UNIT-4

DISTRIBUTION CHANNEL

 Distribution is the process of making the products or services available to the

consumer and involves movement of goods and services from manufacturers to the end
users.
 Marketing channel or distribution channels refers to an organized network of
interconnected organizations and agencies involved in the process of making a product
or service available to users or consumers.
FUNCTIONS AND IMPORTANCE OF MARKETING CHANNELS-
 Providing information about the products to the customers and about
customers, competitors and marketing conditions to the producers.
 Promoting the marketing offer and sales process.
 Negotiating with producers and consumers to settle the terms of deals.
 Helping in actual transfer of title or ownership from one organization or
individual to other.
 Acquiring stocks, maintaining inventories and catering to even small size
requirements of the consumers.
 Providing pre-sale and post-sales service.
 Risk taking
 Acting as agent of change and transferring technology to users.
 They help in decentralizing markets.
 They sell products in assortment.
CLASSIFICAITON OF INTERMEDIARIES-

Marketing intermediaries are classified on the basis of ownership of goods and by their
level-

(A) Classification by Ownership of Goods-

 Wholesalers/Distributors- These are business organizations or individuals
that buy goods and services in large quantities for resale, mostly to retailers
and other traders or to institutions, industries and commercial enterprises
for their business use.

Functions-
 They purchase, sort, assemble, grade and store goods in bulk
quantities and resell it for profit.
  They extend credit (financing), provide other services and
counseling to retailers and suppliers’.
 They provide delivery service (transportation) and sales promotion
for their customers.
 They provide marketing intelligence to their suppliers.
 Retailers- These are the business organizations and individuals that buy
goods and services mostly in small quantities, for resale to final consumers
and organizational end users. They may or may not take title to the goods.
They may handle the goods on consignment basis and sell them on
commission to end users for their personal non-business use.
 Brokers/Agents- Brokers are individuals or business organizations that
negotiate purchases or sales or both on behalf of their clients. They do not
take title to the goods or maintain any inventory and so bear no risk. They
get commission or fee for the service rendered.
(B) Classification of Intermediaries by Levels-
1. Zero-Level Channel- Zero level channels implies that there is no
intermediary or middlemen between a manufacturer and final consumer.

Manufacturer/Producer Consumer/End User

2. One-Level Channel- One level channel contains only one intermediary

such as retailer, dealer or agent/broker.

Manufacturer Retailer/Broker End User

3. Two-Level Channel- Contains two intermediaries.

Manufacturer Wholesaler/Agents Retailer Consumer

4. Three-Level Channel- Consists of three intermediaries may be agents,

wholesalers, retailers or main dealers, dealers and sub dealers.

Manufacturer Agents Redistribution Retailers Consumers

Stockiest
MARKETING CHANNEL FLOWS-

Besides physical flow, there are other flows such as information flow, title or transfer of
ownership flow, communication/promotion flow, financial transactions, and transfer of
risk flow.

1. Physical Flow- This flow takes place between suppliers, manufacturers,

intermediaries and consumers. It is often a one-way flow provided that
products are not supplied on returnable basis.
Suppliers Manufacturers Dealers Consumers

2. Information Flow- It is communication in all directions between channel

members. It comprise dispatch of catalogues, brochures, change in price
lists, advertising, placing of order by mail, phone or fax for post-sales
service sent by consumers, fixed back or marketing intelligence.

Suppliers Manufacturers Dealers Consumers

3. Ownership Title Flow- It consists of transfer of ownership and is generally

in same direction as that of physical flow. The title rests with buyer or
seller.
4. Financial/Payment Flow- It is the money flow that moves through the
channel. It originates from the consumers and flows up to the supplier
comprising payments being made through banks or other financial
institutions.
Manufacturers Dealers Customers

5. Transfer of Risks- There are many risks involved in transaction i.e. in sale
and purchase of products that channel members bear such as price change,
damage, spoilage etc.
PLANNING AND IMPLEMENTING CHANNEL STRATEGY-
Developing a channel system involves the following steps-
1. Establishing Channel Objectives- The channel objectives will
include-
 Channel Performance- Objectives to be expressed in terms
of service output levels, sales, market share and profit
contribution goals, extent of coverage of target market.
 Control Objectives- Specifying company’s role in
coordinating channel operations.
 Financial Support Objectives- Specify financial resources
to be deployed to establish and support channel operations.
 Operational Objectives- Specify the extent of support to be
given to channel members in their operations and product
servicing.
2. Determining Type of Distribution Channel- There are two types
of marketing channels-
 Conventional Marketing Channel- It comprise
independent and almost autonomous business entities, each
negotiating the terms of marketing or sale agreement through
hard bargaining without being dominated or controlled by any
other channel member. In CMC, channel members like
manufacturers, agents, brokers, retailers, wholesalers are loosely
aligned by mutual agreements, each having its own decision
making power and freedom of entry or exit.
 Vertical Marketing System- It is a channel system in
which a channel member has a dominant or controlling authority
over the functioning of other channel members. It consists of
producers, wholesalers and retailers.
3. Identifying Channel Objectives- There are four criteria that can be
used for identifying channel alternatives-
 Intensity of distribution
 Access to end users
 Existing distribution practices
 Activities and functions to be performed by channel
members.
4. Evaluating Alternatives and Selecting Channels-
 a. Evaluating Alternatives- The criteria to evaluate and assess
each channel alternative can be-
 Economic Criteria- The most important criteria to evaluate
channel alternatives is to see the expected economic
performance of each channel alternative. This would involve
sales-cost analysis of each alternative and thus determining
expected revenues and likely channel costs.
 Time Needed for Developing a Channel- Marketer will favor
those channel alternatives that take less time to develop and
mature.
 Control Criteria- If the channel members are maximizing their
profits without any consideration to sale of manufacturer’s
goods, the alternative may not be a good choice.
 Legal Regulations and Restrictions- Legislation measures and
legal restrictions including local restrictions imposed on sale and
movement of goods also affect the decisions in channel
selection.
b. Selecting the Channel Alternative- After evaluating all the
channel alternatives, the company can select the most
appropriate channel level that would help in achieving its
marketing objectives.
5. Choosing the Channel Members- Selecting channel members is a
two way process. It is not only that a producer or manufacturer
selects channel members, the intermediaries have also to decide
whether or not a manufacturer or producer suits them. The company
needs to match the expected performance of the selected channel
with its marketing requirements. While selecting the channel
participants i.e. intermediaries, the producer needs to be sure about
intermediary’s capability to deliver sales, their financial position,
capability, image, past experience in sales and services, managing
ability. On the other hand, the intermediary would also consider
standing and image of the producer – company and its
products/brands, support or help to be provided by it, expected
profit margins, suitability of the product with their line and how the
addition of the principal’s products promote and help its growth
when entering into distribution relationship with the producer.
 6. Managing Channels and Evaluating their Performance-
Effective functioning of channel system mainly depends upon an
abiding, enduring and smooth relationship devoid of any conflicts,
and demands active support of the producer in matter of pricing,
promotion and servicing of the products.
(A). Motivating Channel Participants- Channel members also need
support in form of training, supervision and encouragement. Following
are the measures that can help in motivating channel members-
 Providing incentives eg. Special rebates, rewards for attaining
results exceeding the sales quota.
 Regular contact with channel members i.e. meetings and
conferences.
(B). Evaluating and Modifying Channels- The manufacturer should
continuously evaluate and assess the channel’s performance against set
channel objectives through services output levels, sales volume, market
share, profit contribution, delivery time, market coverage, inventory
levels, accessibility, customer service and satisfaction. In case the
performance falls, the producer should identify the performance gaps,
diagnose the reasons for the same and take up necessary corrective
actions.

FACTORS TO BE TAKEN INTO CONSIDERATION WHILE SELECTING A CHANNEL

(A) Considerations Related to Product

When a manufacturer selects some channel of distribution he/she should take
care of such factors which are related to the quality and nature of the product.
They are as follows:
1. Unit Value of the Product:
When the product is very costly it is best to use small distribution channel. For
example, Industrial Machinery or Gold Ornaments are very costly products that
are why for their distribution small distribution channel is used. On the other
hand, for less costly products long distribution channel is used.
2. Standardised or Customised Product:
Standardised products are those for which are pre-determined and there has no
scope for alteration. For example: utensils of MILTON. To sell this long
distribution channel is used.
On the other hand, customised products are those which are made according to
the discretion of the consumer and also there is a scope for alteration, for
example; furniture. For such products face-to-face interaction between the
manufacturer and the consumer is essential. So for these Direct Sales is a good
option.
3. Perishability:
A manufacturer should choose minimum or no middlemen as channel of
distribution for such an item or product which is of highly perishable nature.
On the contrary, a long distribution channel can be selected for durable goods.
4. Technical Nature:
If a product is of a technical nature, then it is better to supply it directly to the
consumer. This will help the user to know the necessary technicalities of the
product.
(B) Considerations Related to Market
Market considerations are given below:
1. Number of Buyers:
If the number of buyer is large then it is better to take the services of
middlemen for the distribution of the goods. On the contrary, the distribution
should be done by the manufacturer directly if the number of buyers is less.
2. Types of Buyers:
Buyers can be of two types: General Buyers and Industrial Buyers. If the more buyers
of the product belong to general category then there can be more middlemen. But in
case of industrial buyers there can be less middlemen.

3. Size of Market:
If the market area of the product is scattered fairly, then the producer must take
the help of middlemen.
(C) Considerations Related to Manufacturer/Company
Considerations related to manufacturer are given below:
1. Goodwill:
Manufacturer’s goodwill also affects the selection of channel of distribution. A
manufacturer enjoying good reputation need not depend on the middlemen as he
can open his own branches easily.

2. Desire to control the channel of Distribution:

A manufacturer’s ambition to control the channel of distribution affects its
selection. Consumers should be approached directly by such type of
 manufacturer. For example, electronic goods sector with a motive to control the
service levels provided to the customers at the point of sale are resorting to
company owned retail counters.
3. Financial Strength:
A company which has a strong financial base can evolve its own channels.
On the other hand, financially weak companies would have to depend upon
middlemen.
(D) Considerations Related to Government
Considerations related to the government also affect the selection of channel
of distribution. For example, only a license holder can sell medicines in the
market according to the law of the government.
In this situation, the manufacturer of medicines should take care that the
distribution of his product takes place only through such middlemen who
have the relevant license.
DISTRIBUTION STRATEGIES
Exclusive Distribution:

Exclusive distribution gives the retailer an exclusive right to sell product in a defined area for a period of

time. Eg:- Luxurious Goods. Exclusive simply means limiting distribution to only one outlet in any area,

and can be a strategic decision based on applying the scarcity principle to creating demand.There are

several advantages of offering an exclusive distributorship. Some of them are given here:

i. An exclusive dealership implies greater control over the activities of the retailer.

iii. With exclusivity, it is easier to maintain higher margins for all.

iv. There is less competition at the point of sale.

v. The retailer will be willing to exert effort on ‘pushing’ products to the consumers.

There are also some of the following disadvantages that have to be considered:

i. The product receives less coverage in the target markets.

ii. The image of the retailer has an impact on the customer’s image of the brand.
Intensive Distribution:

Intensive distribution aims to provide saturation coverage of the market by using all available
outlets. The objective is to reach the customer in as many ways as possible. This strategy is best
suited for many fast-moving consumer goods (FMCG) and for many fads. Companies cover many

retailers and make the product widely available for its short shelf life. The advantages of having

an intensive distribution are as follows:

i. The product gets wider coverage in the target market.

ii. It is convenient for customers to find the product.

iii. Faster sales cycle is possible.

The disadvantages to be considered are as follows:

i. Lesser control over the retail operations.

ii. Since there is less push for the retailer, a consumer pull has to be generated.

Selective Distribution:

Selective distribution involves a producer using a limited number of outlets in a geographical area

to sell products. A few retailers are chosen to stock the product in a given region. Eg:- consumer

durables, apparel, and other relatively high-value goods use this kind of distribution network.

Multi Level marketing

Referred also as pyramid selling, network marketing and referral marketing, multi level
marketing represents a widely used marketing strategy in which the distribution channel is
compensated both for their own sales as well as for the sales of the sales people that they recruit.

The recruitment for such multi level marketing is mainly done through word of mouth. For
example, Avon, Oriflame and Tupperware (just a few examples) are using this kind of strategy of
multi level marketing. The companies are encouraging their existing distributors to recruit new
distributors by providing them a percentage of the new distributors’ sales profits.
Disadvantages of Multi level marketing
Problem comes when people do not sell the product at all but keep making new distributors. Thus,
in some cases, the chain collapses because the sale is ultimately very less.
For example – If A is the master distributor and he recruits B, then a percentage of profits made
by B will also be passed on to A. Furthermore, when B makes a sub distributor C, then a
percentage of profits of C will be given to B, but a small percentage will also be given to A. Thus
A, without doing much work is earning profits. All of them have to sell the product to earn profits,
but the problem comes when the distributor keeps on making sub distributors but none of them are
selling a large amount of products. In such a case, the chain collapses as people start leaving the
chain thereby making it unstable.

CHAPTER-17

RETAILING

Retailing is a business activity that involves selling products/services to customers for their non-
commercial, individual or family use. Retailing is the last stage of distribution process.

TYPES OF RETAILERS-

Retailers are classified into four categories-

1. Retailers Based on Ownership-

It includes-

a. Independent Retailers- are those where a retailer only a single retail unit. These can be
set up with minimum licensing requirements.
b. Chain Retailer ship- These own several retail outlets. Purchasing decisions and activities
are carried out centrally for these various outlets.
c. Leased Department- In this a retailer takes a portion of a major store or outlet on lease or
rent and is responsible for decorating his section of the store. The retailer pays an
amount equal to a percentage of his sales to the store owner.
d. Vertical Marketing Unit- It comprises all the levels of independently owned businesses
along a channel of distribution. In vertical marketing unit, all the three functions of
business- manufacturing, wholesaling and retailing- may be owned by a single person,
and comprise a fully integrated system. When the three functions are owned by two
 persons, it comprises a partially integrated system and when owned by three different
individuals they are called independent systems.
e. Consumer Cooperatives- are the retail outlets that are owned and operated by a group of
consumers. The representatives of these consumers look after the day to day operations
of the retail outlet.
2. Retailing Based on the Extent of Product Lines Handled-
These are of following types-

a. Specialty Stores- Specialty stores offer a wide selection of specially chosen goods
pertaining to a single product line. Thus these stores provide a narrow product line but a
wide assortment of choice within this product line. These stores normally target selective
and small segments of the market for sales. The stores are manned by personnel who are
knowledgeable about the product line. Eg:
b. Department Stores- Department stores are the general merchandise retailers with
considerably large retail space with separate sections allocated for toiletries, foodstuff,
baby care products etc. thus they offer a wide selection of products to consumers.
Generally the quality of goods sold in department stores ranges from average to very
good quality. Eg: they have branches in major cities.
c. Discount Stores- Discount stores are similar to the department stores, except that these
stores offer products at less than the retail price. The purpose of doing so is to obtain
profits on large volume sales. These stores are normally targeted at middle and lower
middle class customers. Eg:
d. Supermarkets- Supermarkets are retail outlets that are based on the concept of self
service. The customers can picks up products on their own, from wide varieties of brands
displayed on the shelves.
e. Hypermarkets- They are large supermarkets with the shop floor area ranging between
two lakh to three lakh square feet. These stores also offer a wide variety of products
ranging from needles to household equipment. Eg:
3. Retailing Based on the Services vs. Goods Retail Strategy Mix-
Retailing business can also be classified into goods and services-

a. Goods Retailing- Here physical products are sold. Eg:

b. Service Retailing- Here consumers do no get does not get ownership of the product.
However, he has access to the service. Eg:
Service retailing again can be subdivided into-

i. Rented Goods Services- In this case, the consumer pays a fee for the time
he uses the goods but does not own it. Eg:
 ii. Owned Goods Service Retailing- The service provider does not own the
goods he services. Eg:
iii. Non-Goods Service Retailing- Personal services are provided. No physical
goods are involved; only the time and expertise of the person who is going
to provide the service is bought for a fee. Eg:
4. Non-Store Based Retailing- It can be in the form of-
a. Direct Selling- is a process of selling the products directly to the customers by meeting
them personally in their homes, offices or other non-store locations. Eg:
b. Direct Marketing- is a process of exposing the consumer to the product or service,
through mailers, telephone calls, cable, satellite T.V., or radio and subsequently soliciting
a response from the consumer by asking him/her to contact the company through
telephone, email or post. Eg:
c. Automatic Vending- is a type of non-store retailing in which vending machines are used
to dispense goods or services to customers without the involvement of a sales person.
When customers insert a coin or card in vending machine, it delivers the product or the
service to the customer. Eg:
FRANCHISING-

Franchising is a contractual and legally binding agreement between a franchiser and a franchisee. A
franchiser may be the owner of a trade mark or trade name, a producer of goods or a service provider. He
gives the franchisee the right to do business using his trade mark, trade name, product or service. In
running his business, the franchisee has to follow the specifications laid down by the franchiser in a
contract binding the two parties. This agreement is also known as franchise agreement.

There are certain factors that companies need to consider before franchising their businesses. Companies
have to establish their brands in the market before venturing into franchising. Franchisees should be
chosen on the basis of their prior experience and local knowledge, so that they can serve the market
efficiently

ADVANTAGES AND DISADVANTAGES OF FRANCHISING-

ADVANTAGES TO THE FRANCHISER-

1. Low Capital And Low Risk

2. Speedier Expansion
3. Extended Market Penetration
4. Motivation Of The Franchisee
5. Controlling The Quality
DISADVANTAGE TO A FRANCHISER-
 1. Expenses Involved
2. Lower Profit Potential
ADVANTAGES TO THE FRANCHISEE-

1. Reduced Business Risk

2. Operational Advantage
3. Easy Financing Of The Business
4. Entrepreneurial Benefits
5. Resale Of The Business
DISADVANTAGES TO THE FRANCHISEE

1. Limited Freedom
2. Fee Payment
3. Non Performance Of The Franchiser

ADVERTISEMEN
T

Advertising is a paid form of a non-personal message communicated through the various

media by industry, business firms, non-profit organisations, or individuals. Advertising is
persuasive and informational and is designed to influence the purchasing behaviour and/or
 thought patterns of the audience. It can also be defined as the paid form of non-personal
presentation and promotion of ideas, goods and services by an identified sponsor.
The key elements of advertisement are:

 Non-personal - Unlike personal selling, advertising affords no direct personal contact

with the customer. Although this is a limitation, especially in industrial markets, it means
that the advertiser has less control over what is said and to whom.
 Paid for by an identified sponsor - Advertising is directly sponsored and paid for by the
advertiser. It is intended to create a favourable response on the part of the consumer and is
identified as being for commercial or organizational gain on the part of the sponsor.
 Promotion of ideas, goods or services - The word ‘promotion’ rather than ‘selling’ is
used; although some advertising is intended to create a sale in its own right, such as in
classified advertising or some forms of direct marketing, most advertising is only part of
the process of moving consumers nearer to making a purchase.

Characteristics of Advertising:
1. Tool for Market Promotion:

There are various tools used for market communication, such as advertising, sales

promotion, personal selling, and publicity. Advertising is a powerful, expensive, and

popular element of promotion mix.

2. Non-personal:

Advertising is a type of non-personal or mass communication with the target

audience. A large number of people are addressed at time. It is called as non-personal

salesmanship.
3. Paid Form:
 Advertising is not free of costs. Advertiser, called as sponsor, has to spend money for
preparing message, buying media, and monitoring advertising efforts. It is the
costliest option of market promotion. Company has to prepare its advertising budget
to appropriate advertising costs.

4. Wide Applicability:

Advertising is a popular and widely used means for communicating with the target market. It
is not used only for business and profession, but is widely used by museums, charitable trusts,
government agencies, educational institutions, and others to inform and attract various target
publics.

5. Varied Objectives:

Advertising is aimed at achieving various objectives. It is targeted to increase sales, create

and improve brand image, face competition, build relations with publics, or to educate
people.

6. Forms of Advertising:

Advertising message can be expressed in written, oral, audible, or visual forms. Mostly,
message is expressed in a joint form, such as oral-visual, audio-visual, etc.

7. Use of Media:

Advertiser can use any of the several advertising media to convey the message. Widely used
media are print media (newspapers, magazines, pamphlets, booklets, letters, etc.), outdoor
media (hoardings, sign boards, wall-printing, vehicle, banners, etc.), audio-visual media
(radio, television, film, Internet, etc.), or any other to address the target audience.

8. One-way Communication:

Advertising involves the one-way communication. Message moves from company to

customers, from sponsor to audience. Message from consumers to marketer is not possible.
Marketer cannot know how far the advertisement has influenced the audience.

PROCESS OF DESIGNING ADVERTISEMENT PROGRAM

The following are the steps involved in the process of advertising:

1. Briefing: the advertiser needs to brief about the product or the service which has to be
advertised and by doing the analysis of the product.

2. Knowing the Objective: Marketer should first know the objective or the purpose of
advertising. i.e. what message is to be delivered to the audience. The marketing
communication objectives of a company involve creating awareness and knowledge about
the company’s product enhancing the image of the product/service by developing suitable
positioning strategies. However, following can be the objectives of advertisement-

1. To get the attention of customer.

2. To hold his interest in company’s product.
3. To stir up desire in the customer for the product.
4. To make him purchase the company’s product.
3. Research: this step involves finding out the market behavior, knowing the
competitors, what type of advertising they are using, what is the response of the
consumers, availability of the resources needed in the process, etc.

4 Target Audience: the next step is to identify the target consumers most likely to
buy the product. The target should be appropriately identified without any confusion.
For e.g. if the product is a health drink for growing kids, then the target customers will
be the parents who are going to buy it and not the kids who are going to drink it.

5 Media Selection: now that the target audience is identified, one should select an
appropriate media for advertising so that the customers who are to be informed about
the product and are willing to buy are successfully reached.

6 Setting the Budget: then the advertising budget has to be planned so that there is no
short of funds or excess of funds during the process of advertising and also there are
no losses to the company. Companies usually follow certain procedures for allocating
marketing communication budgets. They are-

 Objective and Task Method-

In this method, a company first determines the objectives to be
achieved through the communication. After determining the
 objectives, the tasks necessary to achieve those objectives are
arrived at. Subsequently, the finances required to perform such
tasks are evaluated and accordingly, a comprehensive budget
based on the amount required for all the tasks to be performed
is allocated.
 Competitive Parity Method-
Some companies adopt this method in which the marketing
communication budget is developed on the basis of the budget
allocated by the competitors for such purposes. In this method,
the budget allocated is almost equal to the amount allocated by
the competitor for his marketing communication process.
 Percentage of Sales Method-
The percentage of sales method is a process in which the
current and future sales of a company are estimated and some
percentage of the sales figure is allocated as the budget for
marketing communication process.
 Affordable Method-

Some companies adopt this method in which the marketing

communication budget is assigned on the basis of the company’s
affordability. Irrespective of the amount the sales promotional
activity requires, the company allocates a budget according to what
it can afford.

7 Designing and Creating the Ad/ designing of advertising message: first the
design that is the outline of ad on papers is made by the copywriters of the agency,
then the actual creation of ad is done with help of the art directors and the creative
personnel of the agency. The factors influencing the design of the advertisement
message are-

 Message Content-
 The content of the message specifies what is to be conveyed to the
audience through advertising or any other communication process.
 A message has to use an appeal to be effective.
  There are 3 types of appeals that can be generally used to convey the
message-
1. Rational Appeal-
 When companies use rational appeal in their advertisements or
other communication, they assume that customers make logical and
rational decisions after information processing. When using a
rational appeal, a company highlights the benefits and value
associated with the product and tries to convince the target
audience that the product delivers these benefits.
2. Emotional Appeal-
 A company may try to use emotional appeal in a positive or
negative manner to attract customers and persuade them to
purchase the product. Negative emotional appeal depends on
feelings such as shame, guilt, fear etc. to persuade people to abstain
from smoking and drinking encourage them to lose weight etc.
Positive emotional appeal depends on feelings such as humor,
love, pride and joy.
3. Moral Appeal-
 Moral appeal tries to encourage customers to ride on the right path
and follow a vitreous life. Eg.-
 Structure-
 The message structure determines how attractive it is to the target
audience. Generally, the message structure is designed to influence
the audience to an action for purchase of the product. It is better to
put forth the strongest points first.
 Format-
 The message format should be strong and supportive of the type of
medium being used. If the radio is used to convey the message,
then crisp, short and sweet words have to be used with clear
 pronuouncination. If the print media is to be used, then the text of
the message, and alignment and placement of the text and pictures
should be appropriate so that the advertisement gains the maximum
attention of the viewers. If T.V is used as a medium, it has the
advantage of audio visual effects which have to be utilized to the
fullest extent possible.
 Source-
 The message source also carries immense significance. That is the
reason why many companies opt for celebrity endorsement. Eg.-

8 Perfection: then the created ad is re-examined and the ad is redefined to make it

perfect to enter the market.

9 Place and Time of Ad: the next step is to decide where and when the ad will be
shown. The place will be decided according to the target customers where the ad is
most visible clearly to them. The finalization of time on which the ad will be
telecasted or shown on the selected media will be done by the traffic department of
the agency.

10 Execution: finally, the advertisement is released with perfect creation, perfect

placement and perfect timing in the market.

11 Performance: the last step is to judge the performance of the ad in terms of the
response from the customers, whether they are satisfied with the ad and the product,
did the ad reached all the targeted people, was the advertise capable enough to
compete with the other players, etc. Every point is studied properly and changes are
made, if any.

Advertising Objectives:
Advertising is aimed at achieving various objectives. Objectives may be commercial or social
in nature. Prof. Kelly gave the concept of DAGMAR – Defining Advertising Goals for
Measuring Advertising Results – in relation to advertising objectives. Broadly, advertising
objectives can be categorized into three classes, such as informative objectives, persuasive
objectives, and reminder objectives.
However, following are the objectives:
1. To Inform Buyers:

This objective includes informing customers regarding product’s availability, price, features,
qualities, services, and performance, changes made in the existing product and introduction of
new products. Company also highlights its location, achievements, policies, and performance
through advertising.

2. To Convince Buyers:

Company uses advertisement to convince the buyers about superior advantages offered by its
product. Company communicates competitive advantages the product offers to induce
customers buy it. Comparative advertising is used to prove the additional benefits of product
at a given price.

3. To Remind Buyers:

Marketer uses advertising to remind the buyers regarding existence of company, products,
maintenance of quality, superior services, and chasing customer-orientation.

4. To Face Competition:
Advertising enables the firm to respond the competitors strongly. It helps the firm to
distinguish its total offerings from competitors. In competitive marketing environment, the
firm cannot survive without an effective advertisement.

5. To Achieve Sales Targets:

A company can advertise its products in various media to attract customers situated in
different parts of the world. Even, non-users can be converted into users and usage rate can be
increased. Thus, company can achieve its sales objectives by advertisement.

6. To Build and Improve Brand Image:

Advertising is used for brand recognition and acceptance. A company can distinguish its
brand by magnifying major benefits the product offers. Advertisement attracts customers
toward the brand; they try it and accept it over time.

7. To Help or Educate People:

It educates people about availability of new products, its features and qualities, price,
services, and other related aspects.

8. To Build Company Image and Reputation:

 A company opts for advertisement to build prestige and reputation in the market. Many
companies advertise its policies, activities, and achievements to make a permanent place in
the mind of people.

9. To Assist Sales Force and Middlemen:

Advertising is an aid to middlemen and salesmen. Advertising also popularizes the name of
dealers.

Public Relations (PR)/Publicity

Public Relations (PR) is another tool of promotion al mix designed “to improve, maintain or
project a company or product image ”
Public Relations is referred to everything that is conducted to improve mutual understanding
between an organisation and target groups and all those with whom it comes into contact both
within or outside the organisation with the aim of building goodwill and good image. The UK
Institute of Public Relations has given the following definition-
“Public Relations is the deliberately planned and sustained effort to establish and maintain
mutual understanding between an organisation and its publics”.
The above definition focuses on (i) good relations with the publics and (ii) creating goodwill
among the organisation s’ publics. The public of PR refer to those groups of people with whom
the organisation wants to communicate specifically like customers, trade, media, workforce and
other target audiences to whom messages need to be communicated.
Many authors use the term “Publicity” instead of term “Public Relations”. However, publicity is
defined as non-personal stimulation of demand for a product, service or business unit by
planting commercially significant news about it in a printed medium or obtaining favourable
presentation of it upon radio, TV or stage that is not paid by sponsored.

Importance of PR

1. It helps in creating a good and favourable image of the company products in the eye5
of consumers

2. It helps in the introduction of new products by providing information about them to

news media by press releases or in any other way

3. It helps in improving the sagging image of an existing product and in repositioning it in

the market

4. It helps in influencing the national and local governments on decisions affecting the
organisations.
 5. It helps in influencing specific groups and establishing relationships with them which
may be favourable to organisations

6. It helps in keeping good and healthy relations with various agencies like the
government, trade unions, customers, community and other agencies, which is crucial for the
success of the company.

Developing a Marketing PR (Publicity) Programme/ Campaign

Designing and developing a marketing PR programme involves-

1) Determining publicity objectives- Each company will have its own publicity/ PR
requirements depending upon the type of products. So every campaign will have different
objective. They can be-
(l) to Create awareness among publics of the company’s productive services or performance

(2) to build company’s credibility and image

(3) to motivate and help distributors and channel members and salesforce sell the product

(4) to save promotion cost

(5) to promote a social cause

2. Designing Messages and Selecting PR Tools

The next step is to find PR messages for communication to various publics. The messages may
be in the form of news stories, Editorials, arguments, features, interviews in printed media or on
TV, and radio speeches. PR information to the public can be given through press releases,
company magazines, special numbers, journals, newsletters, annual reports or through formal
and informal talks by the company management or through films and television programmes.
Some major tools of marketing PR (Publicity) are given below-

(1) Company Publications/Literature/Audio-Visuals: Company publications include

company magazines, annual reports, newsletters, brochures, booklets, pamphlets, audio-
visual materials This tells the audiences about the company, its products and services
(2) News and Press-Releases: it is one the most important tool for PR. For this they have to
maintain relationship with the media editors and reporters to gain their favour and get
news stories, features, articles, editorials accepted for publications.

(3) Events: Companies can organise and sponsor a number of special events such as sports
tournaments, music, dance and other arts and cultural Programmes, contests and
competitions, exhibitions, to capture the attention of the target audiences.
 (4) Advertising: Messages involving PR can also be communicated through advertising e.g.,
that the company is the best, the market leader in a product-market.

(5) Social Service Activity: Companies can build goodwill by donating or contributing
money and efforts to good social or community causes. It can be done through product
coupons signifying that a small part of money received from sale of the product would
be given for a charitable purposes say for eradication of Aids, leprosy, for education of
orphans etc.

3. Implementing the PR Programme

Publicist needs special and creative skill in writing a news, story or message. He must be
competent in organising and conducting meetings and should be well skilled in public speaking
and reporting. They need to have the ability to maintain personal relationships with the media
correspondents and editors. Now-a-days, PR or publicity work is given to PR agencies.

4. Evaluating PR Effectiveness

Though evaluating PR results is a difficult and complicated exercise. However, a best method
is-
Exposures: It means to measure the coverage that was given to the company and its products in
print media or upon radio and TV and number of persons exposed to company related news.
This can be measured in terms of column covered, number of paragraphs, air time on radio and
TV, estimated audiences of readers, listeners and viewers to assess.

Personal Selling
Meaning of Personal Selling:
Personal selling is an act of convincing the prospects to buy a given product or service. It is the
most effective and costly promotional method because there is face to face conversation
between the buyer and seller and seller can change its promotional techniques according to the
needs of situation.
According to American Marketing Association, “Personal selling is the oral presentation in a
conversation with one or more prospective purchasers for the purpose of making sale; it is the
ability to persuade the people to buy goods and services at a profit to the seller and benefit to
the buyer”.
Features of Personal Selling:
The main features of personal selling are:

i. It is a face to face communication between buyer and seller.

ii. It is a two way communication.
iii. It is an oral communication.
iv. It persuades the customers instead of pressurizing him.
v. It provides immediate feedback.
vi. It develops a deep personal relationship apart from the selling relationship with the buyers
and customers.

Personal Selling Process:

The process of personal selling includes prospecting and evaluating, preparing, approach and
presentation, overcoming objections, closing the sale and a follow up service.
1. Prospecting and evaluating:

The effort to develop a list of potential customers is known as prospecting. Sales people can
find potential buyers, names in company records, customer information requests from
advertisements, telephone and trade association directories, current and previous customers,
friends, and newspapers. Prospective buyers predetermined, by evaluating (1) their potential
interest in the sales person’s products and (2) their purchase power.
2. Preparing:
Before approaching the potential buyer, the sales person should know as much as possible
about the person or company.
3. Approach and presentation:
During the approach, which constitutes the actual beginning of the communication process, the
sales person explains to the potential customer the reason for the sales, mentions how the
potential buyer’s name was obtained, and gives a preliminary explanation of what he or she is
offering. The sales presentation is a detailed effort to bring the buyer’s needs together with the
product or service the sales person represents.
4. Overcoming objections:
The primary value of personal selling lies in the sales person’s ability to receive and deal with
potential customers’ objections to purchasing the product. In a sales presentation many
objections can be dealt with immediately. These may take more time, but still may be
overcome.
5. Closing the sale:
Many sales people lose sales simply because they never asked the buyer to buy. At several
times in a presentation the sales person may to gauge how near the buyer is to closing.
6. Follow up:
To maintain customer satisfaction, the sales person should follow up after a sale to be certain
that the product is delivered properly and the customer is satisfied with the result.

Objectives of Personal Selling:

The major objectives of salesmanship are as follows:

(i) Attracting the Prospective Customers:

The first and foremost objective of a salesperson is to attract the attention of people who might
be interested to buy the product he is selling.
(ii) Educating the Prospective Customers:
The salesman provides information about the features, price and uses of the product to the
people. He handles their queries and removes their doubts about the product. He educates them
as to how their needs could be satisfied by using the product.
(iii) Creating Desire to Buy:
The salesman creates a desire among the prospective customers to buy the product to satisfy
specific needs.
(iv) Concluding Sales:
The ultimate objective of personal selling is to win the confidence of customers and make them
buy the product. Creation of customers is the index of effectiveness of any salesperson.
(v) Getting Repeat Orders:
A good salesperson aims to create permanent customers by helping them satisfy their needs and
providing them product support services, if required. He tries for repeat orders from the
customers.

Functions of Personal Selling:

The important functions of a salesperson are as follows:

1. Personal selling is an important method of demonstrating the product to the prospective

customers and giving them full information about the product. It is easier to persuade a person
to buy a product through face-to-face explanation.
2. In most of the situations, there is a need of explaining the quality, uses and price of the
product to the buyer to help him purchase the want satisfying product. Thus, salesmanship is
also very important.
 3. If a product cannot fully satisfy the needs of the customers, the information is transmitted
to the manufacturer who will take appropriate steps.
4. There is direct fact-to-face interaction between the seller and the buyer. The salesperson
can receive feedback directly from the customer on a continuous basis. This would help him
in modifying his presentation and taking other steps to sell satisfaction to the buyer.

Requisites of Effective Personal Selling:

In order to achieve effective personal selling, the following requirements
must be fulfilled:
1. Personal Qualities:

An effective salesman must possess certain physical, mental, social and vocational qualities.
2. Training and Motivation:

In order to achieve effective personal selling, it is essential to train and motivate the sales
persons. The training programme for the sales persons should aim to provide knowledge of
various selling programme and various selling techniques among the trainees. Eg- a salesman
must be trained how to understand the nature of a customer, how to arouse his interest in the
product, and how to close the sales.
3. Wide Knowledge:
A salesman should have wide knowledge about the following:

(a) Self:
The salesman must know himself in order to make use of his personality in selling the products.
He should try to know his strong and week points and remove his weak points through training
and experience. He should continuously undertake his self- assessment to know what he
requires in order to be an effective salesman.
(b) Employer:
The salesman is a representative of his employer. He should have a thorough knowledge of the
origin and growth of the employer’s business. He must know objects, policies and
organisational structure of the employer’s firm. This will enable the salesman to make use of
the plus points of the firm selling the product.
(c) Product:
The salesman must have full knowledge about the product he sells. He must know what the
product is and what are its special features and uses. He should also know the whole process
of production so that he may be able to answer the customer’s queries and objections
satisfactorily. Mostly, the customers are ignorant about the features, technical details, and
benefits of the product and they expect the salesman to give them sufficient information about
it.

(d) Competitors’ Products:

The salesman must have complete knowledge about the competitive products because buyers
often compare several products before purchasing one of them. The salesman should know the
positive and negative features of the various substitutes so that he is in a position to prove the
superiority of his product.

(e) Customers:
Before selling something, a salesman must have sufficient knowledge about the customers to
whom he is going to sell. He must try to understand the nature of customers, their habits and
their buying motives if he is to win permanent customers. There are a number of considerations
which make the prospect to buy a particular product. He should deal with the customer
according to his nature. He should also try to know whether a customer intends to purchase for
personal use or for business use.

Advantages of Personal Selling:

1. The key advantage personal selling has over other promotional methods is that it is a two-
way form of communication. In selling situations the salesperson can adjust the message as
they gain feedback from customer. So if a customer does not understand the initial message
the salesperson can make adjustments to address questions or concerns.
2. The interactive nature of personal selling helps in building relationships with customers,
particularly in the business-to-business market and with those companies that either sell
expensive products or sell lower cost but high volume products (i.e., buyer must purchase in
large quantities).
3. Personal selling is the most practical promotional option for reaching customers who are
not easily reached through other methods. The best example is in selling to the business
market where, advertising, public relations and sales promotions is not possible.

Disadvantages of Personal Selling:

1. Most customers have had some bad experiences with salespeople who they perceived were
overly aggressive or even downright annoying.
2. A second disadvantage of personal selling is the high cost in maintaining this type of
 promotional effort. Costs incurred in personal selling include:

(i) High Cost-Per-Action (CPA):

Since personal selling involves person-to-person contact, the money spent to support a sales
staff (i.e., sales force) is very high. These costs include compensation (e.g., salary, commission,
and bonus), providing sales support materials, allowances for entertainment spending, office
supplies, telecommunication and much more.

(ii) Training Costs:

Most forms of personal selling require the sales staff be extensively trained on product
knowledge, industry information and selling skills. For companies that require their salespeople
attend formal training programs, the cost of training can be quite high and include such
expenses as travel, hotel, meals, and training equipment while also paying the trainees’ salaries
while they attend.
3. High Job turnover. For companies that assign salespeople to handle certain customer
groups (e.g., geographic territory), turnover may leave a company without representation in a
customer group for an extended period of time while the company recruits and trains a
replacement.

Sales Promotion
Sales promotion is referred to as a tool of communicating with an audience through
a variety of non-personal non-media vehicles or short term incentives to encourage
purchase or sale of a product or service.

Objectives of Sales Promotion

1. To boost sales in the short and long term
2. To increase profit
 3. To launch a new product
4. To encourage brand loyalty
5. To clear the hold stock

PROCESS OF DEVELOPING SALES PROMOTION PROGRAM

Designing sales promotion program, involves the following steps:
(i) Identifying the target audiences
(ii) Determining sales-promotion objectives
(iii) Deciding on sales promotion vehicles (Incentives)
(iv) Setting sales promotion budget
(v) Evaluating sales promotion effectiveness.
Step 1. Identifying the Target Audiences.
In an effort to boost purchase of a product or service, a marketing manager requires the
cooperation and attention of all the three parties — consumers or the end users, the distribution
channel members (i.e. the trade), and the salesforce. Thus sales promotion programme aims at
three target audiences.
(i) Consumers or the end users
(ii) Trade i.e. distributors, wholesalers, retailers (channel members)
(iii) Salesforce
The company will need to study and analyse the characteristics (nature and structure) of all
these three types of audiences to arrive at the marketing opportunities available in market
place. An in-depth study and analysis of the nature and makeup of the selected target audience
will provide guidelines for determining sales promotion objectives.
Step 2. Determining Sales Promotion Objectives
The sales promotion objectives are derived from overall marketing objectives. Again sales
promotion objectives for different target audiences will differ. For example,
(a) Sales Promotion Objectives for consumers i.e. the end users’ may
be-
(i) to encourage the non-user to visit the store or showroom and make an enquiry.
(ii) to make the customer try the new product
(iii) to encourage the consumer to purchase more units and stock its product.
(iv) to attract the customer using competitors’ brands to its product
(b) Sales Promotion Objectives for the trade may be -
(i) to elicit cooperation of the trade or retailers in the company’s total marketing
effort.
(ii) inducing them to maintain larger inventory
(iii) encouraging off-season purchase
(iv) to motivate distributors to provide more shelf or floor space to company’s
products and push them.
(v) to encourage them to sell the product at lower price
(vi) to build brand loyalty of retailers/stockists.
(C) Sales Promotion Objectives for Salesforce may be
(1) to encourage sales force to make more calls on consumers and distributors.
(2) to make them put in more efforts and emphasis on certain brands or new products
or during particular seasons such as off-season.

Step 3. Deciding on Sales Promotion Vehicles (Incentives)

After having established the sales promotion objectives, the next task is to select promotion
tools that may achieve the set objectives. While selecting the sales promotion tools and
incentives, marketers have to keep in view the characteristics of the target audience,
competitors’ offers and cost effectiveness of each vehicle.
A. Consumer-Promotion Vehicles/Incentives: Some major sales promotion
incentives to induce the consumers (end users) are given here.
(1) Coupons or Vouchers: Manufacturers offer many types of coupons or vouchers
as tools of sales promotion. A coupon or a voucher is a certificate that entitles a
customer to exchange it for some specific good or service, cash gift of a stated saying
(discount) on the purchase of a product per its conditions. These coupons can be inserted in a
pack of a product or in a newspaper or magazine ad or mailed directly to a customer. These
coupons induce the consumers and channel members to stock up on the product. They have
special importance when a new product is launched or for strengthening the image of an
existing product. Gift coupons or tokens are coupons or tokens enclosed with a product in a
pack and a number of them can be exchanged for a gift as mentioned in the coupons.
(2) Price-Pricks: These are offers of “Save off" the normal price of a product (e.g.,
Rs. 12/ Off) printed on the package itself, it is called reduced price pack. The package
may contain 2 units instead of a single packet and offered at the price of one (two for
the price of one) or it may be a banded pack containing an additional unit of related
product at the same price. Eg- a toothbrush with a tooth paste or an extra quantity of
the product in the pack (20% extra). Then another version is BUY 1, GET 1 FREE!
The offer is printed on pack meant for free distribution.
(3) Free Trials (Samples): Customers are given or sent free samples to try for
themselves in the hope that they will buy the product. This is a very effective device
in launching a new product. Manufacturers of cars, motorcycles and scooters often
offer free test drives to evince interest in their products.
(4) Cash Refund Offers: In some cases, cash refund is made after the product is
purchased. The consumer is asked to send the bill of purchase to the manufacturer or
distributor and get a given amount of rebate refunded.
(5) Point of Purchase (POP) Displays and Demonstrations (In- Store
Promotions): Some marketers think that the audiences give their best attention when
they are shopping in a store or a retailing shop. These promotional tools include
displays, at points of purchase (in stores or at retail outlets), of posters, stickers,
electronic and neon- sign boards. Demonstrations are also arranged at the retailing
outlets or at super stores to convince the consumers about the performance of the
product. Eg-
(6) Prizes and Contests: Some companies induce customers to take part in contests,
jingles, quizzes and win prizes. Some companies place lottery tickets in packs while
some others give it on purchase of their product. The tickets give them a chance to win prizes
in the form of cash, merchandise, gift coupons, free air tickets, free trips, two or three nights’
stay in a hotel at a hill resort etc. Now many companies like Pepsi Cola, Wills, Coca Cola
provide chance to win prizes in contests.
(7) Gifts: A number of companies distribute free gifts to their customers through their
dealers and distributors. Gifts include pens, calendars, chairs, table decorations. They
carry the name of the company. Then there can be other types of incentives like
premiums or extra free merchandise like 20gm free with 50gm pack of Coffee, Cash
dividends, patronage awards etc. etc.
B. Trade - Promotion Incentives: Some major incentives for retailers, dealers and
channel members are -
(1) Price discounts on purchase of product (s) in a particular period. They are
accounted for in the bills.
(2) Bonus offers: The retailers or dealers are offered special bonus terms on bulk
purchases e.g. 13 to a dozen or 8 items charged is 6 on a minimum order.
(3) Allowances for displaying or arranging the company's product in a special way or
advertising the company's product. These are called display allowance, advertising
allowance.
(4) Free Goods: Some companies offer free speciality items like pads, pens, ashtrays,
bags to their dealers. Bonus offers as mentioned above are also termed as free goods
on purchase of bulk quantity of merchandise.

(C) Incentives for Salesforce

These incentives include bonuses, contests, gifts such as appliances, free vacation or trips to
persons getting the highest sales volumes etc.

Trade shows
Manufacturers also organises trade Shows, conventions, sales contests and many other shows
for select audiences to promote their products. In these shows, products are exhibited and their
use demonstrated. Buyers can examine the products themselves. A number of companies book
space in 5-star hotels for such displays to attract upper class customers.
In developing a promotion programme, the mangers have to make decisions such as the size of
incentives, timing of promotion, conditions of participation and the sales promotion budget.

Step 4. Setting Sales Promotion Budget

Market managers who are charged with the responsibility of developing and implementing
sales promotion programme must estimate the budgeted cost of incentives for implementing
various promotional activities. They must take into the account the administrative cost and
incentive cost of each tool.
There are two approaches to estimating the sales promotion budget. There are two approaches-
(i) Top-down approach: In this approach, the top management decides the
amount of sales promotion budget. The expenditure on promotional activities
is to be limited to the authorised budget provision. The main defect of this
approach is that decisions made are arbitrary and may be irrational.

(ii) Bottom-up approach: This approach is a sort of objective task approach. In

this approach, the target audiences are identified, promotional objectives established
and then activities and incentives are decided to fulfil the set objectives. Then costs to
be incurred in implementing each promotional activity are estimated. The total costs
for performing all sales promotional activities give the total budget estimates. The
estimated budget is discussed with the top management in details and got reviewed
and approved.
In fact, sales promotion budget is a part of the promotional budget which again is a component
of overall marketing budget. Therefore, the decision on it should be made during the process
of setting budget for the overall promotional programme.

Step 5. Evaluating Sales Promotion Performance

Evaluation of promotion performance cart be made before implementing an activity on a
sample basis (i.e. Pretesting) and during and after the implementation of sales promotion
activity (i,e. Post-testing). Both involve marketing research studies.
Pretesting is a study used to evaluate audience response to a sales promotion activity before a
decision is 'made to implement the activity on a full scale. The incentive is tried on a sample
out of the target audience and results recorded.
Post testing is a research study used to evaluate actual audience response to a Sales
promotion activity during its implementation or after It has been implemented in full. This
study will involve examining sales data, counting number of orders, number of coupons
redeemed, number of enquires/orders received during trade Shows etc.

Direct Marketing
Direct marketing occurs when businesses address customers through a multitude of channels,
including mail, e-mail, phone. Direct marketing messages involve a specific “call to action,”
such as “Call this toll-free-number” or “Click this link to subscribe.” The results of such
campaigns are immediately measurable, as a business can track how many customers have
responded through a message’s call to action.

Types of Direct Marketing

Direct marketing is spreading rapidly and it is done by a number of ways. Following are the
forms of direct Marketing that are employed by most of the organizations in the business
community.

Telemarketing
Telemarketing is that form of direct marketing in which telephone is used for the purpose of
communicating with the customers buys the products directly from the sellers. Telemarketing
is further divided into the following two types.
 Outbound Telephone Marketing

 Inbound Toll Free

Outbound Telephone Marketing

Outbound telephone marketing is used to sell the products directly to the customers by calling
them on the telephone.

Inbound Toll Free

In this type, orders are received from customers on the telephone as a result of ads on
television or radio etc. There are many customers who admire the unsolicited telemarketing,
but most of them feels disturbance by receiving such unsolicited sales messages on the
telephone. Therefore, certain legislation is being made for the protection of people from this
unsolicited telemarketing during specific hours of the day.

Direct Mail Marketing

These forms of direct marketing include direct mail marketing in which an offer, reminder,
announcement or other things are sent to the address of a particular person. Direct one to one
Communication takes place in direct mail marketing. There are several advantages of using
direct mail marketing which are as follow.
 It is much more flexible.

 It is personalized.

 Selection of target market is high.

  The results are easily measured.
The cost of direct mail marketing is relatively higher than other forms of direct marketing,
but in this case the prospects are quickly converted into the potential customers. Direct mail
marketing is further divided into the following three types.
 Fax Mail

 E-mail

 Voice mail
Catalog Marketing
In catalog marketing, catalogs are mailed to a specified list of customers or provide physical
catalogs to a group of people at stores in order to sell particular products. A catalog is a
combination of at least eight printed pages which includes details of multiple products along
with the identification of direct ordering mechanism. A complete line of goods is offered
through catalogs by some stores. There are many direct retailers who place the catalogs of
their product on the internet. The internet based catalogs are passive in nature and therefore
need to be marketed electronically.
Direct Response Television Marketing
There are two forms of direct response television marketing which are as follow.
 Direct Response Advertising

 Home Shopping Channels

Direct Response Advertising
When infomercials or television spots are aired by the marketers, direct response advertising
takes place.

Home Shopping Channels

These consist of complete channels or programs that are specified in selling goods or
services.
In the coming years linkages with the internet technology along with the two sided interactive
television would transform the television shopping much sophisticated from the current type
and it would be regarded as one of the most effective forms of direct marketing.

Kiosk Marketing
There are certain organizations that have sophisticated machines called kiosks, which provide
information about the particular products and have an effective ordering mechanism. These
kiosk machines are placed in the main area of the cities like airport, stores and other famous
locations. Some business marketers also place their kiosk machines at the trade shows for the
promotion of their products. Moreover the merger of the real world with the virtual world of
commerce is making kiosks as much more online in nature.

Online Marketing & Electronic Commerce

One of the effective forms of direct marketing is the online marketing & the electronic
commerce, which is carried out completely in an electronics’ way. There are online computer
systems that connect the customers with the seller in an online manner so that that can make
transactions.
Online marketing & electronic commerce is further divided into the following two forms.
 Commercial Online Services

 Internet

Commercial Online Stores

The information and marketing services are offered by the authorized commercial online
service provider who charges a monthly fee for its subscribers.
Benefits of Direct Marketing
Direct marketing appeals to numerous marketers because its results can be assessed directly. On
the other hand, standard advertising uses indirect measurements, like awareness or engagement,
as there is no direct response from a customer. Measurement of results is a basic aspect in
effective direct marketing.
Increase consumer loyalty: Direct marketing can help you build direct relationships with the
consumers. It is possible to customize promotions, letters and offers to create an instant link with
your customer and improve their personal connection to your company.
Flexible Targeting: Direct marketing lets you talk directly, determine, segregate and
communicate with well-defined target markets. This implies you get a better conversion and rate
of success than if you tried communicating to everybody in the mass market.
Cost-Effectiveness: Direct marketing which is aimed at a certain audience will help you set
sensible sales targets and improve sales results on a limited marketing budget. Companies can
run effective and purposeful direct marketing promotions at a fraction of the price of broadcast
advertising.
Quick Delivery: Direct marketing is both quick and versatile in attaining results. This is
specially valid for telemarketing, one of the direct marketing tools, as the outcomes of a
conversation can be recorded right away and scripts adjusted to improve results.