Marketing In

Banking &
Insurance
Topic:
Introduction To
Marketing

Submitted to:
Prof. Vikram Trivedi

Group Members:

Names

Roll No.

Olivia Dmello

Sabine Machado

22

Kalpesh Mhaiskar

28

Sharath Nair

30

Alisha Nunes

32

Smith Pinto

37

Index

Introduction
Marketing centres on a set of processes for
creating, communicating and delivering value to
customers; for managing customer relationships;
and, for providing direction to an organization
based on market insights. Marketing consists of
individual and organizational activities that
facilitate and expedite satisfying exchange
relationships in a dynamic environment through
the creation, distribution, promotion and pricing of
goods, services and ideas. The simple premise of
marketing is that to be successful, any
organization must understand its customers
requirements and satisfy them in a manner that
gives the organization an edge over its
competitors, and by staying abreast of changing
market dynamics it will continue to offer

compelling propositions to these targeted

customers. This involves offering the right
marketing mix of product, people, service, pricing,
promotion and distribution channel. Marketing
depends, therefore, on constant updating of ideas
and market knowledge. Customers are often
surprisingly fickle and modify their needs and
wants; rivals alter their strategies; and, forces in
the marketplace regularly change. There is,
though, much more to marketing than serving
customers through marketing programmes
Marketings core focus is indeed the understanding
and ongoing satisfaction of targeted customers,
but marketers must provide much more for their
organizations. Effective marketing should analyze
markets in order to be able to maintain customer
interest and satisfaction, combat competitors,
identify opportunities and recognize threats.
Marketers should be the eyes and ears for their
organizations regarding market dynamics. Having
determined which opportunities to pursue and
having agreed the mix of target markets to
prioritize, marketing should create target customer

engagement strategies, establish the wow factor

and ensure there is a robust basis for competing.
Marketing programmes should be developed
appropriate for the successful execution of this
strategy.

Definition
Marketing is the science and art of exploring, creating,
and delivering value to satisfy the needs of a target
market at a profit. Marketing identifies unfulfilled
needs and desires. It defines, measures and quantifies
the size of the identified market and the profit
potential. It pinpoints which segments the company is
capable of serving best and it designs and promotes
the appropriate products and services.
Marketing is often performed by a department within
the organization. This is both good and bad. Its good

because it unites a group of trained people who focus

on the marketing task. Its bad because marketing
activities should not be carried out in a single
department but they should be manifest in all the
activities of the organization.

Features of Marketing
Services are as follows:
1. Systematic Process
The marketing is systematic in nature. The main aim of
marketing is to satisfy the needs and wants of the
customers by bringing into the right products.
The following is the process of marketing involves:

The product is design as per customer requirements.

The right price of product is fixed.
Effective promotion strategy of the product is defined.
Distribution of the products at the right place and at
the right time is planned.
The marketing process is taken on to accomplish
organizational objectives (profits, market share, etc.)
and to generate customer satisfaction.
The marketing process is continuous in Nature. Firstly it
starts with the marketing research. Then after the sale
of the product it comes on to customer feedback and
later on sales and services of the product.

2. Ideas, Goods and Services

Marketing sells new ideas and it also sells goods and
services.
The marketing process involved following things.
The perceptible goods like FMCG products and
consumer durables are dispensed and plan by the
marketers.
Airlines, hotels, insurance, banks, etc. are sold by the
marketers.
Furthermore, ideas are marketed by social and Govt.
organizations,

which includes campaigns relating to anti-drugs, AIDS

awareness, anti-corruption, etc. In fact, every market
offering includes a basic idea. A marketer of a face
cream sells the idea of a beautiful person and that of a
soft drink sells the idea of refreshment.

3. Target Markets
Marketing is bothered with target markets. No one can
sell everything to anyone. Therefore, the marketer
should be conclusive in selecting the targeted clients or
buyers. A marketer needs to design goods and services
to a particular target segment or market.
Examples of features of marketing are given below:
A marketer cannot design and sell a particular model of
a car to all prospective buyers. He has to design
distinct models to different segments of the market
depending upon their income, status, preferences, etc.

4. All Pervasive
The marketing process is not only applicable to
business organization but as well as to non-business
organizations.
Examples of features of marketing are given below.

An educational institution may adopt marketing

approach to:
Suggest the right courses to the students (product).
Charge the appropriate fees to the students (price).
Promotion of courses to the students (if so required).
Provide the courses to the student at the right time
and place.

5. Customer Satisfaction
These days marketer plans to target on customer
satisfaction. It has an association between product
performance and customer anticipation.
The consumers gets pleased when product
performance matches with customer expectation.
When product performance is below customer
expectation, the customers are dissatisfied.
When product performance exceeds customer
expectation, the customers are delighted.
When product performance exceeds very much more
than expectation, the customers get astonished.
These days the customers are given excited offer and
value-added services. The main focus of today's
marketers is customer satisfaction. Customer value can
be enhanced by providing additional facilities at little or

no extra cost, such as extension in after-sale-service

and warranties, free delivery and installation, etc. If
possible, marketers need to astonish customers by
providing services, which are very much more than
their expectations.
Examples of features of marketing are given below.
Federal Express has created customer value by: It
allows customers to track packages through the
company's web site. By connecting to the FedEx site
and by entering the airway bill number, customers can
locate a package in transit. After the package has been
delivered, they can even identify the name of the
person who signed for it. This service is free of charge.
This facility has enhanced the customer value and
loyalty.

6. Competitive Advantage

Competitive market the strategies should be perfect.

The marketers should find unique ideas and innovation
to compete in today's market. The marketers should be
proactive and should have decision-making skills.
New innovative designs or models.
Advanced Creative promotion plans.
Effective customer relationship techniques, etc.
The pro-active decisions give the competitive
advantage to professional marketers.

7. Corporate Image
An effective marketing strategy ensures the
development of the firm, and it also improves its
corporate image in the society. Because of effective
marketing strategy, the firm's turnover in terms of
profit, share and sales in the market improves.
Therefore, corporate image improves in the minds of
Employees, Customers, Dealers, Suppliers,
Shareholders and other stakeholders.
A good corporate image in the minds of stakeholders
helps a firm to expand and grow.
Develop trust and confidence of the customers.
Get support from the Shareholders and financial

institution.
Get cooperation from dealers and suppliers, etc.

8. Expansion of Business
Marketing facilitates expansion of the firm. Due to
effective marketing, the performance of the
organization improves in terms of sales, profits and
market share. Therefore, a firm may adopt expansion
strategy. For expansion.
Market Penetration: increase in marketing activities in
the existing market.
Market Development: entry into brand new
marketplaces.
Product Development: development of new products
for existing / modern markets.

9. Organizational Objectives
The marketing objectives of the firm are achieved due
to efficient marketing.The marketing objectives are as
follows:
Increase in the profits of the firm by leap and bounds.
Increase in the market stake, improves corporate
image.
It enhanced the brand loyalty of the customer and

also improves the brand image of the firm.

10. Marketing Environment

The marketing is affected by number of factors such as:
Government policies,
Economic conditions,
Customer preferences,
International environment,
Competitors strategies,
Financial climate, etc.
Marketers should actively scan the environment. For
instance, a marketer must analyze the marketing-mix
adopted by the competitors. Accordingly, he has to
design products that offer a differential advantage to
the consumers, which may bring higher returns to the
firm.

11. Integrated Approach

Marketing needs to integrate with the other functional
areas of the organization. There is a need for

integration of various departments such as finance,

production, human resources, etc. All functional areas
should interact and interlink to achieve the firm's
overall objectives.
For instance, a decision to increase advertising would
require support from the finance department. And a
decision to introduce a new model requires active
coordination between the production and marketing
department. And a decision to introduce a new model
requires active coordination between the production
and marketing department.

12. Societal Interest

Because of advanced marketing social interest of the
society is maintained. There should be always balance
between public interest and customer's satisfaction by
the marketers.
For instance, professional marketers undertake
research and development to develop products, which
are eco-friendly and also generates customer
satisfaction. And at the same time brings higher profits
to the organization.
Examples of features of marketing are given below.
Such products include fuel efficient cars, compact air
conditioners, etc.

Functions Of Marketing
Marketing Information Management
Managing marketing information helps you understand
your customers needs. You can gather information by
reviewing published market research reports, asking
your sales team for feedback or carrying out a survey
using a market research firm. You should also monitor
product review sites and social media, such as
Facebook and Twitter, where you can find information
on consumers needs and attitudes toward products.

Distribution

Your distribution strategy determines how and where

customers can obtain your products. If you market
products to a small number of business customers, you
may deal with them directly through a sales team. If
your business expands to other regions or countries, it
may be more cost effective to deal with customers
through local distributors. Companies marketing
consumer products distribute them through retail
outlets or, increasingly, via the Internet

Product/Service Management
Marketing provides valuable input to product and
service development. Information on customers needs
helps to identify the features to incorporate in new
products and product upgrades. Marketing also
identifies opportunities to extend a product range or
launch existing products into new sectors.

Pricing
Pricing plays an important role in determining market
success and profitability. If you market products that
have many competitors, you may face strong price
competition. In that situation, you must aim to be the

lowest-cost supplier so you can set low prices and still

remain profitable. You can overcome low price
competition by differentiating your product and offering
customers benefits and value that competitors cannot
match.

Promotion
Promotion makes customers and prospects aware of
your products and your company. Using promotional
techniques, such as advertising, direct marketing,
telemarketing or public relations, you can communicate
product benefits and build preference for your
companys products.

Selling
Marketing and selling are complementary functions.
Marketing creates awareness and builds preference for
a product, helping company sales representatives or
retail sales staff sell more of a product. Marketing also
supports sales by generating leads for the sales team
to follow up.

Financing

Successful marketing provides a regular flow of revenue

to pay for business operations. Marketing programs
that strengthen customer loyalty help to secure longterm revenue, while product development programs
open new revenue streams. Financing also plays a role
in marketing success by offering customers alternative
methods of payment, such as loans, extended credit
terms or leasing.

Introduction To Service
Sector
A service is the action of doing something for someone
or something. It is largely intangible (i.e. not material).

You cannot touch it. You cannot see it. You cannot taste
it. You cannot hear it. You cannot feel it. So a service
context creates its own series of challenges for the
marketing manager since he or she must communicate
the benefits of a service by drawing parallels with
imagery and ideas that are more tangible.
Search quality is the perception in the mind of the
consumer of the quality of the product prior to
purchase through making a series of searches. So this
is simple in relation to a tangible product because you
might look at size or colour for example. Therefore
search quality relates more to products
and services.

Characteristics
1. Lack of ownership

You cannot own and store a service like you can a

product. Services are used or hired for a period of time.
For example when buying a ticket to the USA the
service lasts maybe 9 hours each way , but consumers
want and expect excellent service for that time.
Because you can measure the duration of the service
consumers become more demanding of it.

2. Intangibility
You cannot hold or touch a service unlike a product. In
saying that although services are intangible the
experience consumers obtain from the service has an
impact on how they will perceive it. The intangibility
ctreates afeeling of uncertainty about the outcome of a
sevices this makes it difficult for him to comprehend
the enormity of the service offer.for example teacher
provides services are intangible.

3. Inseparability

Services cannot be separated from the service

providers. A product when produced can be taken away
from the producer. However a service is produced at or
near the point of purchase. Take visiting a restaurant,
you order your meal, the waiting and delivery of the
meal, the service provided by the waiter/ress is all
apart of the service production process and is
inseparable, the staff in a restaurant are as apart of the
process as well as the quality of food provided.

4. Perishibility
Services last a specific time and cannot be stored like a
product for later use. If travelling by train, coach or air
the service will only last the duration of the journey.
The service is developed and used almost
simultaneously. Again because of this time constraint
consumers demand more.for example ,a train that
leaves the railway station half full means that the
sevices of the empty half remain unused.

5. Heterogeneity
It is very difficult to make each service experience
identical. If travelling by plane the service quality may
differ from the first time you travelled by that airline to
the second, because the airhostess is more or less

experienced.
A concert performed by a group on two nights may
differ in slight ways because it is very difficult to
standardise every dance move. Generally systems and
procedures are put into place to make sure the service
provided is consistent all the time, training in service
organisations is essential for this, however in saying
this there will always be subtle differences.service
provided is consistent all the time.

CLASSIFICATION OF
SERVICES
The following charts visualize various classes of
services along with the organizations that provide
them.
Consumer Services:

Services
Boarding and Lodging
Beauty and Fitness
Medical
Post Sales
Entertinment
Communications
Transportation
Insurance

Organizations
Hotels, Motels,
Dharmashalas
Beauty Parlours,Gyms,
Fitness Centers
Nursing Homes,
Dispensaries, Hospitals
Garage, Company Stations
Cinema, Club,Amusment
Parks
T.V., Radio, Internet
Shipmens, Steamers,
Buses, Rails, Aeroplanes
Insurance Companis

Financial

Finance Companies, Banks

Type Of Service Operations-Partial

List
Transportation services
Railway
Airlines
Local passenger transportation
Inter-state passenger transportation
Road transportation
Helicopter service
Private aircraft services
Water transportation

Type of service operations-partial

list
Transportation services
Railway
Airlines
Local passenger transportation
Inter-state passenger transportation
Road transportation
Helicopter service
Private aircraft services
Water transportation
Insurance
Credit reporting Real estate services

Marketing Mix
The Marketing mix is a set of four decisions which
needs to be taken before launching any new product.
These variables are also known as the 4 Ps of
marketing. These four variables help the firm in making
strategic decisions necessary for the smooth running of
any product / organization. The marketing mix refers to
the set of actions, or tactics, that a company uses to
promote its brand or product in the market. The 4Ps
make up a typical marketing mix - Price, Product,
Promotion and Place. However, nowadays, the
marketing mix increasingly includes several other Ps
like Packaging, Positioning, People and even Politics as
vital mix elements.

What is the Marketing Mix?

The marketing mix is characterized by four different but
equally important variables. These variables are never
constant and may be changed over time. However, a
change in one of the variables may cause a change in

all the other variables as well.

Product
Physical
Evidenc
e

Price

People

Place

Process

Promotio
n

1. Product
When the product is right, you dont have to be a
great marketer. Lee Iacocca
The product offered is a standard set of items that are
similar in taste and appearance wherever in the world
they are being sold. There is some adaptation
according to local tastes and laws. For example, a more
vegetarian menu is offered in India, where a majority
does not eat meat. In Muslim countries, any pork
products are eliminated and halal meat is used. There
are also taste adaptations such as beer in Germany,
yogurt drinks in Turkey and espresso in Italy. There are
also burger variations in different countries. Despite
these differences, the menu is structured in the same
way which allows for the same experience everywhere.

The product can be analysed on three levels:

1. The core benefit it provides - what does it actually

do?
2. The tangiable product - the physical dimensions,
what does it look like, is it reliable?

3. The additional benefits - what guarantees are

given to the customer, what are the brand values and
what do they convey to the buyer?

Making a successful product

A successful product is designed to meet customer
requirements. These requirements may be identified
through market research. The design of the product
should take into account the production process. A well
designed product can save on costs, can be made
easily to a consistent quality and meets the needs of
customers very precisely.
If a firm takes its time to develop a product the chances
are that it will have longer term success.

Analysing the existing position

When deciding on what marketing actions to take, such
as whether to invest in developing a new product, a

firm will want to examine its existing position. Only by

assessing how its products are doing will it be able to
decide what to do next.
To analyse its position, a firm may make use of
techniques such as the product life cycle and product
portfolio analysis (PPA)

The product life cycle

The product life cycle traces the path of the sales of a
product over its life. The typical path for a product can
be divided into five stages.
1. The research and development stage
2. The introduction (launch) stage
3. The growth stage
4. The maturity and saturation stage
5. Decline
For example:
The Cadburys WISPA,
origionally launched in the
1980s was eventually
discontinued due to falling

sales and loss to customers to competitors such as

Aero.
However following an internet campaign and large
public demand, in 2007 Cadburys re-launch the WISPA.

Product portfolio analysis

Most firms have more than one product, some have
hundreds. The range of products and services a firm
has is called its 'product portfolio.As part of the
planning process, a business will examine the position
of these products in their markets.
Product portfolio analysis examines tha market position
of a firm's products.
The Boston matrix is a method of product portfolio
analysis that examines the products of the business in
terms of their market share and market growth

The new product devlopment process

As you can see from the diagram opposite, developing
a new product requires many different skills, including
marketing and operations.
Often, new product development teams will be cross
functional, meaning that they include employees from
different departments so that the idea is examined
from different perspectives

Idea
generation

Idea
screening

Concept
developme
nt and
testing

Business
analysis

Testing

Technical
implement
action

Price
The organization attempts to price differently across its
operations. This means that the right price is selected
for the right market. Pricing decisions are made by
setting a pricing objective, determining demand,

Launching
the
product

estimating costs, analyzing competing offers, deciding

on a pricing method and then finalizing a price. By
following this method and primarily assessing
competitors, the company can understand what the
customer is willing to pay and what value they attach
to the product.

Importance of pricing in marketing

mix
1. Price is the pivot of an economy
In the economic system, price is the mechanism for
allocating resources and reflecting the degrees of both
risk and competition. In an economy particularly free
market economy and to a less extent in controlled
economy, the resources can be allocated and
reallocated by the process of price reduction and price
increase.
Price policy is a weapon to realize the goals of planned
economy where resources can be allocated as per
planned priorities.Price is the prime mover of the
wheels of the economy namely, production,
consumption, distribution and exchange. As price is a
sacrifice of purchasing power, it affects the living
standards of the society; it regulates business profits
and, hence, allocates the resources for the optimum
output and distribution. Thus, it acts as powerful agent
of sustained economic development.

2. Price regulates demand

The power of price to produce results in the market
place is not equalled by any other component in the
product-mix.It is the greatest and the strongest P of
the four Ps of the mix. Marketing manager can
regulate the product demand through this powerful
instrument. Price increases or decreases the demand
for the products. To increase the demand, reduce the
price and increase the price to reduce the demand.
Price has a special role to play in developing countries
where the marginal value of money is high than those
of advanced nations. De-marketing strategy can be
easily implemented to meet the rising demand for
goods and services.As an instrument, it is a big gun and
it should be triggered exclusively by those who are
familiar with its possibilities and the dangers involved.
It is so because; the damage done by improper pricing
may completely sap the effectiveness of the well-

conceived marketing programme. It may defame even

a good product and fame well a bad product too.

3. Price is cmpetitive weapon

Price as a competitive weapon is of paramount
importance. Any company whether it is selling high or
medium or low priced merchandise will have to decide
as to whether its prices will be above or equal to or
below its competitors. This is a basic policy issue that
affects the entire marketing planning process.
Secondly, price does not stand alone as a device for
achieving a competitive advantage.
In fact, indirect and non-price competitive techniques
often are more desirable because, they are more
difficult for the competitors to copy. Better results are
the outcome of a fine blend of price and non-price
strategies. Thirdly, there is close relationship between
the product life-cycle and such pricing for competition.

There are notable differences in the kinds of pricing

strategies that should be used in different stages. Since
the product life span is directly related to the products
competitiveness, pricing at any point in the life-cycle
should reflect prevailing competitive conditions.

4. Price

is the determinant of

profitability
Price of a product or products determines the
profitability of a firm, in the final analysis by influencing
the sales revenue. In the firm, price is the basis for
generating profits. Price reflects corporate objectives
and policies and it is an important ingredient of
marketing mix. Price is often used to off-set the
weaknesses in other elements of the marketing-mix.
Price changes can be made more quickly than any
other changes in the product, channel, and personal
selling and sales-promotion includes advertising. It is
because; price change is easily understood and

communicating to the buyer in a precise way. That is

why, price changes are used frequently for defensive
and offensive strategies. The impact of price rise or fall
is reflected instantly in the rise or fall of the product
profitability, thinking that other variables are
unaffected.

5. Price

is a decision input

In the areas of marketing management, countless and

crucial decisions are to be made. Comparatively
marketing decisions are more crucial because, they
have bearing on the other branches of business and
more difficult as the decision-maker is to shoot the
flying game in the changing marketing environment.
Normally, profit or contribution is taken as a base for
pay-off conditions. Price can be a better criterion for

arriving at cut-off point because; price is the

determinant of profit or contribution.
As pointed earlier, price as an indicator has a special
role in the decision-making process in developing
countries because, consumer response to price
changes will be more quick and tangible as people have
higher marginal value of money at their disposal. For
instance, if it is a decision regarding selecting product
improvement possibilities, select that possibility which
gives the highest price as compared to the cost.
These five points make product pricing an important
and major function of marketing manager. However,
until recently, it has been one of the most neglected
areas of marketing management.
In fact, we must have a specialist in pricing as we do
have in other functions of marketing. This negligence is
quite evident from the fact that even the well-known
companies in the world price their products on simple
concepts of costs market position competition and
desired profit. Scientific pricing is much more than this
easy exercise.

Factors affecting pricing decisions

The pricing decisions for a product are affected by
internal and external factors.

Internal factor
1.Cost:

While fixing the prices of a product, the firm should

consider the cost involved in producing the product.
This cost includes both the variable and fixed costs.
Thus, while fixing the prices, the firm must be able to
recover both the variable and fixed costs.

2. The predetermine objectives

While fixing the prices of the product, the marketer
should consider the objectives of the firm. For instance,
if the objective of a firm is to increase return on
investment, then it may charge a higher price, and if
the objective is to capture a large market share, then it
may charge a lower price.

3. The image of the firm

The price of the product may also be determined on the
basis of the image of the firm in the market. For
instance, HUL and Procter & Gamble can demand a
higher price for their brands, as they enjoy goodwill in
the market.

4. Product life cycle

The stage at which the product is in its product life
cycle also affects its price. For instance, during the
introductory stage the firm may charge lower price to
attract the customers, and during the growth stage, a
firm may increase the price.

6. Credit period offered

The pricing of the product is also affected by the credit
period offered by the company. Longer the credit
period, higher may be the price, and shorter the credit
period, lower may be the price of the product.

7. Promotional activity
The promotional activity undertaken by the firm also
determines the price. If the firm incurs heavy
advertising and sales promotion costs, then the pricing
of the product shall be kept high in order to recover the
cost.

 External factor
1. Competition
While fixing the price of the product, the firm needs to
study the degree of competition in the market. If there
is high competition, the prices may be kept low to
effectively face the competition, and if competition is
low, the prices may be kept high.

2. Consumer
The marketer should consider various consumer factors
while fixing the prices. The consumer factors that must
be considered includes the price sensitivity of the
buyer, purchasing power, and so on.

3.

Government control

Government rules and regulation must be considered

while fixing the prices. In certain products, government

may announce administered prices, and therefore the

marketer has to consider such regulation while fixing
the prices.

4. Economic conditions
The marketer may also have to consider the economic
condition prevailing in the market while fixing the
prices. At the time of recession, the consumer may
have less money to spend, so the marketer may reduce
the prices in order to influence the buying decision of
the consumers.

5. Channel intermediaries
The marketer must consider a number of channel
intermediaries and their expectations. The longer the
chain of intermediaries, the higher would be the prices
of the goods.

Example
The organization attempts to price differently across its
operations. This means that the right price is selected
for the right market. Pricing decisions are made by
setting a pricing objective, determining demand,

estimating costs, analyzing competing offers, deciding

on a pricing method and then finalizing a price. By
following this method and primarily assessing
competitors, the company can understand what the
customer is willing to pay and what value they attach
to the product.

Place
To maximize sales and reach out to larger audiences, it
is very important for your business to be visible to
potential customers. The place of business, distribution
channels and logistics plays a crucial role in the
success of your marketing strategy. While product,
pricing and promotions go hand in hand with the place
factor, if your business location is not appropriately
chosen, the rest your efforts would hardly get noticed!
Hence, to get the marketing mix right, select the place
where you would set up shop very carefully, choose
your channel partners and distributors wisely and then
get on with your marketing efforts in an integrated
way.
If you are the owner of a small or medium sized
business, a business strategist or a marketing
professional, then you must first do a thorough market
research with respect to the area, customer
demographics and preferences, social and economic
considerations etc. before you choose your company
location. You may have noticed that the neighbourhood
coffee shop on the main road is frequently visited by

office-goers as well as students on the way back from

their work or colleges.
McDonalds has presence in 116 countries of the world.
The organization believes in strategic expansion that
focuses on a locations long term potential.
The strategic location of the coffee-shop matters; had
he opened his business in a narrow alley between two
buildings, he wouldnt have had as much foot traffic as
he attracts now.

Factors consider while deciding on

Market Mix
PLACE
Avoid Competition

If you are an

entrepreneur or just starting out on your business

venture, avoid setting up shop next to a competitor
of yours. Your competition might already have a
loyal customer base and this could affect your sales.
Think out-of-the-box and select a locale that has
enough space for your offerings.

Visibility As said earlier, its always better to

have an office on the main road instead of behind a
building on a deserted street of the neighborhood.
You may have to pay more for the location but in the
long run, the visibility of your business increases and

more and more people will find out about your

services and products.

High Footfall Find out the density of traffic in

the area you want to set up your business in. If
people rarely visit the place for their purchasing
requirements, then even a good business plan
wouldnt be sufficient to ensure growth.

Accessibility Ensure that your business place

is easily accessible to potential customers to walk-in
and enquire about your offerings. If the accessibility
is difficult, nobody would make the extra effort to
reach you when theres a similar business thats
easily reachable.

Businessmen often make the mistake of not giving

enough attention to the place or location of their
business, thinking that everything would be a smooth
sail just on the basis of their pricing and product
features. But its not so. You might have seen that
restaurants and cafes are normally located at corners
of streets or intersections.

Significance of Internet Marketing

Youll be surprised to know that in todays age of

lightning-fast communication and instant messaging,
businesses have grown leaps and bounds even without
setting up an office space! People are transacting
online, sending business proposals, generating
invoices, collecting funds and selling products or
services right from their fingertips. Internet and mobile
technology has removed many hurdles from the
traditional marketing efforts of the bygone era. With
the fast-paced world that we live in, customers expect
the quickest solutions to their problems, the fastest
deliveries and cost-effective transactions from
businesses across the globe.
If you are a businessman or a marketing executive of
your company, ensure that your business is not only
online but also reaching out and engaging with
customers on a regular basis. Through digital
marketing, mobile apps and social media promotions,
businesses can increase their growth potential rapidly.
In short, while the place of your business and selection
of distribution channels plays an integral part in your
marketing success, remember to invest your resources
in internet, mobile and social media marketing for
greater visibility and customer reach.

Promotion
By first understanding cultural differences, a localized
promotion strategy is employed. The focus is on both
the brands global image and its local sensitivity. If the
product is manufactured keeping the consumer needs
in mind, is rightly priced and made available at outlets
convenient to them but the consumer is not made
aware about its price, features, availability etc, its
marketing effort may not be successful. Therefore
promotion is an important ingredient of marketing mix
as it refers to a process of informing, persuading and
influencing a consumer to make choice of the product
to be bought. Promotion is done through means of
personal selling, advertising, publicity and sales
promotion. It is done mainly with a view to provide
information to prospective consumers about the
availability, characteristics and uses of a product. It
arouses potential consumers interest in the product,
compare it with competitors product and make his
choice. The proliferation of print and electronic media
has immensely helped the process of promotion.

Factors Governing Promotion Mix

Nature of product

Different types of products require different promotion

mix. In case of consumer goods, advertisement is
considered to be the most important because the goods
are non-technical and produced on a large scale. But
for industrial goods, personal selling is regarded as the
most important tool because the products are technical
in nature and costly, and persuasion is considered
essential for their sale.

Types of market
If the number of customers is quite large and they are
spread over a vast area, advertisement is more helpful
because it can reach people everywhere. However, if
the number of customers is not very large and they are
concentrated geographically, personal selling and sales
promotion may be more effective.

Stage of the product life cycle

The promotional mix depends on the stage of the
product in product life cycle. During introduction, heavy
expenditure is incurred on advertisement followed by
personal selling and sales promotion. During the growth
stage, customers are aware of the benefits of product.
Hence, advertisement along with personal selling is

more effective. At the maturity stage, competition is

more intense. Sales promotion becomes the most
important tool to boost sales.

Budget
Funds available for promotion also decide promotion
mix; for example, advertisement is a costly tool. If
sufficient funds are not available, this tool may not be
adopted. Personal selling involves continuous spending.
Thus, budget is a deciding factor for promotion mix.

Push versus pull strategy

When firms push the product to middlemen, they in
turn push it to consumersthis is known as push
strategy. In this case, personal selling or display should
be more effective. Pull strategy refers to the policy of a
company to strive to build up consumer demand
without recourse to middlemen. Generally, advertising
is considered more important in case of pull strategy.

Elements Of Promotion Marketing

Mix
Advertising
Advertising can be defined as any paid form of nonpersonal communication about an organization,
product, service, or idea by an identified sponsor. The
non-personal component means that advertising
involving mass media (e.g., TV, radio, magazine, and
newspaper) that can transmit a message to large
groups of individuals, often at the same time.
Advertising is the best-known and most widely
discussed form of promotion, probably because of its
pervasiveness.
It is also a very important promotional tool, particularly
for companies whose products and services are
targeted at mass consumer markets. Advertising is an
important part of many marketers promotional mixes
as it can be a very cost-effective method for
communication with large audiences.

Sales Promotion:

The next variable in the promotion mix is sales

promotion, which is generally defined as those
marketing activities that provide extra values or
incentives to the sales force, the distributors, or the
ultimate consumer and can stimulate immediate sales.

Sales promotion is generally broken

into two major categories:
1. Consumer-oriented activities:
Consumer-oriented sales promotion is targeted to an
ultimate user of a product or service, and it includes
giving coupons, samplings, discounts, premiums and
various point-of-purchase materials.

2. Trade-oriented activities:
Trade-oriented sales promotions are targeted towards
marketing intermediaries such as wholesalers,
distributors and retailers. Promotional and
merchandising allowances, price, deals, sales contests
and trade shows are some of the promotional tools
used to encourage the trade to stock and promote a
companys product.

Personal selling
The next element of an organizations promotional mix
is personal selling. It is a form of person-to- person
communication in which a seller attempts to assist
and/or persuade prospective buyers to purchase the
companys products or services or to act on an idea.
Unlike advertising, personal selling involves direct
contact between buyers and sellers, either face to face
or through some forms of telecommunications such as
telephone sales. Personal selling involves more
immediate and precise feedback because the impact of
sales presentation can generally be assessed from
customers reactions.

Public relation
Public relation is defined as the management function
which evaluates public attitudes, identifies the policies
and procedure of an individual or organization with the
public interest, and executes a programme of action to
earn public understanding and acceptance.
When an organization systematically plans and
distributes information in an attempt to control and
manage its image and the nature of the publicity it

receives, it really engages in a function known as public

relation.

Publicity
Publicity refers to non-personal communication
regarding an organization, product, service, or idea not
directly paid for or run under identified sponsorship. It
usually comes in the form of news story, editorial or
announcement about an organization, or its product
and services. An advantage of publicity over other
forms of promotions is its credibility.

Direct marketing
Direct marketing is one of the fastest-growing sectors in
which organizations communicate directly with target
customers to generate a response or a transaction.
Companies such as L.L. Bean, Lands End, and J. Crew
have been very successful in using direct marketing to
sell their clothing products. DELL computers and
Gateway have experienced tremendous growth in the
computer industry by selling a full line of personal
computers through direct marketing.

Packaging

A well-designed product can influence or induce the

prospect to buy the product. Packaging is considered to
be the face value of the product. It plays an important
role as it provides information of the product, protects
the product while transportation and makes it
attractive.

Role Of Promotion In Marketing Mix

Promotions are an integral part of the marketing mix. In

general, promotions tend to focus on how to attract the
attention of consumers and motivate them to take
action or make a purchase. There are many ways
marketers can go about promoting a product or service,

but it requires strategic research into the target

audience and where to find them.
The role of promotion in the marketing mix is critical for
brands who want to ensure the right consumers are
reached and objectives are met. Brands can achieve
this by using strategic tactics to connect with
consumers to generate a response.
In order to accomplish this, brands must look closely at
the many ways to market/promote and decide which
methods are most likely to reach the desired consumer
demographic. This means taking into account factors
such as age, gender, location as well as socioeconomic, psychographic and competitive data.
The question then becomes, which type of promotion
will deliver the greatest return on investment? While
the answer to that question is not always black and
white, there are several marketing promotions that
have stood the test of time for their effectiveness in
attracting customers and growing market share.

Rebates
With nearly three quarters of
Americans claiming to be price
sensitive when
shopping, rebates have become
an increasingly popular way to
promote a brand or service. The
perceived value of a rebate is
what drives consumers down the
path of purchase. Strategies
such as show-rooming and other
price comparison tactics have
forced brands to find more
creative ways to grab the
attention of consumers both
online and in store.
Rebates also offer a lower net-price for their marketing
spend, which attracts shoppers while preserving
margins for retailers and brands unlike instant
discounts. Brands can choose to offer their rebate
payments via prepaid gift cards, giving them an
additional marketing boost.

Gift cards also help drive consumers back to the store

where they made the initial purchase. Typically about
30 percent of rebate dollars are spent back at the
original store where the product was purchased.
Brands and their fulfillment partners have also made
the rebate redemption process easier for consumers by
offering them the choice of mobile, online and mail-in
options. In addition, brands can use the rebateredemption process to collect customer data and optins for future marketing efforts, making rebates an ideal
promotion for building long-term loyalty.

Sweepstakes Contest
Very few promotional tactics can generate more buzz
and excitement around a brand than a wellexecuted sweepstake, game or contest. They can
reinforce, extend and enhance brand values, drive
customer engagement, foster brand advocates, support
in-store and ecommerce sales strategies as well create
high impact with a limited budget.
The power of sweepstakes and contests as promotional
vehicles lies in their ability to create an emotional
connection, drive interest and engagement. While
prizes are important, it is only one aspect of developing

an effective, engaging campaign. Legal compliance and

risk management are critical factors as well as
operational logistics.
Today more than ever, brands have more challenges to
connect with consumers and to be relevant. The
shopper landscape is rapidly changing and it is now
critical for brands to be authentic in ways that engage,
drive sales and loyalty.
Sweepstakes and contests can be effective standalone
tactics or part of a larger strategic marketing initiative
to focus attention, promote a conversation and engage
an audience. One of the first things to consider when
developing a sweepstakes or contest is how will the
promotion support the brands sales goals and what
KPIs should be established to measure success?
Knowing your budget constraints will also help define
the scope of the project.
Working with a promotion fulfillment provider can help
you develop a solid plan of action for both the
development of the promotion as well as how to
optimize consumer engagement.
A key element to a well-executed sweepstakes or
contest in todays marketplace is understanding if the

promotion is relevant and appealing to your target

audience.

Compliance and Risk Management

While rebates, sweepstakes and contents have proven
to be highly effective promotional tactics, careful
attention must be paid to the legal aspects to ensure
they are in compliance with federal, state and local
regulations.
When it comes to rebates, each state has separate
guidelines for escheatment reporting). There are also a
series of guidelines (per state) regarding proper design
of the submission form. The risk of consumer rebate
fraud is also prevalent, so it is important to partner with
a promotion fulfillment center who can help spot issues
such as multiple submissions under fictitious names or
counterfeit forms and proofs of purchase.
Sweepstakes and contests are also subject to
government scrutiny and the internet/social media
have made the rules even more complex. Keeping
compliant entails areas such as proper filing of the
promotion and disclosure of rules, terms and privacy
policy. In addition, the rules must protect all parties

involved in the promotion including sponsors and other

participants.
In addition to risk and compliance, a good rebate,
sweepstake or contest should be highly orchestrated in
terms of its logistics, quality standards and supporting
documentation to ensure the promotion is executed at
the highest possible level and offers a solid paper trail
in the event of an audit.
When developing your brand marketing plan, consider
including a promotion that motivates consumers,
creates engagement, enhances brand awareness and
grows market share. The key to making it successful is
to be authentic, compelling and compliant.

Process
In all of the thousands on McDonalds worldwide, the
same process is used for making the food. The food
specifications for size, weight and content are the same
everywhere. All suppliers need to meet these
specifications. Kitchen and restaurant layouts are the
same. To cater to language differences, the menu
displays contain images that help create similarities
everywhere. There are also defined processes for
service delivery such as all orders need to be filled

within 90 seconds in the restaurant while drive through

wait time is 3.5 minutes.

People
People are one of the most important elements ever of
the marketing mix today. This is mainly because of the
phenomenal rise of the services industry. Even products
are being sold through retail outlets today. And if the
retail outlets are not handled with the right people, the
product will not be sold. Thus, the right people are
important in product as well as service marketing mix
in the current marketing scenario.
There are many examples of total industries altogether
relying on the expertise of the people hired by them.
Who do you think MBAs from Harvard or Kelloggs are
so highly paid? This is because they are the right
people to be given the correct responsibilities. The
salary of such people is directly proportional to the
weight of the organization that they can carry on their
shoulders. Thus, this old saying about society in
general is absolutely correct in todays business
environment.

Important Element Of People

People are the most important element of

any service or experience. Services tend to be
produced and consumed at the same moment, and
aspects of the customer experience are altered to meet
the individual needs of the person consuming it. Most
of us can think of a situation where the personal service
offered by individuals has made or tainted a tour,
vacation or restaurant meal. Remember, people buy
from people that they like, so the attitude, skills and
appearance of all staff need to be first class. People
have an important role in service delivery, they are
relied upon to deliver and maintain
transactional marketing and people play an important
part in the customer relationship.

Personal selling
There are different kinds of salesperson. There is
the product delivery salesperson. His or her main task
is to deliver the product, and selling is of less
importance e.g. fast food, or mail. The second type is
the order taker, and these may be either internal or
external. The internal sales person would take an
order by telephone, e-mail or over a counter. The
external sales person would be working in the field. In
both cases little selling is done. The next sort of sales
person is the missionary. Here, as with those
missionaries that promote faith, the salesperson builds
goodwill with customers with the longer-term aim of
generating orders. Again, actually closing the sale is
not of great importance at this early stage. The forth
type is the technical salesperson, e.g. a technical sales
engineer. Their in-depth knowledge supports them as
they advise customers on the best purchase for their
needs. Finally, there are creative sellers. Creative
sellers work to persuade buyers to give them an order.
This is tough selling, and tends to offer the biggest
incentives. The skill is identifying the needs of a
customer and persuading them that they need to

satisfy their previously unidentified need by giving an

order

Customer service
Many products, services and experiences are supported
by customer services teams. Customer services provide
expertise (e.g. on the selection of financial services),
technical support (e.g. offering advice on IT and
software) and coordinate the customer interface (e.g.
controlling service engineers, or communicating with a
salesman). The disposition and attitude of such people
is vitally important to a company. The way in which a
complaint is handled can mean the difference between
retaining or losing a customer, or improving or ruining a
companys reputation. Today, customer service can be
face-to-face, over the telephone or using the Internet.
People tend to buy from people that they like, and so
effective customer service is vital. Customer services
can add value by offering customers technical support,
expertise and advice.
People deliver services in all sorts of settings. It is an
important element of marketing mix. If you go to an
organized event such as the Olympics then everything

about the experience is underpinned by people.

Behind-the-scenes there are project managers and
chefs, maitre d and accountants. The people deliver
the service and this is the same for restaurants,
hairdressers and auto mechanics.
People are the transactional interface between the
company and its customers so people deliver the
service and they collect money i.e. get paid on behalf
the company for the service. So if you go to a
restaurant the waiter will greet you, take your order
and serve your food and finally he or she will take the
money which completes the contractual transaction.
People underpin the customer relationship between the
company and the consumer. Remember that people
buy from people (as we always remind you on
Marketing Teacher) and that the relationship between
the person you are dealing with and yourself add much
value to the transaction.
If you know youre going to eat at your favorite
restaurant, it a good idea to learn the waiters name
and build a rapport. Think of other times such as when
you were selling a property and an agent was a
particularly reliable and polite person, or perhaps you

bought a car because you trusted the salesperson and

this advantage clinched the deal. Marketing today is
based on Customer Relationship Management (CRM)
and the relationship with people that youre dealing
with at the company can recruit you as a customer,
retaining you as a customer and encourage you to
remain a customer in the future. This is where people
underpin the long-term customer relationship.

Training
All customer facing personnel need to be trained and
developed to maintain a high quality of personal
service. Training should begin as soon as the individual
starts working for an organization during an induction.
The induction will involve the person in the
organizations culture for the first time, as well as
briefing him or her on day-to-day policies and
procedures. At this very early stage the training needs
of the individual are identified. A training and
development plan is constructed for the individual
which sets out personal goals that can be linked into
future appraisals. In practice most training is either onthe-job or off-the-job. On-the-job training involves

training whilst the job is being performed e.g. training

of bar staff. Off-the-job training sees learning
taking place at a college, training center or conference
facility. Attention needs to be paid to Continuing
Professional Development (CPD) where employees see
their professional learning as a lifelong process of
training and development.

Importance of People
People as differentiating factors
Large IT companies like Accenture and Infosys
differentiate themselves with the quality of manpower
that they have. These companies always make the
statement that they have highly skilled manpower.
Thus, people over here become a major differentiating
factor. Similarly in restaurants, the better the cook, the
more is the success of the hotel. Besides the cook, the
way the waiter handles you, the Spas that make you
feel great, the way they serve you food, are all
contributions by people who work in that industry.
Industries nowadays know the importance of holistic
marketing and how a single person who is in touch
with the end customer, can make or break the relation
with the end customer. Thus, most companies
nowadays target the right people who match the
companies requirement.

People in customer service

As per the point made here by marketing teacher, with

the rise in the services industry, people have the most
important and the most critical job in the world
Customer service. It was as if this P in the marketing
mix was made for the proper service to the customer.
Customers come to the service department when they
are irritated and frustrated with the product, or when
they want prompt service. The service department of
companies like Vodafone and Airtel are the reason
these companies have been able to maintain the top
position. Similarly, ICICI and HDFC are examples of
banks which are at the top because of customer
service.
Maintaining your cool, handling customer
complaints properly, are some pre requisites required
from people in the services industry. These qualities are
in built in some people whereas other people need to
be taught the same. Thus, many top companies have
training departments and they have a strict training
schedule as well as incentive provisions to motivate
their employees to serve customers better. People are
so much under observation that even sales
departments are audited for the number of complaints
escalated in a single year. Most companies have got the

clear message that the right hierarchy makes a

different to how the company is presented to the end
customer.
So the bottom line If you are a company who has the
right product marketing mix, then you better start
thinking of the people who will play a major role in the
success or failure of your organization.

For example
The company staffs locally and also promotes from
within. This allows the team managing the operations
to understand local cultures as well as the corporate
philosophy. The people chosen are trained in both
technical skills and customer focus. A Hamburger
University in the USA as well as other training centers
in different parts of the world teach standard practices
that are to be employed in restaurants all over the
world. This training helps standardize product and
service delivery

Physical Evidence
All McDonalds locations are similarly created with a
family friendly environment. There is a play area for
children, and service is always provided with a smile.

All menus are structured in similar ways with fries and

drink combos. The childrens meal always has toys.
These are all elements of physical evidence that are
standard in all Mcdonalds locations.

Elements
Services being intangible, customers often rely on
tangible cues, or physical evidence, to evaluate the
service before its purchase and to assess their
satisfaction with the service during and after
consumption. General elements of physical evidence
are shown in Table They include all aspects of the
organizations physical facility (the services cape) as
well as other forms of tangible communication.
Elements of the services cape that affect customers
include both exterior attributes (such as parking,
landscape) and interior attributes (such as design,
layout, equipment, and decor). Physical evidence
examples from different service contexts are given in
Table 9.2. It is apparent that some services
communicate heavily through physical evidence (e.g.
hospitals, resorts, child care), while others provide
limited physical evidence (e.g. insurance, express mail).

Role of Service Evidences

A distinction is made in services marketing between

two kinds of physical evidence:

(a) Peripheral evidence;

(b) Essential evidence.

Peripheral evidence
Peripheral evidence is actually possessed as part of the
purchase of a service. It has however little or no
independent value. Thus a bank cheque book is of no
value unless backed by the funds transfer and storage
service it represents.
An admission ticket for a cinema equally has no
independent value. It merely confirms the service. It is
not a surrogate for it. Peripheral evidence adds to the
value of essential evidence only as far as the customer
values these symbols of service.
The hotel rooms of many large international hotel
groups contain much peripheral evidence like
directories, town guides, pens, notepads, welcome
gifts, drink packs, soaps and so on. These
representations of service must be designed and

developed with customer needs in mind. They often

provide an important set of complementary items to
the essential core service sought by customers.

Essential evidence
Essential evidence, unlike peripheral evidence, cannot
be possessed by the customer. Nevertheless essential
evidence may be so important in its influence on
service purchase it may be considered as an element in
its own right. The overall appearance and layout of a
hotel; the feel of a bank branch; the type of vehicle
rented by a car rental company; the type of aircraft
used by a carrier are all examples of physical evidence.

Managing the evidence

Service organizations with competing service products
may use physical evidence to differentiate their service
products in the marketplace and give their service
products a competitive advantage. A physical product
like a car or a camera can be augmented through the
use of both tangible and intangible elements.
A car can be given additional tangible features like a
sliding roof or stereophonic radio equipment; a camera
can be given additional tangible features like control

devices which enable use in a wide variety of light

conditions.
A car may be sold with a long life antirust warranty or
cost- free service for the first year of ownership; a
camera with a long-life warranty or free lens insurance.
Tangible and intangible elements may be used to
augment the essential product offer. In fact
organizations marketing tangible dominant products
frequently use intangible, abstract elements as part of
their communications strategy.
Service marketing organizations also try to use tangible
clues to strengthen the meaning of their intangible
products.

Make the Service more Tangible:

The bank credit card is an example of the tangible

representation of the service, credit. The use of a
credit card means:
(a) The service can be separated from the seller;

(b) Intermediaries can be used in distribution thereby

expanding the geographic area in which the service
marketer can operate;
(c) The service product of one bank can be
differentiated from the service product of another bank
(e.g. through colour, graphics and brand names like
Visa).
(d) The card acts as a symbol of status as well as
providing a line of credit.

Make the Service Easier to Grasp

Mentally:
There are two ways in which a service can be made
easier to grasp mentally.
(a)

Associate the service with a

tangible object which is more easily

perceived by the customer.
This approach may be used in advertising messages
where the intangible nature of service is transferred
into tangible objects representing that service. These
may have more significance and meaning for

customers. It is easier for the customer to grasp what

their service means compared with competitors.
(a) Use tangible objects that are considered important
by the customer and which are sought as part of the
service. Using objects that customers do not value may
be counter-productive.
(b) Ensure that the promise implied by these tangible
objects in fact is delivered when the service is used.
That is, the quality of the goods must live up to the
reputation implied by the promise.
If these conditions are not met, then incorrect,
meaningless and damaging associations can be
created.

(b) Focus on the Buyerseller Relationship:

This approach focuses on the relationship between the
buyer and the seller. The customer is encouraged to
identify with a person or group of people in the service
organization instead of the intangible services
themselves.

Advertising agencies use account executives; market

research agencies assemble client teams; the Bank
uses personal bankers. All encourage a focus on
people performing services rather than upon the
services themselves.