A STUDY ON AFFILIATE MARKETING TOWARDS BIZGURUKUL

PRODUCTS

MEANING AND DEFINITION :

Marketing is a form of communication between a business house and its customers
with the goal of selling its products or services to them. Goods are not complete products until
they are in the hands of customers. Marketing is that management process through which goods
and services move from concept to the customer. Marketing has less to do with getting customers
to pay for a product as it does with developing a demand for that product and fulfilling the
customer’s needs.

According to the American Marketing Association (AMA) Board of Directors, Marketing is the
activity, set of institutions, and processes for creating, communicating, delivering, and
exchanging offerings that have value for customers, clients, partners, and society at large.

Dr. Philip Kotler defines marketing as “the science and art of exploring, creating and delivering
value to satisfy the needs of a target market at a profit. Marketing identifies unfulfilled needs and
desires. It defines, measures and quantifies the size of the identified market and the profit
potential. It pinpoints which segments the company is capable of serving best and it designs and
promotes the appropriate products and services.”

Thus, marketing refers to all the activities involved in the creation of place, time, possession and
awareness utilities and beyond.

MARKETING CONCEPTS- TRADITIONAL AND MODERN:

Concept is a philosophy, attitude, a line of thinking, an idea or notion to relating any aspects of
divine and human creations. The philosophy of an organization in the dynamic creation of
marketing is referred to as a marketing concept. Thus, marketing concept is a way of life in
which the resources of an organization are mobilized to create, stimulate and satisfy the
consumer at a profit.

TRADITIONAL/ CLASSICAL CONCEPT:

According to this concept, marketing consists of those activities which are concerned with the
transfer of ownership of goods from producers to consumers. Here, the role of physical
distribution and marketing channels is over emphasized. It refers to marketing as the process by
which goods are made available to ultimate consumers from their place of origin. The emphasis
of marketing is on sale of goods and services. Consumer satisfaction is overlooked.

MODERN CONCEPT:
 According to this concept, marketing is concerned with the creation of consumers. According to
the modern thinker Peter Drucker, Marketing is so basic that it cannot be considered as a
separate function. It is the whole business seen from the customers’ point of view…business
success is not determined by the producer but the customer. Thus, the modern concept lays
greater emphasis on customers and considers them as kings. Marketing is not merely a physical
process but is something beyond that. It is the managerial philosophy which centres around the
wants and desires of customers.

TRADITIONAL CONCEPT vs. MODERN CONCEPT

1. Traditional marketing starts from production and ends with sale but modern marketing
includes planning, product, price, promotion, place, people, after sale service etc.

2. Traditional marketing concentrate on favorable products, but modern marketing concentrates

on customer needs, wants and satisfaction.

3. In traditional marketing, only those products are sold which the producer produces. No focus
is laid on consumer preference. On the other hand, modern marketing indulge in production only
after analyzing consumer demands.

4. Traditional marketing is product and production oriented while modern marketing is consumer
oriented.

5. The target of traditional marketers was to earn maximum profit by maximizing sales. But, the
main motive of modern marketers is to earn profits through satisfaction of consumer needs.

6. The principle of traditional market was “caveat emptor” i.e., “let the buyer beware”. Whereas,
the principle followed by modern market is “caveat venditor” i.e., “let the vendor beware”.

SELLING vs. MARKETING

It is a common error committed when people say they are going for marketing when they
actually go to the market to purchase goods/ services. Well, it is simply buying from consumers’
end and selling from the sellers’ end. Marketing is a wider term than selling. Let us now see how
selling differs from marketing.

MARKETING
1. It begins before sale and continues after sale.

2. It focuses on consumer needs.

3. It has long term perspective aiming for growth and stability.

4. It is a philosophy of business.
5. Here, customer comes first, then product.

6. It has wider scope.

SELLING
1. It begins after production and ends with the sale.

2. It focuses on seller’s needs.

3. It has short-term perspective.

4. It is a routine day to day physical process

5. Here, product comes first, then customers.

6. Its scope is narrower as compared to marketing.

Thus, from the above table the distinction of marketing from selling can be understood.

FUNCTIONS OF MARKETING
Marketing functions are those specialized activities that a marketer must perform in order to
identify and source potentially successful products for the market place and then promote them
by differentiating them from similar products. The important functions of marketing are
discussed briefly below:

1. Research & Development Function- A marketer has to carry out adequate research to identify
the size, behavior, culture, gender, demands etc. of the target market segment, and then develop
the products/services accordingly to meet and satisfy the needs of target customers.

2. Buying Function- The marketing department has to assist the purchase and supply department
by sending specifications of the materials required so as to get timely and quality materials for
production.

3. Standardization & Grading- Standardization means setting quality standards to achieve

uniformity in the product. It provides consistent quality assurance to consumers. Grading means
classifying the product on certain accepted benchmarks or bases such as size, quality etc.
Through grading, the marketer can get higher price for quality product.

4. Packaging and Labeling- Packaging is traditionally done to protect the goods from damage in
transit and to facilitate easy transfer of goods to customers. But now it is also used by the
manufacturer to establish his brand image as distinct from those of his rivals. Another activity
involved with packaging is labeling. It means putting identification marks on the package. Label
is that part of a product which contains information about the producer and the product.

5. Branding- It is the process of stamping a product with some identification name or mark or a
combination of both. Branding means giving a distinct individuality to a product. Some popular
brands are Airtel, Sony, Lux, Nirma etc.

6. Pricing- Determination of price of a product is an important task of a marketing manager.

Price is influenced by cost of product and service offered, profit margin desired, prices fixed by
rival firms, government policy, etc.

7. Promotion Function- The marketing manager must design adequate strategies to make known
to consumers about the availability of products in the market. Without this function, products
will remain in the hands of producers and will never reach the consumers. Four important
methods of promotion are advertising, personal selling, publicity and sales promotion.

8. Physical Distribution- This function involves the activities which are necessary to transfer
ownership of goods to customers and also making available goods at the right place and time.

9. Transportation- It provides the physical needs which facilitate the movement of persons,
goods and services from one place to another.

10. Warehousing- To meet the expected demands of consumers, goods are produced or procured
well in advance and stored in warehouses till they are transferred to customers. Warehouses
protect the goods from any damage which may be caused by any rodents, moisture, sun, theft,
etc.

11. Risk- taking function- Risks are involved in almost all levels of marketing process. Risk
taking in marketing refers to the financial risk that is inherent in producing and handling goods,
including the possible loss due to a fall in prices and the losses from spoilage, depreciation,
obsolescence, fire and floods etc.

12. Customer Support Services- This function relates to developing customer support services
such as after sales services, handling customer complaints and adjustments, providing credit
facilities, maintenance services, technical services etc. These services provide maximum
customer satisfaction and develop brand loyalty for a product. All the above, and in some
situations, more other functions are performed by the marketing manager.
MARKETING MIX- THE 7 Ps of MARKETING
Marketing mix represents a blending of decisions in few areas for the satisfaction of the needs of
customers. E.J. McCarthy had formerly given four elements of Marketing Mix. These include:
(1) Product, (2) Price, (3) Promotion, and (4) Place or Physical Distribution. These elements are
popularly called the “four Ps of Marketing Mix”. As marketing became a more sophisticated
discipline, one more element was added to these 4 Ps- People. Later on two more Ps were added,
especially for the service sector, viz., Process and Physical evidence. . These elements are
interrelated because decisions in one area usually affect actions in the others. The blend or
mixture of these elements are often referred to as Marketing Mix. It basically concentrates on the
target consumers. Let us have a brief discussion of the above mentioned elements-

MARKETING MIX
1. Product: It involves planning, developing and producing the right type of products and
services to be offered by the firm to the customers. It deals with the product range, design,
durability, branding, packaging, color and other features.

2. Price: A product is only worth what a customer is willing to pay for it. The marketing
manager must determine the price in such a way that it covers the cost of production and
distribution of the product and a reasonable margin of profit. Other variables influencing price
are the price fixed by competitors, government regulation etc. It is the only element of marketing
mix that generates revenue- everything else represents a cost.

3. Promotion: It deals with informing the customers about the firm’s product and persuading
them to purchase the same through personal selling, advertising, publicity and sales promotion.

4. Place or Physical distribution: It is concerned with making the product/service available to the
customers at the right place, at the right time and in the right quantity. The place where the
customers buy a product and the means of distributing the product to that place must be
appropriate and convenient to the customers.

5. People: It generally refers to the employees of the business organization who deal with the
customers.

WHAT IS AFFILIATE MARKETING?

Affiliate marketing is an advertising model in which a company compensates third-party
publishers to generate traffic or leads to the company’s products and services. The third-party
publishers are affiliates, and the commission fee incentivizes them to find ways to promote the
company.

KEY TAKEAWAYS

 Affiliate marketing is a marketing scheme in which a company compensates partners for

business created from the affiliate's marketing tactics.
 Digital marketing, analytics, and cookies have made affiliate marketing a billion-dollar
industry.
 Firms typically pay affiliates per sale and less frequently by clicks or impressions.
 The three main types of affiliate marketing are unattached affiliate marketing, involved
affiliate marketing, and related affiliate marketing.

UNDERSTANDING AFFILIATE MARKETING

The internet has increased the prominence of affiliate marketing. Amazon (AMZN) popularized
the practice by creating an affiliate marketing program whereby websites and bloggers put links
to the Amazon page for a reviewed or discussed product to receive advertising fees when a
purchase is made. In this sense, affiliate marketing is essentially a pay-for-performance
marketing program where the act of selling is outsourced across a vast network.

Affiliate marketing predates the Internet, but in the world of digital marketing, analytics, and
cookies made it a billion-dollar industry. A company running an affiliate marketing
program can track the links that bring in leads and, through internal analytics, see how many
convert to sales.

An e-commerce merchant wanting to reach a wider base of internet users and shoppers may hire
an affiliate. An affiliate could be the owner of multiple websites or email marketing lists; the
more websites or email lists that an affiliate has, the wider its network. The hired affiliate then
communicates and promotes the products offered on the e-commerce platform to their network.
The affiliate does this by running banner ads, text ads, posting links on its websites, or sending
emails to clientele. Firms use advertisements in the form of articles, videos, and images to draw
an audience’s attention to a service or product.

Visitors who click the ads or links are redirected to the e-commerce site. If they purchase the
product or service, the e-commerce merchant credits the affiliate’s account with the agreed-
upon commission, which could be 5% to 10% of the sales price.

According to Business Insider, 15% of e-commerce revenue can be attributed to affiliate

marketing.

SPECIAL CONSIDERATIONS
The goal of this model is to increase sales and create a win-win solution for both merchant and
affiliate. The system is unique and profitable and becoming increasingly popular.

The internet and improving technologies are making the model easier to implement. Companies
have improved how they track and pay commissions on qualified leads. Being better able to
track leads and sales contributes to how they can improve or better position their products.

Those interested in pursuing affiliate marketing will benefit from understanding what's
involved, as well as its advantages and disadvantages. Companies seeking affiliates will benefit
from properly vetting and qualifying their partners. Overall, it is a low-cost, effective way of
advertising products and services, increasing brand awareness, and expanding a consumer base.

TYPES OF AFFILIATE MARKETING

There are three main types of affiliate marketing: unattached affiliate marketing, related affiliate
marketing, and involved affiliate marketing.

1. Unattached Affiliate Marketing: This is an advertising model in which the affiliate has

no connection to the product or service they are promoting. They have no known related
skills or expertise and do not serve as an authority on or make claims about its use. This
is the most uninvolved form of affiliate marketing. The lack of attachment to the
potential customer and product absolves the affiliate from the duty to recommend or
advise.
2. Related Affiliate Marketing: As the name suggests, related affiliate marketing involves
the promotion of products or services by an affiliate with some type of relationship to
the offering. Generally, the connection is between the affiliate's niche and the product or
service. The affiliate has enough influence and expertise to generate traffic, and their
level of authority makes them a trusted source. The affiliate, however, makes no claims
about the use of the product or service.
3. Involved Affiliate Marketing: This type of marketing establishes a deeper connection
between the affiliate and the product or service they're promoting. They have used or
currently use the product and are confident that their positive experiences can be shared
by others. Their experiences are the advertisements, and they serve as trusted sources of
information. On the other hand, because they're providing recommendations, their
reputation may be compromised by any problems arising from the offering.

ADVANTAGES AND DISADVANTAGES OF AFFILIATE MARKETING

Affiliate marketing can yield great rewards for the advertising company and the affiliate
marketer. The company benefits from low-cost advertising and the creative marketing efforts of
its affiliates, and the affiliate benefits by earning additional income and incentives . The return
on investment for affiliate marketing is high as the company only pays on traffic converted to
sales. The cost of advertising, if any, is borne by the affiliate.

The advertising company sets the terms of an affiliate marketing program. Early on, companies
largely paid the cost per click (traffic) or cost per mile (impressions) on banner advertisements.
As technology evolved, the focus turned to commissions on actual sales or qualified leads. The
early affiliate marketing programs were vulnerable to fraud because clicks could be generated
by software, as could impressions.

Now, most affiliate programs have strict terms and conditions on how to generate leads. There
are also certain banned methods, such as installing adware or spyware that redirect all search
queries for a product to an affiliate's page. Some affiliate marketing programs go as far as to lay
out how a product or service is to be discussed in the content before an affiliate link can be
validated.

So an effective affiliate marketing program requires some forethought. The terms and
conditions must be clearly spelled out, especially if the contract agreement pays for traffic
rather than sales. The potential for fraud in affiliate marketing is possible.

Unscrupulous affiliates can squat on domain names with misspellings and get a commission for
the redirect. They can populate online registration forms with fake or stolen information, and
they can purchase AdWords on search terms the company already ranks high on, and so on.
Even if the terms and conditions are clear, an affiliate marketing program requires that someone
monitor affiliates and enforce rules.

In exchange, however, a company can access motivated, creative people, to help sell their
products or services to the world.

Pros
 Access to a broader market
 Better accounting of qualified leads
 Low-cost advertising

Cons
 Subject to fraud
 Less creative control
 Vulnerable to theft

EXAMPLES OF AFFILIATE MARKETING

Amazon Affiliate Marketing

Amazon's affiliate marketing program, Amazon Associates, is one of the world's largest affiliate
marketing programs.2 Creators, publishers, and bloggers sign up to have Amazon products and
services shared on their websites or apps, and in return, receive compensation for the sales their
sites generate.

Amazon sets strict criteria for the types of sites and apps that host its ads. For example, sites
must not contain replicated content from another site or creator and be available to the public.
Websites must be active with fresh content and suitable according to Amazon's standards. For
example, they must not contain obscene or offensive content, promote violence or illegal acts,
or contain any content deemed harmful to others.

Approval is contingent on a thorough review by Amazon staff and meeting a qualified sales
quota (three within 180 days of the application). If an application is rejected, it will not be
eligible for reconsideration. Once approved, commissions are earned as site visitors purchase
products or services from Amazon.

Amazon Associates can earn up to 20% in commissions for qualified sales. Rates are fixed and
based on product and program categories. As a bonus, Amazon offers special commissions on
certain events.

ETSY AFFILIATE MARKETING

Etsy (ETSY) — a global, online marketplace for vintage goods and other unique items—
promotes its products through various channels, including affiliate marketing partners. To
apply, applicants must submit an online application through its affiliate program portal. To
qualify as an Etsy affiliate marketing partner, eligible candidates must be at least 18, have an
active, unique website, have a brand identity, and meet other criteria.3

If approved, Etsy pays a commission to the affiliate for sales they procure—sales resulting from
their site's promotion of the product. Commission rates vary and are paid on the order price.
Etsy sellers can be affiliates, but they cannot earn commissions on their products without
special permission. Etsy declares that it has the right to terminate an agreement at any time for
any reason and that it can withhold compensation for any legitimate reason.

EBAY AFFILIATE MARKETING

eBay's Partner Network is eBay's affiliate marketing program that pays partners for sharing their
personal listings outside of eBay Inc. (EBAY). The affiliate earns a commission and may earn
credit towards their final merchant fees.4 eBay partners can also earn commissions on other
sellers' items.

Commissions are earned when a buyer bids on or immediately purchases an item within 24
hours of clicking the eBay purchase link on the affiliate's site. For submitted bids, the
commission is paid if the buyer wins the auction within 10 days of the bid.

Commission rates depend on the category of items sold and range from 1%-4%. No more than
$550 will be paid on any one qualifying sale. Gift cards, items sold by charities, and special
promotions are generally excluded as qualifying sales because of their low revenue streams.

BUZZFEED

Buzzfeed is a New York-based digital media company known for viral news and entertainment
stories, quizzes, and product reviews. Its Buzzfeed Shopping segment features and reviews
different partners' products and services. Visitors can read Buzzfeed's product reviews and
select affiliate links to purchase. Buzzfeed earns a commission from each sale generated from
its website.

HOW DO AFFILIATE MARKETERS GET PAID?

Affiliate marketers get paid a commission for referring customers to companies where they
make purchases. These commissions can range from less than 1% to 20% or more, depending
on the product and level of referral volume. For online campaigns, a customized link or referral
code is used to track sales. In this sense, it is a source or passive income since the affiliate can
continue to earn money once they have set up their campaign.

HOW MUCH MONEY CAN YOU MAKE AS AN AFFILIATE

MARKETER?

Incomes for affiliate marketers vary, with some making a few hundred dollars and some making
six figures. It depends on what is being marketed, how much influence the marketer has, the
affiliate's reach, and how much time is invested in marketing products. Often, those spending
more time marketing the company's products will earn more money.

CAN BEGINNERS DO AFFILIATE MARKETING?

Becoming successful through affiliate marketing takes time, skill, and experience. However, it
may suit beginners a bit better than alternative platforms since you do not have to invest in
physical merchandise or inventory at the start.

CAN YOU START AFFILIATE MARKETING WITH NO MONEY?

Yes, there are several free platforms and affiliate networks available for little or no money.
Instead, you will need to big a large online following through efforts such as blogging, social
media posting, and so on.

HOW DO I BECOME AN AFFILIATE MARKETER?

To become an affiliate marketer, consider what platform you will use to promote products
and/or services. Blogs are an effective channel for advertising and promoting as it allows the
blogger, serving as an expert, to express an opinion about the offering.

After identifying a platform, find a specific category that you are comfortable with or interested
in. A focused segment can better help you attract a dedicated consumer base. Research affiliate
programs and choose one or more based on your needs, whether it be earning high commissions
or generating more traffic. Lastly, develop solid and interesting content around the offerings and
work to increase traffic to your site.

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