1

Write a short note on evolution of marketing

What is Marketing?
There are hundreds of ways to define Marketing. But in simple, it is continuous
process of understanding customer requirement and
satisfies those requirements in most effective way and get in a long term relationship
with the customer.
Marketing revolves around segmenting the market, targeting a profitable segments
and position offering in a unique way to compete over the others.
Evolution of Marketing Concept
Old concept of marketing was to make goods available so that people who had needs
can buy. But as human needs changes and many players offering same goods, the
concept changes from making available to satisfying needs.
The core concept of marketing exchange process have stated since human
civilization and it has transforms through many phases into modern marketing
management today.
Exchange oriented Stages: After the stages of nomads people started to settle on
the banks of rivers and engaged in agriculture and other economic activities. Then
the problem of deficit and surplus in production came into existence. In order to
have smooth exchanges Barter System came into existence. This is the starting
point of marketing activities.
Production oriented Stages (1760-1830): This stage came with the dawn of
industrial revolution which started during 1760. The concept behind this stage was if
you can offer products with reasonable price and quality, nothing can prevent you
from selling and making profits. Here producer gave more emphasis on their
production not on the customer requirements.

Sales oriented Stage: Technological development, improving living standard,

development in communication and transportation lead people to believe that they
can demand more quality goods from the producers than they were offering.
Producers started realizing consumers will normally not buy enough unless

approached with a substantial selling and promotional efforts. Under this concept
the greater emphasis was on increasing the sales than on customer satisfaction
Marketing oriented Stages: As the consumer demand and producers supply
came into equal positions, the producers were forced to rethink over the selling
concept and thus it leads to introduction of marketing concepts. Moreover, intense
competition in the market made producers realize that products could not be sold
without having a strong understanding of consumer needs and preferences.
Consumer oriented Stage: This stage have totally opposite view than the other
stages above. Here producers started producing products keeping in mind the
requirement of the customer. Production process are adjusted and re-adjusted in
order keep align with ever changing needs of customers. Competition becomes a
keen factor here.
Management oriented Stages: This is the present stage of the evolution of
marketing concept. Consumer marketing became an accepted marketing philosophy.
Today marketing is the most crucial in business planning and decision-making.

2.What

are 5 methods of pricing?

1. PRICING METHODS Marketing Management

2. 2. PricingAn introduction Pricing method or strategy is the route taken by the firm in
fixing the price. The method/strategy must be appropriate for achieving the desired
pricing objectives.
3. 3. Pricing methods1. Cost Based PricingTypes of cost based pricing Mark-Up
Pricing(cost plus pricing) Absorption cost pricing (full cost pricing) Target rate of
return pricing Marginal cost pricing
4. 4. Mark-up pricing The selling price is fixed by adding Mark-up or Margin to its cost.
Usually used by: Distributers, Marketing firms etc.. Slower the turnaround of the
product larger the margin and vice versa.Example:Supplyco.
5. 5. Absorption cost pricing Mainly used by manufacturing firms. It uses standard costing
techniques. It includes : Fixed cost Variable cost + PAROFIT Selling and
administering cost Advertisement cost It is also known as full cost pricing.
6. 6. Target rate of return pricing Similar to Absorption cost pricing. The difference is in
fixing the profit margin. The profit margin/ mark up is fixed by considering the ROI. Firm
will have return objectives, like 5% of invested capital, or 10% of sales revenue. Then

7.

8.
9.

10.

11.

12.

13.

14.

15.

you arrange your price structure so as to achieve these target rates of return. Market
leaders or monopolists uses this pricing strategy.
7. Marginal Cost Pricing It takes cost and demand into consideration while fixing the
price. It aims at maximizing contribution towards fixed cost. It gives flexibility to recover
the fixed cost depending on the market condition. It also gives flexibility in recovering a
large portion of cost from certain segment and a small portion from some other segment.
8. Break-even concept Revenue / Cost (Rs) Total Cost B Variable cost Fixed Cost Out
Put
9. Pricing methods2. Demand Based Pricing The pricing decision is also depending on
Demand and supply of the commodity. More realistic .Types of cost based pricing are:
What the traffic can bear pricing Skimming pricing Penetration pricing
10. What the traffic can bear The seller sets the maximum price the buyers are willing
to pay in giver circumstances. It will bring a high profit during this period. Chance of
error in judgment are very high. Can be used in the following conditions. Shortage of
goods Monopoly Oligopoly
11. Skimming Pricing Initially the products will be introduced in a high price and
subsequently settle down for a lower price. Example: Mobile Phones, Televisions etc..
Most of the electronic items.
12. Penetration pricing Initially introduced at a lower price and increases its price as its
demand in the market increases. Good to capture new market. Opposite of skimming.
Keep the product out of competition for longer time. Example: DTH Services,
Magazines, TV channels etc.. 3. Competition Oriented Pricing It need not mean that
pricing the commodity matching its competitors, it can also be the following: Premium
pricing Discounted Pricing Parity Pricing/going rate pricing
4.Product line pricing The products in a given product line are related to each other. The
manufacturing cost of these products also will not be much different. The need not price
the product optimally but it may price the product line optimally. It is mainly indented to
get optimum profit from the line.Example: Pulsar 150, 180, 200, 220
15. 5.Tender pricing Industrial products The customers go by competitive bidding
through sealed tenders. The seller can only get the best possible price. He should
thoroughly analyze the competitors.
16. 6. Affordability based Pricing Essential commodities Social welfare pricing The idea
of this pricing is to make the product available to the targeted population at an affordable
rate. Items usually distributed through public distribution system. Subsidies may be
involved Example: Chick shampoo , Akash, medicine etc.
17. 7. Differentiated pricing Different price for the same product in different location.
(SanDisk cruzer balde Pen-drive, Petrol ) The price difference may also be made in the
case of customer class. Volume of purchase. ( Offer packs Lux soap, Colgate value
packs etc)

7 )Briefly

explain types of new products and

reason why new product are failed?

NEW PRODUCT FAILURE

In this era of tight competition from domestic and global firms the firm who don't come
out with new products are putting themselves at great risk Because their existing
products are prone to changing customer needs, shorter product life cycles, new
technologies and increased competition.
Despite years of research and huge capital being pumped in to understanding the
consumer, making a launch successful is still a difficult task. The new product largely
depends on the product quality and the marketing tactics of the firm, there are many
occasions were the product failed miserably even after using the best technology and
quality the reason is that the new product is not worth for the customers. The prime
factor for the new product success is - customer value. Value is what the customer
thinks is value. The major reasons for product failure are
1. Faulty product idea:
The product often fail because faulty of product idea. A good idea can revolutionize the
market but a bad idea may prove bitter to the firm or it may backfire Eg: Polar industries
in 1991 launched "COOL CATS" fan - decorated with cartoon characters meant primarily
for children. The fan was priced at premium; the idea was that children's were
increasingly becoming influensors in purchase decisions and to attract the kids with the
cartoon creatures and to position the product exclusively for kids. The product failed
miserably inspite of its huge advertising budget because when the fan was put on it
didn't have any colour effect and the customer did not justify its premium price.
2. Distribution related problems:
The new product fails if the product is unable to meet the channel requirements. While
developing the product the channel requirements must be given adequate consideration.
Eg: when NESTLE launched its new chocolates the product and promotion was ok but the
product failed in the distribution side because the company stipulated the product to be
stored in refrigerators. The product faced two problems in the distribution side because it
meant excluding a number of retail outlets as they didn't have this facility and secondly
the chocolate was not picked by the customers as it was not seen upfront in the retail
shops. Finally Nestle had to reformulate the product according to channel requirements.
3. Poor timing of launch:
Too early or late entry into the market is a common cause of failure. Kinetic Merlin was
launched in pune in 1991.It was a 3 in 1 set consisting of a colour television, a stereo
with detachable speakers and a home computer. The product was targeted at the Indian
consumers who are fond of sophisticated gadgets to immediately adopt such an
innovative idea but in reality the idea was too advanced for the customers to digest at
that time because they were not exposed to such type of products before.
4. Improper Positioning:

Positioning means putting the product into the predetermined orbit. Improper positioning
may affect the product success. Eg: Titan Tanishq introduced their 18 carat jewellery and
the product was positioned at elite segment but there was a contradiction as to why
these elite segment should go in for a low carat gold because the norms for gold in India
at that time was 22 carat. The product failed miserably in retrospect Titan had to
introduce 22-carat jewellery.

What do you mean by product development? Explain product development

process.

Answer
Introduction to Product Development
In this fast-changing world we are experiencing change in our daily life and at marketplace
too. Customer needs, wants, and expectations are changing more rapidly. Customers are increasingly
demanding advance features, appealing designs, better quality, and reliability in products. To meet the
changing demands of customer, business organisations are investing heavily in research and
development (R&D). Business organisations are updating existing products and developing new
products to satisfy changing customer needs, wants, and expectations.
The development of competitive new products is a prerequisite for every business organisation to be
successful. Samsung has outperformed Nokia in the global mobile-phone market and become the
global leader. Samsung updates its existing mobile phones and brings new mobile phones more
frequently at competitive low price with advance features, appealing designs, better quality and
reliability. Nokia failed to satisfy changing customer needs, wants, and expectations, and lost its
market
position.
Definition
of
Product
Development
In general, the Product Development can be defined as "creating, innovating, or developing entirely a
new product , or presenting an existing product with enhanced utility, improved features, more
appealing design, better quality and reliability to satisfy the requirements of its end-users."
Meaning
of
Product
Development
Product means a good, service, idea or object created as a result of a process and offered to serve a
need or satisfy a want. Development means the act or process of growing, progressing, or
developing.
Product Development is a process of improving the existing product or to introduce a new product
in the market. It is also referred as New Product Development. The functions of product development
are as follows :1.
Creation of an entirely new product or upgrading an existing product,
2.

Innovation of a new or an existing product to deliver better and enhanced services,

3.

Enhancing the utility and improving the features of an existing product,

4.

Continuous improvement of a product to satisfy rapidly changing customer needs and wants.

Product Development Process

Product development process is a crucial process for the success and survival of any business.
Today, businesses are operating in a highly dynamic and competitive environment. Business
organisations have to continuously update their products to conform to current trends. The product
development process starts from idea generation and ends with product development and
commercialisation. Following are the steps in the process of product development.
1.
Idea Generation - The first step of product development is Idea Generation that is
identification of new products required to be developed considering consumer needs and demands.
Idea generation is done through research of market sources like consumer liking, disliking, and
competitor policies. Various methods are available for idea generation like - Brain Storming, Delphi
Method, or Focus Group.
2.
Idea Screening - The second step in the process of product development is Idea Screening
that is selecting the best idea among the ideas generated at the first step. As the resources are
limited, so all the ideas are not converted to products. Most promising idea is kept for the next stage.
3.
Concept Development - At this step the selected idea is moved into development process.
For the selected idea different product concepts are developed. Out of several product concepts the
most suitable concept is selected and introduced to a focus group of customers to understand their
reaction. For example - in auto expos different concept cars are presented, these models are not the
actual product, they are just to describe the concept say electric, hybrid, sport, fuel efficient,
environment friendly, etc.
4.
Market Strategy Development - At this step the market strategies are developed to evaluate
market size, product demand, growth potential, and profit estimation for initial years. Further it
includes launch of product, selection of distribution channel, budgetary requirements, etc.
5.
Business Analysis - At this step business analysis for the new product is done. Business
analysis includes - estimation of sales, frequency of purchases, nature of business, production and
distribution related costs and expenses, and estimation of profit.
6.
Product Development - At this step the concept moves to production of finalised product.
Decisions are taken from operational point of view whether the product is technically and
commercially feasible to produce. Here the research and development department develop a physical
product.
7.
Test Marketing - Now the product is ready to be launched in market with brand name,
packaging, and pricing. Initially the product is launched in a test market. Before full scale launching
the product is exposed to a carefully chosen sample of the population, called test market. If the
product is found acceptable in test market the product is ready to be launched in target market.
8.
Commertialisation - Here the product is launched across target market with a proper market
strategy and plan. This is called commercialisation phase of product development.

10

What is positioning

Examples of Positioning in Marketing

by Rick Suttle, Demand Media

Small companies use a number of positioning strategies in marketing. The key is

ensuring that all advertising and actions are commensurate with the positioning strategy.

A positioning strategy is the type of image a business wants to portray to the public.
Some companies strive to be market leaders in the strategic position they develop.
Others may need to change their positioning objectives to survive or increase sales and
profits.

Value Positioning
Some small companies use value positioning strategies. They price their products at or
below industry averages, according to Quick MBA, a popular online reference site. Value
positioning in marketing appeals to consumers who are sensitive to price changes.
Marketers may target low- to middle-income consumers or just appeal to cost-conscious
buyers. The value positioning strategy tends to work well during recessions or slower
economic periods. The downside is that smaller companies usually can't achieve value
leader status in an industry. Larger companies enjoy economies of scale, meaning they
have lower average unit costs because they buy in higher volumes.

Quality Positioning
Small businesses also may assume a quality positioning stance in the market. This
means they focus on offering the highest quality products possible. This type of strategy
is common with companies that have superior engineering departments. A smaller
company may be a leader in a particular type of technology. Hence, it naturally uses
quality as its core competency. Many entrepreneurs in technical industries position
themselves as quality leaders. Small business owners usually price their products above
industry averages when using quality positioning strategies. The reason is that they need
to recoup the extra costs associated with product research, engineering and production.

Demographics-Related Positioning
Marketers also use various demographics such as age and gender for positioning in
marketing. For example, a small vitamin manufacturer may create vitamins that appeal
to consumers 50 and older. The company's advertising messages may center around
special nutritional requirements of older Americans. Similarly, other companies employ
gender-related positioning strategies. Their products may be targeted predominately
toward men or women. For example, some companies target women with their cigarettes
and beverages.

Competitive Positioning
Small companies also may use competitive positioning strategies. The objective of a
competitive positioning strategy is to reposition the competition in the minds of
consumers, according to Quick MBA. This type of positioning is common when there are
two strong competitors in an industry. A company may use comparative advertising to
demonstrate that its brands are superior. Hence, it attempts to alter the image a

competitor wishes to portray and put itself in that top position. Business owners often
use competitive positioning strategies as counterstrategies. For example, a software
company known for its customer service may advertise to counter a competitor's claim
that the competitor's customer service is superior.

11

Write short note different positioning strategies?

Major Types of Market Positioning strategies - Market Positioning

Definitioin
Market Positioning refers to arrangement for a product to occupy a clear distinctive, and desirable
place relative to competing products in the minds of target consumer. Positioning of product in the
market is a major determinant of company profits. A Product position is the image that the product
projects in relation to competitive product and to their products marketed by the same company.

Positioning strategies

can be grouped into following six categories:

1). positioning in relation to a competitor: - Position is directly against the competition.

2). positioning by product attribute: -The company associates its product with some product
features.

3). positioning by price and quality: -To position on high price, high quality or low price, low
quality basis.

4). Positioning by product use- Position by the uses of the product.

5). Positioning by target market: - (Market Segmentation)

6). Positioning by product class: - (Associating the Product) a class of product

5 Patterns of Target Market

Selection that May Considered
by a Company
by Smriti Chand Marketing

Advertisements:

A company may consider five patterns of target market selection as

described below:
The process of manipulating the marketing mix in terms of differentiating
products, methods of communication and other marketing variables is
known as market targeting or target marketing. Market targeting should not
be confused as synonymous to market segmentation. Market segmentation
is the prelude to targeting.
Through segmentation, a firm divides the market into many segments. But
all of them need not form the target market. The target market signifies only
those segments that it wants to adopt as its markets. Thus the target
markets are selected out of the segments formed.

Evaluating the Market Segments:

In evaluating market segments, any company must look at 2 factors:
1. The segments overall structural attractiveness in terms of size, growth,
profitability, scale economics and low risk

2. Companys objectives and resources

Selecting the Market Segments:

Once a marketer has evaluated the different segments for their size,
growth, and attractiveness, and found that they are compatible with the
companys objectives and resources, the obvious step is to go far selecting
the market segments. There are five patterns of target market selection,
which was first put forward by D F Abell:
1. Single Segment Concentration
2. Selective Segment Specialisation
3. Market Specialisation
4. Product Specialisation
5. Full Coverage
Let us try to understand this taking example of a company X in electric
appliances market.

The company can consider 5 patterns of target market selection as

described below:

1. Single Segment Concentration:

In this case, the marketer prefers to go for single segment. In our
hypothetical example, the company X uses this strategy when it produces a
typical product for a single type of market like plasma TV. In real life,
companies like Allahabad Law Agency (only law books) and BPB
publications (only Computer books) are good examples. The company may
adopt this strategy if it has strong market position, greater knowledge about
segment-specific-needs, specified reputation and probable leadership
position.

2. Selective Segment Specialisation:

This is known as multistage coverage because different segments are
sought to be captured by the company. The company selects a number of
segments each of which is attractive, potential and appropriate. There may
be little or no synergy among the segments, but this strategy has the
advantage of diversifying the firms risk.
In our example, if the company X produces plasma TV as well as Walkman,
the two different types of products obviously for two different types of
markets, then it can be cited as an example of Selective Segment
Specialisation strategy. Bata shoes were mostly in the popular segment
until beginning of 1990s. Then, it turned itself into premium segment while
still retaining the appeal of popular segment. The taking of select segments
of shoe market could not help Bata to gain full control of market. After 1995,
it has come back again to the popular segment.

3. Market Specialisation:
Here the company takes up a particular market segment for supplying all
relevant products to the target group. In our example, the company X can

implement Market Specialisation strategy by producing all sorts of home

appliances like TV, washing machine, refrigerator and micro oven for
middle class people.
Here the chosen segment is the middle class and the firm specializes in
that market only. Sudha Publications Pvt. Ltd. publishes and sells books for
the students and job-hunters that include competition books (CAT, IIT-JEE,
IAS), general knowledge books and personality development books.

4. Product Specialisation:
Product specialisation occurs when a company sells certain products to
several different types of potential customers. In our example, if the
company X produces only a particular type of gizmo like toaster that is
consumed by all type of people, they we can say that the company uses
Product Specialisation strategy. Product specialisation promises strong
recognition of customer within the product areas. Super Precision
Components supply small nuts and screws for use in military, industry and
daily use.

5. Full Coverage:
The company attempts to serve all customer groups with all the products
they might need. Only very large firms can undertake a full market
coverage strategy that can be done in 2 ways:
i. Undifferentiated marketing or convergence:
The company ignores market segment differences and goes after the
whole market with one market offer. It focuses on a basic buyer need rather
than on differences among buyers.

ii. Differentiated marketing or divergence:

The company operates in several market segments and designs different
programmes for each segment. It creates more total sales than the former.
But the following costs would be higher:

15

Different types of promotion

Whenever a person opens his social account, he always finds advertisements on the page placed
somewhere on the page and the person most of the times has a glance on them. People
generally feel that advertising and promotion means the same, however there is difference
between the two.
Let us first understand this difference between advertising and promotion. Advertising is the
process of marketing your product through various media in such a way that it can help you to
gain maximum profit over long-term basis. It will also provide you with short-term gains but
more importantly it will help you build your brand which will provide you with long-term
benefits.

image:KROMKRATHOG, freedigitalphotos.net
The various media can be newspaper, radio, TV and social media. With the help of advertising
you can always make the customer remember your product for a longer period of time.
Everyone remembers Airtel with the Har Ek Friend Zaroori Hota Hai Jingle and similarly Coke
with Haa Haa Mai Crazy Hun. These are numerous ways by which you can get your product
stuck in the mind of the consumer by creating awareness. Moreover, advertising done has to be
cost effective and it depends upon the product being advertised and the brand advertising the
same because advertising is the most important marketing tool that can help you sell your
product as well as gain profits. On the other hand, promotion is majorly concerned with
achieving profits on short term basis with the help of promotional offers, providing employees t-

shirts with company logo, giving the esteemed customers benefits (such as discount cards, etc).
All these help the organization to increase sales and build a larger customer base. For example,
when Reliance Communications had started its GSM Mobile service, then the customers were
provided with Rs. 10 as talktime everyday for first 3 months and
this offer was a huge hit.
Another point is that advertisement and promotion go hand in hand. You cannot promote a
product until you advertise the same. When McDonalds launched their Masala Grill Burger, they
started advertising the product nearly 2 months in advance and on the launch, they had the
promotional offer of bringing the newspaper cutting and getting the Masala Grill Burger free in
the morning. The promotional offer serves to bring a surge of interest among the public, helping
to make it more effective.

Now first let us look at the mediums used for advertisements.

First and the most common is Television. We all see various advertisements on TV. The Ads
shown depend upon whether they are for local people or the whole nation. It is an expensive
way of reaching the audience. Moreover, the time and the channel at which the Ads are shown
are also important for reaching the target audience. For example, a sports company like Nike
would prefer to advertise on a sports channel and at a time when some tournament is on
instead of a channel showing daily soap operas.

Second is Radio. The Ads on radio need to be short and crisp so that the audience does not get
bored by these Ads. Radio is the best medium for local and small scale industries as they would
target the local market only and since now-a-days radio has become a hit means of
entertainment so it is an effective medium.

Third is Print Ads. This includes Ads in newspapers as well as magazines. Most of the newer
entrants in the market, utilize this means. Big Bazaar, Metro Cash and Carry, etc use this means
very effectively by printing the Ads on the first and the last page. The print Ads have a longer life
and they can be used to effectively tell the importance of the product to the target audience.

Last but surely not the least is Social Media. It is cheap and the most effective means of reaching
the target audience especially the youth.
The various ways of promotions are as follows:

First is online contests. We generally see contests being run on the social sites by various
organizations where winners are given attractive prizes. This is a way to lure the customers so
that they starting utilizing your product. Data of the people is also collected by such events and
this data comes in very handy for the organization.

Second is providing free coupons and other services. This type of promotional strategy is
generally used by the telecom companies wherein they provide free coupons as well other free
services to their loyal customers. The clothing companies also come out with various
promotional offers in order to lure the customers.
Third is redeemable coupons. This is generally used by organizations involved in e-commerce
wherein when a customer has bought something from the online sites, then they are provided
with coupons that can be redeemed on their next purchase. This is a very effective strategy for ecommerce because people tend to buy the product as they are getting the discount.

Advertising and Promotion play a very crucial role in the sales of a product and thus are very
important. This is so because people tend to remember products by these Ads and promotions.
A good Ad and promotion can do wonders for the product and at the same time if any one of the
aspects is not upto the mark the product is bound to fail. Taking an example of automobile
industry, Maruti Suzuki advertises its car Ertiga in a very beautiful manner saying it is LUV (Life
Utility Vehicle) and the results are to be seen. It is running successfully. On the other hand
another car of the same company, Kizashi of Grand Vitara (which has been stopped now) were
nowhere to be seen because Maruti has not been able to advertise and promote these and
Maruti has thus failed in the higher segment.

So, on the whole Advertising and Promotion play a very crucial role and this part of marketing
need to be handled with utmost dedication as this is one of the ways in which your brand is
projected in front of the customer.
And I would like to sum up with the lines of Mark Twain, Many a small thing has been made
large by the right kind of Advertising and Promotion

16

Different types of sales promotion

What is sales promotion?

Sales promotion relates to short term incentives or activities that encourage
the purchase or sale of a product or service. Sales promotions initiatives are
often referred to as below the line activities.
What are the major sales promotion activities?
Sales promotion activities can be targeted toward final buyers (consumer
promotions), business customers (business promotions), retailers and

wholesalers (trade promotions) and members of the sales force (sales force
promotions). Here are some typical sales promotion activities:
Consumer promotions

Point of purchase display material

In-store demonstrations, samplings and celebrity appearances

Competitions, coupons, sweepstakes and games

On-pack offers, multi-packs and bonuses

Loyalty reward programs

Business promotions

Seminars and workshops

Conference presentations

Trade show displays

Telemarketing and direct mail campaigns

Newsletters

Event sponsorship

Capability documents

Trade promotions

Reward incentives linked to purchases or sales

Reseller staff incentives

Competitions

Corporate entertainment

Bonus stock

Sales Force Promotions

Commissions

Sales competitions with prizes or awards

18

Product Life Cycle

Stages in the Product Lifecycle

There are four stages in the product life cycle: introduction, growth, maturity, and decline .

Firm Life Cycle

Firms progress through stages of development, indicated by their changing profits
over time.

Introduction
After all research and development has be done it is time to launch the product and begin its
lifecycle. The introduction stage of the product life cycle is when the marketing team
emphasizes promotion and the product's initial distribution. Often the product will have little or
no competitors at this point. Nonetheless, sales may remain low because it takes time for the market
to accept the new product. At this stage of the life cycle, the company usually loses money on the
product.
Growth
In the growth stage of the product life cycle, the market has accepted the product and sales begin to
increase. The company may want to make improvements to the product to stay competitive. At this
point, there are still relatively few competitors.
Maturity
In the maturity stage of the product life cycle, sales will reach their peak. Other competitors enter the
market with alternative solutions, making competition in the market fierce. The company that
introduced the new product may begin to find it difficult to compete in the market.
Decline

In the decline stage of the product life cycle, sales will begin to decline as the product reaches its
saturation point. Most products are phased out of the market at this point due to the decrease in sales
and because of competitive pressure. The market will see the product as old and no longer
in demand.
There is no set schedule for the stages of a product life cycle. Differences will occur depending on the
type of product, how well it is received by the market, the promotional mix of the company, and the
aggressiveness of the competition.

19.

Features of product

A function of an item which is capable of gratifying a particular consumer need and

is hence seen as a benefit ofowning the item. In business, a product feature is one
of the distinguishing characteristics of a product or servicethat helps boost
its appeal to potential buyers, and might be used to formulate a product
marketing strategy that highlights the usefulness of the product to targeted
potential consumers.

20.

Different types of products

There are different types of products and they too act as a family tree and have
their branches and are classified under different sections on the basis of their
features. Different types of products category are:
The differentiated product The differentiated product enjoys a
distinction from other similar products/brands in the market. The differential
claimed may be real, with a real distinction on ingredient, quality, utility, or
service, or it may be psychological brought about through subtle sales
appeals.
The customised product Customer specific requirements are taken into
account while developing the product. Commonly practised in the industrial
product marketing, where the manufacturer and the user are in direct contact
and the product gets customised to the requirements of the customer.
The augmented product The augmented product is the result of
voluntary improvements brought about by the manufacturer in order to

enhance the value of the product, which are neither suggested by the customer
nor expected by them. The marketer on his own augments the product, by
adding an extra facility or an extra feature to the product.
The potential product The potential product is tomorrows product
carrying with it all the improvements and finesse possible under the given
technological, economic and competitive condition. There are no limits to the
potential product. Only the technological and economic resources of the firm
set the limit.

Types of Distribution:
Intensive, Selective and
Exclusive Distribution
21

by Smriti Chand Distribution

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Some of the important types of distribution in international market are

1. Intensive 2. Selective and 3. Exclusive distribution.
It represents the level of international availability selected for a particular
product by the marketer; the level of intensity chosen will depend upon
factor such as the production capacity, the size of the target market, pricing
and promotion policies and the amount of product service required by the
end-user.

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There are three broad options:

1) Intensive Distribution:
Intensive distribution aims to provide saturation coverage of the market by
using all available outlets. For many products, total sales are directly linked
to the number of outlets used (e.g., cigarettes, beer). Intensive distribution
is usually required where customers have a range of acceptable brands to
choose from. In other words, if one brand is not available, a customer will
simply choose another.
This alternative involves all the possible outlets that can be used to
distribute the product. This is particularly useful in products like soft drinks
where distribution is a key success factor. Here, soft drink firms distribute
their brands through multiple outlets to ensure their easy availability to the
customer.
Hence, on the one hand these brands are available in restaurants and five
star hotels and on the other hand they are also available through countless
soft drink stalls, kiosks, sweetmarts, tea shops, and so on. Any possible
outlet where the customer is expected to visit is also an outlet for the soft
drink.

2) Selective Distribution:
Selective distribution involves a producer using a limited number of outlets
in a geographical area to sell products. An advantage of this approach is
that the producer can choose the most appropriate or best-performing
outlets and focus effort (e.g., training) on them. Selective distribution works
best when consumers are prepared to shop around in other words
they have a preference for a particular brand or price and will search out
the outlets that supply.

This alternative is the middle path approach to distribution. Here, the firm
selects some outlets to distribute its products. This alternative helps focus
the selling effort of manufacturing firms on a few outlets rather than
dissipating it over countless marginal ones.
It also enables the firm to establish a good working relationship with
channel members. Selective distribution can help the manufacturer gain
optimum market coverage and more control but at a lesser cost than
intensive distribution. Both existing and new firms are known to use this
alternative.

3) Exclusive Distribution:
Exclusive distribution is an extreme form of selective distribution in which
only one wholesaler, retailer or distributor is used in a specific geographical
area.
When the firm distributes its brand through just one or two major outlets in
the market, who exclusively deal in it and not all competing brands, it is
said that the firm is using an exclusive distribution strategy. This is a
common form of distribution in products and brands that seek a high
prestigious image.
Typical examples are of designer ware, major domestic appliances and
even automobiles. By granting exclusive distribution rights, the
manufacturer hopes to have control over the intermediaries price,
promotion, credit inventory and service policies. The firm also hopes to get
the benefit of aggressive selling by such outlets.