Sales promotion is one of the most loosely used terms in the marketing vocabulary. We define sales promotion as demand stimulating devices designed to supplement advertising and facilitate personal selling. In other words, sales promotion signifies all those activities that supplement, co-ordinate and make the efforts of personal selling and advertising more effective. It is non recurrent in nature which means it cant be used continuously. Concept of Sales Promotion Sales promotion consists of diverse collection of incentive tools, mostly short-term designed to stimulate quicker and / or greater purchase of a particular product by consumers or the trade. Where as advertising offers a reason to buy, sales promotion offers an incentive to buy. Sales promotion includes tools for consumer promotion (for example samples, coupons, prizes, cash refund, warranties, demonstrations, contest); trade promotion (for example buying allowances, free goods, merchandise allowances, co-operative advertising, advertising and display allowances, dealer sales contests); Continue reading
Marketing Concepts
Factors Affecting Pricing Decisions
Pricing the product is one of the important element in marketing mix. Until recently it has been one of the most neglected areas. Even today, pricing in some firms is simply based on the concepts of cost, market position, competition and necessary profits. Most important Factors affecting Pricing Decisions Objectives of the Business : There may be various objectives of the firm such as getting a reasonable rate of return, to capture the market, maintenance of control over sales and profits etc. A pricing policy thus, should be established only after proper consideration of the objectives of the firm. Cost of the Product: Cost and price of a product are closely related. Normally, the price cannot or shall not fixed below its cost (including the product, administrative and selling costs). Price also determines the cost. Market Position. The prices of the products of different producers are different either because of Continue reading
Brand-Product Matrix
To characterize the product and branding strategy of a firm, one useful tool is the brand-product matrix, a graphical representation of all the brands and products sold by the firm. In the brand-product matrix all products offered under different brands are represented by columns. This helps marketers understand the current brand line and explore further opportunity in expanding the product line. In the brand-product matrix all current existing brand are represented in form of rows referred to as brand portfolio. The brand portfolio analysis is essential to design and develop new marketing strategies to target a given product category. Brand-product matrix helps in showcasing different brands in any given product category. In that respect brand hierarchy is graphical representation of company’s products and its brands. Hierarchical structure starts with corporate brand and then showcases different product category and below brands. This sort of presentation helps devise marketing strategy at many Continue reading
Concept of Distribution Channels in Marketing
The Importance of Distribution Most producers use intermediaries to bring their products to market. They try to develop a distribution channel (marketing channel) to do this. A distribution channel is a set of interdependent organizations that help make a product available for use or consumption by the consumer or business user. Channel intermediaries are firms or individuals such as wholesalers, agents, brokers, or retailers who help move a product from the producer to the consumer or business user. A company’s channel decisions directly affect every other marketing decision. Place decisions, for example, affect pricing. Marketers that distribute products through mass merchandisers such as Wal-Mart will have different pricing objectives and strategies than will those that sell to specialty stores. Distribution decisions can sometimes give a product a distinct position in the market. The choice of retailers and other intermediaries is strongly tied to the product itself. Manufacturers select mass merchandisers Continue reading
Advertising Agency – Meaning, Functions and Benefits
An advertising agency is an independent organization set up to render specialized services in advertising in particular and in marketing in general. Advertising agencies started as space brokers for the handling of the advertisements placed in newspapers. Over the years, the function of the agencies has changed. Their main job today is not to aid media but to serve advertisers. An advertising agency or ad agency is a service business dedicated to creating, planning and handling advertising (and sometimes other forms of promotion) for its clients. An advertising agency is independent from the client and provides an outside point of view to the effort of selling the client’s products or services. An agency can also handle overall marketing and branding strategies and sales promotions for its clients. Typical ad agency clients include businesses and corporations, non-profit organizations and government agencies. Agencies may be hired to produce an advertising campaign . Continue reading
Power Equations of Distribution Channels
The use of power by individual channel member to affect the decision making or the behavior of other is the mechanism by which congruent and effective roles become specified, roles become realigned, when necessary and appropriate role performance is enforced. There are a number of power equations that may be available to one channel member in his attempt to influence the other and vice versa. 1. Reward power 2. Coercive power 3. Legitimate power 4. Referent power 5. Expert power Let us discuss these power equations one by one; 1. Reward power: This refers to the capacity of one channel member to reward other if the latter conforms the influence of the former. This power base is present in virtually all channel system. The rewards are usually manifest in the perceived or actual financial gains, which channel member’s experience as the results of conforming to Continue reading