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ASSIGNMENT 1

BASICS OF MARKETING
MARKETING Definition
Marketing is the management process for identifying,
anticipating and satisfying customer requirements profitably.
Source - The Chartered Institute of Marketing (CIM). Accessed
2012.
The CIM definition looks not only at identifying customer needs,
but also satisfying them (short-term) and anticipating them in
the future (long-term retention). The definition also states the
importance of a process of marketing, with marketing
objectives and outcomes. CIM is recognised as being one of the
most influential marketing
bodies in the world. It is the professional body for marketing in
the United Kingdom.
MARKETING Strategy
In order for businesses to win market share and stay relevant
they need to consider many types of marketing strategies. Each
marketing strategy can communicate to a target market the
benefits and features of a product.
Marketing strategies can also communicate an overall value to
their customers. In many cases, this is the core of building
equity or good will in your target markets. Apple, for example,
has invested in creating commercials for television, billboards,
and magazines that showcase their products in such a way that
their customers feel an affinity towards Apples products.
MARKETING MIX Definition
The marketing mix is one of the most famous marketing terms.
The marketing mix is the tactical or operational part of a
marketing plan. The marketing mix is also called the 4Ps and
the 7Ps. The 4Ps are price, place, product and promotion.
The services marketing mix is also called the 7Ps and includes
the addition of process, people and physical evidence.
The marketing mix is . . . The set of controllable tactical
marketing tools product, price, place, and promotion that
the firm blends to produce the response it wants in
the target market.
Source - Kotler and Armstrong (2010).
The concept is simple. Think about another common mix a
cake mix. All cakes contain eggs, milk, flour, and sugar.
However, you can alter the final cake by altering the amounts
of mix elements contained in it. So for a sweet cake add more
sugar!
It is the same with the marketing mix. The offer you make to
your customer can be altered by varying the mix elements. So
for a high profile brand, increase the focus on promotion and
desensitize the weight given to price.

The marketing mix definition is simple. It is about putting


the right product or a combination thereof in the place, at the
right time, and at the right price. The difficult part is doing this
well, as you need to know every aspect of your business plan.
As we noted before, the marketing mix is predominately
associated with the 4Ps of marketing, the 7Ps of service
marketing, and the 4 Cs theories developed in the 1990s.
Here are the principles used in the application of the right
marketing mix:
MARKETING MIX 4PS

A marketing expert named E. Jerome McCarthy created the


Marketing 4Ps in the 1960s. This classification has been used
throughout the world. Business schools teach this concept in
basic marketing classes.
The marketing 4Ps are also the foundation of the idea of
marketing mix.
#1 Marketing Mix Product

A product is an item that is built or produced to satisfy the


needs of a certain group of people. The product can be
intangible or tangible as it can be in the form of services or
goods.
You must ensure to have the right type of product that is in
demand for your market. So during the product development
phase, the marketer must do an extensive research on the life
cycle of the product that they are creating.
A product has a certain life cycle that includes the growth
phase, the maturity phase, and the sales decline phase. It is
important for marketers to reinvent their products to stimulate
more demand once it reaches the sales decline phase.
Marketers must also create the right product mix. It may be
wise to expand your current product mix by diversifying and
increasing the depth of your product line.
All in all, marketers must ask themselves the question what
can I do to offer a better product to this group of people than
my competitors.
In developing the right product, you have to answer the
following questions:
What does the client want from the service or product?
How will the customer use it?
Where will the client use it?
What features must the product have to meet the clients
needs?
Are there any necessary features that you missed out?
Are you creating features that are not needed by the
client?
Whats the name of the product?
Does it have a catchy name?
What are the sizes or colours available?
How is the product different from the products of your
competitors?
What does the product look like?

PRODUCT LIFE CYCLE Stages

As consumers, we buy millions of products every year. And just


like us, these products have a life cycle. Older, long-established
products eventually become less popular, while in contrast, the
demand for new, more modern goods usually increases quite
rapidly after they are launched.
Because most companies understand the different product life
cycle stages, and that the products they sell all have a limited
lifespan, the majority of them will invest heavily in new product
development in order to make sure that their businesses
continue to grow.

The product life cycle has 4 very clearly defined stages, each
with its own characteristics that mean different things for
business that are trying to manage the life cycle of their
particular products.
Introduction Stage This stage of the cycle could be the
most expensive for a company launching a new product. The
size of the market for the product is small, which means sales
are low, although they will be increasing. On the other hand,
the cost of things like research and development, consumer
testing, and the marketing needed to launch the product can be
very high, especially if its a competitive sector.
Growth Stage The growth stage is typically characterized by
a strong growth in sales and profits, and because the company
can start to benefit from economies of scale in production, the
profit margins, as well as the overall amount of profit, will
increase. This makes it possible for businesses to invest more
money in the promotional activity to maximize the potential of
this growth stage.
Maturity Stage During the maturity stage, the product is
established and the aim for the manufacturer is now to
maintain the market share they have built up. This is probably
the most competitive time for most products and businesses
need to invest wisely in any marketing they undertake. They
also need to consider any product modifications or
improvements to the production process which might give them
a competitive advantage.
Decline Stage Eventually, the market for a product will start
to shrink, and this is whats known as the decline stage. This
shrinkage could be due to the market becoming saturated (i.e.
all the customers who will buy the product have already
purchased it), or because the consumers are switching to a
different type of product. While this decline may be inevitable,
it may still be possible for companies to make some profit by
switching to less-expensive production methods and cheaper
markets.
Product Life Cycle Examples
Its possible to provide examples of various products to
illustrate the different stages of the product life cycle more
clearly. Here is the example of watching recorded television and
the various stages of each method:
1. Introduction 3D TVs
2. Growth Blue ray discs/DVR
3. Maturity DVD
4. Decline Video cassette
The idea of the product life cycle has been around for some
time, and it is an important principle manufacturers need to
understand in order to make a profit and stay in business.
However, the key to successful manufacturing is not just
understanding this life cycle, but also proactively managing
products throughout their lifetime, applying the appropriate
resources and sales and marketing strategies, depending on
what stage products are at in the cycle.

CHALLENGES of PLC Curve


As a model, the curve provides a good approximation of the
sales and profits that can be expected as products pass through
the four stages of the typical life cycle. However, there are a
few things to bear in mind when trying to apply the Product Life
Cycle Curve in the real world.
1. Unpredictability: While a products life may be limited, it
is very hard for manufacturers to predict exactly how long
it is likely to be, especially during the new product
development phase. While most manufacturers are very
good at making the best decisions based on the
information they have, consumer demand can be
unpredictable, which means they dont always get it right.
2. Change: The unpredictability of a products life span
comes from the fact that all the factors that influence the
product life cycle are constantly changing. For example,
changes in the cost of production or a fall in consumer
demand due to the launch of alternative products, could
significantly alter the duration of the different product life
cycle stages.
3. The Curve is a Model: Critics of the product life cycle
have claimed that some manufacturers may place too
much importance on the suggestions the model makes, so
that it eventually becomes self-fulfilling. To illustrate the
point, if a company uses the product life cycle curve as a
basis for its decisions, a decrease in sales may lead them
to believe their product is entering the Decline stage and
therefore spend less on promoting it, when the opposite
strategy could help them to capture more market share
and actually increase sales again.
While the Product Life Cycle Curve needs to be applied with a
certain amount of care, and manufacturers are unlikely to rely
solely on its simple illustration to predict their sales and profits,
it is still a useful tool.
With a general appreciation of the kind of challenges that will
be faced during each of the four stages, the model provides
businesses and their marketing departments with the
opportunity to be plan ahead and be better prepared to meet
those challenges.

New Product Development Stages


Before a product can embark on its journey through the
four product life cycle stages, it has to be developed. New
product development is typically a huge part of any
manufacturing process. Most organizations realize that all
products have a limited lifespan, and so new products need to
be developed to replace them and keep the company in
business. Just as the product life cycle has various stages, new
product development is also broken down into a number of
specific phases.
Developing a new product involves a number of stages which
typically centre on the following key areas:
The Idea: Every product has to start with an idea. In some
cases, this might be fairly simple, basing the new product on
something similar that already exists. In other cases, it may be
something revolutionary and unique, which may mean the idea
generation part of the process is much more involved. In fact,
many of the leading manufacturers will have whole
departments that focus solely on the task of coming up with
the next big thing.
Research: An organization may have plenty of ideas for a new
product, but once it has selected the best of them, the next
step is to start researching the market. This enables them to
see if theres likely to be a demand for this type of product, and
also what specific features need to be developed in order to
best meet the needs of this potential market.
Development: The next stage is the development of the
product. Prototypes may be modified through various design
and manufacturing stages in order to come up with a finished
product that consumers will want to buy.
Testing: Before most products are launched and the
manufacturer spends a large amount of money on production
and promotion, most companies will test their new product with
a small group of actual consumers. This helps to make sure that
they have a viable product that will be profitable, and that
there are no changes that need to be made before its
launched.
Analysis: Looking at the feedback from consumer testing
enables the manufacturer to make any necessary changes to
the product, and also decide how they are going to launch it to
the market. With information from real consumers, they will be
able to make a number of strategic decisions that will be crucial
to the products success, including what price to sell at and how
the product will be marketed.
Introduction: Finally, when a product has made it all the way
through the new product development stage, the only thing left
to do is introduce it to the market. Once this is done, good
product life cycle management will ensure the manufacturer
makes the most of all their effort and investment.
Thousands of new products go on sale every year, and
manufacturers invest a lot of time, effort and money in trying to
make sure that any new products they launch will be a success.
Creating a profitable product isnt just about getting each of the
stages of new product development right, its also about
managing the product once its been launched and then
throughout its lifetime.
This product life cycle management process involves a range of
different marketing and production strategies, all geared
towards making sure the product life cycle curve is as long and
profitable as possible.

#2 Marketing Mix Price


The price of the product is basically the amount that a
customer pays for to enjoy it. Price is a very important
component of the marketing mix definition.
It is also a very important component of a marketing plan as it
determines your firms profit and survival. Adjusting the price of
the product has a big impact on the entire marketing strategy
as well as greatly affecting the sales and demand of the
product.
This is inherently a touchy area though. If a company is new to
the market and has not made a name for themselves yet, it is
unlikely that your target market will be willing to pay a high
price.
Although they may be willing in the future to hand over large
sums of money, it is inevitably harder to get them to do so
during the birth of a business.
Pricing always help shape the perception of your product in
consumers eyes. Always remember that a low price usually
means an inferior good in the consumers eyes as they
compare your good to a competitor.
Consequently, prices too high will make the costs outweigh the
benefits in customers eyes, and they will therefore value their
money over your product. Be sure to examine competitors
pricing and price accordingly.
When setting the product price, marketers should consider the
perceived value that the product offers. There are three major
pricing strategies, and these are:
Market penetration pricing
Market skimming pricing
Neutral pricing
Here are some of the important questions that you should ask
yourself when you are setting the product price:
How much did it cost you to produce the product?
What is the customers perceived product value?
Do you think that the slight price decrease could
significantly increase your market share?
Can the current price of the product keep up with the price
of the products competitors?
PRICING STRATEGY.
1. Pricing at a Premium
With premium pricing, businesses set costs higher than their
competitors. Premium pricing is often most effective in the
early days of a products life cycle, and ideal for small
businesses that sell unique goods.
Because customers need to perceive products as being worth
the higher price tag, a business must work hard to create a
value perception. Along with creating a high-quality product,
owners should ensure their marketing efforts, the products
packaging and the stores dcor all combine to support the
premium price.
2. Pricing for Market Penetration
Penetration strategies aim to attract buyers by offering lower
prices on goods and services. While many new companies use
this technique to draw attention away from their competition,
penetration pricing does tend to result in an initial loss of
income for the business.
Over time, however, the increase in awareness can drive profits
and help small businesses to stand out from the crowd. In the
long run, after sufficiently penetrating a market, companies
often wind up raising their prices to better reflect the state of
their position within the market.
3. Economy Pricing
Used by a wide range of businesses including generic food
suppliers and discount retailers, economy pricing aims to
attract the most price-conscious of consumers. With this
strategy, businesses minimize the costs associated with
marketing and production in order to keep product prices down.
As a result, customers can purchase the products they need
without frills.
While economy pricing is incredibly effective for large
companies like Wal-Mart and Target, the technique can be
dangerous for small businesses. Because small businesses lack
the sales volume of larger companies, they may struggle to
generate a sufficient profit when prices are too low. Still,
selectively tailoring discounts to your most loyal customers can
be a great way to guarantee their patronage for years to come.
4. Price Skimming
Designed to help businesses maximize sales on new products
and services, price skimming involves setting rates high during
the introductory phase. The company then lowers prices
gradually as competitor goods appear on the market.
One of the benefits of price skimming is that it allows
businesses to maximize profits on early adopters before
dropping prices to attract more price-sensitive consumers. Not
only does price skimming help a small business recoup its
development costs, but it also creates an illusion of quality and
exclusivity when your item is first introduced to the
marketplace.
5. Psychology Pricing
With the economy still limping back to full health, price remains
a major concern for American consumers. Psychology
pricing refers to techniques that marketers use to encourage
customers to respond on emotional levels rather than logical
ones.
For example, setting the price of a watch at $199 is proven to
attract more consumers than setting it at $200, even though
the true difference here is quite small. One explanation for this
trend is that consumers tend to put more attention on the first
number on a price tag than the last. The goal of psychology
pricing is to increase demand by creating an illusion of
enhanced value for the consumer.
6. Bundle Pricing
With bundle pricing, small businesses sell multiple products for
a lower rate than consumers would face if they purchased each
item individually. Not only is bundling goods an effective way of
moving unsold items that are taking up space in your facility,
but it can also increase the value perception in the eyes of your
customers, since youre essentially giving them something for
free.
Bundle pricing is more effective for companies that sell
complimentary products. For example, a restaurant can take
advantage of bundle pricing by including dessert with every
entre sold on a particular day of the week. Small businesses
should keep in mind that the profits they earn on the higher-
value items must make up for the losses they take on the
lower-value product.
IES

Things to consider when pricing your Product


Choosing a pricing strategy for your product can be intimidating
because theres a lot riding on it. You can tackle this task by
breaking it down using these five considerations:
1. Cost
You want to ensure that the price of your product generates
enough revenue to cover your costs. So heres the question:
How much does it cost to take your product from manufacturing
to consumption? When calculating this figure, make sure to
include the price of raw materials, assembly, labour, rent,
shipping and any other overhead costs you incur. Add these up
and divide by the number of products you produce in the given
time period. Once youve pinpointed the average cost per
product, youll see precisely the revenue you need to cover all
of your expenses.
Of course, youre probably not trying to just breakeven you
want to make a profit. The percentage that youd like to make
off of each item is called your gross profit margin target, which
you can calculate with this formula:
Where P = price and C = cost:
Gross Profit Margin Target = (P-C)/P
When you plug in your target percentage and cost, the
equation will result in the price. Creating a simple Excel
spreadsheet with this formula will help you calculate these
figures as you add together all of your costs.
How much profit should you aim for? Target percentage varies
based on the type of business. For instance, manufacturers and
retailers often target 50 percent, while distributors target
something around 30 percent.
2. Customers
Learning a much as you can about your customers will help you
accurately price your products. Are they bargain hunters? Do
they splurge on tech products? Do they value quality over mass
consumption? While we can (and should) continue testing after
setting a price, there are a few simple ways to predict your
target markets behaviour and preferences beforehand.
Conducting market research will outline the demographics and
psychographics of your target audience and reveal their
purchasing behaviour. Basic database, survey and internet
research (which you can do in-house) will expose common
traits among your customer base. If you want a more in-depth
understanding of the groups tendencies, consider hiring a
third-party market research company. This type of research
demonstrates trends like how crucial your product is to their
lifestyle. If your product provides a function that they cant live
without, a higher price point will not deter them. For example,
smartphones have become such a critical staple for millennial
that even a high price tag will not keep them from purchasing a
new one every few years.
3. Competition
How is your competition pricing their products? This number is
great jumping off point. You want your price to be competitive,
but also reflect your products value. You will need to find out if
their product has the same perceived value as yours. How do
customers compare the products? What types of reviews is
each product getting? Again, conducting market research and
even performing your own internet searches will provide useful
insight on this topic. When researching the competition, dont
just settle for the prices you can find on their website. Do some
digging on review sites, or even as a secret shopper. If your
product clearly provides more value than the competition, a
higher price point will help indicate to your audience that its a
superior product. If the competitions product proves more
valuable, try pricing your product just below theirs as a less
expensive, but high-quality option.

4. Tiered Pricing
Does your product have options that vary in value? Compare
the experience to buying a new car: Can your customers
choose between standard and fully loaded? If so, you should
consider adding a tiered pricing structure. Tiered pricing
appeals to customers because it allows them to choose the
price level that best fits their budget. If your product(s) can be
differentiated through additional features, price them at points
that reflect their individual values. Try using a pricing structure
that offers good, better, and best options for products or
services that have increasing levels of value. Applying this
strategy can help you capture a larger portion of the market by
offering multiple options for a range of shoppers.
5. Odd Number Pricing
After considering all of the above pricing factors, the exact
price comes down to a matter of cents. Why does iTunes sell
songs at 99 cents instead of $1? In the eyes of a consumer, a
few cents can mean the difference between purchasing or
passing. A pricing strategy thats been around for decades
suggests that a product retailing at $39.99 is much more
appealing than one at $40. Although this difference may seem
arbitrary, studies have shown that this pricing strategy is
successful for the majority of product categories. Once you
know that youre competitively priced and covering your costs,
test out single-digit strategies to find which best fits your target
audience.

#3 Marketing Mix Place

Placement or distribution is a very important part of the


product mix definition. You have to position and distribute the
product in a place that is accessible to potential buyers.
This comes with a deep understanding of your target market.
Understand them inside out and you will discover the most
efficient positioning and distribution channels that directly
speak with your market.
There are many distribution strategies, including:
Intensive distribution
Exclusive distribution
Selective distribution
Franchising
Here are some of the questions that you should answer in
developing your distribution strategy:
Where do your clients look for your service or product?
What kind of stores do potential clients go to? Do they
shop in a mall, in a regular brick and mortar store, in the
supermarket, or online?
How do you access the different distribution channels?
How is your distribution strategy different from your
competitors?
Do you need a strong sales force?
Do you need to attend trade fairs?
Do you need to sell in an online store?
TYPES OF DISTRIBUTION CHANNELS
In todays fast paced world, distribution by a company can be
an enormous competitive advantage to the company. Most
companies target their customers far and wide. Because of the
rising costs, companies are trying to expand in various markets
so that they have a higher turnover and hence a higher margin.
To reach far and wide, you need the right distribution strategies
in place. You cannot market a product and then not deliver the
product to the end customer. This is a sheer loss of money as
you waste money on your marketing and the opportunity loss is
also huge. Not to mention, the loss to the brand when the
customer wants to purchase the product but cannot find it.
Thus, there is a lot of importance given to making proper
distribution strategies for a company. This is also the reason
why Place (Which majorly consists of distribution) is one of the
major 4Ps of the marketing mix. Place is considered in case of
products as well as services.
Distribution strategy is mainly decided by keeping the top
management in loop because it affects overall operations. This
strategy can be summarised with 3 main points.
How to get the product from the manufacturing point to
the end customer.
How to control costs and save time while executing the
distribution strategy
How to build a competitive advantage through distribution

On a macro level, there are two types of distribution.


1) Indirect distribution
Indirect distribution is when the product reaches the end
customer through numerous channels in between. For example
The product goes from manufacturer to C&F, then to the
distributor, then to the retailer and finally to the customer. Thus
the chain is long.
2) Direct distribution
Direct distribution is when the company either directly sends
the product to end customer or when the channel length is very
less. A company selling on an e commerce portal or selling
through modern retail is the form of direct distribution.
Furthermore, distribution strategies are also decided based on
the level of penetration that the company wants to achieve.
This level of penetration is decided again by the remaining 3
Ps of the marketing mix Product, price and promotions.
However, based on the level of penetration, the distribution
strategies vary as follows.
3) Intensive distribution
When the company is having a mass marketing product, then it
uses intensive distribution. Intensive distribution tries to cover
as much of the market as it can. Typical FMCG and consumer
durable products are best example of intensive distribution
strategy.
4) Selective distribution
A company like Armani, Zara or any other such branded
company will have selective distribution. These companies are
likely to have only limited outlets. For example In an urban
city, Armani might have 2-3 outlets at the maximum whereas
Zara might have 4-5.
5) Exclusive distribution
If Zara has 4-5 outlets in a city, how many outlets would a
company like Lamborghini have? Probably one in a region of 5-7
cities. Thats exclusive distribution for you. If a company wants
to give a big region to one single distributor then it is known as
exclusive distribution strategy. In some cases, a distributor
might be appointed for a complete country. There would be no
one other than that distributor operating in that company.
Overall, distribution strategies depend a lot on the various
products which the companies might have. A single company
might have multiple product line and lengths, each with its own
distribution strategy.
Some products, which are premium, might need selective
distribution whereas others which are mass products, may need
intensive distribution. The strategies for both types will be
different. So, in the end, the distribution of a company is
dynamic in nature and it contributes a lot to the competitive
advantage of the company.

#4 Marketing Mix Promotion

Promotion is a very important component of marketing as it can


boost brand recognition and sales. Promotion is comprised of
various elements like:
Sales Organization
Public Relations
Advertising
Sales Promotion
Advertising typically covers communication methods that are
paid for like television advertisements, radio commercials, print
media, and internet advertisements. In contemporary times,
there seems to be a shift in focus offline to the online world.
Public relations, on the other hand, are communications that
are typically not paid for. This includes press releases,
exhibitions, sponsorship deals, seminars, conferences, and
events.
Word of mouth is also a type of product promotion. Word of
mouth is an informal communication about the benefits of the
product by satisfied customers and ordinary individuals. The
sales staff plays a very important role in public relations and
word of mouth.
It is important to not take this literally. Word of mouth can also
circulate on the internet. Harnessed effectively and it has the
potential to be one of the most valuable assets you have in
boosting your profits online. An extremely good example of this
is online social media and managing a firms online social
media presence.
In creating an effective product promotion strategy, you need
to answer the following questions:
How can you send marketing messages to your potential
buyers?
When is the best time to promote your product?
Will you reach your potential audience and buyers through
television ads?
Is it best to use the social media in promoting the product?
What is the promotion strategy of your competitors?
Your combination of promotional strategies and how you go
about promotion will depend on your budget, the message you
want to communicate, and the target market you have defined
already in previous steps.
TYPES OF Promotion Strategies
Contests
Contests are a frequently used promotional strategy. Many
contests don't even require a purchase. The idea is to promote
your brand and put your logo and name in front of the public
rather than make money through a hard-sell campaign. People
like to win prizes. Sponsoring contests can bring attention to
your product without company overtness.
Social Media
Social media websites such as Facebook and Google+ offer
companies a way to promote products and services in a more
relaxed environment. This is direct marketing at its best. Social
networks connect with a world of potential customers that can
view your company from a different perspective. Rather than
seeing your company as "trying to sell" something, the social
network can see a company that is in touch with people on a
more personal level. This can help lessen the divide between
the company and the buyer, which in turn presents a more
appealing and familiar image of the company.
Mail Order Marketing
Customers who come into your business are not to be
overlooked. These customers have already decided to purchase
your product. What can be helpful is getting personal
information from these customers. Offer a free product or
service in exchange for the information. These are customers
who are already familiar with your company and represent the
target audience you want to market your new products to.
Product Giveaways
Product giveaways and allowing potential customers to sample
a product are methods used often by companies to introduce
new food and household products. Many of these companies
sponsor in-store promotions, giving away product samples to
entice the buying public into trying new products.
Point-of-Sale Promotion and End-Cap Marketing
Point-of-sale and end-cap marketing are ways of selling product
and promoting items in stores. The idea behind this
promotional strategy is convenience and impulse. The end cap,
which sits at the end of aisles in grocery stores, features
products a store wants to promote or move quickly. This
product is positioned so it is easily accessible to the customer.
Point-of-sale is a way to promote new products or products a
store needs to move. These items are placed near the checkout
in the store and are often purchased by consumers on impulse
as they wait to be checked out.
Customer Referral Incentive Program
The customer referral incentive program is a way to encourage
current customers to refer new customers to your store. Free
products, big discounts and cash rewards are some of the
incentives you can use. This is a promotional strategy that
leverages your customer base as a sales force.
Causes and Charity
Promoting your products while supporting a cause can be an
effective promotional strategy. Giving customers a sense of
being a part of something larger simply by using products they
might use anyway creates a win/win situation. You get the
customers and the socially conscious image; customers get a
product they can use and the sense of helping a cause. One
way to do this is to give a percentage of product profit to the
cause your company has committed to helping.
Branded Promotional Gifts
Giving away functional branded gifts can be a more effective
promotional move than handing out simple business cards. Put
your business card on a magnet, ink pen or key chain. These
are gifts you can give your customers that they may use, which
keeps your business in plain sight rather than in the trash or in
a drawer with other business cards the customer may not look
at.
Customer Appreciation Events
An in-store customer appreciation event with free refreshments
and door prizes will draw customers into the store. Emphasis on
the appreciation part of the event, with no purchase of anything
necessary, is an effective way to draw not only current
customers but also potential customers through the door. Pizza,
hot dogs and soda are inexpensive food items that can be used
to make the event more attractive. Setting up convenient
product displays before the launch of the event will ensure the
products you want to promote are highly visible when the
customers arrive.
After-Sale Customer Surveys
Contacting customers by telephone or through the mail after a
sale is a promotional strategy that puts the importance of
customer satisfaction first while leaving the door open for a
promotional opportunity. Skilled salespeople make survey calls
to customers to gather information that can later be used for
marketing by asking questions relating to the way the
customers feel about the products and services purchased. This
serves the dual purpose of promoting your company as one
that cares what the customer thinks and one that is always
striving to provide the best service and product.

Marketing Mix 7Ps


The 7Ps model is a marketing model that modifies the 4Ps
model. The 7Ps is generally used in the service industries.
Here is the expansions from the 4Ps to the 7Ps marketing
model:
#5 Marketing Mix People
Of both target market and people directly related to the
business.
Thorough research is important to discover whether there are
enough people in your target market that is in demand for
certain types of products and services.
The companys employees are important in marketing because
they are the ones who deliver the service. It is important to hire
and train the right people to deliver superior service to the
clients, whether they run a support desk, customer service,
copywriters, programmersetc.
When a business finds people who genuinely believe in the
products or services that the particular business creates, its is
highly likely that the employees will perform the best they can.
Additionally, theyll be more open to honest feedback about the
business and input their own thoughts and passions which can
scale and grow the business.
This is a secret, internal competitive advantage a business
can have over other competitors which can inherently affect a
businesss position in the marketplace.
#6 Marketing Mix Process

The systems and processes of the organization affect the


execution of the service.
So, you have to make sure that you have a well-tailored process
in place to minimize costs.
It could be your entire sales funnel, a pay system, distribution
system and other systematic procedures and steps to ensure a
working business that is running effectively.
Tweaking and enhancements can come later to tighten up a
business to minimize costs and maximise profits.
#7 Marketing Mix Physical Evidence
In the service industries, there should be physical evidence that
the service was delivered. Additionally, physical evidence
pertains also to how a business and its products are perceived
in the marketplace.
It is the physical evidence of a business presence and
establishment. A concept of this is branding. For example, when
you think of fast food, you think of McDonalds.
When you think of sports, the names Nike and Adidas come to
mind.
You immediately know exactly what their presence is in the
marketplace, as they are generally market leaders and have
established a physical evidence as well as psychological
evidence in their marketing.
They have manipulated their consumer perception so well to
the point where their brands appear first in line when an
individual is asked to broadly name a brand in their niche or
industry.
Marketing Mix 4Cs

The 4Cs marketing model was developed by Robert F.


Lauterborn in 1990. It is a modification of the 4Ps model. It is
not a basic part of the marketing mix definition, but rather
an extension. Here are the components of this marketing
model:
Cost According to Lauterborn, price is not the only cost
incurred when purchasing a product. Cost of conscience or
opportunity cost is also part of the cost of product
ownership.
Consumer Wants and Needs A company should only sell
a product that addresses consumer demand. So,
marketers and business researchers should carefully study
the consumer wants and needs.
Communication According to Lauterborn, promotion is
manipulative while communication is cooperative.
Marketers should aim to create an open dialogue with
potential clients based on their needs and wants.
Convenience The product should be readily available to
the consumers. Marketers should strategically place the
products in several visible distribution points.
Whether you are using the 4Ps, the 7Ps, or the 4Cs, your
marketing mix plan plays a vital role. It is important to devise a
plan that balances profit, client satisfaction, brand recognition,
and product availability. It is also extremely important to
consider the overall how aspect that will ultimately determine
your success or failure.
By understanding the basic concept of the marketing mix and
its extensions, you will be sure to achieve financial success
whether it is your own business or whether you are assisting in
your workplaces business success.
The ultimate goal of business is to make profits and this is a
sure-fire, proven way to achieve this goal.
MARKETING MANAGEMENT
"Marketing management is 'the art and science of choosing
target markets and getting, keeping, and growing customers
through creating, delivering, and communicating superior
customer value' (Kotler and Keller, 2008: 5)."
The concept reviews the process used to determine what
products or services may be of interest to customers and the
strategy to use for marketing mix. It also explores the process
of understanding, creating and delivering value to targeted
business markets and customers.
MARKET SEGMENTATION and TARGETING
Market segmentation is the process of dividing an entire market
up into different customer segments. Targeting or target
marketing then entails deciding which potential customer
segments the company will focus on. Marketing segmentation
always comes before targeting, which helps a company be
more selective about who they are marketing their products to.
Marketing segmentation and targeting are equally important for
ensuring the overall success of a company.
Significance

Marketing segmentation and targeting are particular important


for finding customers that are the best match for a business
products and services. It is not feasible to go after all
customers, because customers have different wants, needs and
tastes. Some customers want to be style leaders. They will
always buy certain styles and usually pay a high price for them.
Other customers are bargain shoppers. They try to find the
lowest price. Obviously, a company would have difficulty
targeting both of these market segments simultaneously with
one type of product. For example, a company with premium
products would not appeal to bargain shoppers.

Identification

The process of marketing segmentation and targeting are


necessary to identify and target certain demographic groups.
Customer demographics can include gender, age, income,
household size, geographic area and even various ethnic
groups. One or more of these demographic segments will be
more likely to purchase a companys products or services, while
other demographic segments may be more suitable for
competitive products or services. Hypothetically, a certain new
radio station may discover that their music appeals more to 34-
to-54-year-old women who earn over $50,000 per year. The
station would then target these women in their marketing
efforts.

Types

Marketing segmentation and targeting can be used for both


consumer and business customers. Besides demographics,
other ways to segment consumers is by different psychographic
or behavioralistic characteristics, such as their interest and
usage rate, respectively, according to the article "Market
Segmentation" at Net MBA, a well-respected online business
reference site. Business customers are usually segmented by
company type and size. For example, a small food distributor
may likely target small or mid-sized restaurants, hospitals and
nursing homes.

Function

Marketing segmentation can be a lengthy process. It is


important for the company to know exactly which segments
represent the most potential sales for its business. After a
company identifies all possible market segments, it can start
targeting these customer segments with direct mail, magazine,
radio, television, and even Internet marketing. Targeting
specific customers entails creating the right advertising
message with the right media. For example, an ad for an
expensive perfume would be well-suited for one or more
premium style magazines that fill grocery store magazine
racks.

Considerations

Companies can perform marketing segmentation and targeting


by first conducting some marketing research. The company will
need to include demographic types of questions, so it can later
determine which demographic groups comprise the majority of
their customer base. Companies that use marketing
segmentation and targeting properly can usually expect great
sales and profits, according to Evan Carmichaels site, a top
resource for small business strategies.

UNIQUE SELLING PROPOSITION


A unique selling proposition (USP, also seen as unique selling
point) is a factor that differentiates a product from its
competitors, such as the lowest cost, the highest quality or the
first-ever product of its kind. A USP could be thought of as
what you have that competitors dont.
A successful USP promises a clearly articulated benefit to
consumers, offers them something that competitive products
cant or dont offer, and is compelling enough to attract new
customers.
Here are a few famous examples of USPs:
Avis Were only number two. We try harder campaign.
Dominos 30 minutes or its free promise.
FedExs When it absolutely, positively has to be there
overnight.
Southwests claim to be the lowest-priced airline.

MARKET RESEARCH
The systematic gathering, recording and analysis of data
about problems relating to the marketing of goods and
services The American Marketing Association.
TYPES OF RESEARCH
Most research can be divided into three different
categories; exploratory, descriptive and causal. Each serves a
different end purpose and can only be used in certain ways. In
the online survey world, mastery of all three can lead to
sounder insights and greater quality information. Over the next
couple weeks well be taking a look into all these forms of
research and how you can incorporate each in your
organizations strategies for improvement and growth as well
as measuring your companys level of success. Today, lets do a
quick overview of all three types of research, and how they fit
in a research plan.
Exploratory Research
Exploratory research is an important part of any marketing or
business strategy. Its focus is on the discovery of ideas and
insights as opposed to collecting statistically accurate data.
That is why exploratory research is best suited as the beginning
of your total research plan. It is most commonly used for
further defining company issues, areas for potential growth,
alternative courses of action, and prioritizing areas that require
statistical research.
When it comes to online surveys, the most common example of
exploratory research takes place in the form of open-ended
questions. Think of the exploratory questions in your survey as
expanding your understanding of the people you are surveying.
Text responses may not be statistically measureable, but they
will give you richer quality information that can lead to the
discovery of new initiatives or problems that should be
addressed.
Descriptive Research
Descriptive research takes up the bulk of online surveying and
is considered conclusive in nature due to its quantitative
nature. Unlike exploratory research, descriptive research is
preplanned and structured in design so the information
collected can be statistically inferred on a population.
The main idea behind using this type of research is to better
define an opinion, attitude, or behaviour held by a group of
people on a given subject. Consider your everyday multiple
choice question. Since there are predefined categories a
respondent must choose from, it is considered descriptive
research. These questions will not give the unique insights on
the issues like exploratory research would. Instead, grouping
the responses into predetermined choices will provide
statistically inferable data. This allows you to measure the
significance of your results on the overall population you are
studying, as well as the changes of your respondents opinions,
attitudes, and behaviours over time.
Causal Research
Like descriptive research, causal research is quantitative in
nature as well as preplanned and structured in design. For this
reason, it is also considered conclusive research. Causal
research differs in its attempt to explain the cause and effect
relationship between variables. This is opposed to the
observational style of descriptive research, because it attempts
to decipher whether a relationship is causal through
experimentation. In the end, causal research will have two
objectives: 1) To understand which variables are the cause and
which variables are the effect, and 2) to determine the nature
of the relationship between the causal variables and the effect
to be predicted.
For example, a cereal brand owner wants to learn if they will
receive more sales with their new cereal box design. Instead of
conducting descriptive research by asking people whether they
would be more likely to buy their cereal in its new box, they
would set up an experiment in two separate stores. One will sell
the cereal in only its original box and the other with the new
box. Taking care to avoid any outside sources of bias, they
would then measure the difference between sales based on the
cereal packaging. Did the new packaging have any effect on
the cereal sales? What was that effect?

Marketing Research V/S Market Research:


Marketing research is a broader term including market
research. Marketing research is concerned with all the major
functions of marketing. Market research is primarily concerned
with knowing the capacity of the market to absorb a particular
product. Marketing research is not only concerned with the
jurisdiction of the market but also covers nature of the market,
product analysis, sales analysis, time, place and media of
advertising, personal selling and marketing intermediaries and
their relationships etc.
Marketing Research:
Marketing research serves the purpose of intelligence wing of
the marketing management. Its scope is very broad as
compared to market- research. It is concerned with collection of
market information systematically and impartially, analysis and
evaluation of relevant data and use such data for the benefit of
the organisation.
It is a careful and objective study of various areas of marketing
activities. What, when, where and how to sell the end product
and the services are four questions to which the marketing
research wing provides an answer.
Thus, market research and marketing research are different
from each other. Market research is a narrow concept whereas
marketing research is a broad one and its scope is much wider.
It includes nature of the market, product analysis, sales
analysis, time, place and media of advertising, personal selling,
pricing, sales organisation, packaging, brand names, etc.

Objectives of Marketing Research:


Marketing research is undertaken for attaining the following
objectives:
(1) To Provide Basis For Proper Planning:
Marketing and sales forecast research provides sound basis for
the formulation of all marketing plans, policies, programmes
and procedures.
(2) To Reduce Marketing Costs:
Marketing research provides ways and means to reduce
marketing costs like selling, advertisement and distribution etc.
(3) To Find Out New Markets for The Product:
Marketing research aims at exploring new markets for the
product and maintaining the existing ones.
(4) To Determine Proper Price Policy:
Marketing research is considered helpful in the formulation of
proper price policy with regard to the products.
(5) To Study in Detail Likes and Dislikes of the Consumers:
Marketing research tries to find out what the consumers, (the
men and women who constitute the market) think and want. It
keeps us in touch with the consumers, minds and to study their
likes and dislikes.
(6) To Know The Market Competition:
Marketing research also aims at knowing the quantum of
competition prevalent in the market about the product in
question. The company may need reliable information about
competitors moves and strategies which are of immense
significance for further planning.
(7) To Study The External Forces and Their Impact:
Marketing research provides valuable information by studying
the impact of external forces on the organisation. External
forces may include conditions developing in foreign markets,
Govt, policies and regulations, consumer incomes and spending
habits, new products entering in the market and their impact on
the companys products.
QUALITATIVE AND QUANTITATIVE RESEARCH

BRAND
A brand is a product, service, or concept that is publicly
distinguished from other products, services, or concepts so that
it can be easily communicated and usually marketed. A brand
name is the name of the distinctive product, service, or
concept. Branding is the process of creating and disseminating
the brand name. Branding can be applied to the entire
corporate identity as well as to individual product and service
names.
Brands are usually protected from use by others by securing a
trademark or service mark from an authorized agency, usually
a government agency. Before applying for a trademark or
service mark, you need to establish that someone else hasn't
already obtained one for your name.
Although you can do the searching yourself, it is common to
hire a law firm that specializes in doing trademark searches and
managing the application process, which, in the United States,
takes about a year. Once you've learned that no one else is
using it, you can begin to use your brand name as a trademark
simply by stating it is a trademark (using the "TM" where it first
appears in a publication or Web site). After you receive the
trademark, you can use the registered symbol after your
trademark.
Brands are often expressed in the form of logos, graphic
representations of the brand. In computers, a recent example
of widespread brand application was the "Intel Inside" label
provided to manufacturers that use Intel's microchips.
A company's brands and the public's awareness of them is
often used as a factor in evaluating a company. Corporations
sometimes hire market research firms to study public
recognition of brand names as well as attitudes toward the
brands.
Here is David Ogilvy's definition of a brand:
The intangible sum of a product's attributes: its name,
packaging, and price, its history, its reputation, and the way it's
advertised.
BRAND IMAGE
Brand image is the current view of the customers about a
brand. It can be defined as a unique bundle of associations
within the minds of target customers. It signifies what the
brand presently stands for. It is a set of beliefs held about a
specific brand. In short, it is nothing but the consumers
perception about the product. It is the manner in which a
specific brand is positioned in the market. Brand image conveys
emotional value and not just a mental image. Brand image is
nothing but an organizations character. It is an accumulation of
contact and observation by people external to an organization.
It should highlight an organizations mission and vision to all.
The main elements of positive brand image are- unique logo
reflecting organizations image, slogan describing
organizations business in brief and brand identifier supporting
the key values.
BRAND IDENTITY
Brand identity stems from an organization, i.e., an
organization is responsible for creating a distinguished product
with unique characteristics. It is how an organization seeks to
identify itself. It represents how an organization wants to be
perceived in the market. An organization communicates its
identity to the consumers through its branding and marketing
strategies. A brand is unique due to its identity. Brand identity
includes following elements - Brand vision, brand culture,
positioning, personality, relationships, and presentations.

BRAND PERSONALITY
Brand personality is the way a brand speaks and behaves. It
means assigning human personality traits/characteristics to a
brand so as to achieve differentiation. These characteristics
signify brand behaviour through both individuals representing
the brand (i.e. its employees) as well as through advertising,
packaging, etc. When brand image or brand identity is
expressed in terms of human traits, it is called brand
personality. For instance - Allen Solley brand speaks the
personality and makes the individual who wears it stand apart
from the crowd. Infosys represents uniqueness, value, and
intellectualism.
BRAND EQUITY
Brand image is the current view of the customers about a
brand. It can be defined as a unique bundle of associations
within the minds of target customers. It signifies what the
brand presently stands for. It is a set of beliefs held about a
specific brand. In short, it is nothing but the consumers
perception about the product. It is the manner in which a
specific brand is positioned in the market. Brand image conveys
emotional value and not just a mental image. Brand image is
nothing but an organizations character. It is an accumulation of
contact and observation by people external to an organization.
It should highlight an organizations mission and vision to all.
The main elements of positive brand image are- unique logo
reflecting organizations image, slogan describing
organizations business in brief and brand identifier supporting
the key values.
SAMPLING
Sampling is a process used in statistical analysis in which a
predetermined number of observations are taken from a larger
population. The methodology used to sample from a larger
population depends on the type of analysis being performed,
but may include simple random sampling or systematic
sampling.

TYPES OF SAMPLING
Sampling takes on two forms in statistics: probability sampling
and non-probability sampling:
Probability sampling uses random sampling techniques to
create a sample.
use non-random processes like
Sampling techniques
researcher judgment or convenience sampling.
Probability sampling is based on the fact that every member of
a population has a known and equal chance of being selected.
For example, if you had a population of 100 people, each
person would have odds of 1 out of 100 of being chosen. With
non-probability sampling, those odds are not equal. For
example, a person might have a better chance of being chosen
if they live close to the researcher or have access to a
computer. Probability sampling gives you the best chance to
create a sample that is truly representative of the population.
Using probability sampling for finding sample sizes means that
you can employ statistical techniques like confidence
intervals and margins of error to validate your results.
Types of Probability Sampling
Simple random sampling is a completely random
method of selecting subjects. These can include assigning
numbers to all subjects and then using a random number
generator to choose random numbers. Classic ball and urn
experiments are another example of this process
(assuming the balls are sufficiently mixed). The members
whose numbers are chosen are included in the sample.
Stratified Random Sampling involves splitting subjects
into mutually exclusive groups and then using simple
random sampling to choose members from groups.
Systematic Sampling means that you choose every
nth participant from a complete list. For example, you
could choose every 10th person listed.
Cluster Random Sampling is a way to randomly select
participants from a list that is too large for simple random
sampling. For example, if you wanted to choose 1000
participants from the entire population of the U.S., it is
likely impossible to get a complete list of everyone.
Instead, the researcher randomly selects areas (i.e. cities
or counties) and randomly selects from within those
boundaries.
Multi-Stage Random sampling uses a combination of
techniques.

Types of Non-Probability Sampling


Convenience Sampling
Convenience sampling is probably the most common of all
sampling techniques. With convenience sampling, the samples
are selected because they are accessible to the researcher.
Subjects are chosen simply because they are easy to recruit.
This technique is considered easiest, cheapest and least time
consuming.
Consecutive Sampling
Consecutive sampling is very similar to convenience sampling
except that it seeks to include ALL accessible subjects as part
of the sample. This non-probability sampling technique can be
considered as the best of all non-probability samples because it
includes all subjects that are available that makes the sample a
better representation of the entire population.
Quota Sampling
Quota sampling is a non-probability sampling technique
wherein the researcher ensures equal or proportionate
representation of subjects depending on which trait is
considered as basis of the quota.
For example, if basis of the quota is college year level and the
researcher needs equal representation, with a sample size of
100, he must select 25 1st year students, another 25 2nd year
students, 25 3rd year and 25 4th year students. The bases of
the quota are usually age, gender, education, race, religion and
socioeconomic status.
Judgmental Sampling
Judgmental sampling is more commonly known as purposive
sampling. In this type of sampling, subjects are chosen to be
part of the sample with a specific purpose in mind. With
judgmental sampling, the researcher believes that some
subjects are fit for the research compared to other individuals.
This is the reason why they are purposively chosen as subjects.
Snowball Sampling
Snowball sampling is usually done when there is a very small
population size. In this type of sampling, the researcher asks
the initial subject to identify another potential subject who also
meets the criteria of the research. The downside of using a
snowball sample is that it is hardly representative of the
population.

TYPES OF DATA & MEASUREMENT SCALES: NOMINAL,


ORDINAL, INTERVAL AND RATIO
There are four measurement scales (or types of data): nominal,
ordinal, interval and ratio. These are simply ways to categorize
different types of variables. This topic is usually discussed in
the context of academic teaching and less often in the real
world. If you are brushing up on this concept for a statistics
test, thank a psychologist researcher named Stanley
Stevens for coming up with these terms. These four
measurement scales (nominal, ordinal, interval, and ratio) are
best understood with example, as youll see below.
Nominal
Lets start with the easiest one to understand. Nominal scales
are used for labelling variables, without any quantitative value.
Nominal scales could simply be called labels. Here are
some examples, below. Notice that all of these scales are
mutually exclusive (no overlap) and none of them have any
numerical significance. A good way to remember all of this is
that nominal sounds a lot like name and nominal scales are
kind of like names or labels.

Examples of Nominal Scales


Note: a sub-type of nominal scale with only two categories (e.g.
male/female) is called dichotomous. If you are a student,
you can use that to impress your teacher.
Continue reading about types of data and measurement scales:
nominal, ordinal, interval, and ratio
Ordinal
With ordinal scales, it is the order of the values is whats
important and significant, but the differences between each
one is not really known. Take a look at the example below. In
each case, we know that a #4 is better than a #3 or #2, but we
dont knowand cannot quantifyhow much better it is. For
example, is the difference between OK and Unhappy the
same as the difference between Very Happy and Happy?
We cant say.
Ordinal scales are typically measures of non-numeric concepts
like satisfaction, happiness, discomfort, etc.
Ordinal is easy to remember because it sounds like order
and thats the key to remember with ordinal scalesit is
the order that matters, but thats all you really get from these.
Advanced note: The best way to determine central tendency on
a set of ordinal data is to use the mode or median; the mean
cannot be defined from an ordinal set.

Example of Ordinal Scales

Interval
Interval scales are numeric scales in which we know not only
the order, but also the exact differences between the values.
The classic example of an interval scale is Celsius temperature
because the difference between each value is the same. For
example, the difference between 60 and 50 degrees is a
measurable 10 degrees, as is the difference between 80 and 70
degrees. Time is another good example of an interval scale in
which the increments are known, consistent, and measurable.
Interval scales are nice because the realm of statistical analysis
on these data sets opens up. For example, central
tendency can be measured by mode, median, or mean;
standard deviation can also be calculated.
Like the others, you can remember the key points of an
interval scale pretty easily. Interval itself means space in
between, which is the important thing to rememberinterval
scales not only tell us about order, but also about the value
between each item.
Heres the problem with interval scales: they dont have a true
zero. For example, there is no such thing as no temperature.
Without a true zero, it is impossible to compute ratios. With
interval data, we can add and subtract, but cannot multiply or
divide. Confused? Ok, consider this: 10 degrees + 10 degrees
= 20 degrees. No problem there. 20 degrees is not twice as
hot as 10 degrees, however, because there is no such thing as
no temperature when it comes to the Celsius scale. I hope
that makes sense. Bottom line, interval scales are great, but
we cannot calculate ratios, which brings us to our last
measurement scale

Example of Interval Scale

Ratio
Ratio scales are the ultimate nirvana when it comes to
measurement scales because they tell us about the order, they
tell us the exact value between units, AND they also have an
absolute zerowhich allows for a wide range of both descriptive
and inferential statistics to be applied. At the risk of repeating
myself, everything above about interval data applies to ratio
scales + ratio scales have a clear definition of zero. Good
examples of ratio variables include height and weight.
Ratio scales provide a wealth of possibilities when it comes to
statistical analysis. These variables can be meaningfully
added, subtracted, multiplied, divided (ratios). Central
tendency can be measured by mode, median, or mean;
measures of dispersion, such as standard deviation and
coefficient of variation can also be calculated from ratio scales.

This Device Provides Two Examples of Ratio Scales (height and


weight)
DIFFERENTIATION
Approach under which a firm aims to develop and market
unique products for different customer segments. Usually
employed where a firm has clear competitive advantages, and
can sustain an expensive advertising campaign. It is one of
three generic marketing strategies that can be adopted by any
firm.
Types of Differentiation
1. Product Differentiation
Product differentiation is a marketing strategy whereby
businesses attempt to make their product unique to stand out
from competitors. Businesses do this to gain an edge in
industries where multiple competitors produce similar products.
Product differentiation means that some feature, physical
attribute, or substantive difference exists between a product
and all other alternatives.
2. Service Differentiation
How do you differentiate your services from that of the
competition? Its easier in products where the variables are
tangibles but pretty different in case of services. When the
physical product cannot be differentiated easily, the key to
competitive success may lie in adding valued services and
improving their quality. This is the outlook of
service differentiation.
Ordering Ease, Delivery, Installation, Customer Training,
Customer Consulting, Maintenance and Repair are the factors
that influence Service Differentiation.
3. Personnel Differentiation
Companies can gain a strong competitive advantage through
having better-trained people. Better trained personnel should
exhibit following 6 characteristics:
i. Competence: They should possess the required skill
and knowledge
ii. Courtesy: They should be friendly, considerate and
respectful
iii. Credibility: They should be trustworthy
iv. Reliability: They should perform the service
consistently and accurately
v. Responsiveness: They should respond quickly to solve
the customers problems
vi. Communication: They should understand the
customers and communicate properly

4. Image Differentiation
A person responds differently to company
and brand images. Identity comprises the ways that a
company aims to identify or position itself or its product,
whereas image is the way the public perceives the company or
its products. Image is affected by many factors beyond the
companys control.
For example, Nike mainstream popularity turns off 12-to-24-
years-olds, who prefers Airwalk and other alternative brands
that convey more extreme sports image. Hence Image
differentiation is important for a company or product. An
effective image establishes the products character and value
proposition, it conveys this character in a distinctive way and it
delivers emotional power beyond a mental image. For image
differentiation to work, it must be conveyed through every
available communication vehicle and brand contact, including
logos, media and special events.

5. Channel Differentiation
Companies can achieve competitive advantage through the
way the design their distribution channels coverage, expertise
and performance. For example, Maruti Udyog Ltd. makes its
cars available to customers through several distribution
channels. The company realised that there is huge market for
second hand cars and this market is dominated by unorganised
players. To cater to this situation, MUL established a separate
distribution channel by opening True Value outlets which act
as intermediaries between buyers and sellers.