Module IVB Distribution and Promotion 3czhPvZEHI PDF

Principles of Marketing| Richa Saxena
Module VI
IVB DISTRIBUTION AND

PROMOTION
Chapter IV. 4 Distribution Channel Strategy
In the United States, it has 90 aircraft for
Article 4.16 Amazon Air. Across the globe, this would be
around 150 aircraft, including India.
Amazon Air will enable faster
This strategy gives Amazon more control over
deliveries in top metros
delivery and gives us full visibility end–to–end.
Amazon’s cargo service in India will allow the US Also, faster delivery improves the shopping
ecommerce behemoth to deliver more goods experience on Amazon. Besides air, Amazon uses
faster and in next-day delivery time slots to railways and trucks to deliver goods nationwide.
consumers, especially in top metro cities. Amazon Air’s debut would also help its 1. 1
million sellers reach more consumers.
Amazon will continue to move goods by air
through third-party aircraft firms such as Indigo, A dedicated cargo fleet will also help Amazon
Spicejet and Vistara, while Amazon Air will be service more same-day and next-day deliveries
dedicated to markets like Bengaluru, Hyderabad, for its Prime users here.
New Delhi and Mumbai, said Akhil Saxena, vice Amazon Prime is a paid subscription programme
president — of customer fulfilment and offering faster delivery, additional discounts to
worldwide customer service — Amazon. The consumers, and access to streaming platforms
launch of Amazon Air is another critical like Amazon Prime Video and Amazon Music.
investment to strengthen Amazon’s delivery
infrastructure in the country, according to Last week, reported that Amazon had infused an
Saxena and Sarah Rhoads, VP of Amazon Global additional 400 crore in its local shipping arm
Air. It has over 50 fulfilment centres (FC) across Amazon Transportation Services. In June 2022,
more than 15 states. Amazon Transportation had received around 375
Amazon Air will cut down delivery timelines by crores from parent entities of Amazon, EThad
extending the delivery time from 7 pm to 10 pm. reported.
Amazon feels that faster delivery promises have Amazon opened its in-house logistics
a higher conversion rate from consumers into infrastructure to third-party merchants and is
actual orders against abandoning the items in a experimenting with delivering non-Amazon
cart over longer delivery slots. For now, Amazon orders. ET was the first to report this
has leased two aircraft in India in partnership development in November last year (Mishra,
with Quikjet. 2023).
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Picture IVB. 1 Telangana Minister KT Rama Rao at the induction ceremony of Quikjet’s new Amazonbranded aircraft in
Hyderabad
Successful value creation needs successful value delivery. Holistic marketers are increasingly taking a
value network view of their businesses. Instead of limiting their focus to their immediate suppliers,
distributors, and customers, they examine the whole supply chain that links raw materials, components,
and manufactured goods and shows how they move toward the final consumers. Companies are looking at
customer segments and considering various ways to sell, distribute, and service their offerings. Companies
today must build and manage a continuously evolving and increasingly complex channel system and value
network (Kotler & Keller, 2016, p. 647)
Marketing Channels and Value Networks

Most producers do not sell their goods directly to the final users; between them stands a set of
intermediaries performing various functions. These intermediaries constitute a marketing channel (also
called a trade or distribution channel). Marketing channels are interdependent organisations involved in
making a product or service available for use or consumption.
Some intermediaries –wholesalers and retailers – buy, take the title, and resell the merchandise. They are
called merchants. Others – brokers, manufacturers’ representatives, and sales agents – search for
customers and negotiate on the producer’s behalf but do not take title to the goods. They are called agents.
Still others – transportation companies, independent warehouses, banks, and advertising agencies – assist
in the distribution process but neither take title to goods nor negotiate purchases or sales. They are
facilitators (Kotler & Keller, 2016, p. 648).
The Importance of Channels

A marketing channel system is a firm’s particular set of marketing channels. The company’s pricing
depends on whether it uses mass merchandisers or high-quality boutiques. The firm’s sales force and
advertising decisions depend on the training and motivation dealers need. Also, channel decisions involve
relatively long-term commitments to other firms and a set of policies and procedures.
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Push Vs. Pull Strategy

In managing its intermediaries, the firm must decide how much effort to devote to push versus pull
marketing. A push strategy involves using its sales force and trade promotion money to induce
intermediaries to carry, promote, and sell the product to the end user. Push strategy is appropriate for low
brand loyalty in a category; the brand choice is made in the stores, the product is an impulse item, and
product benefits are well understood.
A pull strategy involves the manufacturer using advertising and promotion to induce consumers to ask
intermediaries for the product, thus inducing them to order it. The pull strategy is appropriate for high
brand loyalty and high involvement in the category. People perceive differences between brands when they
choose the brand before going to the store.
Top marketing companies such as Apple, Coca-cola, and Nike skillfully employ push and pull strategies.
A push strategy is more effective when accompanied by a well-designed, well-executed pull strategy that
activates consumer demand (Kotler & Keller, 2016, p. 648).
Multichannel Marketing
Successful companies typically employ multichannel marketing, using two or more marketing channels to
reach customer segments in one market area. HP uses its sales force to sell to large accounts, outbound
telemarketing to sell to medium-sized and direct mail with an inbound phone number to small accounts,
and the internet to sell speciality items. Each channel can target a different segment of buyers or different
need states for one buyer to deliver the right products in the right places in the right way at the least cost.
When this does not happen, channel conflict, high cost, or insufficient demand can result. Research has
shown that multichannel customers can be more valuable to marketers. Most companies today have
adopted multichannel marketing.
Companies increasingly employ digital distribution strategies, selling directly online to customers or
through e-retailers. These companies seek to achieve omnichannel marketing. Multiple channels work
seamlessly together and match each target customer’s preferred ways of doing business, delivering the
right product information and customer service regardless of whether customers are online, in-store, or on
the phone (Kotler & Keller, 2016, pp. 649–650).
market for beauty products. Reliance Retail

launched its flagship Tira store at Jio World
Drive in Bandra Kurla Complex in Mumbai,
along with the Tira app and website launch.
Reliance Retail said Tira offers a curated

assortment of global and home-grown brands.
Article 4.17 Last year, Reliance Retail Ventures Ltd (RRVL)
bought a controlling stake in makeup and
Reliance Retail takes on Nykaa, personal care brand Insight Cosmetics. In a 2021
launches omnichannel beauty report, global market research platform Statista
product platform Tira said that India ranked fourth in revenue
generation from the beauty and personal care
India’s largest retailer Reliance Retail Limited market, just behind the US, China, and Japan,
announced the launch of Tira, an omnichannel projecting that online sales would grow 18.2 per
platform for beauty products. With Tira’s cent in the next few years.
launch, Reliance will be taking on Nykaa, Tata
Cliq Palette, Myntra and other players in the
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Reliance Retail Ventures is the holding company

of Reliance Retail Limited. Tira’s online platform
also offers blogs, tutorials, trend-setting tips,
personal recommendations and a virtual try-on
feature.
The Tira store at Jio World Drive in Mumbai is

spread across 4,300 square feet and designed by
London-headquartered innovation studio Dalziel
& Pow.
Tira stores will have dedicated gifting stations to

personalise purchases. Tira will also have
Picture IVB. 2 Tira Stores
Fragrance Finder, which will help consumers
Isha Ambani, Executive Director of Reliance match fragrances closest to their preferences.
Retail Ventures Limited, said, “We are excited to
bring the Tira experience to our Indian Reliance Retail Limited is a subsidiary of
customers. With Tira, we aim to break down Reliance Retail Ventures Limited (RRVL), the
barriers in the beauty space and democratise holding company of all the retail companies
beauty for consumers across segments. Our under the RIL (Reliance Industries Limited)
vision for Tira is to be the leading beauty group. RRVL, through its subsidiaries and
destination for accessible yet aspirational beauty, affiliates, operates an integrated omnichannel
one that is inclusive and one that harbours the network of 17,225 stores and digital commerce
mission of becoming India’s most loved beauty platforms across grocery, consumer electronics,
retailer.” fashion and lifestyle (ETonline, 2023)
An integrated marketing channel system is one in which the strategies and tactics of selling through
one channel reflect the strategies and tactics of selling through one or more other channels. Adding more
channels gives companies three important benefits:
1. Increased market coverage.

2. Lower channel cost
3. Ability to do more customised selling
However, new channels typically introduce conflict and problems with control and cooperation when they
compete for the same customers. Companies should use different sales channels for different-sized
business customers—a direct sales force for large customers, a digital strategy or telemarketing for
midsize customers, and distributors for small customers—but be alert for conflict over account ownership.
Multichannel marketers must also decide how much of their product to offer in each channel (Kotler &
Keller, 2016, p. 650).
Value Networks
According to the demand chain planning strategy, the company should first consider the target market
and then design the supply chain backwards from that point. The company can be viewed as at the centre
of a value network—a system of partnerships and alliances that a firm creates to source, augment, and
deliver its offerings.
Demand chain planning can help the company in the following ways:
1. The company can estimate whether more money is made upstream or downstream, in case it can
integrate backwards or forward.
2. The company is more aware of disturbances anywhere in the supply chain that might change costs,
prices, or supplies.
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3. Companies can go online with their business partners to speed communications, transactions, and
payments; reduce costs; and increase accuracy.
Managing a value network means increasing investments in information technology (IT) and software
such as supply chain management (SCM) software from SAP and Oracle designed Enterprise Resource
Planning (ERP) (Kotler & Keller, 2016, p. 652).
The Digital Channels Revolution

The Digital Channels Revolution is profoundly transforming distribution strategies. Traditional brick-
and-mortar channel strategies are being modified or even replaced. Online retail sales (or e-commerce)
have doubled; apparel and accessories, consumer electronics, and computer hardware are the three fastest-
growing categories. Customers expect seamless channel integration. Retailers and manufacturers are
assembling massive amounts of social, mobile, and location (SoMoLo) information they can mine to learn
about their customers.
The Role of Marketing Channels

Why would a producer delegate some of the selling jobs to intermediaries? Delegation means relinquishing
some control over how and to whom the products are sold. Producers do gain several advantages by using
intermediaries. Many producers lack the financial resources to carry out direct marketing. Producers who
establish their channels can often earn a greater return by increasing investment in their main business.
In some cases, direct marketing simply is not feasible. Intermediaries normally achieve superior efficiency
in making goods widely available and accessible to target markets. Intermediaries usually offer the firm
more than it can achieve independently through their contacts, experiences, specialisation, and scale of
operations.
Channel Functions
A new firm typically starts as a local operation selling in a limited market, using existing intermediaries.
If the firm is successful, it might branch into new markets and use different channels in different markets.
International markets pose distinct challenges. Customers’ shopping habits can vary by country. The
channel system evolves as a function of local opportunities and conditions. Channel member’s functions
are
- Gather information about potential land and current customers, competitors, and other actors and
forces in the marketing environment.
- Develop and disseminate persuasive communications to stimulate purchasing.
- Negotiate and reach agreements on price and other terms so that transfer of ownership or
possession can be affected.
- Place orders with manufacturers.
- Acquired the funds to finance inventories at different levels in the marketing channel.
- Assume risks connected with carrying out channel work.
- Provide for the successive storage and movement of physical products.
- Provide for buyers’ payment of their bills through banks and other financial institutions
- Oversee the actual transfer of ownership from one organisation or person to another.
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Channel Flows
A marketing channel performs the work of moving goods from producers to consumers. It overcomes the
time, place, and possession gaps that separate goods and services from those who need and want them.
Members of the marketing channel perform several key functions. Some functions constitute a forward
flow of activity from the company to the customer. Other functions create a backward flow from customers
to the company. Still, others occur in both directions.
A manufacturer selling a physical product and services might require three channels:
 A sales channel
 A delivery channel
 A service channel
Figure IVB. 1 Five Marketing Flows
Channel Levels
The producer and the final consumer are part of every channel.
A zero-level channel (also called a direct-marketing channel) consists of—a manufacturer selling
directly to the final consumer. The major examples are mail orders, online selling, door-to-door sales, and
manufacturer-owned stores.
Article 4.18
95 per cent of sales in India comes
from online platforms: Oriflame
A top company official has said that India is

among the priority markets for the direct-
selling Swedish beauty brand Oriflame, where it
expects to continue its double-digit growth over
the next 3-5 years. The company, which sells
cosmetic and wellness products in India, also
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expects double-digit growth in its sales force,

adding more direct sellers in the coming years.
Amid the COVID-19 pandemic, Oriflame has

witnessed an upswing in the wellness products
business, contributing to around 20 per cent of its
India business from the earlier 4 per cent, and
expects this trend to continue with some minor
corrections. The company feels it will continue to
grow here for the next decades because of the
growing population and will continue investing in
India and building the business. One of the Picture IVB. 3 Oriflame products
priority markets for Oriflame is India. Though Oriflame has nearly 3 lakh direct sellers working
India’s growth slowed down in the last two years with the company, which helps drive traffic
of the pandemic, the company managed to ensure towards the company’s website. Around 80 per
that profitability increased. cent of them are female. “Many of these people
India and China are at the top position in (direct sellers) order from the website and deliver
Oriflame’s global business. Both the markets are to customers or order for the customers. Every
neck to neck and almost the same size. Besides activity goes through the direct seller,” he said,
Indonesia and Turkey, Mexico and Poland are the adding that a brand partner is always involved in
other leading markets for Oriflame globally. generating a customer. Oriflame has two
Oriflame Holding AG’s net sales for 2021 were manufacturing plants in the country -- Noida and
1,016.5 million euros (over Rs 8,400 crore). Roorkee --and 80 per cent of their production is
for the domestic market. The rest 20 per cent is
Oriflame entered India in 1995 and was among exported to other markets of the Swedish beauty
the first direct-selling firms here. With 26 years brand.
of experience and a good understanding of the
country, the company has added relevant Widell also welcomed the government’s move to
products.” At present, 95 per cent of sales of notify the Consumer Protection (Direct Selling)
Oriflame in India comes from online platforms Rules, 2021, which bans promoting pyramid and
through the app and websites, and because of money circulation schemes in the sector. “This is
this, the company has decided to close many of its good for the industry,” he said, adding that there
offices in the country. The company has offices in is clarity for the sector and legitimacy has been
selected metro cities only. Instead of paying that extended to the direct selling industry. According
money to landlords, the company has now to Widell, many young people are now opting for
invested that money in digital tools and product direct selling as their career as the sector
development. provides flexibility in the flexibility of work (PTI,
2022).
A one-level channel contains one selling intermediary—such as a retailer. A two-level channel

contains two intermediaries—a wholesaler and a retailer. A three-level channel contains—wholesalers,
jobbers, and retailers.
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Picture 19. 2 Consumer and Industrial Marketing Channels
Channel-Design Decisions
Designing a marketing channel system involves analysing customer needs, establishing channel
objectives, identifying major channel alternatives, and evaluating major channel alternatives.
Task – I: Analysing Customers’ Needs and Wants

In designing the marketing channel, the marketers must understand the target customers’ desired service
output levels. Channels produce five service outputs:
1. Lot size
2. Waiting and delivery time
3. Spatial convenience
4. Product variety
5. Service backup
The marketing-channel designer knows that providing greater service outputs means increased channel
costs and higher customer prices.
Task – II: Establishing Objectives and Constraints

Channel objectives should be stated in terms of targeted service output levels. Channel institutions should
arrange functional tasks to minimise total channel costs and provide desired service outputs. Perishable
products require several intermediaries. Bulky products, such as building materials, require
intermediaries at a minimum distance from the target markets. Non-standard products, such as
custom-built machinery and specialised business forms, are sold directly by the company sales
representatives. Planners can identify several market segments that want different service levels.
Channel objectives vary with product characteristics. Channel design must consider the strengths and
weaknesses of different types of intermediaries. Legal regulations and restrictions also affect channel
design.
Task - III: Identifying and Evaluating Major Channel Alternatives

Companies can choose from various channels for reaching customers—from sales forces to agents,
distributors, dealers, direct mail, telemarketing, and the internet.
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Each channel has unique strengths and weaknesses, so most companies now use several channels.
Hopefully, each channel reaches a different segment of buyers and delivers the right products to each at
the least cost. Three elements describe a channel alternative: 1) The types of available business
intermediaries, 2) The number of intermediaries needed.
Types of Intermediaries
A firm needs to identify different types of intermediaries available to carry on its channel work. Companies
should search for innovative marketing channels. Sometimes a company chooses an unconventional
channel because of the difficulty, cost, or ineffectiveness of working with the dominant channel. The
advantage is that the company will encounter less competition during the initial move into this channel.
The firm may choose from direct vs indirect or online vs offline.
Number of Intermediaries
Companies must decide on the number of intermediaries at each channel level. Three strategies are
available: exclusive, selective, and intensive.
Exclusive distribution means severely limiting the number of intermediaries. It is used when the
producer wants to control the resellers’ service level and outputs. Often it involves exclusive dealing
arrangements. Exclusive deals between suppliers and retailers are becoming a mainstay for specialists
looking for an edge in the business world.
Selective distribution involves the use of more than a few, but less than all, of the intermediaries who
are willing to carry a particular product
Intensive distribution involves the manufacturer placing goods or services in as many outlets as
possible.
Manufacturers are constantly tempted to move from exclusive or selective to intensive distribution to
increase coverage and sales.
Terms and Responsibilities of Channel Members

Each channel member must be treated respectfully and allowed to be profitable. The trade relation mix’s
main elements are price policies, conditions of sale, territorial rights, and specific services to be performed
by each party.
snacks and a smaller beverage cup that is being

initially tested in four markets – Bengaluru,
Gurgaon, Bhopal and Indore.
“Introducing these things is to take it to the next

level. We think this will help us to get new
consumers into our fold. The trigger is to create
Article 4.19 new occasions for current consumers and also get
a larger expanse of consumers to come in,”
Is Starbucks India going desi? said Sushant Dash, CEO of Tata Starbucks, a
Starbucks is launching masala chai and filter joint venture that operates Starbucks in India.
coffee in India, a global first for the world’s The focus on Indianised products and menus for
biggest coffee chain revamping its menu to global consumer goods and restaurant chains
attract consumers with Indianised and more isn’t new. For instance, McDonald’s has been
affordable options. selling McAloo Tikki while Domino’s has paneer
makhani and chicken tikka pizza for years now.
The menu now also includes street-style freshly
assembled sandwiches, milkshakes, bite-sized
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Even Starbucks has chole paneer kulcha and Starbucks, which started its India operations in
turmeric latte on its menu. So, what triggered the October 2012, recorded the fastest store
move? Affordability and demand for local and expansion last fiscal year when it opened an
small-sized options said the company. average store weekly. The company also entered
eight new cities, taking the total number of stores
“Some of the food items that we are launching as to 268, spread across 26 cities in India. The
the starting point in a Starbucks become more aggressive expansion also led to its sales
affordable and attract a larger segment of expanding 76% despite two Covid-19 waves,
consumers,” Dash told ET in an exclusive although on a low base.
interaction. “The idea is to also learn, see the
Experts said product portfolio expansion and
consumer acceptance across markets, see the
entry into new territories would keep quick-
nuances, check and adjust and then see where it
service restaurant chains competitive.
goes.” Starbucks’ positioning in India is premium
compared to its rivals Cafe Coffee Day and
“Companies are aware that consumer tastes keep
McCafe, which have significantly lower prices.
changing, and their constant desire for freshness
The American firm’s move also comes close on the
in the menu pushes companies to keep
heels of two global rivals – Canadian coffee chain
innovating product offerings,” said Himanshu
Tim Hortons and British sandwich and coffee
Nayyar, lead analyst at Yes Securities, in an
chain Pret a Manger –announcing their plans to
investor note. “Companies are revamping
enter India this year. Unlike daily household
existing stores, updating product offerings and
essentials and groceries, discretionary segments
adding innovative offerings to meet the Indian
such as eating out and lifestyle products have
diaspora’s taste and remain competitive.” (Sagar
been insulated from slowing consumer demand
Malvia, 2022)
led by inflation.
Task –IV: Evaluating the Major Alternatives

Each channel alternative must be evaluated against economic, control, and adaptive criteria.
Economic Criteria
 Each channel will produce a different level of sales and costs.
 Firms will try to align customers and channels to maximise demand at the lowest overall cost.
 Sellers try to replace high-cost channels with low-cost channels if the value-added per sale is
sufficient.
Control and Adaptive Criteria

Using a sales agency poses a control problem. Members must commit to each other for a specified time to
develop a channel. However, these commitments invariably decrease the producer’s ability to respond to
a changing marketplace. In rapidly changing, volatile, or uncertain product markets, the producer needs
channel structures and policies that provide high adaptability.
Article 4.20
ITC
ITC is one of the first frontline FMCG companies
to start its ecommerce operation for premium and
niche products. It seeks to expand market share
in the fast-growing online sales segment and
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ensure wider availability of products. Nielsen’s diabetes and those with metabolic disorders and
recent report says e-commerce share in total healthy food, such as millet and ragi flour, which
FMCG sales in India has tripled over the last two it will launch in the next few quarters. A
years, with 98% of Indian consumers with access distributor will fulfil orders, while ITC will tie up
to the internet having made an online purchase. with third-party logistic providers operating in
ecommerce.
The conglomerate will sell food and non-food
FMCG products from the recently launched e- ITC sells through trade partners on Amazon,
store, itcstore. It is currently undertaking a pilot Flipkart, Grofers, and Big Basket. The move to
to sell gourmet chocolates, Fabelle. ITC’s online expand into direct online sales is not due to the
store will be limited to metros that account for recent disruption in large e-commerce
the largest share of consumption of premium and marketplaces but to expand its reach and ensure
niche FMCG products for now. The store will products are never out of stock for online
complement its sales efforts through online shoppers. ITC also runs direct ecommerce
channel partners and marketplaces. ITC has also operations for its lifestyle apparel business, WLS
launched an e-store and an app for stationery and John Players. It has recently started online
products. sales of Classmate notebooks and other
stationery products, with the pilot operational in
ITC plans to sell premium and niche FMCG
Bengaluru, Chennai, and Kolkata. This platform
products to discerning consumers through the e-
allows consumers across the country to customise
store. Based on the success in major metros, the
the covers of their Classmate notebooks, which
company may scale it up later to other cities. The
are then printed and delivered to them.
online store will initially sell in Delhi-NCR,
Mumbai, Chennai, Bengaluru, Hyderabad, and ITC aspires to become India’s largest pure-play
Kolkata. ITC intends to sell its premium skincare FMCG firm by 2030 across products like
range Dermafique, Sunbean Gourmet Coffee, packaged food, personal care, and stationery,
blended atta sold under the Aashirvaad brand, accounting for ₹1lakh crore in revenue. In 2017-
and products currently sold in limited markets or 18, the non-cigarette FMCG business revenue
have a niche appeal, ghee, rice, and protein was ₹11,328, while the gross business profit
biscuits. nearly quintupled to ₹164 crores (Writankar
The company will also sell a range of functional Mukharjee, 2019).
food, such as products targeted at people with
Channel-Management Decisions
After a company has chosen a channel alternative, individual intermediaries must be selected, trained,
motivated, and evaluated. Channel arrangements must be modified over time.
Selecting Channel Members

To customers, the channels are the company. Companies need to select their channel members carefully.
Producers should determine what characteristics distinguish better intermediaries to facilitate channel
member selection. They should evaluate the years in business, other product lines, profit records, financial
strength, cooperativeness, and service reputation.
If the intermediaries are sales agents, producers should evaluate the following:
 Number and character of other lines carried.

 Size and quality of the sales force.
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If the intermediaries are department stores that want exclusive distribution, the producer should
evaluate: o Locations, o Future growth potential, o Type of clientele
Training and Motivating Channel Members

A company needs to determine intermediaries’ needs and construct a channel positioning to tailor its
offering to provide superior value to these intermediaries. Stimulating channel members to top
performance starts with understanding their needs and wants. The company should provide training and
market research programs to improve intermediaries’ performance. The company must constantly
communicate that the intermediaries are partners in a joint effort to satisfy the product’s end-users.
Producers vary greatly in skill in managing distributors.
Channel power can be defined as the ability to alter a channel member’s behaviour. Manufacturers can
draw on the following types of power to elicit cooperation:
 Coercive power
 Reward power
 Legitimate power
 Expert power
 Referent power
Coercive and reward power are objectively observable. Legitimate, expert and referent power are more
subjective and dependent on parties’ ability and willingness to recognise them. Most producers see gaining
intermediaries’ cooperation as a huge challenge. More sophisticated companies try to forge long-term
partnerships with distributors.
Evaluating Channel Members

Producers must periodically evaluate intermediaries’ performance against such standards as sales quota
attainment, average inventory levels, customer delivery times, damaged and lost goods treatment, and
cooperation in promotional and training programs. Underperformers need to be counselled, retrained,
motivated or terminated.
Modifying Channel Arrangements

A producer must periodically review and modify its channel design and arrangements. Modification
becomes necessary
 When the distribution channel is not working as planned.

 When consumer-buying patterns change
 When the market expands
 When new competition arises
 When innovative distribution channels emerge
 And when the product moves into the later stages of the product life cycle
No marketing channel will remain effective over the whole product life cycle. The optimal channel
structure will inevitably change in competitive markets with low entry barriers.
 The change could involve adding or dropping individual channel members.

 Adding or dropping particular market channels.
 Developing a totally new way to sell goods.
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The most difficult decision involves revising the overall channel strategy. Distribution channels become
outmoded, and a gap arises between the existing and ideal systems that would satisfy target customers’
needs and desires.
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Chapter IV.5 Retailing and Wholesaling
Retailing
Retailing includes all the activities involved in selling products or services directly to final consumers for
personal, non-business use. Retailers are businesses whose sales come primarily from retailing. Many
marketers are now embracing shopper marketing, the idea that the retail store is an important marketing
medium. In recent years nonstore retailing has been growing much faster than store retailing (Kotler &
Keller, 2016, p. 686).
Types of Retailers
Store Retailers
Different formats of store retailers have different competitive and pricing dynamics. The most important
of major stores retailers are summarised in Figure IVB. 2
Figure IVB. 2: Major types of Store Retailers
Specifically, they position themselves as offering one of four levels of service:
1. Self-service retailers serve customers willing to perform their own “locate compare-select”
process to save time or money.
2. Self- selection – customers find their own goods, though they can ask for assistance.
3. Limited-service retailers provide more sales assistance because they carry more shopping goods
about which customers need information.
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4. Full-service retailers include high-end speciality stores and first-class department stores.
Salespeople assist customers in every phase of the shopping process (Kotler & Keller, 2016, p. 687).
Non-store Retailers
Although the overwhelming bulk of goods and services is sold through stores, non-store retailing has been
growing much faster than store retailing, especially given e-commerce and m-commerce. Nonstore
retailing falls into four major categories:
1. Direct marketing- started with mail and catalog marketing, today it includes telemarketing and
online shopping.
2. Direct selling- It is also known as multilevel selling and network marketing. Here companies sell
door to door or through at-home sales parties.
3. Automatic vending – this offers variety of merchandise such as, soft drinks, newspapers, candies,
magazines, and many other on the go products.
4. Buying service – this aims giving discounts to corporate clients
Corporate Retailing and Franchising

Corporate Retailing and Franchising (corporate chain stores, voluntary chains, retailer and consumer
cooperatives, franchises, and merchandising conglomerates) achieve economies of scale, greater
purchasing power, wider brand recognition, and better-trained employees than independent stores can
usually gain alone. In a franchising system, individual franchisees are a tightly knit group of enterprises
whose systematic operations are planned, directed, and controlled by the operation’s innovator, called a
franchisor. Franchises are distinguished by three characteristics:
1. The franchisor owns a trade or service mark and licenses it to franchisees in return for royalty
payments.
2. The franchisee pays for the right to be part of the system
3. The franchisor provides its franchisees with a system for doing business
Franchisors gain the motivation and hard work of employees who are entrepreneurs rather than “hired
hands,” the franchisees’ familiarity with local communities and conditions, and the enormous purchasing
power of being a franchisor. Franchisees benefit from buying into a business with a well-known and
accepted brand name.
Retail Marketing Decisions

Target Market
Too many retailers fail to define their target markets and positions clearly. They try to have “something
for everyone” and satisfy no market well. In contrast, successful retailers define their target markets well
and position themselves strongly.
Channels
Retailers must decide which channels to employ to reach their customers
Product Assortment
The retailer’s product assortment must match the target market’s shopping expectations in breadth and
depth. Destination categories may play a particularly important role because they have the greatest
impact on where households choose to shop and how they view a particular retailer. Identifying the right
product assortment can be especially challenging in fast-moving industries such as technology or fashion.
The retailer must develop a product-differentiation strategy.
 Feature exclusive national brands
15
 Feature mostly private-label merchandise

 Feature blockbuster distinctive-merchandise events
 Feature surprise or ever-changing merchandise
 Feature the latest or newest merchandise first
 Offer merchandise-customizing services
 Offer a highly targeted assortment
 Merchandise may also vary by geographical market.
Procurement
The retailer must establish merchandise sources, policies, and practices. Retailers use sophisticated
software to track inventory, compute economic order quantities, order goods, and analyze dollars spent on
vendors and products. Some stores are using radio frequency identification (RFID) systems made up of
“smart” tags—microchips attached to tiny radio antennas—and electronic readers to facilitate inventory
control and product replenishment. Stores are using direct product profitability (DPP) to measure a
product’s handling costs (receiving, moving to storage, paperwork, selecting, checking, loading, and space
cost) from the time it reaches the warehouse until a customer buys it in the retail store.
Prices
Prices are a key positioning factor and must be set in relationship to the target market, product-and-
service assortment mix, and competition. All retailers would like high turns X earns (high volumes and
high gross margins), but the two don’t usually go together. Most retailers fall into the high-markup, lower-
volume group (fine specialty stores) or the low-markup, higher-volume group (mass merchandisers and
discount stores). All retailers are seeking to cut costs to improve margins.
Service
Another differentiator is unerringly reliable customer service, whether face to face, across phone lines, or
via online chat.
 Prepurchase services include accepting telephone and mail orders, advertising, window and
interior display, fitting rooms, shopping hours, fashion shows, and trade-ins.
 Postpurchase services include shipping and delivery, gift wrapping, adjustments and returns,
alterations and tailoring, installations, and engraving.
 Ancillary services include general information, check cashing, parking, restaurants, repairs,
interior decorating, credit, rest rooms, and baby-attendant service.
Store Atmosphere
Every store has a look and a physical layout that makes it hard or easy to move around
Store Activities and Experiences:

in addition to natural advantages, such as products that shoppers can actually see, touch, and test; real-
life customer service; and no delivery lag time for most purchases, stores also provide a shopping
experience as a strong differentiator.
Communications
Retailers use a wide range of communication tools to generate traffic and purchases.
Location
The three keys to retail success are often said to be “location, location, and location.” Retailers can place
their stores in the following locations:
1. Central business districts

2. Regional shopping centers
16
3. Community shopping centers

4. Shopping strips
5. A location within a larger store
6. Stand-alone stores
(Kotler & Keller, 2016, pp. 692–700)
provide this service, even though it hits their

daily cash flow, to retain customers for the long
term. Thus kirana stores are important nodes of
India’s informal economy and not just sellers of
products. And that’s why they are valued as
India’s economic backbone even as a formal
economy is still taking shape.
These days, most Kirana stores take orders on

the phone and provide home delivery, two big
Article 4.21 reasons for their remarkable resilience in the face
of huge competition from corporate biggies.
Why kiranas will survive the
corporate blitz Forrester Research estimated India’s retail
market was worth $883 billion in 2021, of which
Mom-and-pop stores, the small neighbourhood grocery retail accounted for $608 billion. The
family-run businesses (or the kirana stores, as market is expected to grow by next year to $1.3
we call them in India) put the community in trillion. And Kirana stores are estimated to form
commerce — the warmth of communication on nearly 90% of the total market. There are nearly
first-name terms, the familiar smell of the 11 million Kirana stores in India.
merchandise, a bit of haggling, and a little small
talk. We are now trading all that away for speed, This unorganised sector is so vast that the
comfort, variety and big discounts of the faceless government is now eyeing it to boost its tax
and nameless e-commerce or impersonal stores collection. The number of businesses in the GST
run by huge retail chains. net increased to 14 million in January 2023 from
about 6 million in 2017. To widen the taxpayer
On March 29, Americans observe ‘National Mom base under the GST, the government now looks
and Pop Business Owners Day’ to celebrate small at sector-specific measures to tap many of these
businesses, especially the family-owned, that 11 million mom-and-pop stores.
have been a vital part of their economy. Small
businesses create local jobs and strengthen local The big challenge to small business
economies by returning the dollars they earn to Just as e-commerce bulldozed the brick-and-
the local economy. That’s why the slogan ‘buy mortar business in America, in India too, e-
local’ reverberates throughout America’s small commerce and big retail chains have become a
towns. challenge to Kirana stores.
Kirana, the backbone of India’s Organised modern trade has smelt blood in
informal economy India’s huge unorganised retail sector. From
online platforms such as Amazon Pantry and Big
In India, these mom-and-pop stores are typically
neighbourhood grocery stores. Apart from being Basket to mammoth retail chains such
social connectors for the local community, they as Reliance and D-Mart, kirana owners are
also serve as an informal credit source, especially buffeted by blows from all sides.
in rural areas. Customers can buy on credit on a The bulk purchases by these big companies
weekly or monthly basis. The Kirana stores enable them to offer lower prices to customers,
17
making it difficult for Kirana stores to compete commerce apps like Swiggy Instamart, Zepto,
on price. Huge discounts, often reaching 50%, and Blinkit, which allow small businesses to
during festivals, and free delivery services help digitalise and offer online orders and delivery
these goliaths to attract more customers and services. These apps provide features such as
have a larger brand reach. Moreover, these inventory management, online payments, and
companies have better supply chain delivery logistics, enabling small businesses to
optimisation, inventory management, and online compete with larger e-commerce companies.
ordering and delivery services that local Kirana
The biggest hope for Kirana stores — to not
shops may be unable to replicate.
merely survive but thrive — lies in the
But Kirana has hope yet government’s Open Network for Digital
While large companies may have strong brand Commerce (ONDC), an electronic platform where
recognition and razor-sharp sales tactics, local Kirana stores can sell online and compete with
Kirana shops can still leverage their strong ties biggies such as Amazon and Flipkart by adopting
to the community to build customer loyalty. their strategies. ONDC is still in its initial stages
Small businesses can offer a personal touch, and has not reached its promise.
getting to know their customers by name and “It’s an idea whose time has come,” Nandan
providing personalised service. Nilekani, one of the architects of ONDC, had
But that’s the definitional appeal of the said, “We owe it to the millions of small sellers to
neighbourhood Kirana store. Signs now indicate show an easy way to participate in the new high-
Kirana stores are nowhere near decimation, as growth area of digital commerce.”
was feared nearly a decade ago when corporate Think of how the Unified Payments Interface
giants had set their eyes on this unmarked (UPI) has revolutionised payments in India at
territory. every level. ONDC is supposed to do the same
with online retail. If ONDC lives up to its
promise, mom-and-pop stores will never go out of
favour, at least not for the competition they face
from big online retailers.
But the fact remains that new-age tech support

to India’s Kirana stores in one or the other form
will help them fend off competition from
corporate giants. And given India’s huge social
and economic diversity, it is difficult for big
companies to map rural and small-town India
even when they take to small-format standalone
stores; mom-and-pop stores, it seems, are here to
Picture IVB. 4: Mon and Pop Stores
stay (Shalinee Mishra, 2023).
Kirana stores are finding many opportunities to
survive. One of them is the emergence of e-
Wholesaling
Wholesaling includes all activities selling goods and services to that buying for resale or business use.
Wholesalers are those firms engaged primarily in wholesaling activities. Wholesalers buy mostly from
producers and sell to retailers, industrial consumers, and other wholesalers. Wholesalers add value by
performing one or more of the following channel functions:
Selling and Promoting: Wholesalers’ sales forces help manufacturers reach many small customers
cheaply.
18
Buying and Assortment Building: Wholesalers can select items and build assortments their customers
need, thereby saving the consumers much work.
Bulk-Breaking: Wholesalers save customers money by buying in carload lots and breaking bulk (breaking
large lots into small quantities).
Warehousing: Wholesalers hold inventories, reducing suppliers’ and customers’ inventory costs and risks.
Transportation: Wholesalers can provide quick delivery to buyers because they are closer than the
producers.
Financing: Wholesalers finance their customers by giving credit, and they finance their suppliers by
ordering early and paying bills on time.
Risk Bearing: Wholesalers absorb risk by taking title and bearing the cost of theft, damage, spoilage, and
obsolescence.
Market Information: Wholesalers inform suppliers and customers about competitors, new products, and
price developments.
Management Services and Advice: Wholesalers often help retailers train their sales clerks, improve store
layouts and displays, and set up accounting and inventory control systems (Kotler & Keller, 2016, pp. 703–
704).
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Chapter IV.6 Marketing Communications

Modern marketing calls for more than developing a good product, pricing it attractively and making it
accessible. Companies must also communicate with present and potential stakeholders and the general
public. For most companies, the question is not whether to communicate but rather what to say, how to
say it, whom, and how often. Consumers themselves are taking a more active role in the communication
process and deciding what they want to receive and how they want to communicate to others about the
products and services. Holistic marketers creatively employ multiple forms of communication to reach and
influence target markets effectively.
The Role of Marketing Communications

Marketing communications are how firms attempt to inform, persuade, and remind consumers—directly
or indirectly—about the products and brands they sell. They represent the company's voice and its brands;
they are how the firm can establish a dialogue and build relationships with consumers. By strengthening
customer loyalty, they can contribute to customer-based brand equity. Marketing communications also
aim at showing consumers how and why a product is used, by whom, where, and when. Consumers can
learn who makes the product and what the company and brand stand for and become motivated to try or
use it.
Marketing communications act as a brand-building tool for all types of entities marketed.
The Changing Marketing Communications Environment

Technology and other factors have changed how consumers process communications and whether they
choose to process them. The digital marketing environment, the rapid diffusion of mobile phones,
broadband, wireless connection, and ad-skipping have eroded mass media effectiveness.
Social media advertising helps marketers hyper-target the right demographics, build audience data for
the future, and track ROIs. The increasing trend of social media capitalising on popular trends and
engaging in ongoing conversations has changed the marketing landscape. Marketers have found an easy
and ephemeral way of being relevant to their target audiences.
A Basic Model of Communication

Over the years, a basic communications model has evolved, representing the communications process's
various elements. This model is shown as
Figure IVB. 3: Model of Communication
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The elements of the model include:
I. SOURCE
The sender or source of communication is the person or organisation with information to share with
another person or group. It should be noted that the source can be an individual (e.g., a salesperson or
hired spokesperson) or a non-personal entity such as the corporation or organisation itself. The receivers'
perception of the source influences how the communication is received, interpreted, and responded to.
The most credible source will be identified on the three parameters – expertise, trustworthiness, and
likability. While celebrity as spokespeople helps in great attention and recall, ordinary people in the ads
bring more realism and overcome consumer scepticism.
Picture 20.1 Celebrity as a source criteria
without reading the fine print will likely get into

hot water.
Besides their main vocation — mostly involving

acting and sports — consumers’ favourite
celebrities actively endorse many products across
categories. However, the celebrity endorsement
game has changed quite a bit in recent months.
Brand ambassadorship and its associated
industries have become stricter, streamlined and
more corporate. Celebrities, therefore, need to
become more responsible about every aspect of
Article 4.22
endorsement.
The rules are changing for Why did this happen, though? For one, the
celebrity endorsements. What to upsurge of crypto ads for a couple of years proved
keep in mind to be a big trigger for the government to tighten
In recent months, brand ambassadorship and the the noose on celebrities. The lack of guidelines
industries linked to it have become stricter, around crypto exchanges and NFTs gave way to
streamlined and more corporate, with the many grey areas. Crypto companies spent
Central Consumer Protection Authority (CCPA) generously advertising their platforms. But this,
establishing guidelines for celebrity endorsers. sometimes, ended up in consumers being misled
Celebrities are now expected to do their due due to a lack of clear ad guidelines. Last year,
diligence on each aspect of endorsement. Those the Central Consumer Protection
who don’t consult advisors and sign paperwork Authority (CCPA) intervened with guidelines
establishing rules for celebrity endorsers.
The Advertising Standards Council of
21
India (ASCI) also stepped in with their own endorsers. These are no longer merely limited-
virtual digital asset promotion guidelines for term endorsements but long-term plans for
cryptos and NFTs. maximising returns for lending their names to
brands and building products around their brand
Funnily enough, even Amitabh Bachchan wrote
value. The focus on their career moves impacts
about the notices he received on what he
what they endorse. Overall, the concept of ‘skin
promotes on social media and, overall, the
in the game’ wasn’t so prevalent in the past.
stricter endorsement rules. “It’s a tough life, ain’t
it [sic],” Bachchan said on his social media. Proceed with caution
Some areas are a complete no-no: Betting,
Do the work
gambling, alcohol and paan masala, to name a
The first thing a celebrity and their agency need
few — that are (or should be) completely off the
to do before associating with a brand is to conduct
list. Authorities also say no to celebrities
due diligence. Understanding the product,
endorsing surrogate products. However, there
service, or category and what they expect to say
are brand extensions that they can consider
about it. Ensuring they know the space in which
within the criteria — provided all parameters are
the product or service operates is an important
in place.
starting point.
We find a lot of celebrities are keen to endorse
For instance, we ask the brands to show us the
certain products. When that happens, we must
paperwork — ads, scripts, where product-related
find ways to protect them in the contract. For
statements are made — and ask for data that
example, take a celebrity who’s keen to endorse a
substantiates them. If there is a notice at some
crypto product. The contract needs to
point, the brand needs to be able to defend its
acknowledge ASCI’s guidelines around this and
stand. ASCI, especially, has become very
clearly state that the celebrity and the brand will
particular about this. Celebrities who don’t
adhere to them. The entire process can take time,
consult advisors and sign the paperwork without
especially if it is a tricky category like crypto.
reading the fine print will most likely get into hot
water. They also need to remember that they New kid on the block
must be transparent and accountable if they’re Influencers are the new celebrities; they’ve
endorsing something for fees. After all, it isn’t gotten a fillip, especially after the pandemic.
just about the endorsement. Their personal However, they need to remember that ASCI’s
brand is also at stake. guidelines apply to everyone.
From ambassadors to owners Brands have upped the ante in tapping the
The business of endorsements has changed too. influencer market, and amid all of this, not too
Today, celebrities look at acquiring stakes in many influencers take legal help before
businesses they endorse. Take Katrina endorsing a product. Very few influencers go to
Kaif’s Kay Beauty, Deepika Padukone with lawyers, except maybe the few established,
Epigamia and Virat Kohli with One8, for popular names. Another oft-ignored area is
instance. It’s evident that to them, the brands are trolling — a whole new space to navigate. More
a long-term plan, not just a two to three-year than legal claims, social media trolling and
endorsement. Lending their names to brands also backlash can lead a personal brand to get
helps to maximise returns on the investment. cancelled (Chandrima Mitra, 2023).
International celebrities, such as Roger Federer,

are also an example of a great celebrity
II. ENCODING
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Encoding is the process of putting together thoughts, ideas, and information into a symbolic form to
communicate a message. The sender's goal is to encode the message in such a manner to ensure that the
receiver will understand it. The encoding process leads to a message containing the information or
meaning the source or sender wishes to convey. Messages can take various forms and may include symbolic
forms or signs.
Picture IVB. 5: Pepsi Emoticons
III. MESSAGE
How marketing communications are presented is very important in determining their effectiveness.
Consideration must be given to message content, how the information will be structured for presentation,
and the type of appeal used. In selecting a message strategy, management searches for appeals, themes,
or ideas to tie into the brand positioning and help establish POP and POD. These appeals may focus on
the brand's tangible, functional, intangible, or emotional value.
MESSAGE APPEALS: An informational appeal elaborates on product or service attributes or benefits

and assumes strictly rational processing of the communication; logic and reason rule. A transformational
appeal elaborates on a non-product-related benefit or image. It often attempts to stir up emotions that will
motivate purchase. Communicators use negative appeals such as fear, guilt, and shame to get people to
do things or stop doing things.
Picture IVB. 6: Message Appeal options
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IV. COMMUNICATION CHANNEL

The channel is the method or medium by which the communication travels from source or sender to
receiver. At the broadest level, channels of communication exist in two types:
PERSONAL CHANNELS involve direct, interpersonal (face-to-face) contact with individuals or groups.
Salespeople serve as personal channels when they deliver their sales messages. It can be further
distinguished as an advocate, expert, and social communication channel.
Advocate channels consist of company salespeople contacting buyers. Expert channels consist of
independent experts making statements to target buyers. Social channels, such as friends, family, and co-
workers, can be a powerful personal source of information through what is commonly referred to as word-
of-mouth communication. Many companies work to generate positive word-of-mouth discussions for their
companies or brands.
Personal influence carries excellent weight when products are expensive, risky, or purchased infrequently
and when products suggest something about the user's status or taste.
Figure IVB. 4: Common Communication Platforms
NONPERSONAL CHANNELS carry a message without personal contact between sender and receiver.
Nonpersonal channels are generally called mass media and include various print and broadcast media
forms.
24
V. DECODING
The receiver is the person(s) with whom the sender shares thoughts or information. Receivers are
generally viewed as the consumers in the target audience targeted by the firm's marketing and
promotional program. Decoding is transforming and interpreting the sender's message back into thought.
It is heavily influenced by the receiver's frame of reference or field of experience. Effective communication
is more likely when common ground or shared meaning or understanding exists or has been established
between the sender and receiver.
VI. RECEIVER
How the receiver will receive the message will depend upon the following:
The motivation of the consumer to buy the product.
 State of mind as a positive frame of mind is more receptive.

 Previous experiences and knowledge about the product.
 Level of interest created
VII. NOISE
Throughout the communications process, the message is subject to noise which refers to factors that
distort or interfere with adequate reception or comprehension. Noise can occur during a message's
encoding, transmission, or decoding. Noise can also occur because of a lack of common ground or
understanding between the sender and receiver. The occurrences of zapping and zipping cause noise.
Zapping means using the remote control to switch to another channel when the commercial break comes.
Zipping refers to the video recorder: fast-forwarding through the commercial break while watching a pre-
recorded program.
VIII. FEEDBACK
Feedback is part of the receiver's response that is communicated back to the sender and takes various
forms. Feedback provides the sender with a way of monitoring how the target audience decodes and
receives the message. There are several ways to assess this, like TRPs, media research, and tracking
studies.
IX. RESPONSE
Response refers to the receiver's reaction after seeing, hearing and reading the message. These responses
can range from non-observable actions, such as storing information in memory, to immediate actions, such
as ordering a product seen in a direct response ad.
The response process can be understood based on three phases – cognitive (learn), affective (feel), and
conative (do). This type of response is highly seen in complex buying behaviour.
Alternative sequences can be do-feel-learn (when the audience is highly involved and dissonance-reducing
behaviours like educational institutes) and learn-do-feel (when the involvement is low for variety-seeking
and habitual buying behaviour). The four Traditional Response Hierarchy Models that explain these
phases as
25
Figure IVB. 5: Response Process
Designing Promotional Campaign

Figure 20.3 shows the eight steps in developing effective communications and
designing a promotional program. Most of them we have covered in the
communications model. These steps identify the target audience, set the
communication objectives, design the communications, select the communication
channels, and establish the total marketing communications budget.
Step I: Identify the Target Audience

The process must start with a clear target audience in mind: potential buyers of
the company's products, current users, deciders or influencers, individuals, groups,
particular publics, or the general public. The target audience critically influences
the communicator's decisions about what to say, how, when, where, and whom.
Though segmentation bases will be helpful, usage and loyalty will be crucial in
identifying target audiences.
Figure IVB. 6: Steps in

designing promotional
campaign
26
Picture IVB. 7: Motivations for Target Audience
Step II: Set the Communications Objectives

The objectives for the communications need to be ascertained. Suppose the objective is to establish the
need for the category. In that case, the communication should be around informing the customers about
the need for the category.
Picture IVB. 8: Media Drive for Nixon
27
Other objectives may be brand awareness, increasing brand recall, building brand attitude by improving
attitudes, and influencing purchase intention. The most effective communications can achieve multiple
objectives.
Picture IVB. 9: Improving Brand Beliefs and Attitudes
Step III: Design the Communications

Formulating the communications to achieve the desired response requires answering three questions:
what to say (message strategy), how to say it (creative strategy), and who should say it (message source).
Message Strategy: In selecting a message strategy, management searches for appeals, themes, or
ideas that will tie into the brand positioning and help establish points of parity or points-of-difference
Picture IVB. 10: Product Performance
These appeals or ideas may relate directly to product or service performance (the brand's quality, economy,
or value). Others may relate to more extrinsic considerations (the brand as contemporary, famous, or
traditional).
28
Picture IVB. 11: Extrinsic Considerations
Buyers expect one of four types of reward from a product: rational, sensory, social, or ego satisfaction. They
might visualise these rewards from results-of-use experience, product-in-use experience, or incidental-to-
use experience. Communication's effectiveness depends on how well a message is expressed, and it is
content. If communication is ineffective, the wrong message is used, or the right one is poorly expressed.
Creative Strategies: We can broadly classify creative strategies as either informational or

transformational appeals, as already discussed in the message appeals.
Message Source: We already discussed the criteria for celebrities to be the most credible sources
of communication —expertise, trustworthiness, and likability.
Picture IVB. 12: The Power of Dhoni
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Step IV: Select the Communications Channels

We have already discussed that communication channels may be personal and non-personal. Within each
is many subchannels. Electronic word of mouth (eWOM) has become an increasingly popular
communication channel in the digital world. Cruise Critic is a platform dedicated to informing, educating,
and promoting cruise travel among travel enthusiasts.
Picture IVB. 13: The eWOM
Step V: Establish the Total Marketing Communications Budget
Affordable method
Some companies set communications expenditures at what they think they can. This method ignores the
role of marketing communications as an investment and their immediate impact on sales volume. It also
leads to an uncertain annual budget, making long-range planning difficult.
Percentage-of-Sales Method
Some companies set a communications budget as a specified percentage of current or anticipated sales or
the sales price. It views sales as the determiner of communications rather than as a result. It leads to a
budget set by the availability of funds rather than market opportunities. It discourages experimentation
with countercyclical communication or aggressive spending. Dependence on year-to-year sales fluctuations
interferes with long-range planning.
Competitive-Parity Method
Some companies decide their communications budgets to achieve share-of-voice parity with competitors.
There are no grounds for believing that competitors know better. Company reputations, resources,
opportunities, and objectives differ so much that communications budgets are hardly a guide. Moreover,
no evidence exists that budgets based on competitive parity discourage communication wars.
Objective-and-Task Method
Under this approach, budgets are developed by defining specific objectives, identifying the tasks that must
be performed to achieve them, and estimating their costs.
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Step VI: Selecting the Marketing Communications Mix

Companies must allocate their marketing communications budget over the eight major communication
modes—advertising, sales promotion, events and experiences, public relations and publicity, online and
social media marketing, mobile marketing, direct and database marketing, and the sales force. Companies
are always searching for ways to gain efficiency by substituting one communication tool for others. We
shall discuss them in detail in the next session.
Factors in Setting the Marketing Communications Mix

Type of Product Market: Consumer markets spend more on sales promotion and advertising. Industrial
marketers spend more on personal selling.
Advertising can increase awareness of new products and explains product features. Reminder advertising
is more economical than salesforce. However, an effectively trained company sales force can increase stock
position, build enthusiasm, conduct missionary selling and manage key accounts.
Buyer-Readiness Stage: Communications tools vary in cost-effectiveness at different buyer readiness

stages. Advertising and publicity play the most crucial role in the awareness-building stage. Customer
comprehension is primarily affected by advertising, and personal selling customer conviction is influenced
mainly by personal selling, and sales promotion is most helpful in closing the sale recording. Also,
reordering is affected mainly through personal selling and sales promotion and somewhat by reminder
advertising Note 2: Online activities can affect virtually any stage.
Figure IVB. 7: Cost-Effectiveness of Three Different Communication Tools at Different Buyer-Readiness Stages
Product Life-Cycle: In the introduction stage of the product life-cycle, advertising, events and
experiences, and publicity have the highest cost-effectiveness, followed by personal selling to gain
distribution coverage and sales promotion and direct marketing to induce trial. In the growth stage,
demand has momentum through word of mouth and interactive marketing advertising, events and
experiences. Personal selling has become more critical in the majority stage in the decline stage; sales
promotion continues, and other solid communication tools are reduced. Salespeople give the product only
minimal attention.
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Step VII: Measuring Communication Results

Inputs and expenses: senior managers want to know the outcomes and revenues of their
communications investments. However, their communication heads supply only inputs and expenses:
press clipping counts, numbers of ads placed, or media costs.
Reach and frequency (the percentage of the target market exposed to a communication and the number
of exposures), recall and recognition scores, persuasion changes, and cost-per-thousand calculations.
Step VIII: Managing the Integrated Marketing Communications

Process
The American Marketing Association defines integrated marketing communication as "a planning process
designed to assure that all brand contacts received by a customer or prospect for a product, service, or
organisation are relevant to that person and consistent over time."
Media coordination can occur across and within media types, but marketers should combine personal and
nonpersonal communication channels through multiple-vehicle, multiple-stage campaigns to maximise
and increase message reach and impact. Integrated marketing communications can produce more vital
message consistency and help build brand equity and create a more significant sales impact (Kotler &
Keller, 2016, pp. 543–559).
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Chapter IV.7 Tools of Promotion Mix

An organisation communicates with the marketplace through a carefully planned and controlled
promotional program that utilises the promotional mix elements. The promotional mix is the primary
tool or element to accomplish the organisation’s objectives. The role and function of each promotional mix
are as follows:
Advertising
Advertising is defined as
“any paid form of nonpersonal communication about an organisation, product, service,

or idea by an identified sponsor”
Advertising reaches geographically dispersed buyers. It can build up a long-term image for a product or
trigger quick sales. Specific forms of advertising, such as TV, can require a large budget, whereas other
forms, such as newspapers, do not. The mere presence of advertising might affect sales:
Pervasiveness—Advertising permits the seller to repeat a message many times.
Picture IVB. 14: Airtel Girl
Amplified expressiveness—Advertising provides opportunities for dramatising the company and its
brands and products through the artful use of print, sound, and colour.
Control—The advertiser can choose the aspects of the brand and product to focus on communications.
Picture IVB. 15: Sellers can showcase their power through ads
33
Advertising objectives can be classified according to whether their aim is to:
Informative Advertising aims to create brand awareness and knowledge of new products or new
products new features. Yakult or Epigamia ads inform consumers of the benefits of flavoured yoghurt.
Picture IVB. 16: Epigamia Range
Persuasive Advertising aims to create liking, preferences, conviction, and purchase of a product or
service. Comparative advertising helps consumer analyse in detail; fear appeal help overcome negative
demand for unsought products.
Picture IVB. 17: Persuasive Advertising
Reminder Advertising aims to stimulate repeat purchases of products and services. Mauka-mauka ads
for India-Pakistan World Cup ties aim to remind the event’s value to the audience.
Reinforcement Advertising aims to convince current purchasers that they made the right choice in
the most creative form. Automobile ads often depict testimonials from satisfied customers (Kotler & Keller,
2016, p. 569).
34
Picture IVB. 18: Guerilla Marketing from Volkswagen
may transform how the world uses search

engines in a way that would make search engine
marketing obsolete. With so many changes, what
is the future of advertising, and what path will
the industry take?
Let’s begin with a look at TV advertisements. In

Article 4.23 India, for example, by 2025, only 46% of TV users
will be using cable, down from 54% in 2020,
From TV screens to social streams:
according to a report cited by the Economic
The future of advertising in a Times. A combination of streaming services and
changing world the internet led to this decline. In
How we consume media has changed 2007 Netflix started its online streaming service;
significantly in the last ten years. But what has from then to now, things have been vastly
changed even more is how we consume the side different. In 2023, almost every media house has
dish of media; advertisements. The days of sitting its streaming service, with which they are
through 20 mins of continuous ads while we wait producing heaps of content; Amazon Prime,
to watch our favourite show have long passed. Hotstar, and Zee5 are all fighting for the same
With on-demand content, TV ads have eyeballs. YouTube and Instagram have also
disappeared for those watching Netflix. successfully pulled viewers away from TV screens
and into their phones. The decline of television is
But the ad industry has dealt with even more
well documented. Unfortunately, it means that
trouble in the past two years. In
TVads will be a victim of this decline.
2021, Apple released IOS 14.5, giving users more
power to limit companies from accessing their The next issue came in the form of social media
data for advertising. This update made it much giants and privacy. When Apple released its
harder for companies like Meta, which rely on update allowing users to opt out of sharing their
user data for targeted advertising. Now ChatGPT data, most users opted not to; according to
35
statistica data, the monthly percentage of users platforms like Instagram, TikTok, and YouTube
who opted to share data varied between 11-25%. have become famous for brands to reach
This update was a critical blow to the business consumers. Influencers can create sponsored
model of any social media company that relied on content that showcases a brand’s product or
user data to generate targeted ads. There is a service to their audience, often resulting in
growing concern among users and a general shift higher engagement rates than traditional
toward less data tracking. Meta was fined 411 advertising.
million Euros for violating privacy laws in the
Influencer marketing is based on the trust
EU, so legislation that bans targeted ads may
between the influencer and their audience, so
soon be coming.
product promotions feel more authentic. They
The latest change occurred in the aftermath of provide a targeted audience, which can be tailor-
the shock caused by ChatGPT. Recently made for a particular product. They also come
Microsoft has integrated GPT-3 into its Bing with greater creative freedom, allowing them to
search engine, and Google has announced plans promote the product in a manner that speaks to
to do the same with its AI competitor. These AI their audience and is often more cost-effective.
will act as search engine replacements; the need
to sift through thousands of websites will no
longer exist as these AI engines can directly
answer any question. This will be another
headache for advertisers as search engine
advertising and search engine optimisation
might soon become a thing of the past.
So, what is the future of advertising? Like any

industry, advertising will adapt. There are two
paths that advertising might take. The first will
be new forms of advertising through emerging
technologies. The world is racing towards AR and
Picture IVB. 19: Historical or History?
VR technology, and advertisers must keep pace.
Creating interactive ads in augmented and There are, of course, downsides to influencer
virtual reality may be a way to keep users marketing. The influencers become ambassadors
engaged and to develop enthralled. Creating ads to the brand, so any negative publicity transfers
in these new technologies through product to the brand. This can cause publicity issues, as
placement and native advertising, a form of has happened with many high-profile celebrities.
advertising that blends in with the surroundings The question of legitimacy is also a big one with
and makes it more engaging for users might be influencer marketing, whether influencers are
one way to stay ahead of the curve. One such genuine with their messaging, and this issue has
campaign successfully carried out was by Gucci, already come to the fore with celebrity
where they created a virtual town within a game ambassadors of Android companies tweeting
called Roblox where players could from iPhones! So, influencer marketing definitely
try Gucci clothes virtually. Samsung has also comes with its own set of issues.
used VR to create a campaign that imitated a
moon landing. So, creating these campaigns is The future of advertising is uncertain, like any
quite possible even today. industry, but the need to adapt is certain,
especially when so much change is coming. The
But the most significant shift in advertising will key to thriving may be welcoming and resisting
be the focus on influencer advertising. change (Yash Singh Juneja, 2023).
Influencers with large followings on social media
36
Advertising Media – Broadcast & Print

Television
Television has virtually saturated households throughout India and many other countries and has become
a mainstay in most people’s lives. They rely on TV for news and information, which is their primary
entertainment form. The penetration and popularity of television make it the predominant form of mass
media. It has often been noted that television represents the ideal advertising medium with its ability to
combine visual images, sound, motion, and colour. While television has numerous advantages, it has some
problems and limitations as an advertising medium.
Radio
The radio, as an entertainment and advertising medium, changed dramatically with the rapid popularity
of television. Radio has evolved primarily into a local advertising medium characterised by highly
specialised programming that appeals to the population’s narrow segments. Radio has survived and grown
as an advertising media vehicle because it offers advertisers certain advantages. However, radio does have
certain limitations that affect its role as an advertising medium.
Magazines
Magazines serve readers’ educational, informational, and entertainment needs and interests in both the
consumer and business markets. Simultaneously, some magazines are general mass-appeal publications
and most target particular audiences in both the consumer and business markets.
Newspapers
Newspapers are the second primary form of print media and represent the most extensive advertising
media in total advertising volume. Newspapers are an especially important advertising medium for local
advertisers such as retailers. However, newspapers can also be a valuable medium for national advertisers
as well. The vast majority of newspapers are daily publications serving a local community.
The Support Media

Outdoor Advertising—while one of the oldest advertising mediums, outdoor advertising has been the
most recent and creative advertising form.
In-Store Media—Advertisers promote their products in supermarkets and other stores with untypical
media like displays, banners, and shelf signs. These point-of-purchase materials include video displays on
shopping carts, kiosks that provide recipes and coupons at counters and cash registers, LED boards, and
ads broadcast over in-house screens.
Transit Advertising—While similar to outdoor in that signs and electronic billboards are often
employed, transit differs in that these ads are oriented around transportation. Buses, taxis, commuter
trains, aeroplanes, and subways are some of the transit forms employed.
Advertising in Movie Theaters —one of the oldest advertising mediums is ads at the movies. These
advertising forms’ advantages include high exposure, the ability to create mood, low costs, high recall, and
clutter avoidance. Disadvantages may also include cost (relative to some other media) and irritation.
In-flight Advertising- In-flight television commercials are one of the more rapidly growing mediums in
use. Advantages of in-flight advertising include a desirable audience (high income), a captive audience,
and low cost and good segmentation capabilities. Disadvantages include irritation, limited availability of
media time, lack of attention, and wear out.
37
Product Placements —whether one considers product placements an advertising form or a form of
promotion, no one can argue that this means of getting exposure to a product is increasing. Since Coke’s
incredible success (in the movie Taal), more and more products have appeared in movie theatres and on
television.
Follow the demand

With extreme temperatures becoming more
commonplace each year, are brands struggling to
adapt their marketing strategies? Not at the
moment, say Naturals Ice Cream and Starbucks,
two brands are known to release regular seasonal
Article 4.24 campaigns.
With the weather blowing hot and

cold, what happens to seasonal
advertising?
Last month, Mumbai woke up to its wettest
March day in at least eight decades. The city
recorded its hottest day of 2023 at 39.3 degrees
Celsius in the same month. In a similar surprise,
temperatures in Delhi, which are normally
scorching this time of year, have been kept in
check by surprise March rains. Down south,
Kerala has received more-than-the-usual
Picture IVB. 20: Weather Blues
summer rains — 12.7 mm of rain against the
average of 9.5 mm. Despite the unseasonably warm weather in
December 2022, Starbucks says it saw one of its
Unexpected weather changes play havoc with
biggest months propelled by its seasonal menu.
agriculture by damaging crops and leading to
“To an extent, we’re protected from seasonality
unmitigated inflation — especially in the food
because Starbucks has always been positioned as
sector, among other industries. Another often
that third place where you go [after your home or
overlooked side effect is in advertising and
office]. Or consumers come in to experience our
marketing. For instance, if a brand rolls out a
seasonal menus or meet up for different occasions
summer campaign, but the weather is rainy, the
— Valentine’s Day, Friendship Day, Women’s
communication may not resonate with
Day,” explains Deepa Krishnan, director –
consumers. Similarly, a winter-themed campaign
marketing, category, loyalty and digital Tata
might bomb if most of the country is experiencing
Starbucks. However, she notes that the brand
a heat wave.
has seen fluctuations in demand for hot versus
This mismatch is unavoidable since scripts are cold beverages whenever the weather shifts.
approved months before a campaign’s launch,
Prasad Patil, the co-founder of Drink Water
says Aalap Desai, CCO, creative experience,
Design Studio, the creative agency behind
West, Dentsu Creative India. “Weather changes
Naturals Ice Cream, says unpredictable weather
have been erratic recently. On many occasions, it
hasn’t really affected sales since “ice cream is still
changes in hours. Predicting and connecting to
an indulgence category”. But it does play a crucial
what is happening [weather-wise] when an ad
role in the quality and availability of stocks. Last
release is impossible,” he says.
year, the brand had to cut down a three-month
campaign promoting Naturals’s annual ‘Berry
38
Festival’ to two months because transportation trends in weather (at the time) and predictions
issues had led to limited berry stocks. for the future will trigger these decisions.
Unpredictable weather can be a deterrent for a Year-round messaging

day or two, but the market tends to normalise, With erratic and unpredictable temperatures,
adds Amul’s new MD, Jayen Mehta. there is a case to be made for generic ad
Kamal Nandi, business head and EVP, Godrej campaigns over seasonal-themed ones. Ice cream
Appliances, was unfazed when it suddenly makers, for instance, focus a lot of their
started raining in March this year, causing a marketing spending on year-round advertising to
temporary blip in demand. With multiple parts of push the idea that there is no specific season or
the country experiencing one of the hottest occasion to enjoy an ice cream. Consider Amul’s
Februarys on record, Godrej Appliances enjoyed year-round ‘Ice Cream vs Frozen Dessert’
a 27% value growth and a 24% volume growth in campaign or the advertising Naturals does
its cooling categories. “Unseasonal rains are a around their ‘Taste the Original’ brand
short phenomenon and have limited impact since positioning.
the weather tends to get even more oppressive “The result [of these year-round campaigns is
and hotter right after the spell of rains,” Nandi evident in the sales pattern that has changed
says. This is also why the brand is still targeting over the years with a reduced seasonality index,”
a 40% growth this summer over its 2022 says Amul’s Mehta, citing how the difference
counterpart. between the peak season for sales (February to
It’s important to mention that several seasonal June) and lean season for sales (July to January)
categories also saw bumper sales in 2022; the has decreased over the years. “The seasonality of
market has bounced back for the first time in two ice creams has reduced. It’s no longer a product
years after the Covid-19 gloom. restricted to only summers. This has changed the
way we decide on advertising or marketing
Longer campaign seasons spending. Our advertising campaigns — print or
However, the story changes a bit when it comes media — are [now] spread across the year with
to spending. As the seasons get longer and increased frequency during the summer months
temperatures more extreme, Dentsu Creative’s or festival months.”
Desai says clients are more motivated to run
These factors — year-round visibility and year-
traditional seasonal campaigns for longer.
round point-of-sale advertising — have added to
There was a time when seasonal ads would run the double-digit growth of the ice cream industry
for two to three months on average; this has now year-on-year, he adds.
increased to four or five months, he shares.
However, the efficacy of a generic campaign
In the case of early summer, summer-specific depends on the category, says Joshi. “Generic
categories and brands tend to start advertising campaigns will not work for a seasonal category
earlier to maximise the opportunity, according to unless you have innovative products — like all-
Mohit Joshi, CEO, Havas Media Group India. For weather ACs — which extend the product’s
instance, Coca-Cola and PepsiCo India kicked off relevance beyond the peak summer months.”
their bevvy of summer campaigns in February.
A Voltas spokesperson adds that if the product
The former launched two ad spots with Janhvi
proposition is made relevant throughout the
Kapoor and Tiger Shroff on February 22, while
year, even seasonal categories can be de-
Pepsi’s ‘Rise Up Baby!’ campaign with Ranveer
seasonalised. “The brand may not get the peak
Singh went live on February 28.
volumes during the low season, but it will stay
However, Joshi cautions that overall spending relevant in the consumer’s mind, which can be
will not increase, but campaigns’ phasing may leveraged during peak season,” they share.
change in line with the ‘weather realities’ closer
to the implementation date. The most recent
39
Tapping into the impulse stay agile by dialling up or dialling down certain
Voltas also noted that the demand for cooling offerings in keeping with the weather outside.
products is no longer restricted to the March- Weather-based advertising, which uses real-time
June and October months. “A weather update for weather forecasts to push relevant messaging to
the next week or a hot February afternoon can customers, is another path advertisers are
trigger a purchase decision,” their spokesperson exploring. Timely, personalised weather-
noted. “This requires marketers to approach their triggered communication can drive customers to
end-customers in real time and be flexible with make unplanned purchases. Categories such as
their marketing communication.” retail, apparel and e-commerce can benefit from
However, unpredictable weather patterns also it.
present a marketing opportunity. Starbucks However, with the weather fluctuating —
often turns to social media to capitalise on the sometimes in hours — Krishnan believes brands
moment. Krishnan explains, “During the March shouldn’t react to every single change. Instead,
rains, we put out a post saying, ‘Don’t let the they should take more of a studied view and
rains hamper your mood. differentiate between climate and weather. In
Cheer yourself up by visiting a Starbucks’.” Since short, not each unexpected rainy afternoon needs
their beverage and food planning is usually done a relook at the marketing calendar (Shannon
for an entire season, social media helps the brand Tellis, 2023).
Evaluating the Effectiveness of Advertising

Advantages
 a cost-effective way of communicating, particularly with large audiences

 ability to create images and symbolic appeals and to differentiate similar products and services
 a valuable tool for creating and maintaining brand equity
 ability to strike a responsive chord with the audience through creative advertising
 opportunity to leverage popular advertising campaigns into successful IMC programs, which can
generate support from retailers and other trade members
 ability to control the message (what, when, and how something is said and where it is delivered)
Disadvantages
 the cost of producing and placing ads can be very high, particularly television commercials
 it can be difficult to determine the effectiveness of advertising
 there are credibility and image problems associated with advertising
 the vast number of ads has created clutter problems. Consumers are not paying attention to much
of the advertising they see and hear.
Sales Promotion
Sales Promotion has been defined as “a direct inducement that offers an extra value or incentive
for the product to the sales force, distributors or the ultimate consumer with the primary
objective of creating an immediate sale.” There are several important aspects to sales promotion:
Companies use sales promotion tools—coupons, contests, premiums, and the like—to draw a stronger and
quicker buyer response, including short-run effects such as highlighting product offers and boosting
sagging sales
Ability to be attention-getting—They draw attention and may lead the consumer to the product.
40
Incentives—They incorporate some concession, inducement, or contribution that gives value to the
consumer.
Invitation—They include a distinct invitation to engage in the transaction now.
Sales promotion involves some inducement that provides an extra incentive to purchase the product or
service
Sales promotion is essentially an acceleration tool designed to speed

up the selling process and maximise sales volume.
Sales promotion programs and activities can be targeted to different

parties in the marketing channel, including wholesalers, retailers, and
consumers. Sales promotion can be broken into two major categories:
Consumer-Oriented Sales Promotion

Techniques
The various consumer-oriented sales promotion techniques marketers
use should be discussed, their advantages and limitations and their role
in meeting various promotional objectives.
SAMPLING—sampling involves various procedures whereby

Picture IVB. 21: Newspaper Inserts
consumers are given some quantity of a product for no charge to induce
trial. Sampling is often used to introduce a new brand to the market
but is also used for established products.
 Some of the more widely used sampling methods include:

 Door-to-door sampling
 Sampling through the mail
 In-store sampling
 On-package sampling
 Event sampling
COUPONING —Couponing is the oldest yet most widely used and effective sales promotions tool.
Coupons make it possible to offer a price reduction to price-sensitive prices without reducing the price for
everyone. Coupons can be distributed in a variety of ways, including:
 media delivery in newspapers and magazines and as free-standing inserts (FSIs)

 through direct mail
 in or on packages
 in stores and at points-of-purchase
 over the internet through online promotion sites
PREMIUMS—A premium is an offer of an extra item of merchandise or service, either free or at a low
price, used as an incentive for purchase.
CONTESTS AND SWEEPSTAKES—A contest is a promotion whereby consumers compete for prizes
or money based on skills or ability, and winners are determined by judging entries against predetermined
criteria. Contests often provide a purchase incentive by requiring proof of purchase to enter or obtain an
entry form from a dealer or advertisement. A sweepstake is a promotion whereby winners are determined
purely by chance and cannot require proof of purchase as a condition for entry. Another form of
sweepstakes is a game with a chance element associated with winning.
41
REFUNDS AND REBATES—Refunds or rebates offer to return some portion of the product purchase
price after supplying some proof of purchase. Consumers are generally responsive to refund, or rebate
offers, particularly as the savings offer’s size increases. Marketers are using rebates extensively,
particularly in product categories such as consumer electronics.
BONUS PACKS—Bonus packs offer the consumer an extra amount of a product at the regular price
by providing larger containers or extra units.
PRICE-OFF DEALS—Price-off deals reduce the brand’s regular price, typically right on the package
through specially marked price packs.
LOYALTY PROGRAMS—Loyalty programs (also referred to as continuity or frequency programs)

are promotional programs that reward customers for continuing to purchase the same brand of a product
or service over time. Loyalty programs have become commonplace in several product and service
categories, particularly travel, hospitality, and retailers. Many consumer packaged goods companies are
also developing frequency programs that offer consumers to accumulate points to purchase their brands.
The points can be redeemed for gifts such as merchandise or discounts (Kotler & Keller, 2016, p. 586).
Trade Oriented Sales Promotion

Manufacturers can use various trade promotion tools as inducements for wholesalers and retailers. These
include:
CONTESTS AND INCENTIVES—manufacturers use contests and special incentive programs to

stimulate greater selling efforts from resellers’ management or sales personnel. An important target of
contests or special incentives is the sales personnel of the middlemen. In addition to using contests,
programs targeted to sales personnel may include pushing money or spiffs.
TRADE ALLOWANCES—probably the most commonly used trade promotion is some form of trade
allowance, a discount or deal offered to the retailer or wholesaler to encourage them to stock, promote,
or display a manufacturer’s products.
DISPLAYS AND POINT-OF-PURCHASE MATERIALS—marketers use various point-of-purchase

materials, including end-of-aisle displays, posters, banners, shelf cards, motion pieces, stand-up racks, and
other materials. Point-of-purchase displays are an important promotional tool because they can help
manufacturers obtain more effective in-store merchandising. Products often sell better when they are on
display. Consumers are more likely to notice them, and price deals often accompany displays.
SALES TRAINING PROGRAMS—another important form of manufactured sponsored promotional

assistance is sales training programs for reseller sales personnel. Manufacturers provide sales training
assistance to retail salespeople in many ways, including having formal classes, having their sales reps
work with resellers, and providing sales manuals, brochures, videos, and other selling aids.
TRADE SHOWS—a trade show is an exhibition or forum where manufacturers display their products
to current and prospective buyers. Trade shows provide a major opportunity to display and demonstrate
products, interact with customers, identify new prospects, gather customer and competitive information
and even write new orders. The trade show’s social aspects are also important. Many customers use them
to entertain key customers and develop and maintain relationships (Kotler & Keller, 2016, pp. 586–587).
42
Evaluating the Effectiveness of Sales Promotion

Advantages
 provides extra incentive to consumers or intermediaries to purchase or stock and promote a brand
 way of appealing to a price-sensitive consumer
 way of generating extra interest in products or ads
 effects can often be more directly measured than those of advertising
 can be used as a way of building or reinforcing brand equity
Disadvantages
 too much attention on short-run marketing planning and performance

 do not help establish or reinforce brand image, and short-term sales gains are often achieved at
the expense of long-term brand equity
 problems with sales promotion clutter as consumers are bombarded with too many coupons,
contests, sweepstakes, and other promotional offers
 consumers may become over-reliant on sales promotion incentives which can undermine
favourable attitudes and brand loyalty.
 In some industries, promotion wars may develop whereby marketers’ sales promotion incentives
extensively, which results in lower profit margins and makes it difficult to sell products at full
price.
Events and Experiences

Event marketing is a form of promotion in which a company or brand is linked to a specific event or
themed activity developed to create consumer experiences and promote a product or service. Marketers
often do event marketing by associating their products with popular activities such as sporting events,
concerts, fairs, or festivals. It is important to distinguish between event marketing and event sponsorships.
The two are often used interchangeably yet refer to different activities. Event sponsorships are promotions
whereby a company develops sponsorship relations with a particular event and provides financial support
in return for the right to display a brand name, logo, or advertising message and be identified as a sponsor
of the event.
The official TV broadcaster of Tata IPL

2023 clocked a total of 8.7 billion minutes of
consumption for the opening match. This is a huge
leap of 47 per cent compared to last year. 130
million viewers tuned in for the live broadcast of
the first match.
Article 4.25 On the other hand, JioCinema saw a record 1.47
billion digital video views on the opening weekend
IPL on TV v/s digital
of the IPL. A peak attendance of 16 million
viewers was recorded on Jio Cinema during the
The field isn’t on fire only for the players this time first match.
at the Tata IPL 2023. Competition is also cut-
throat between Viacom18’s OTT and Disney Sandeep Goyal, managing director of Rediffusion,
Star’s TV viewership numbers. believes in digital more. He said, “At seven pm,
when most matches start, most potential viewers
Is this situation more like Zomato’s latest ad are in commute mode on weekdays. Digital
campaign ‘Zomaito Zomahto’, where both viewing is the only choice. TV loses out. So, the
comparatives may seem different but essentially battle for eyeballs is real.”
are the same?
43
TV still has the advantage of a big screen

experience, but digital wins out when faced with
no viewing versus viewing on a small screen. Plus,
it has interactivity. For TV, the fight is not an easy
one. That said, TV is family viewing. At home, it
is the ‘always on’ medium. That advantage will
continue to stay, Goyal added.
The latest straw poll by Red Lab revealed more

Indians are watching the IPL on TV compared to
digital. 47 per cent of respondents said they liked
watching cricket this season on TV, and 22 per
cent of men resorted to digital, while the
remaining 31 chose both.
Rohit Raj, vice president of strategy

at Dentsu, believes sports is perhaps the last
appointment viewing opportunity that TV has up
its sleeve. However, digital is making inroads
there as well. While digital brings a sense of
Picture IVB. 22: IPL on Big Screen
control and interactivity to the overall cricket
viewing experience. The TV viewing experience Airtel Digital TV and Tata Play offer additional
continues to be a more passive one. feeds, including instant highlights, key moments
and stats feed by the press of a button on the
Viacom18’s Jio Cinema also garnered less view
remote.
count due to the glitches during the second
consecutive day of IPL. According to the users, On the larger front, the battle between TV and
English commentary kept losing audio. Others digital started a little before the pandemic, which
also complained about video buffering, app is still ongoing and seems to be marching uphill.
crashes and lagging issues. Goyal said, “It is survival of the loudest! The one
who shouts the loudest hopefully gets the viewer.”
Ajit Varghese, executive vice president and head
of the network - ad sales at Walt Disney India, did According to Goyal, for the first time since the IPL
not let the opportunity pass to take a jab at the started, broadcasters have to compete not just for
OTT streaming platform. His post on Linkedin eyeballs but advertisers too. They have to show
read, “Want best ROI on investments, stick that their screen has more pulling power. Here,
to Star Sports.” Clearly, Star Sports is the hi-decibel advertising helps.
aggressively trying to garner more viewers this
Nowadays, most viewers also opt for connected TV
season. The broadcaster has announced an
setups. In 2021, Connected TV sets increased to 10
association with Airtel Digital TV and Tata Play.
million, as stated by the EY M&E Report of 2022.
With this partnership, the viewership experience
30 per cent of content consumed on large screens
for the user will be enhanced with superior Dolby
is social, gaming, digital and more. This also
‘Atmos’ audio quality and special features on
makes the situation tougher for TV broadcasters.
linear television.
Furthermore, these numbers highlight another
aspect. Is smart TV’s making the TV feed
irrelevant as most of the audience now connects
mobiles to TV?
Raj said, “TV seems to be fighting a losing battle

with digital, both in terms of the flexibility and
convenience of usage as well as the dynamic
44
nature of the content being created for the With more mobile penetration and data charges
medium.” coming down, the number of cord-cutters is
expected to increase until more innovation in the
He added, “With 5G coming in and as the 5G
television viewing experience.
prices settle, the road ahead for TV looks even
tougher.” Only time can tell how the pitch turns out for both
teams (Chehneet Kaur, 2023).
The Dentsu executive explained that traditional
TV feeds are irrelevant for many cord-cutters.
Public Relations and Publicity

The Traditional Definition of PR—The traditional role reflects a management function with its primary
responsibility to communicate and accept its policies and programs within its various communities.
The New Role of PR—The new role assumes a much broader and more marketing-oriented perspective. In
the new orientation, the public relations department operates closely with the marketing department
(rather than as separate entities) to develop programs and policies. The public relations department’s
activities must be coordinated with marketing and integrated into the overall promotional mix.
Public Relations and Publicity are underused, yet a well-thought-out program coordinated with the other
communications-mix elements can be extremely effective, especially if a company needs to challenge
consumers’ misconceptions.
High credibility—News stories and features are more authentic and credible to readers than ads.
Ability to reach hard-to-find buyers—Public relations can reach prospects who prefer to avoid mass
media and targeted promotions.
Dramatisation—Public relations can tell the story behind a company, brand, or product.
The dissemination of publicity is a task that is the responsibility of the public relations department. It is
the development of programs to deal with publicity originating from other sources. At the same time,
public relations activities are under the firm’s control. The same cannot always be said for publicity.
Publicity is a form of earned media.
The Evaluation of Effectiveness of Public Relations

Advantages
 credibility
 low cost
 less clutter
 lead generation
 ability to reach specific groups
 image building
Disadvantages
 The primary disadvantages result more from improper implementation of the programs than from
public relations in and of itself. These include:
 not completing the communication process
 redundancies with the marketing effort
45
The advantages of good publicity are (1) credibility, (2) news value, (3) high word-of-mouth
communications, and (4) a perceived endorsement by the media. Disadvantages include possible problems
with (1) timeliness and (2) accuracy.
Digital Communications
Covered in Module VI
Evaluating the Effectiveness of Digital Communications

Advantages
 Target marketing and message tailoring

 Interactive capabilities
 Information access
 Sales potential
 Creativity
 Exposure
 Speed
 A complement to the IMC program
Disadvantages
 Measurement problems
 Annoyance
 Clutter
 Potential for deception
 Privacy
 Limited production quality
 Poor reach
 Irritation
Direct Marketing
Direct marketing involves a whole set of activities by which the seller attempts to elicit a direct action
response—for example, a purchase. It employs many aspects of marketing, including marketing research,
segmentation, advertising, evaluation, etc. A distinction is made between direct marketing and direct
marketing media. The former includes the entire set of marketing activities involved in obtaining a direct
response. Direct marketing media are the tools that direct marketers use in the communications process.
Direct and database marketing have three noteworthy characteristics:
Personal — Personal facts, opinions, and experiences can be stored in massive databases and
incorporated into personal messages.
Proactive—A direct marketing piece can create attention, inform consumers, and include a call to action.
Complementary—Product information can be provided that helps other marketing communications,

especially in terms of e-commerce.
Direct marketers most often seek a direct response. This response need not necessarily be a behavioural
response, as direct marketing is now used for other purposes: to build an image, maintain customer
satisfaction, and inform and educate customers in an attempt to lead to future actions
46
Several direct response media are available to the marketer, including:
DIRECT MAIL—Direct mail marketing means sending an offer, announcement, reminder, or another
item to an individual consumer. Keys to the success of direct mail are the mailing list and the ability to
segment markets. Most direct marketers apply the RFM (recency, frequency, monetary amount) formula
to select consumers according to how much time has passed since their last purchase and how much they
have spent since becoming a customer.
CATALOGS—Catalogs are the oldest method of direct marketing.
TELEMARKETING—Huge amount of sales took place through telemarketing phone calls.

Telemarketing has been hurt by the do not call lists, though the business to the business sector remains
strong (Kotler & Keller, 2016, pp. 623–625).
Personal Selling
Personal selling is the most effective tool at the later stages of the buying process, particularly in building
buyer preference, conviction, and action.
Customised—The message can be designed to appeal to any individual.
Relationship-oriented—Personal selling relationships can range from matter-of-fact to deep personal

friendships.
Response-oriented—The buyer is often given personal choices and encouraged to respond directly.
Personal selling offers the marketer several advantages other advertising and promotional media do not
offer. The dyadic exchange process allows for direct feedback, message tailoring, and increased attention-
getting capabilities. Simultaneously, as noted, the personal sales force’s efforts must be supported and
integrated into the promotional program.
Advantages
 the ability to achieve two-way interaction

 tailoring of the message
 lack of distractions
 involvement in the decision process
Disadvantages
 inconsistent messages
 salesforce/ management conflicts
 high cost
 poor reach
47
References
Chandrima Mitra. (2023). The rules are changing for celebrity endorsements. What to keep in mind. ET Brand
Equity. https://brandequity.economictimes.indiatimes.com/news/marketing/the-rules-are-changing-for-
celebrity-endorsements-what-to-keep-in-mind/96720156
Chehneet Kaur. (2023, April). IPL on TV v/s digital: A ‘Zomaito Zomahto’ situation? ET Brand Equity.
https://brandequity.economictimes.indiatimes.com/news/media/ipl-on-tv-v/s-digital-a-zomaito-zomahto-
situation/99366906
ETonline. (2023, April 5). Tira: Reliance Retail takes on Nykaa, launches omni-channel beauty product platform
Tira - The Economic Times. The Economic Times.
https://economictimes.indiatimes.com/industry/services/retail/reliance-retail-takes-on-nykaa-launches-
omni-channel-beauty-product-platform-tira/articleshow/99267402.cms
Kotler, P., & Keller, K. (2016). Marketing Management (15th ed.). Pearson India Education Private Limited.
Mishra, D. (2023, January 24). Amazon Air to Push Faster Deliveries in Top Metros - The Economic Times. The
Economic Times. https://economictimes.indiatimes.com/epaper/delhicapital/2023/jan/24/et-efm/amazon-
air-to-push-faster-deliveries-in-top-metros/articleshow/97261697.cms
PTI, B. of B. (2022, April). 95 per cent of sales in India comes from online platforms: Oriflame, ET BrandEquity.
ET Brand Equity. https://brandequity.economictimes.indiatimes.com/news/business-of-brands/95-per-
cent-of-sales-in-india-comes-from-online-platforms-oriflame/90770949
Sagar Malvia. (2022, June). Is Starbucks India going desi? ET Brand Equity.
https://brandequity.economictimes.indiatimes.com/news/business-of-brands/is-starbucks-india-going-
desi/92793569
Shalinee Mishra. (2023). Mom-And-Pop Stores: Mom-and-Pop Store Day: Why kiranas will survive the
corporate blitz . The Economic Times. https://economictimes.indiatimes.com/industry/services/retail/mom-
and-pop-store-day-why-kirana-will-survive-the-corporate-blitz/articleshow/99091239.cms
Shannon Tellis. (2023, April). With the weather blowing hot and cold, what happens to seasonal advertising?,
ET BrandEquity. ET Brand Equity.
https://brandequity.economictimes.indiatimes.com/news/advertising/with-the-weather-blowing-hot-and-
cold-what-happens-to-seasonal-advertising/99249903
Writankar Mukharjee. (2019). ITC: Keen to be no.1 in FMCG, ITC seeks the e-commerce edge. The Economic
Times. https://economictimes.indiatimes.com/industry/cons-products/fmcg/keen-to-be-no-1-in-fmcg-itc-
seeks-the-e-commerce-edge/articleshow/67936108.cms?from=mdr
Yash Singh Juneja. (2023, April). From TV screens to social streams: The future of advertising in a changing
world, ET BrandEquity. ET Brand Equity.
https://brandequity.economictimes.indiatimes.com/news/advertising/from-tv-screens-to-social-streams-
the-future-of-advertising-in-a-changing-world/99220617
48
Practice Questions from Term-End Exam
Q1 Explain the following in brief:
(a) Public Relations (2016) 2
(b) Relationship oriented personal selling (2018) 2
Q2 What is promotion mix? Give advantages and limitations of any FOUR promotion mix 10
tools.(2015)
Q3 What are the various tasks involved in identification of major channel alternatives? (2016) 8
What type of distribution is suitable for: 2
(a) Italian Designer Apparel Store

(b) Mobile repair shop
Q4 Volkswagen India is all set to introduce its popular global products-the Tiguan and the Passat
in the Indian market. Beginning with the made-in-India, made-for-India Ameo in 2016 and
the recent introduction of Golf GTI, Volkswagen continues to expand its product portfolio.
Packed with elements that form the core DNA at Volkswagen, Tiguan and Passat will offer
superior safety features, power, performance, class-leading driving dynamics, and comfort.
(2017)
(a) Discuss the service outputs (based on customer needs and wants in passenger car 4
segment) that Volkswagen has to take into consideration while planning its Channel
design. Present your answer in a form of a table.
(b) Explain in brief the advertising objective/s for Volkswagen for its new range of cars. 3
Q5 GSK, a leading pharmaceutical company is planning to launch a product that helps smokers
quit their habit. They are planning to launch Nicotine Chewing Gums under the brand name
‘NiQuitin' in India. This product works on the principle of Nicotine Replacement Therapy
(NRT), a medically proven method to help reduce urge of smoking. A consumer who is looking
at quitting the habit of smoking can take a gun whenever they have the urge to smoke. Over
a period of 3-6 weeks, the urge slowly reduces and they can completely quit the habit without
any withdrawal symptoms. The product is classified as an ‘Over The Counter' (OTC) medicine,
which means it can be purchased without any prescriptions, but can't be sold like candies or
chewing gums. With this product, GSK is targeting the segment of adults (age group of 25-50)
who are likely heavy smokers and wanting to quit. A key challenge for the company is that
potential consumers often don't realize the need to quit smoking. So, the company is to do two
49
things - first, educate consumers about the need to quit and second, build awareness about
their brand. (2018)
(a) Suggest a Communication Mix that the company could consider in this scenario. 6
Substantiate your suggestions with an explanation of how the proposed element of
communication would be helping the company achieve their communication objective.
(b) Propose channels of distribution that the company should consider. 4
Q6 Korean major Samsung is planning a multi-channel focused handset series, which is expected
to contribute $4 billion (over 28,000 crore) in sales by the end Of 2019. A whole portfolio for
the A series will be launched every month from March till June. Samsung's new A series of
smartphones will be targeted at `millennials', and will see launches of multiple smartphones
priced between 10,000 and 50,000, which will be available across offline channels and all major
online platforms, including its own ecommerce site, helping the company drive volumes.
Samsung's recent M series was online focused and was its first steps towards consolidating its
presence online catering to millennials. With the A series, Samsung would be looking to
capitalise on its traditional strengths of offline retail channels. Samsung’s offline channel
comprises 180,000 retail outlets and 2000 brand stores. (2019)
(a) Identify and discuss major channel alternatives mentioned in the article. 3
(b) Suggest any two promotional tools for Samsung A series. Give reasons 4
Q7 7-Eleven, the world's largest convenience store chain, is in advanced talks with India's Future 10
Group to enter one of the fastest-growing retail markets. Seven & I Group, which owns 7-
Eleven among other retail formats, posted annual revenue of $100 billion through nearly
66,000 stores globally. The Japanese-owned, US-headquartered 7-Eleven generates nearly a
third of its sales in the Asian country. Future Group has a number of neighbourhood stores
through their own format launches and 'through acquisitions. Some of them could surely be
repurposed to 7-Eleven convenience stores, while there could be other franchisees appointed
for specific sites or territories. Future Group, which runs 1,444 stores in 409 cities, generates
most of its revenue from food and grocery retailing. It has three smaller store brands -Easy
Day, Heritage Retail, and Nilgiri's -that have been acquired in the past few years and
contribute 15% to sales. (2019)
Elaborate on Channel-design decisions for the 7-eleven stores in India.
Q8 Marico, the FMCG company, has launched a new Chyawanprash, Saffola Arogyam Chyawan
Amrut Awaleha, marking its foray into the ayurvedic category. The product helps boost
immunity and supports today's respiratory health needs while providing relief from the
seasonal cough, cold and sore throat. The product is available at all leading online and offline
retailers and also on the company website. The retail price for 500 gms is Rs 190. The product
is sold at a discount of 26% on orders placed on the company website and Amazon. Other online
retailers are also giving the discount in the range of 10% to 20%. An ad film for the brand
showcases how a family uses various traditionally established remedies followed in the new
normal to keep up their immunity quotient and overall well-being. Increased awareness in
immunity-boosting and ayurvedic remedies has led to many consumers turning towards
natural ingredients as they are convinced that Ayurveda will help them keep the virus at bay.
The ad film proposes an all-in-one solution for the many remedies found in the new product.
(2021)
(a) The objective of the ad film for the brand is (Select the right option) 1
i. Informative
50
ii. Reinforcement
iii. Persuasive
iv. Reminder
(b) What type of sales promotion is evident in the case (Select the right option) 1
i. Price -off deals
ii. Free samples
iii. Bonus packs
iv. Premiums
(c) Explain the concept of multichannel marketing regarding Saffola Arogyam Chyawan 2
Amrut Awalesh.
Q9 Epigamia is a brand that offers different flavours of Greek Yoghurt. The brand was introduced
in 2015 by Mumbai-based company Drums Foods. Currently, it is available only in 4 cities
(Delhi, Mumbai, Chennai, and Bangalore). Greek Yoghurt as a product is new for most Indians.
It is different from normal yogurt and contains higher levels of protein and lower levels of fat.
It can be used as a snack, added to fruit salads, and in recipes for smoothies. It is priced almost
80% higher than normal yoghurts. During the recent lockdown, Epigamia successfully
addressed the distribution system and process from the farm to the fork and worked on their
natural and healthy yoghurts' positioning. Their primary point of differentiation has been
around ordering, payment, and delivery services and secondarily caring for consumer health.
The company recently launched the digital campaign #YourHappyBalance with Deepika
Padukone as their brand ambassador, who also have a stake in the company. (2021)
(a) The slogan "#YourHappyBalance" explains which element of marketing 1

communication? (Select the correct option) (a) Source (b) Encoding (c) Noise (d)
Decoding
(b) Discuss two advantages and two disadvantages of the digital promotional campaign 4
“#YourHappyBalance.
Q10 ITC is set to become one of the first frontline FMCG companies to start its e-commerce
operation for premium and niche products. It seeks to expand market share in the fastgrowing
online sales segment and ensure wider availability of products. ITC intends to sell its premium
skincare range Dermafique, Sunbean Gourmet Coffee, blended atta sold under the Aashirvaad
brand through its online platform. The company will also sell a range of functional food such
as products targeted at people with diabetes and those with metabolic disorders and healthy
food such as millet and ragi flour, which it will launch in the next few quarters. The fulfillment
of orders will be done by a distributor, while ITC will tie-up with third-party logistic providers
operating in the ecommerce space. ITC currently sells through trade partners on platforms
like Amazon, Flipkart, Grofers, and Big Basket. The move to expand into direct online sales is
not due to the recent disruption in large e-commerce marketplaces but to expand its reach and
ensure products are never out of stock for online shoppers. ITC also runs direct e-commerce
operations for its lifestyle apparel business, WLS and John Players. It has recently started
online sales of Classmate notebooks and other stationery products with the pilot operational
in Bengaluru, Chennai, and Kolkata. This platform allows consumers across the country to
customise the covers of their Classmate notebooks, which are then printed and delivered to
them. ITC aspires to become India's largest pure-play FMCG firm by 2030 across products like
packaged food, personal care, apparel, and stationery, accounting for Rs 1 lakh crore in
revenue. (2021)
51
Comment on the multichannel strategy of ITC? 3
Q11 Reliance Retail is launching a new format called Swadesh that will sell handmade textiles,
handicrafts, agriculture items and other products sourced directly from artisans. The company
said Swadesh is part of its ‘Handmade in India’ programme to showcase authentic handcrafted
products and promote rich Indian art forms in markets worldwide. It will be a collection of
carefully curated products, part of the rich legacy of India’s heritage that come alive in the
hands of India’s supremely skilled and talented craftspeople. Swadesh aims to create a unique
ecosystem for reviving languishing crafts and enhancing the skills of the creative communities
by providing skill enhancement /design training and capacity building workshops that will
ensure sustainable livelihoods for artisan communities.(2022)
Design a Promotional Campaign for Reliance Swadesh. 10
Q12 Hamleys, a struggling 261-year-old U.K. toy-store chain, got a new lease of life in the hands of
billionaire Mukesh Ambani. Hamleys stores are famed for the carnival-like experience,
allowing children to race toy cars, enjoy model train sets and play various games. With its
densely packed cities and limited entertainment options in a country like India, such an
environment could be a hook to get customers to visit again. Hamleys products are also
available online on its website and the major ecommerce platforms. (2022)
Formulate channel design strategy for Hamleys. 10
Q13 Write short notes on Retail Marketing Decisions 5
52
Module VI ........................................................................................................................................................ 1
Chapter IV. 4 Distribution Channel Strategy .............................................................................................. 1
Article 4.16....................................................................................................................................................... 1
Amazon Air will enable faster deliveries in top metros ........................................................................... 1
Marketing Channels and Value Networks ....................................................................................................... 2
The Importance of Channels .......................................................................................................................... 2
Push Vs. Pull Strategy ................................................................................................................................ 3
Multichannel Marketing................................................................................................................................. 3
Article 4.17....................................................................................................................................................... 3
Reliance Retail takes on Nykaa, launches omnichannel beauty product platform Tira ....................... 3
Value Networks ............................................................................................................................................... 4
The Digital Channels Revolution................................................................................................................... 5
The Role of Marketing Channels ....................................................................................................................... 5
Channel Functions .......................................................................................................................................... 5
Channel Flows ................................................................................................................................................. 6
Channel Levels ............................................................................................................................................ 6
Article 4.18....................................................................................................................................................... 6
95 per cent of sales in India comes from online platforms: Oriflame ...................................................... 6
Channel-Design Decisions ................................................................................................................................. 8
Task – I: Analysing Customers’ Needs and Wants....................................................................................... 8
Task – II: Establishing Objectives and Constraints ..................................................................................... 8
Task - III: Identifying and Evaluating Major Channel Alternatives .......................................................... 8
Types of Intermediaries .............................................................................................................................. 9
Number of Intermediaries .......................................................................................................................... 9
Terms and Responsibilities of Channel Members..................................................................................... 9
Article 4.19....................................................................................................................................................... 9
Is Starbucks India going desi?.................................................................................................................... 9
Task –IV: Evaluating the Major Alternatives ............................................................................................ 10
Economic Criteria ...................................................................................................................................... 10
Control and Adaptive Criteria .................................................................................................................. 10
Article 4.20..................................................................................................................................................... 10
ITC .............................................................................................................................................................. 10
Channel-Management Decisions ..................................................................................................................... 11
Selecting Channel Members......................................................................................................................... 11
Training and Motivating Channel Members .............................................................................................. 12
Evaluating Channel Members ..................................................................................................................... 12
Modifying Channel Arrangements .............................................................................................................. 12
Chapter IV.5 Retailing and Wholesaling ........................................................................................................ 14
53
Retailing ............................................................................................................................................................ 14
Types of Retailers .......................................................................................................................................... 14
Store Retailers ........................................................................................................................................... 14
Non-store Retailers ................................................................................................................................... 15
Corporate Retailing and Franchising ...................................................................................................... 15
Article 4.21..................................................................................................................................................... 17
Why kiranas will survive the corporate blitz .......................................................................................... 17
Wholesaling ....................................................................................................................................................... 18
Chapter IV.6 Marketing Communications ..................................................................................................... 20
The Role of Marketing Communications ........................................................................................................ 20
The Changing Marketing Communications Environment ........................................................................ 20
A Basic Model of Communication .................................................................................................................... 20
Article 4.22..................................................................................................................................................... 21
The rules are changing for celebrity endorsements. What to keep in mind ......................................... 21
Designing Promotional Campaign................................................................................................................... 26
Step I: Identify the Target Audience ........................................................................................................... 26
Step II: Set the Communications Objectives .............................................................................................. 27
Step III: Design the Communications ......................................................................................................... 28
Step IV: Select the Communications Channels .......................................................................................... 30
Step V: Establish the Total Marketing Communications Budget ............................................................. 30
Step VI: Selecting the Marketing Communications Mix ........................................................................... 31
Step VII: Measuring Communication Results ............................................................................................ 32
Step VIII: Managing the Integrated Marketing Communications Process .............................................. 32
Chapter IV.7 Tools of Promotion Mix.............................................................................................................. 33
Advertising ........................................................................................................................................................ 33
Article 4.23..................................................................................................................................................... 35
From TV screens to social streams: The future of advertising in a changing world ............................ 35
Advertising Media – Broadcast & Print ...................................................................................................... 37
Television ................................................................................................................................................... 37
Radio ........................................................................................................................................................... 37
Magazines .................................................................................................................................................. 37
Newspapers ................................................................................................................................................ 37
The Support Media .................................................................................................................................... 37
Article 4.24..................................................................................................................................................... 38
With the weather blowing hot and cold, what happens to seasonal advertising? ................................ 38
Evaluating the Effectiveness of Advertising ............................................................................................... 40
Sales Promotion ................................................................................................................................................ 40
Consumer-Oriented Sales Promotion Techniques ...................................................................................... 41
54
Trade Oriented Sales Promotion.................................................................................................................. 42

Evaluating the Effectiveness of Sales Promotion ....................................................................................... 43
Events and Experiences ................................................................................................................................... 43
Article 4.25..................................................................................................................................................... 43
IPL on TV v/s digital ................................................................................................................................. 43
Public Relations and Publicity ......................................................................................................................... 45
The Evaluation of Effectiveness of Public Relations .................................................................................. 45
Digital Communications................................................................................................................................... 46
Evaluating the Effectiveness of Digital Communications ......................................................................... 46
Direct Marketing .............................................................................................................................................. 46
Personal Selling ................................................................................................................................................ 47
References ......................................................................................................................................................... 48
Practice Questions from Term-End Exam ...................................................................................................... 49
55

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Principles of Marketing| Richa Saxena

IVB DISTRIBUTION AND

Marketing Channels and Value Networks

The Importance of Channels

Push Vs. Pull Strategy

market for beauty products. Reliance Retail

Reliance Retail said Tira offers a curated

Reliance Retail Ventures is the holding company

The Tira store at Jio World Drive in Mumbai is

Tira stores will have dedicated gifting stations to

1. Increased market coverage.

The Digital Channels Revolution

The Role of Marketing Channels

Figure IVB. 1 Five Marketing Flows

A top company official has said that India is

expects double-digit growth in its sales force,

Amid the COVID-19 pandemic, Oriflame has

A one-level channel contains one selling intermediary—such as a retailer. A two-level channel

Picture 19. 2 Consumer and Industrial Marketing Channels

Task – I: Analysing Customers’ Needs and Wants

Task – II: Establishing Objectives and Constraints

Task - III: Identifying and Evaluating Major Channel Alternatives

Terms and Responsibilities of Channel Members

snacks and a smaller beverage cup that is being

“Introducing these things is to take it to the next

Task –IV: Evaluating the Major Alternatives

Control and Adaptive Criteria

Selecting Channel Members

 Number and character of other lines carried.

Training and Motivating Channel Members

Evaluating Channel Members

Modifying Channel Arrangements

 When the distribution channel is not working as planned.

 The change could involve adding or dropping individual channel members.

Chapter IV.5 Retailing and Wholesaling

Figure IVB. 2: Major types of Store Retailers

Specifically, they position themselves as offering one of four levels of service:

Corporate Retailing and Franchising

Retail Marketing Decisions

 Feature exclusive national brands

 Feature mostly private-label merchandise

Store Activities and Experiences:

1. Central business districts

3. Community shopping centers

provide this service, even though it hits their

These days, most Kirana stores take orders on

But the fact remains that new-age tech support

Chapter IV.6 Marketing Communications

The Role of Marketing Communications

The Changing Marketing Communications Environment

A Basic Model of Communication

Figure IVB. 3: Model of Communication

The elements of the model include:

Picture 20.1 Celebrity as a source criteria

without reading the fine print will likely get into

Besides their main vocation — mostly involving

International celebrities, such as Roger Federer,

Picture IVB. 5: Pepsi Emoticons

MESSAGE APPEALS: An informational appeal elaborates on product or service attributes or benefits

Picture IVB. 6: Message Appeal options

IV. COMMUNICATION CHANNEL

Figure IVB. 4: Common Communication Platforms