Trends in Marketing-SEPT

Recent Trends in Marketing
SEMESTER- III
Paper: Principles of Marketing
Unit: V
Topic: Trends in Marketing
Course Developer: Sakshi Verma
College: Assistant Professor, PGDAV (M), Delhi
University
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Table of Contents:
Lesson: Recent Trends in Marketing
1. Learning Outcomes
2. Introduction
3. Direct Marketing
3.1 Forms of Marketing
3.2. Advantages and Disadvantages of Direct Marketing
4. Services Marketing
4.1 Concept of Service
4.2 Difference between Goods and Services
4.3 The 7P‟s of Service Marketing
5. Green Marketing
5.1 Green Product and its Characteristics
5.2 Reasons for Going Green
5.3 Green Marketing Mix
6. Relationship Marketing
6.1 Relationship Marketing Process
6.2 Customer Relationship Management (CRM)
7. Rural Marketing
7.1 Rural Consumers
7.2 Rural Vs. Urban
7.3 Marketing Mix for Rural India
7.5 Challenges and Solutions in Rural Markets
8. Retailing Scenario in India

8.1 Major Retail Segments in India
8.2 Changing Scenario of Indian Retail Environment
8.3 FDI in Retail
8.4 The Future of Retail in India
Summary
Exercises
Glossary
References
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1. Learning Outcomes:
After studying this lesson, you should be able to:
 develop understanding regarding the concept of direct marketing and its different
forms,
 apprehend the concept of services marketing and its importance,
 understand the concept of green products, green marketing and marketing mix,
 gain insight about the concept and growing importance of relationship marketing,
 appreciate the concept of CRM,
 understand the concept of rural marketing and its growing importance and
challenges it poses to marketers,
 develop understanding regarding the marketing mix for rural India,
 analyse the changing retailing scenario in India.
2. Introduction:
Marketing is a vital ingredient for business success. It affects our day-to-day life in a
significant manner. The concept of marketing has broadened from being associated
with pushing the products to consumers, to understanding the needs of consumers
and building long term relationship with them. The marketer can reach customers
24X7 via mail, smart phones or even through social media account. So the marketer
is no more limited to his shop. This chapter discusses about some of the most
important trends in the field of marketing. The growth of online marketing, increasing
focus on rural markets, rising concern for green products and focus on building long
term relationship with customers are a few of the visible changes in the life of a
marketer. Retailing is emerging as an important sector in which the role of marketer
is increasing. Considering the growing importance of such events, this chapter aims
to make an attempt to discuss these emerging trends.
3. Direct Marketing:
Figure 1: Direct Marketing
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Source: Self made
Direct marketing is “the use of consumer-direct channels to reach and deliver goods and
services to customers without using marketing middlemen.”
Direct marketing involves developing direct connections with carefully targeted individual
consumers. The aim is to obtain an immediate response from the consumer and cultivate
a long term relationship with them.
Value Addition 1: Quick Facts

Direct Marketing
The term "direct marketing" was identified, named, and defined by Lester Wunderman in
1967. He is considered the father of „contemporary direct marketing‟. He is the
mastermind behind creation of the toll-free 1-800 number. He also popularised
numerous loyalty marketing programs including the magazine subscription card,
Columbia Record Club, and the American Express Customer Rewards program.
Source: http://en.wikipedia.org/wiki/Direct_marketing
Direct Marketing is what it sounds like - directly reaching a market on personal or mass-
media basis. The market comprises customers and potential customers. Mass advertising
uses a single message to reach a large audience while direct marketing uses a one-to-
one marketing approach. The direct marketing has a greater impact because it uses
personalised messages. Personal contacts are made via phone calls and private mailings
while mass-media uses television, magazine ads, radio etc. It involves attempts made
for locating and contacting consumers in order to offer and make incentive-based
information available to them.
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Figure 2: Characteristics of Direct Marketing
2.swf
Activity 1: Explore and Learn : Direct Marketing in Practice

„End to End‟ provides direct marketing services. Their web-page states that they have
close to one and a half decade of working closely with their clients on a range of Direct
Marketing engagements. They have evolved scientific and proprietary business models to
respond to various marketing needs including Acquisition, Loyalty Management,
Customer Attrition Management and Database Management.
Click on the link below which will take you to their webpage. You can explore various
services provided by them and understand how different forms of direct marketing
provide benefits to the companies.
http://www.endtoend.in/direct_marketing_overview.shtml
3.1 Forms of Direct Marketing
Different direct marketing tools are present, including direct mail, telemarketing, catalog
marketing, couponing, online marketing, direct response TV and radio, kiosk marketing,
face-to-face selling, and grassroots campaigns.
Figure 3: Forms of Direct Marketing
Kiosk
marketing Social
Digital
media
marketing
marketing
Catalog Online
marketing marketing
Direct
Telephone
mail
marketing
Forms of
Personal
Direct Text/sms
selling
Marketing marketing
We will now discuss a few important ones briefly:
Door-to-Door Marketing/ Personal Selling
Door-to-door refers to sales technique where a salesperson sells the products and
services to general public by visiting their homes. It is personal selling which involves
direct contact between salesperson and customers as against mass media.
Direct Mail
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Direct mail marketing means sending an offer, announcement, reminder or any other
object to an individual consumer. Sending marketing messages through email is one of
the most widely used direct-marketing methods. It may take the form of advertising
material having been sent directly to home and business addresses or distributing flyers,
television marketing i.e. infomercials, door-to-door solicitations or coupon ads in print
media. Thus, the mails may be in form of letters, flyers, foldouts, multimedia DVD‟s etc.
Marketers are sending out millions of mails each year to a highly selective mailing list.
Availability of personal data about consumers has made direct mail more popular and
convenient. It has become an important part of marketing, particularly in business-to-
business environment.
Figure 4: Direct Mail
4.swf
Source: Self Made
To create an effective direct-mail campaign, marketers must decide the following:-

i. Specific and measurable objectives- Generally the objective is to acquire
orders. However, marketers may also aim to educate the prospects, build
relations, remind them about offers and reinforce recent customer purchase
decisions.
ii. Target markets and prospects- Marketers may identify prospects on the
basis of age, sex, income, education, lifestyle, occasion etc. For example,
newly-weds look out for loans, for housing, furniture while youngsters may
be prospects for laptops, backpacks, etc. The best prospect for a company
would be people who have purchased the products in past.
iii. Offer elements- The marketers have to choose five elements of the offer
strategy- the product, the offer, the medium, the distribution method and
the creative strategy.
iv. Testing campaign- The offer elements of direct mail can be tested.
Marketers must not evaluate only the response rate i.e. how many people
placed orders, but also evaluate level of awareness, interest level and
references the mails created.
v. Measuring campaign success- The marketers must assess if the
campaign is profitable in the long run or not. One can calculate the average
customer longevity, average gross profit margin, annual consumer
expenditure and the cost involved in acquisition and maintenance of
customer.
Telemarketing
Telemarketing involves use of telephones and call centres for attracting prospects,
selling to existing customers and providing services by taking orders and answering to
their queries. The salesperson tries to solicit the prospective customers for buying the
products or services, over the phone, web conferencing or through a subsequent face to
face meeting. Telemarketing can be done from call centre or even from home.
Telemarketing can be in two forms:-
• Outbound telephone marketing- The salesperson sells directly to the consumers

and businesses over phone.
• Inbound telephone marketing- It involves use of toll-free numbers for receiving
orders from television and print ads, direct mail, and catalogs.
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Catalog Marketing
Companies may send full-line merchandise catalogs, business catalogs or consumer
catalogs. The catalogs are usually in print form. Catalogs can be divided into three broad
categories, namely, business-to-business catalogs, consumer catalogs, and catalog
showrooms. With the rising number of consumers going online, e-catalogs are becoming
a popular option. E-catalog can help marketers saves postage and paper costs.
Establishment of "virtual malls" also facilitates online sale. Virtual malls‟ refer to websites
that include a variety of online catalogs.
Figure 5: Catalog Marketing
Source: Self made
Value Addition 2: Surf and Learn

Catalog Marketing
To know more about catalog marketing, its origin, different forms of catalogs, growth of
catalog marketing etc., log on to :
http://www.referenceforbusiness.com/encyclopedia/Ca-Clo/Catalog-Marketing.html
Online Marketing
Online marketing, also known as Internet marketing, refers to advertising and marketing
efforts done via e-mail and web in order to drive direct sales. Such efforts are usually
used in conjunction with the traditional advertising methods, such as television,
newspapers, radio and magazines.
Email addresses can be harvested from different websites and forums, or can even be
purchased. Email marketing popularity is due to its relatively low cost to design, test,
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and send an email message. It also gives marketers an opportunity to deliver messages
round the clock.
Web marketing includes search engines and websites which may be- e-commerce or
affiliate marketing or promotional/ Informative Web sites.
Social Media Marketing

Part of online marketing, social media marketing includes social media sites like
Facebook and Twitter to communicate directly with customers. Companies are able to
gather information regarding consumer‟s habits, choice, and preferences from these
social media sites. They can create content for different segments of consumers they
want to target. The consumers can respond to the companies online, as per their
convenience.
Mobile Marketing
Mobile allows direct marketers to send SMS or MMS, applications, QR Codes, push
notifications directly to the users. Earlier marketers used to advertise through sms but
now with the rise of smartphones, mms and applications are becoming popular to get to
the customers.
Kiosk Marketing
Kiosk is a small, temporary and standalone booth, as shown in the figure below.
Figure 6: An Internet Kiosk In Hemer, Germany
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Source: http://en.wikipedia.org/wiki/Kiosk#mediaviewer/File:Sauerlandstammtisch-Infoterminal1-
Asio.JPG
Kiosk marketing involves placing the kiosks- information and ordering machines in
different locations such as stores, trade shows, airports etc. They can be used to spread
awareness, give information and take orders.
3.2 Advantages and Disadvantages of Direct Marketing
Direct marketing is flexible, can be tailored according to the needs of customers and
have a long-lasting impact. With sms and e-mails you can reach the customers with your
message on their hands. So as compared to mass-marketing, direct marketing has more
power to grab the attention of customers due to personalised messages. However,
efforts can go in vain if the message is not properly designed, if the company targets
wrong customers and if customers pay no attention to the messages. The advantages
and disadvantages offered by direct marketing is summarised below:
Figure 7: Advantages & Disadvantages of Direct Marketing
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Intractive 1
Value Addition 3: MCQs

Quiz on Direct Marketing:
Click on the link below to take a quiz on Direct Marketing.
Source: http://www.tutor2u.net/business/quiz/promotion/quiz.html
4. Services Marketing
Whether you are relaxing at spas and salons, shopping in the malls or online, getting a
new haircut, enjoying coffee with your friends in your favourite coffee shops, enjoying
dinner with your family, transferring money online, studying in a college or online, using
buses, taxis or metros, enjoying family trip or are on a business tour, whatever the case
may be, one thing in common is that you are availing a service in all the cases.
The service industries, also known as 'tertiary sector' involves providing the services to
businesses and final consumers. The focus is on interacting and serving the customers
and not on transforming the physical goods. The Indian service industry has grown at a
faster pace than the agriculture and manufacturing sectors in India. It is also making
substantial contribution to global employment and output. The sector accounted for 60%
of the gross domestic product (GDP) and grew 5 per cent in the financial year 2013.
Some examples of the tertiary industries are shown in figure below:
Figure 8: Service Industries Examples
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8.SWF
4.1 Concept of Service
A service can be defined as “any act or performance that one party can offer to another
that is essentially intangible and does not result in the ownership of anything.” Its
production may or may not be tied to a physical product. From the organization‟s view
point, service is a process, but it is an experience for the customers.
Service Offering Mix
A company‟s offer may have no service attached to it on one hand and on the other it
can offer pure service with no tangible product. Five categories of service mix are
summarised as below:
Figure 9 : Service Mix Categories
9.SWF
i. Pure tangible goods mean goods such as soap, salt which has no service
accompanying it.
ii. Tangible good with accompanying services means a tangible good like car,
television, computer accompanied with certain services like technical support.
iii. Hybrid offering means offering like a restaurant meal, a coffee at cafe which is
accompanied by equal parts of goods and services. You need a good coffee
and good services by the café.
iv. Major services with accompanying minor goods and services refer to services
like airlines where with air-travel services, extra services and snacks are
provided.
v. Pure service refers to services like psychotherapy or massage, which involves
no tangible product.
Characteristics of Services:
Marketing for services differs from that of product because of the unique features of
services. The main distinguishing features of services are discussed below:
Figure 10: Features of „Service‟
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To elaborate, let us understand the features with some examples.
Services are intangible i.e. you cannot feel the service until you experience it personally.
You cannot decide whether the airline provider you choose will give you a comfortable
travelling experience till you travel and experience the services.
The service provider cannot be separated from the service. You cannot separate the
treatment your doctor has to give from the doctor. Also, you cannot take away a service
for consumption at a later stage. For example, a hair-cut cannot be stored or produced
without the barber! Also by availing the service, you do not become the owner, for
example travelling in airplane will not make you owner of that airplane.
The quality of service depends on the service provides, they are not homogenous or we
can say they are variable. Some doctors are more empathic than others and thus gives
more satisfaction to their patients. Services are subjective experience.
You cannot store the services. If the doctor is available during a specified period, you
have to visit him during that period if you want to avail his service.
4.2 Difference between Goods and Service
As we are now aware of what a “service” means, let us quickly differentiate services
from goods.
Table 1: Difference between Goods and Services
Goods Services
Goods are physical commodities. Services refer to a process or an activity.
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They are tangible. They are intangible.
Goods are homogenous. Services are heterogeneous.
Production and distribution are separate Production, distribution and consumption

from their consumption. are simultaneous processes.
Goods can be inventoried for usage at a Services are ephemeral and cannot be
later stage as and when required. inventoried.
Ownership of goods can be transferred. Ownership of services cannot be

transferred.
4.3 The 7 P’s of Service Marketing
Service marketing is a form of marketing which focuses on selling the services. Services
can be tricky to sell because they have certain distinctive characteristics and the
marketing approach to be followed for cannot be identical to those used for selling the
products.
Services marketing includes:-

 building customer loyalty,
 handling complaints,
 managing relationships,
 improving service quality and productivity of service operations, and
 becoming a service leader in your industry.
The traditional marketing mix is extended in case of services. The traditional 4 P‟s are
adapted to the distinctive features of services. Total seven elements are present which
are discussed as follows:
Figure 11: Traditional Marketing Mix: 4 P‟s
Product Price Place Promotion
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i. Product: Product here is the benefit and satisfaction which a customer
experiences. If a bank positions itself as bank with human touch and when
you visit the bank, no employee talks to you properly, they are not willing to
listen to your query and answer, then you will not be satisfied with their
services.
ii. Price: The price charged can take form of fees charged by professionals for
their services, admission tickets for amusement parks, commission charged
by agents and so on. It is difficult to establish the price of service because of
its intangible nature. Differential pricing strategies can be followed by the
service providers. Doctors may charge less fees from lower-income people,
low charges for air-travel during off-season and higher during peak season or
restaurants offering meals at a lower price during non-rush hours are
examples of differential pricing. However services with a tangible component
are easy to price, like dry-cleaning services are offered at standard prices
depending upon the type of clothes.
iii. Place: Service cannot be isolated from the service provider and so the
distribution is limited. The services of doctor can be availed at the clinic he
sits in and so for the treatment, the customer needs to visit the doctor‟s
place. The doctor cannot serve at different locations at the same time.
Alternatively, a doctor may visit the patient‟s residence. But that too has
limitations as a doctor‟s visits cannot be available to all the patients at a given
point of time. This problem arises as the service cannot be separated from the
service provider. In certain other cases, with use of agents such as brokers,
agents, the reach of services can be extended. ATM‟s are the electronic
intermediaries used by the banks to extend their reach to different
geographical areas.
iv. Promotion: Services can be promoted using different communication tools.
They are advertised via different media, direct marketing, sales promotion
and personal selling, all can be used to promote services. Banks advertise on
the national television network, newspapers, online and also when you visit a
bank, the employees give personal time and advice to listen to your needs
and share bank offerings.
Figure 12 : Extended Marketing Mix for Services
People
Physical
Process
evidence
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v. People: People play very important role as employees of the organization are
their face and how well they deal with the customers will decide failure or
success of the organization. The McDonalds has a standard burger selling
across the counters giving a customer the same level of satisfaction when
consumed, but the employee serving you may be cheerful and make your
meal a „happy meal‟ or he may be a rude guy, not talking pleasantly making
you furious. Thus it is very important that the organization trains its
employees about how to deal with the customers under different
circumstances. They should possess adequate knowledge about the company,
products and services offered and tactics to be used in difficult situations.
vi. Process: Process refers to the system used to deliver the service. Imagine
you walk into a McDonald outlet and order a Happy Meal, pay the bill and
wait. Within two minutes different employees compile the items- fries, burger
and coke and deliver your order. This means the process was fast enough to
provide efficient service delivery. If the same order took 15 minutes, then the
customer may get annoyed and dissatisfied. The process can be efficient only
if all the employees are clear about their roles. All services should be
underpinned by clearly defined and efficient processes in order to avoid
confusion and promote a consistent service.
vii. Physical evidence: Physical evidence refers to the physical environment in
which the services are being delivered. Physical evidence includes interior,
décor, logo, ambience, etc. of the place where services are to be rendered.
The service provider can charge premium price for such services. For example
customers entering a salon may be pleased if they get comfortable sofas, air-
conditioned section, free complementary drinks and background music, while
they wait for their turn, on the other hand the customer may never return to
the salon if he/she has to wait standing in a dirty corner with no attention
paid. Similarly you will never want to eat in a restaurant which has dirty
tables and utensils, dirty floor and whose waiters are shabbily dressed. So the
overall environment is very important in giving a satisfying experience to the
customers.
Thus, the marketers need to integrate all the 7 P‟s and customize them to serve the
customers and make them satisfied.
Value Addition 4: Video

Understanding the Extended Marketing Mix for Services
To understand the entire marketing mix, including the extended mix please see the
video available on following link.
http://www.youtube.com/watch?v=mjre0-9p2p8
Would you Like to Travel with such Services?

Here is a sarcastic example of how bad the services can be. After watching the video, I
am sure that you will agree with me that you will never like to travel with such airlines.
So here‟s an example of how the air-travel services should NOT be!
http://www.youtube.com/watch?v=76LP3suWgTw
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5. Green Marketing
American Marketing Association defines green marketing as: "the marketing of products
that are presumed to be environmentally safe.”
As per Businessdictionary.com „green marketing‟ is "Promotional activities aimed at

taking advantage of the changing consumer attitudes toward a brand. These changes are
increasingly being influenced by a firm's policies and practices that affect the quality of
the environment, and reflect the level of its concern for the community."
Green marketing involves development and promotion of products and services that are
capable of satisfying customer‟s wants and need for quality, performance, affordable
pricing and convenience without having any detrimental effect on the environment.
The concept of green marketing has evolved over a period of time. Earlier it was
addressed as “Ecological" green marketing and all the marketing activities were directed
towards providing remedies for environmental problems and then entered
"Environmental" green marketing. It shifted the focus on clean technology involving
designing of innovative products which take care of pollution and waste issues. Now we
have the concept of “Sustainable" green marketing which came into prominence in the
late 1990s and early 2000.
Green consumerism refers to “recycling, purchasing and using eco-friendly products that
minimize the damage to the environment.” This involves decisions such as using energy
star appliances consuming less power, using alternate sources of energy like solar, wind
to generate electricity, not using plastic bags, car pooling, water harvesting, buying
hybrid cars that emit less carbon dioxide, buying locally grown vegetables and fruits.

Green Marketing Concept
This video will introduce you to the concept of green marketing, its target audience and
provide examples of green initiatives taken by companies.
http://www.youtube.com/watch?v=msiEHRkJjYs (last accessed on 29.9.13)

Impact of Plastic Bags
This video will make you aware of the harmful effects of plastic bags and how plastic
affects our environment. It also discusses initiatives taken up by NTUC FairPrice-
Singapore‟s largest grocery retailer to discourage the use of plastic bags.
Click on the link below to see the video.
http://www.youtube.com/watch?v=tqScMrDB7e0 (last accessed on 29.9.13)
5.1 Green Products and their Characteristics

Green products are manufactured through green technology and they minimize
environmental hazards. Green products are not just green in packing, but also green in
production techniques used.
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Figure 13: Characteristics of a Green Product
13.SWF
5.2 Reasons for Going Green
The literature suggests following reasons for increased use of Green Marketing by the
organizations.
1. The environmental marketing is a market opportunity which organizations can

use to achieve its objectives.
2. Organizations are genuinely concerned for their environment and they are of the
opinion that they have a moral obligation towards the society.
3. Government regulations and legislations may be the actual reason behind an
organization‟s environment-friendly steps. For example CNG was adopted in all
public transport systems in New Delhi to curb pollution not on voluntary basis but
because the Supreme Court of India issued a directive to do so in 2002.
4. The organizations may undertake green initiatives because they are forced to do
so by their competitors, who have adopted environmental activities.
5. The cost associated with the disposal of waste or reductions in material usage is
forcing the organizations to modify their behaviour. The disposal of by-products
which are harmful for the environment such as polychlorinated biphenyl (PCB)
contaminated fuel, is becoming increasingly costly and difficult. So it is in favour
of organizations to adopt alternative means for disposal of waste.
Figure 14: Reasons to Go Green
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5.3 Green Marketing Mix

A model of a green marketing mix contains all 4P‟s. They are explained in the figure
below:
Figure 15 : Green Marketing Mix
15.SWF
Value Addition 8: Web-link

Green Initiatives in India
Do u want to know what steps companies in India have taken to save the environment?
Just click on the link below to know about the green initiatives by Indian Railways, SBI,
Nerolac and Wipro.
http://philipkotler2013.blogspot.in/2011/11/green-marketing.html
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6. Relationship Marketing:
“Relationship marketing is a strategy designed to foster customer loyalty, interaction and

long-term engagement. It is designed to develop strong connections with customers by
providing them with information directly suited to their needs and interests and by
promoting open communication.” It is the process of building rapport between the
business and its customers.
Relationship marketing aims to build mutually satisfying long-term relationships with the
key constituents to earn and retain their business. The four main constituents for
relationship marketing are:
i. Customers,
ii. Employees,
iii. Marketing partners like suppliers, dealers, distributors etc., and
iv. Financial community members like shareholders, investors.
The company must create prosperity among all the constituents and balance returns to
the shareholders. Relationship Marketing advocates “know your customers.”
Figure 16: Relationship Marketing: Know Your Customers
Relationships start when the company gains in-depth knowledge about their customers
and let the customers also know about the company so that trust is built. If the company
is clear as to who are their customers, what are their likings and preferences, what they
do not like, how they react to different channels, then the company can use such
knowledge in order to make right decisions regarding marketing of the products, sales or
customer support. The company will be in a position to provide products and services
that customers value and thus will be motivated to engage more with your brand.
Relationship marketing efforts can help the company to create strong bonds between
brand and customers if leveraged strategically. And the bond may be so strong that the
customers stay with your brand forever.
Figure 17: Relationship Marketing
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Source: Self made

Understanding Relationship Marketing
The following link will direct you to a video which explains the concept of relationship
marketing and how it helps company to increase the sale and revenue.
http://www.youtube.com/watch?v=roVoOm4ivG0
6.1 Relationship Management Process

Relationship marketing can also be understood as a brand‟s ability to create an
emotional connection with the consumer. Like any relationship in our life, the relations
with the customers should also touch the human emotions, preferably the positive
emotions. This is the secret for every healthy, happy and long-term relationship.
Relationship marketing involves following steps:
Figure 18: Relationship Management Process
18.SWF
Benefits of Relationship Management

Now we move on to the various benefits CRM offers to the companies. They are listed in
figure 19.
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Figure 19 : Benefits of Relationship Marketing
Benefits
•Creation of marketing network which helps in building a mutually
profitable business.
•The customers are delighted with your services and thus trust your
company. The company develops loyal clintele.
•Loyal customers give positive publicity.
•Loyal customers try new products of the company.
•The customers trust your services and will not resist to price
adjustments.
Based on knowledge about customers, the companies can customize the market
offerings, services, programs, messages and media.
6.2 Customer Relationship Management (CRM)
Customer relationship management (CRM) is “a model for managing a company‟s

interaction with current and future customers. It involves using technology to organize,
automate, and synchronize sales, marketing, customer service, and technical support.”
CRM includes all the aspects of interaction between a company and its customer. It may
be related to sales or service.
CRM helps the company:
i. Understand the customer
ii. Attract new customer
iii. Retain existing customers
iv. Sell more effectively
v. Decrease customer management costs
vi. Increase profits
Figure 20 : CRM
20.SWF
CRM systems can help business in different areas. Some of them are listed in the figure
below:
Figure 21 : Different Types of CRM Systems
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• CRM system tracks responses, deals, leads generated by company's campaign in different channels like
telephone, email, direct mail, social media, etc.
Marketing
• Here the CRM system is used to create and manage the requests made by customers.
Support
and Service
• CRM uses social media sites like Twitter, facebook to track and communicate with the customers.
Social
Media
• CRM system allows for automatic appointments through websites or e-mails.

Appointme
nts
• CRM system for non-profit organizations helps non-profit organizations track fund-raising,
Non-profit memberships, volunteers etc.
business
Social media is steadily emerging as a powerful tool to develop and maintain relations
with the customers. For example, Parle Agro launched a Twitter campaign to track its
new snack- Hippo‟s retail inventory. The customers were asked to tweet whenever they
found Hippo to be out of stock in any store and the company promised to replenish the
stocks. The company reported that they received tweets across 25 cities and were able
to increase sales significantly. Also the company launched a new flavour of Hippo, based
on consumer‟s responses

Benefits of CRM
After reading this section, you should be clear regarding the concept and benefits of
CRM. To give a quick recap, here is a video which will give you information regarding
CRM and how business can make use of technology to track their customers and sales
through CRM application. Please click on the link below to see the video:
http://www.youtube.com/watch?v=7me7mjvTiTI
7. Rural Marketing
The term „rural‟ has different definition. The National Sample Survey Organisation
(NSSO) defines „rural‟ as “an area with a population density of up to 400 per square
kilometer, Villages with clear surveyed boundaries but no municipal board, and having a
minimum of 75% of male working population involved in agriculture and allied
activities.” But the Census of India 2001 has defined urban India and rural India is not
defined. RBI defines rural areas as “those areas with a population of less than 49,000
(tier-3 to tier-6 cities).” So, we notice that there is no single definition of the term
“rural”. However it is generally said that more than half of India is living in rural areas.
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As per Census 2011, rural market constituted 68.84% of India‟s total population. It has
significant contribution to the GDP. Between 2009 and 2012, the rural consumption per
person has increased by 19 per cent yearly. Companies view rural markets as markets
with strong growth potential. This is the reason that even global brands are targeting
rural markets. However, it is not easy to go rural. The rural market is different from
urban market and the companies have to understand the typical characteristics of rural
markets and the demands of consumers to succeed in their efforts. We study the
concept of rural marketing, characteristics of rural markets and consumers, opportunities
and challenges and the marketing mix for rural markets.
Figure 22 : Rural Marketing
Source: http://upload.wikimedia.org/wikipedia/commons/4/4a/Spice_market-India.jpg
Rural marketing is often referred as the movement of goods, services and ideas to rural
areas by using marketing tools and techniques. The aim is to satisfy rural consumers in
order to achieve organization‟s objectives.
However, this is not all about rural marketing. Flow of goods from rural to urban areas is
also included in rural marketing. Thus rural-urban and urban-rural flow of goods and
services comes under the domain of rural marketing.
The concept of rural marketing has emerged over years. Before 1960, rural marketing
was completely unorganized market and was synonymous to agricultural marketing.
During 1960-90, green revolution transformed rural markets. Demand for agricultural
inputs increased with increased agricultural yield. Government paid special attention to
the promotion of Khadi and village industries. Since 1990‟s, the industrial sector of India
gained strength and its contribution to GDP increased. Government of India is spending
billions annually in different schemes for rural development like MGNREGA, SGRY,
PMGSY etc. The demand for consumables and durables rose. The companies found that
the growth opportunities in urban markets was stagnating or falling and hence they
started tapping rural markets.
Characteristics of Rural Markets
The unique features of Indian rural market are as follows:
i. Rural market has a huge potential because of its vast size. As already
mentioned almost 70% of India‟s population resides in villages. This creates a
huge demand potential.
ii. The market is scattered i.e consumers of rural market are spread over 5.5
lakh villages. Different villages have different cultures, habits and
23
consumption patterns, which the marketers need to study before entering that
area.
iii. Rural consumers have low literacy rate as compared to their urban
counterparts, they are more attached to their traditions, customs and beliefs.
Their purchasing power is low and they seek core benefit from the product.
iv. The infrastructure facilities are poor- poor connectivity, poor financial
services, inadequate electricity and water, all pose challenge to marketers.
v. The demand in rural India is seasonal and uneven. Also the purchases are not
in bulk as rural consumers do not have big houses to store the goods.
vi. Change in pattern of demand is noticed among rural consumers. Earlier the
demand was majorly for agricultural products like pesticides, insecticides, but
now the consumers are demanding more FMCG‟s like soaps, shampoos, cold
drinks etc. This has created opportunities for marketers as consumers are now
willing to spend on non-agricultural products too.
7.1 Rural Consumers

The marketers must study the buying behaviour and of the rural consumers to formulate
suitable strategies. The goods and services offered must appeal to the rural consumers.
The strategies followed in urban markets cannot be replicated in rural areas because the
consumers here have certain typical features. They are listed below.
Figure 23 : Rural consumer
Bound by
Traditional
and
customs
Not Relatively
technologi Low
cally literacy
updated rates
Rural
Consumer
Seeks Argricultur
value for e is prime
money occupation
Low
Seasonal
purchasing
income
power
7.2 Rural vs. Urban

Rural markets are different from its urban counterparts in several aspects. The major
differences between the two are listed as below:
24
Table 2: Rural vs. Urban Consumer
Basis of Difference RURAL MARKETS URBAN MARKETS

Market Heterogeneous- consumers Comparatively less
are spread over more than scattered consumers.
5.5. lakh villages.
Purchasing power of Low High
consumers
Education level Low literacy rate among Highly literate consumers.
consumers.
Innovations Slow Fast
Infrastructure Not developed Comparatively developed
Purchasing pattern Seasonal Planned
Needs Low level needs, the High level needs, the
consumers seeks core consumer values product
benefit from the product. differentiation.
Growing Importance of Rural Marketing
Companies like Unilever, Dabur, Coca Cola, ITC, LIC, LG have been taking the rural
route. The rural India is no more a land of holy men with magical powers & snakes. The
rural story is changing and brands like coke, pepsi, pantene, amul, airtel, idea, surf,
lays, ariel are no more new to them.
Following reasons justify firms‟ attempts in going rural.
1. Large population
As already discussed, rural India accounts for majority of population of India and so has
scope for companies to tap the larger audience.
2. Rising incomes
The average income level of the rural consumers has been improving due green
revolution, introduction of modern farming practices, contract farming, industrialisation,
and microfinance, etc. Rural India contributed 56% towards national income last year.
Rural India accounts for 33% of the National saving.
3. Higher growth rate
The rural market has a higher growth rate FMCG‟s and more durable goods than its
urban counterpart.
4. Growth in consumption
There is a growth in purchasing power of rural consumers.
5. Product life cycle stage
Also there are products which have reached the maturity stage in urban markets but are
either at the growth stage in rural markets or are yet to be introduced in rural markets,
hence offering more potential.
6. Changing lifestyles
As the rural consumer is growing aware and enlightened, the lifestyle and preferences
for branded products is increasing. This change in demographics can be beneficial for the
companies.
Activity2 : Empowering Rural India

The companies are educating the rural consumers which is empowering them as well as
creating goodwill for their brands.
ITC E-CHOUPAL
No more we can address the rural India as illiterate and uneducated. ITC e-choupal is
one such example which is educating and empowering the farmers on various aspects of
farming. You can view the two videos and get an insight about how e-choupal is helping
25
the farmers.
http://www.youtube.com/watch?v=cV7y4l8QRrk
http://www.youtube.com/watch?v=Fx4gukMYTGA
PROJECT SHAKTI
Video shows the strategy of Unilever of selling salt by educating the villagers. Project
Shakti educates women who are known as “Shakti Amma” and who after getting
educated becomes distributors of the company. For complete information click on the
link below.
http://www.youtube.com/watch?v=3Gcjs-QYp8M
Find out more such efforts by companies to educate and empower rural consumers.
7.3 Marketing Mix for Rural India
The companies cannot use the same 4 P‟s when they approach rural India. The
marketing mix is to be adapted to suit consumer needs. The marketing mix for the rural
markets is discussed in figure 26.
Figure 24: Marketing Mix for Rural India
26
Marketing Mix for Rural India

PRODUCT PRICE PLACE PROMOTION
We have studied Rural India needs a
The rural consumers
different layers of a different promotion
are highly price-
product. Rural Rural consumers are mix as newspapers,
sensitive and want
consumers seek core widely scattered over magazines and intenet
utility products at
benefits from the villages and the are not suiatble
affordable prices.
products and are not infrastructure facilities mediums for rural
willing to pay more for Keeing this in mind the are poor. But the consumers.
fancy packaging. companies have consumers want
They want value-for-
developed smaller products to be available Most suitable form of
versions of products at their local shops. promotion is radio, T.V
money products. The with use of local
like shampoo sachets
marketers thus offer Marketers have to be lanuage and personal
priced Rs. 1 and 2
rural consumers basic innovative to design a selling. Display of
instead of big bottles,
prduct suited to their distribution channel goods in village fairs,
chota coke, parle
needs. For example covering number of specially during
introduced biscuits in
rural consumers prefer villlages at low cost. festivals can be useful
small packs priced at
washing bars over Tie ups with local in creating awareness
Rs 1,2 and 5.
detergents as they traders, co-operatve and reahing rural
believe rubbing clothes Such prices suit societies can be useful
consumer's pockets. consumers.
will make them clean for the marketers.
and villages have hard
water.
7.4 Challenges and Solutions in Rural Marketing
Designing marketing mix for rural products is a challenge. Some people are of the
opinion that 4 A‟s are to be substituted for the traditional 4P‟s. Following are the four A‟s
which pose challenge to companies while going rural. We shall now discuss which
strategies can be adopted by the companies to overcome such challenges.
i. Acceptability
The first P of the marketing mix is product. The first challenge for marketers is to
understand the needs of rural consumers and produce utility oriented products as
required by the rural population. Some of the goods and services that are flourishing in
rural markets are automotive, soaps, fans, soft drinks, tea, television, toothpowder,
telecom etc.
ii. Awareness
Building awareness about brands is a challenge. Companies need to build reliability for
their brands as rural consumers trust local brands more. This can be done by involving
local villagers who publicise the products of company. As not many people are literate,
brand recognition is difficult because various spurious products are present in the
market. Illiteracy makes them unable to read basic text about the brand identification. It
is easy to sale spurious products in rural market. Companies must give its products a
27
unique packaging and use local language for labelling to make it identifiable. As already
seen from the video above, E-Choupal program of ITC is helping it in establishing brand
image. Promotion through local channels, newspapers in local language, using local
networks will be beneficial than advertising in national newspapers and national
channels.
iii. Affordability
A product can be sold in rural market only if it caters to the need or want of consumers
and is within their paying capacity also. Many companies have launched cheaper
versions of their products to suit the pockets of rural consumers. LG launched its first
low price T.V in rural market –Sampoorna at Re 3000. FMCG companies came up with
sachets and small packs as rural consumers do not like to buy bigger economical packs.
Most of the FMCG products like shampoos, soaps, toothpaste, biscuits etc. are available
in small packets priced in the range of Re 1 to 10. The consumers are not attracted by
product with high price and fancy packing but utility product priced low having simple
packing.
Value addition 11: Video

Chota Coke for Rural India
Coke launched 200ml coke bottle, referred as “chota coke” for tapping rural market. The
300ml coke bottle was available in the market for Rs. 10. Keeping in mind the price
sensitive customers of rural India, chota coke for Rs. 5 was introduced which was an
affordable option.
Visit the link below to see the video.
http://www.youtube.com/watch?v=dBaHomrTWek
Also it is important to note how coke captured attention of rural consumer. The ad
features Amir Khan, a recognized celebrity for the rural consumers so that they trust the
brand. Use of local language, village scene is also appropriately used by the brands to
connect to the rural consumers.
iv. Availability
Poor infrastructure, irregular electricity supply, makes it difficult for the companies to
make their products available to the rural consumers. The companies cannot cover the
scattered rural population unless they tie up with local villagers, NGO‟s or co-operatives.
For example, Unilever‟s Shakti Amma project which involve rural women to sell their
products. This project created rural women entrepreneurs as they turned direct-to-home
distributors of Unilever brands in rural markets with population of less than 5,000.
Companies cannot stick to any one supply chain model and should adopt a flexible
approach. In order to overcome difficult terrain areas the companies may have to use
different mode of transportation such as Camels (like in Rajasthan), mules (hilly areas),
in addition to hand carts, auto and cycle rickshaws.
Example: Marketing strategies by mobile companies
The rural consumers use cell phones basically to communicate. They do not want
applications, games, large memory space as majority of them are not literate. The will
never buy mobile with high-end mobiles with large number of features, not useful for
them. Keeping in mind their requirements, mobile companies have developed mobile
phones with basic features priced as low as Rs 1000 so that rural consumers can afford
it. Mobiles have features such as torch, long lasting battery and high sound which are
desired by rural consumer.
Activity 3: Distribution Channel of Coke

Coke has developed an unconventional sales channel that empowers people and in the
long run will benefit the company also. Explore the web and find out how it is creating its
distribution chain by training retailers under its “Parivartan” program.
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Video Case Study 1: Unilever Rural Strategies

The video shows how Unilever succeeded in increasing sales of its Wheel detergent in
rural India. Check out the video to know the strategy, advertising copy, and appeal, the
company used to attract rural consumers and then answer the questions listed below.
Video link- http://www.youtube.com/watch?v=qlGcd_5fyzI
Q1. What mediums are best to communicate to rural India and why?
Q 2. What are the challenges faced by marketers to reach rural India and how can they
be overcome?
Q 3. Discuss typical characteristics of rural consumers.
Q 4. HUL used several innovative strategies which increased its sales in rural India.
Discuss the strategies you liked most and suggest more ideas to tap rural consumers.
Intractive 2
8. Retailing Scenario in India
Retailing includes all the activities in selling goods and services directly to the consumers
for personal, non-commercial use. Often retailing is equated with sale of products in
stores, but retailing also involves the sale of services: overnight lodging in motels, a
haircut, a DVD rental or a home delivered pizza. So we see that retailing is part of our
everyday lives. Also not all the retailing is done in stores. Direct selling and online sales
are examples of non-store sales. You have already studied different types of store and
non-store retailing in distribution chapter. Here we limit our discussion to study of
changing retailing scenario in India.
Growing Organised Retail

Indian retail sector contributes over 20% to the country‟s gross domestic product (GDP)
and 8% to total employment. In India retailing is pre-dominantly ruled by non-organised
sector. Organised sector constitutes only about 7% of the total retail market. Table 2
shows the share of organised sector in different countries around the world.
Country
Table 3: Organised Sector in Retail: A Comparison
Country Share of organised retail
to total retail
US 85%
UK 80%
Malaysia 55%
Thailand 40%
Philippines 35%
Indonesia 25%
China 20%
South Korea 15%
India 5%
Source: The Indian Kaleidoscope: Emerging trends in retail- Report by PwC
We see the share of organised retail in India is very low in comparison to other
countries. However there is an increase in organised sector in India and it is estimated
that organised sector will grow at 40% p.a. This is due to following reasons shown in
figure 27.
29
Figure 25 : Reasons for Growth of Organised Retail Sector
Easy
availibilty of
inexpensive
credit
Move
Increase in
towards
disposable
allowing FDI
income
in retail
Factors
leading to
growth of
organized
retailing
Rapid
Entry of large urbanisation
domestic
business houses
and Growing
in retail such as young,
Aditya, Reliance affluent
population
Growth of
modern retail
formats
As the income grows, the demand for consumer goods and services increases.
Urbanisation, growth of nuclear families, and growth of young population are
responsible for rising demand of goods and services related to fashion, apparels,
contemporary furniture, restaurants, beauty and health. Malls, hyper-markets, super-
markets provide a variety of goods and brands under one roof, making consumer
shopping experience more convenient. This is the reason that such retail formats are on
the rise. Easy payment options like EMI‟s, availability of loans, credit cards, online
payment options, etc. act as stimuli for the consumers to spend more than they would
have done in absence of such options.
8.1 Major Retail Segments in India
The dominant segments in Indian retail industry are listed as below.
Indian retail industry is the second largest employer after agriculture. Major segments
flourishing in India are food, fashion & fashion accessories, consumer durables, health
and beauty, books etc. This is because 60% of India‟s population is below the age of 30
years. Such young consumers are brand conscious and have a lifestyle which is boosting
health, beauty, food, books and fashion segments.
Activity 4: Explore Retailers in India

Major large- scale retail players in India are:
Tata Group,
30
Future Group,
Reliance Group,
RPG Group,
K Raheja Group
Reliance group has presence in following segments:-

Reliance Wellness dealing in providing wellness services,
Reliance Timeout selling books music and entertainment,
Reliance Auto zone selling automotive parts and services,
Reliance Living furniture, home-ware segment,
Reliance Mart which is a super-market.
Similarly all the other groups have presence in different segments. You are required to
explore and find out different retail stores these groups are operating in. When you do
so, you will be able to know that brands like Tanishq, Titan, Shoppers stop, Home town,
All, Pantaloons etc. belong to different groups. It will help you know how diversified the
business groups are.
8.2 Changing Scenario of Indian Retailing Environment
The developments in the retailing environment in India are discussed below.
i. Emergence of new form of Retail forms and combinations

Retailers are adopting different forms of retailing to provide convenience to the
customers. Malls, automatic vending machines, telemarketing and e-tailing provide
wider choice of goods to customers conveniently. Many retailers are combining different
forms to satisfy their consumers. For example food outlets have opened at gas and
petrol pumps to provide necessary grocery and general items to the customers who stop
at petrol pumps. Shopping malls allow peddler‟s carts and limited-time pop-up stores to
sell their items inside malls, like select city walk mall has Wednesday pop-up shops in
the balcony of mall. It gives consumers an option to buy from open market along with
branded shops in the mall.
ii. Growing competition among different forms of retailing

There is growing competition between different forms of retailing. For example
departmental stores are not competing with the other departmental stores but also with
growing number of stores like discount stores, catalog showrooms etc.
Also non-store retailing is giving tough competition to store-based retailing as direct
mails, cell phones, internet are been increasingly used to reach consumers and are
stealing business away from store based retailers. Successful journey of E-bay, Flipkart,
OLX is giving motivation for more e-tailers to rise.
Online shopping has been surging with the growing online users. India has already
surpassed Japan to become the third largest country after China and USA with almost 74
million online users. As per ASSOCHAM, online retail websites has witnessed a surging
65 percent rise in the traffic compared to previous year.
Case Study 2
FLIPKART: Pioneer in Indian e-tailing market
Flipkart, an e-commerce company started in 2007 by two IIT, Delhi alumini, is now
among top 20 websites of India. It offers a range of goods online, including books,
music, consumer electronics, etc. Internet penetration, convenience of purchasing
products online, etc. are driving the growth of India‟s online retail market. The company
31
has launched its own products under the name of “DigiFlip” and is offering mobile
accessories, pen-drives, bags, computer accessories etc. The company offers different
payment options like net banking, payment by debit card, e-gift voucher and even cash
on delivery. It is believed that consumer behaviour is changing and in a few years,
consumers will be shopping almost everything with thr click of a mouse. Flipkart has
ambitious plans for the year 2013-14. The online retailer plans to:
• Offer new categories on its website,
• Increase its footprint of warehouses,
• Expand operations into new cities,
• Increase staff size from 2000 to over 10,000,
• Grow revenues 10 to 30 times over
Flipkart believes that their online consumer is driven by both price as well as a minimum
level of quality and offering only low-cost products will not be beneficial in long run.
Flipkart believes customer satisfaction is of extreme importance. It believes that if a
customer is satisfied with the experience, they will convey positive message to the
network of their friends and family and hence word-of-mouth advertising will generate
more customers. Flipkart in order to serve its customers efficiently maintains customer
service teams to manage customer queries, track the movement of goods ordered,
ensure timely delivery, etc.
Flipkart also manages its social media presence carefully. Its support team manages
Facebook and Twitter accounts. The company receives around 200 tweets a day, out of
which only 5-6 are negative. The team responds to such negative feedback within an
hour on the site and within 15 minutes to the concerned customer.
Discuss and answer the following questions.

Q1. What factors do you think are responsible for success on Flipkart?
Q 2. Discuss the role of social media in today‟s business environment.
Q3. What competitive advantages do you think online retailers like Flipkart have over
traditional store retailers?
Q4. It is necessary to have online presence in addition to brick-and-mortar stores. Do
you agree? Discuss.
iii. Rise of Large scale retailers

Growth of large scale retailers like Walmart, are able to deliver masses effectively due to
their superior information systems, logistical systems and buying powers. They are
dominant in the distribution chain and dictate the terms and conditions relating to
product, price, promotion, shipping policies. Global retailers have strong brand
positioning as they operate in different countries.
iv. Investment in technology

Technology is changing the way retailers operate inside and outside the stores.
Technology helps retailers in accurate forecasting, controlling inventory costs, ordering
supplies, taking orders electronically etc. Promotional messages are displayed inside the
stores on plasma T.V, for example Axis banks have their advertisements running in the
banks on the televisions placed there. Websites allow consumers to shop for their
favourite things, like the items they love and save for future, compare prices of different
models and track the order‟s progress. Consumers also can get update of the orders
they placed on their mobiles. Many mobile apps now allow consumers to locate nearest
stores too. Thus we see internet and mobile is changing the way business operated. New
and innovative ways are being adopted to attract the customers.
Value Addition 12: Web-link

Technology Update: Introducing to you “Digi PoS Toccare”
“Digi PoS Store Solutions” is a leading provider of point-of-sale technology for retail
environment. It has announced “Digi PoS Toccare Bezel Free Touch Screen” which is the
32
first of its kind and allows image transmission and multi-touch technology not previously
seen in retail stores. To know more about the Toccare screen, visit the following web-
site.
http://www.onwindows.com/Articles/Touch-screen-first-for-retail-
industry/5147/Default.aspx
v. Growth of shopper marketing

The display of a product inside a store affects the buying decision as researches show
that as much as 70-80% of the purchase decisions are taken by consumers inside the
retail stores. Hence point of purchase advertising is assuming important role in
attracting the consumers to buy the products. The window display, placement of goods
inside the store is to be done carefully to gain attention of the consumers. Different
studies show different findings relating to consumer‟s buying decision, for example, one
study revealed that shoppers ignored the products at eye level and optimum location to
place the products was between waist and chest level.
ACTIVITY 5: Developing Customer Loyalty

We all are consumers and buy from different stores. However, some of us are loyal to a
particular retail outlet, like shoppers stop. Which ones are your favourite stores you
always visit? Why are you loyal to those retail stores? What steps are taken by retailer in
developing loyal customers like you? Share your in-store experience in the class.
8.3 FDI in Retail
Single brand retail

Single brand retail policy was announced in 2006. It led to set up of more than 60 retail
brands in India in strategic joint ventures with Indian partners. Some of these include:
• Ferragamo and Georgia Armani with DLF

• Marks & Spencer(M&S) with Reliance Retail
• Fendi with Chordia Fashions
• S Oliver with Orient Craft
• Burberrey with Genesis Color
• Damas with Gitanjali Lifestyle
• Inditex (Zara) with Trent
The current FDI Policy on single brand specifically require the foreign investor to be the
brand owner, and therefore, it closes doors for any direct investment by an international
private equity player in this segment.
Multibrand retail
Government has allowed foreign investment in retail sector in Sep 2012 and since then
there has been a growth of 10.6 percent in the industry and is expected to increase to
US$ 750-850 billion by 2015 according to report by Deloitte. Food and grocery amounts
to 60 percent followed by apparel and mobile phones. FDI in single brand retailing stood
at US $ 96.96 million during April 2000 to June 2013 as per the data released by DIPP.
In order to attract more foreign direct investment government has liberalized rules for
multi-brand retail which are as follows:
1. The stores must source 30 percent of their needs locally but this need can be
met over a period of five years initially and after that it has to be met on annual
basis.
2. 50 percent of the investment of “initial” mandatory investment of $100 million in
setting up cold storage and warehouse as against half of the total investment in
India in building back end infrastructure.
33
3. Foreign retailers can open stores in cities with population below 1 million as
against earlier with population above 1 million.
In January 2012, India approved reforms for single-brand stores welcoming anyone in
the world to innovate in Indian retail market with 100% ownership. However they are
required to source 30 percent of its goods from India.
Government allowed 51% FDI in multi brand retailing in September 2012. Then in June
2013 various clarifications were issued by the Government due to lack of response from
foreign retailers. In December 2013 Tesco became the first retailer to announce $110
million investment in Trent‟s Star Bazaar hypermarket chain for a 50% stake.
But now after 2014 elections, BJP government has indicated not to allow multi-brand
retail by foreign players. The new commerce and industry minister Nirmala Sitharaman
has announced that FDI in multi-brand retail trade will adversely impact the small
traders and farmers. However some believe that allowing FDI will be favourable for
India. Time will tell what the new government decide and whether it will be a wise
decision or not.
8.4 The Future of Retailing in India
As stated by Mr. KV Thomas, the former Consumer Affair Minister, Indian retail market is
projected to be worth US $1.3 trillion by 2020. He further added that with the spread of
internet and transition in consumer behaviour and adoption of western concept online
shopping and direct selling would have huge growth. Another report by Booz and Co.
and RAI expects that Indian retail industry will grow by 9 percent in 2012-16 with
organized retail growing at around 24 percent.
However the industry faces several challenges that need to be dealt with, in order to
realize the growth potential of the industry. Some of the challenges are:
1. Uncertainty in FDI Policy in Retail to encourage foreign players to set up their units
in India,
2. Local Laws and real estate purchase restrictions,
3. Lack of integrated supply chain management,
4. Lack of trained workforce.
The future lies in rural regions and the companies need to understand the likes and
dislikes, the budgetary constraints of the rural consumers and customize their products
and service accordingly.
Summary
 Direct marketing is “the use of consumer-direct channels to reach and deliver
goods and services to customers without using marketing middleman.”
 Service marketing is a form of marketing which focuses on selling the services.
Service marketing needs a different marketing approach to be followed for them
from the approach used for products as they have certain distinctive
characteristics.
 Marketing mix for services comprises of 7 P‟s. In addition to the traditional 4 P‟s-
product, price, place and promotion, the additional 3 P‟s are- people, process and
physical evidence.
 Green marketing refers to marketing of the products that are presumed to be
environmentally safe. It aims at sustainable development.
34
 The 4 P‟s of marketing mix are modified for green marketing as the green
products are produced, promoted and is disposable in a manner which does not
harm the environment. The price is relatively high and aims to cut down on
transportation emissions while transporting the goods.
 Relationship marketing aims to build mutually satisfying long-term relationships
with the key constituents in order to earn and retain their business. It advocates
the philosophy “know your customers”.
 Rural India is gaining importance as it offers huge potential market for various
goods and services. Large population, rising disposable incomes, changing lifestyle
of rural consumers and saturating urban markets are the factors making rural
market attractive for the marketers.
 In India the retail market is dominated by the unorganised sector. However
organised sector is growing and has huge growth potential.
 FDI policies adopted by Government of India are further going to increase share of
organised retail sector and increase competition with unorganised sector.
Exercises:
A. Objective Type Questions
I. State true or false:

a. Services are homogeneous in nature.
b. Service marketing and relationship marketing are synonymous.
c. Retailing involves the sale of goods for non-commercial use.
d. Retailers can either have physical existence or online existence.
e. Fill in the blank with appropriate words.

a. Mass marketing has a ______ reach as compared to direct marketing.
b. Production, consumption and distribution of services is a __________ process.
c. Marketing mix of services has 3 extra P‟s, namely people, process and
__________.
d. 4 A‟s of rural marketing are accessibility, awareness, ________ and availability.
e. In India, share of organised retail is ______ than the share of unorganised retail.
B. Short answers type questions:
a. What do you understand by direct marketing? What benefit does it offer to company?
b. Write short notes on: a. Online and Social media marketing
b. Direct- mail marketing
c. What do you mean by green products?
d. Discuss differentiating features of a product and service.
e. Write a short note on customer relationship management.
f. Compare and contrast rural and urban consumers.
g. Cold drinks like Coca cola are available in rural as well as urban India. What aspects of
advertisement will differ while promoting Coca cola in urban and rural India?
h. Discuss briefly the role of FDI in Indian retail sector.
i. The organised retail holds only 5% of total retail market but it has huge growth
potential. Do you agree? Discuss.
C. Long answer type questions:
a. What is direct marketing? Discuss different forms of direct marketing.

b. Why is the concept of green marketing becoming popular? Discuss marketing mix of
green products.
c. The marketing mix for services is same as that for product. Comment and discuss
service marketing mix.
35
d. In this customer-oriented era, relationship marketing helps the company to create and
retain loyal and satisfied customers. Do you agree? Discuss.
e. What do you understand by rural marketing? Discuss different characteristics of rural
markets and the challenges they pose to the companies.
f. A FMCG company which has a strong presence in urban India wants to tap rural
markets. Suggest marketing mix for the following products which will help the company
to attract rural consumer and tap rural markets.
a. Herbal Shampoo,
b. Motorcycle
g. “The retail landscape of India is changing.” Comment and discuss.
Answers to Objective Type Questions:
I. Answers to state True or False:
a. False b. False c. True d. False
II. Answers to fill in the blanks

a. Wider b. simultaneous c. physical evidence d. affordability
e. lower
Glossary
Consumer: A consumer is a person or a group of people, such as a household, who are
the final users of products or services.
Customer: A customer is the recipient of a good, service, product, or idea, obtained

from a seller, vendor, or supplier for a monetary or other valuable consideration. He may
or may not be the consumer.
Customer loyalty: It refers to likelihood of previous customers to continue to buy from

a specific organization.
Direct marketing: It is “the use of consumer-direct channels to reach and deliver

goods and services to customers without using marketing middleman.”
Direct mail marketing: It includes sending an offer, announcement, reminder or any

other object to an individual consumer.
e-tailing: The sale of goods and services through the internet.
FDI: FDI or foreign direct investment means direct investment in production or business
in a country by an individual or company of another country, either by buying a company
in the target country or by expanding operations of an existing business in that country.
Marketing: Marketing is the science of choosing target markets through market analysis
and market segmentation, as well as understanding consumer behaviour and providing
superior customer value.
Marketing Mix: The marketing mix refers to the set of actions, or tactics, that a
company uses to promote its brand or product in the market. The 4Ps make up a typical
marketing mix - Price, Product, Promotion and Place.
Retailing: It includes all the activities in selling goods and services directly to the
consumers for personal, non-commercial use.
36
Vending machine: It refers to a machine which dispenses items such as snacks,

beverages, alcohol, and other consumer products to customers automatically, after the
customer inserts currency or credit into the machine.
References:
Work cited
Books:
 Chhabra, T.N., Principles of Marketing, Sun India Publication.
 Jethwaney Jaishri;Jain Shruti. Advertising Management. 2 ed. Oxford
 Kotler, Philip; Keller, Kevin Lane; Koshy, Abraham, and Mithileshwar Jha.
Marketing Management: A South Asian Perspective. 14 ed. Pearson
 Levy, Michael; Weitz A Barton; Pandit Ajay. Retailing Management. 6ed. Tata
Mc Graw-Hill
 Lovelock, Christopher; Wirtz Jochen; Chatterjee Jayanta. Services Marketing:
People, Technology, Strategy: A South Asian Perspective. 5 ed. Pearson
Web links:
1. http://en.wikipedia.org/wiki/Direct_marketing
2. http://womeninbusiness.about.com/od/directmailmarketing/tp/hub-dm-
cons.htm
3. http://womeninbusiness.about.com/od/directmailmarketing/tp/hub-pros-
directmail.htm
4. http://womeninbusiness.about.com/od/marketingyourbusiness/tp/hub-
directmarketing.htm
5. http://smallbusiness.chron.com/examples-direct-marketing-campaigns-
24087.html
6. http://www.investopedia.com/terms/d/direct-marketing.asp
7. https://www.boundless.com/marketing/integrated-marketing-
communication/the-promotion-mix/direct-marketing/
8. http://www.pb.com/smb/solutions/direct-marketing/definition-what-is
9. http://www.referenceforbusiness.com/encyclopedia/Ca-Clo/Catalog-
Marketing.html
10. http://www.webopedia.com/TERM/I/internet_marketing.html
11. http://www.studymode.com/essays/Green-Marketing-Concept-776072.html
12. http://www.ibef.org/industry/services.aspx
13. http://lexicon.ft.com/term?term=services-marketing
14. http://www.marketingteacher.com/lesson-store/lesson-services-
marketing.html
15. http://www.managementstudyguide.com/definition-and-characteristics-of-
services.htm
16. http://en.wikipedia.org/wiki/Tertiary_sector_of_the_economy
17. http://en.wikipedia.org/wiki/Category:Service_industries
18. http://www.wisegeek.org/what-is-services-marketing.htm
19. http://www.learnmarketing.net/servicemarketingmix.htm
20. http://www.marketingteacher.com/lesson-store/lesson-services-
marketing.html
21. http://en.wikipedia.org/wiki/Green_marketing
22. http://www.uow.edu.au/~sharonb/STS300/market/green/article2.html
23. http://curiosity.discovery.com/question/what-is-green-consumerism
24. http://www.businessdictionary.com/definition/relationship-marketing.html
37
25. http://www.forbes.com/sites/marketshare/2013/05/09/this-is-the-most-
important-word-when-it-comes-to-relationship-marketing/
26. http://www.appature.com/relationship-marketing.html
27. http://www.learnmarketing.net/benefitsofrelationshipsmarketing.htm
28. http://en.wikipedia.org/wiki/Customer_relationship_management
29. http://www.ibef.org/industry/consumer-markets/indian-rural-market.aspx
30. http://www.ibef.org/industry/consumer-markets/indian-rural-market.aspx
31. http://blogs.rediff.com/shinyvikas/2010/02/22/indias-rural-market-the-
fortune-at-the-bottom-of-the-pyramid/
32. http://www.mbaskool.com/business-articles/marketing/5455-marketing-mix-
from-4ps-to-4as.html
33. http://www.ccsenet.org/journal/index.php/ijms/article/viewFile/23573/16443
34. http://india.gov.in/people-groups/community/rural-indian
35. https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=20&v
ed=0CJwBEBYwCTgK&url=http%3A%2F%2Fmiteshk.webs.com%2FRURALMA
RKETING.pdf&ei=jS9hUoKZG4rprQfh4IC4Cg&usg=AFQjCNH8Q2H3r2mpmCAP
ZHugfY8bIRE3Rw&sig2=R6L1hIoUW-kHg41OZt8YPg
36. https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=7&ca
d=rja&ved=0CFsQFjAG&url=http%3A%2F%2Fbig-consultants.com%2Fwp-
content%2Fuploads%2F2012%2F04%2FIndian-Retail-
Industry.pdf&ei=PCZpUqvLLoX9rAe35YGYBg&usg=AFQjCNEGl86_PCGqQtpsW
1L3uS-8yXaX4w&sig2=uYqCzWNypQ7ZoJqKWiil7w
Suggested Readings:
1. Palmer, Adrian, Introduction to Marketing, Oxford University Press, UK
2. Lamb, Charles W.; Hair, Joseph F., and Carl McDaniel, Principles of Marketing,
South Western Publishing, Ohio.
3. Kumar, Arun & N. Meenakshi, Marketing Management, Vikas Publications.
4. McCarthy, E. Jerome., and William D. Perreault, Basic Marketing, Richard D.
Irwin.
5. Pride, William M., and D.C. Ferell, Marketing: Planning, Implementation &
Control, Cengage Learning.
6. Majaro, Simon, The Essence of Marketing, Prentice Hall, New Delhi.
7. Zikmund, William G. and Michael D‟Amico, Marketing: Creating and Keeping
Customers in an E-Commerce World, Thomson Learning.
8. Etzel, Michael J., Walker, Bruce J., Staton, William J., and Ajay Pandit, Marketing
Concepts and Cases, Tata McGraw Hill (Special Indian Edition).
9. McCarthy, E. Jerome; Cannon, Joseph P., and William D. Perrault, Jr., Basic
Marketing: A Managerial Approach, McGraw Hills.
10. “Reliance unit hopes to turn a new page in India‟s retail story” available at:
http://www.livemint.com/Industry/d5u6qxdH3RqbcmY06lyigI/Reliance-unit-
hopes-to-turn-a-new-page-in-Indias-retail-sto.html
11. “Split with Bharti: Why Walmart will stick to India‟s retail story, despite hurdles”
available at: http://articles.economictimes.indiatimes.com/2013-10-
13/news/42993192_1_fdi-rules-india-s-easyday
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Trends in Marketing-SEPT

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Recent Trends in Marketing

Lesson: Recent Trends in Marketing

8. Retailing Scenario in India

Figure 1: Direct Marketing

Source: Self made

Value Addition 1: Quick Facts

Activity 1: Explore and Learn : Direct Marketing in Practice

3.1 Forms of Direct Marketing

Figure 3: Forms of Direct Marketing

We will now discuss a few important ones briefly:

Door-to-Door Marketing/ Personal Selling

Figure 4: Direct Mail

To create an effective direct-mail campaign, marketers must decide the following:-

Telemarketing can be in two forms:-

• Outbound telephone marketing- The salesperson sells directly to the consumers

Figure 5: Catalog Marketing

Source: Self made

Value Addition 2: Surf and Learn

Social Media Marketing

Figure 6: An Internet Kiosk In Hemer, Germany

3.2 Advantages and Disadvantages of Direct Marketing

Figure 7: Advantages & Disadvantages of Direct Marketing

Value Addition 3: MCQs

Figure 8: Service Industries Examples

4.1 Concept of Service

Service Offering Mix

Figure 9 : Service Mix Categories

Figure 10: Features of „Service‟

To elaborate, let us understand the features with some examples.

4.2 Difference between Goods and Service

Table 1: Difference between Goods and Services

Goods are physical commodities. Services refer to a process or an activity.

Goods are homogenous. Services are heterogeneous.

Production and distribution are separate Production, distribution and consumption

Ownership of goods can be transferred. Ownership of services cannot be

4.3 The 7 P’s of Service Marketing

Services marketing includes:-

Figure 11: Traditional Marketing Mix: 4 P‟s

Product Price Place Promotion

Figure 12 : Extended Marketing Mix for Services

Value Addition 4: Video

Value Addition 5: Video

Would you Like to Travel with such Services?

As per Businessdictionary.com „green marketing‟ is "Promotional activities aimed at

Value Addition 6: Video

Value Addition 7: Video

5.1 Green Products and their Characteristics

5.2 Reasons for Going Green

1. The environmental marketing is a market opportunity which organizations can

Figure 14: Reasons to Go Green

5.3 Green Marketing Mix

Figure 15 : Green Marketing Mix

Value Addition 8: Web-link

“Relationship marketing is a strategy designed to foster customer loyalty, interaction and

Figure 17: Relationship Marketing

Source: Self made

Value Addition 9: Video

6.1 Relationship Management Process

Figure 18: Relationship Management Process

Benefits of Relationship Management

•Loyal customers give positive publicity.

•Loyal customers try new products of the company.

6.2 Customer Relationship Management (CRM)

Customer relationship management (CRM) is “a model for managing a company‟s