offer, and make
incentive-based information available to
consumers.
2. Types of Direct Marketing
Three main types of direct marketing include:
Other types of direct marketing include:
distributing flyers; door-to-door solicitations;
curbside stands; FAX broadcasting; television
marketing (i.e., infomercials); coupon ads in
print media; and voice mail marketing.
3. Does Direct Marketing Work?
That depends on how you define "work."
Direct marketing does ensure people know
about your business. But aggressive,
misleading, or annoying direct marketing can
leave people with a bad impression about your
business.
Be sure to adhere to privacy and contact laws
because there are stiff fines and penalties for
direct marketers that violate direct marketing
laws.
4. Should I Consider Direct Marketing?
Every business owner should consider direct
marketing. However, the type of direct
marketing that will work for your business
depends on your industry, your business
ethics, and your budget.

Sales Promotion

Author: Jim Riley
Last updated: Sunday 23
September, 2012

Marketing - Sales promotion
Sales promotion is the process of persuading
a potential customer to buy the product.
Sales promotion is designed to be used as a
short-term tactic to boost sales – it is not
really designed to build long-term customer
loyalty.
Some sales promotions are aimed at
consumers. Others are targeted at
intermediaries (such as agents and wholesalers)
or at the firm’s sales force.
When undertaking a sales promotion, there are
several factors that a business must take into
account:

What does the promotion cost – will the
resulting sales boost justify the investment?
Is the sales promotion consistent with
the brand image? A promotion that heavily
discounts a product with a premium price
might do some long-term damage to a
brand
Will the sales promotion attract
customers who will continue to buy the
product once the promotion ends, or will it
simply attract those customers who are
always on the look-out for a bargain?
There are many methods of sales promotion,
including:
Money off coupons – customers receive
coupons, or cut coupons out of newspapers
or a products packaging that enables them
to buy the product next time at a reduced
price
Competitions – buying the product will
allow the customer to take part in a chance
to win a prize
Discount vouchers – a voucher (like a
money off coupon)
Free gifts – a free product when buy
another product
Point of sale materials – e.g. posters, display
stands – ways of presenting the product in
its best way or show the customer that the
product is there.
Loyalty cards – e.g. Nectar and Air Miles;
where customers earn points for buying
certain goods or shopping at certain
retailers – that can later be exchanged for
money, goods or other offers
Loyalty cards have recently become an
important form of sales promotion. They
encourage the customer to return to the
retailer by giving them discounts based on the
spending from a previous visit. Loyalty cards
can offset the discounts they offer by making
more sales and persuading the customer to
come back. They also provide information
about the shopping habits of customers –
where do they shop, when and what do they
buy? This is very valuable marketing research
and can be used in the planning process for
new and existing products.

The main advantages and disadvantages of
sales promotion are:

Advantages
Disadvantages
Effective at achieving a quick boost to sales
Encourages customers to trial a product or
switch brands
Sales effect may only be short-term
Customers may come to expect or anticipate
further promotions
May damage brand image

SALES PROMOTION

Sales promotion is one of the seven aspects of
the promotional mix. (The other six parts of
the promotional mix are advertising, personal
selling , direct marketing , publicity/public
relations, corporate image and exhibitions.)
Media and non-media marketing
communication are employed for a pre-
determined, limited time to increase consumer
demand, stimulate market demand or improve
product availability. Examples include contests ,
coupons , freebies, loss leaders, point of
purchase displays, premiums , prizes, product
samples , and rebates
Sales promotions can be directed at either the
customer, sales staff, or distribution channel
members (such as retailers ). Sales promotions
targeted at the consumer are called consumer
sales promotions. Sales promotions targeted
at retailers and wholesale are called trade
sales promotions. Some sale promotions,
particularly ones with unusual methods, are
considered gimmicks by many.
Sales promotion includes several
communications activities that attempt to
provide added value or incentives to
consumers, wholesalers, retailers, or other
organizational customers to stimulate
immediate sales. These efforts can attempt to
stimulate product interest, trial, or purchase.
Examples of devices used in sales promotion
include coupons, samples, premiums, point-of-
purchase (POP) displays, contests, rebates, and
sweepstakes.
Consumer sales promotion techniques
Price deal: A temporary reduction in the
price, such as 50% off.
Loyal Reward Program: Consumers collect
points, miles, or credits for purchases and
redeem them for rewards.
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.
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:-
Aisle interrupter: A sign that juts into
the aisle from the shelf.
Dangler: A sign that sways when a
consumer walks by it.
Dump bin: A bin full of products
dumped inside.
Glorifier: A small stage that elevates a
product above other products.
Wobbler: A sign that jiggles.
Lipstick Board: A board on which
messages are written in crayon.
Necker: A coupon placed on the 'neck'
of a bottle.
YES unit: "your extra salesperson" is a
pull-out fact sheet.
Electroluminescent: Solar-powered,
animated light in motion.

Kids eat free specials: Offers a discount on
the total dining bill by offering 1 free kids
meal with each regular meal purchased.
Sampling: Consumers get one sample for
free, after their trial and then could decide
whether to buy or not.
↑Jump back a section
Trade sales promotion techniques
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: Used to create
the urge of "impulse" buying and selling
your product on the spot.
Training programs: dealer employees are
trained in selling the product.
Push money: also known as "spiffs". An
extra commission paid to retail employees
to push products.
Trade discounts (also called functional
discounts): These are payments to distribution
channel members for performing some
function .