HAWASSA UNIVERSITY

AWADA BUSINESS AND ECONOMICS COLLEGE

DEPARTMENT OF ACCOUNTING AND FINANCE

COURSE TITLE:: PRINCIPLE Of MARKETING

GROUP ASSIGNMENT

Group Members ID number

1.
1 Explain what marketing is
 Marketing refers to activities a company undertakes to promote the buying
or selling of a product or service. Marketing includes advertising, selling,
and delivering products to consumers or other businesses. Some marketing
is done by affiliates on behalf of a company
 Philip Kotler defines marketing as “the science and art of exploring,
creating, and delivering value to satisfy the needs of a target market at a
profit.
 Marketing is a System of Interacting Business Activities: Marketing is that
process through which a business enterprise, institution, or organisation
interacts with the customers and stakeholders with the objective to earn
profit, satisfy customers, and manage relationship.
 Marketing defines the business opportunity, identifies profitable customers
and products/services that will meet customer needs, builds customer
relationships, drives customer demand and communicates corporate or
product/services value.” Ann Z
 Marketing is the social and managerial process by which individuals and
groups
obtain what they need and want through creating,offering and exchangin
gproducts and/or serviceof valuewith others"philipkotler
Ingeneral,allmarketing definitions focus on:

  Identifying customer needs and wants

 Translating customers needs to product and/orservice to satisfyingthem
 Communicatingeffectivelyandefficiently
 Offeringthatinthewaypromisedorasdesignedbasedoncustomers’need
analysis

2 What do we mean by business to consumer and business

to business?
 B2B and B2C are two acronyms that get thrown around regularly. B2B
stands for business-to-business, referring to a type of transaction that takes
place between one business and another. B2C stands for business-to-
consumer, as in a transaction that takes place between a business and an
individual as the end customer
 Business to consumer

 Business to consumer, is a type of commerce where a business sells products

or services to individual consumer
 B2C, or business-to-consumer, is a retail model where products or services
move directly from a business to the end user who has purchased the goods
or services for personal use
 The B2C business model applies to any business transaction where the
consumer directly receives goods or services, such as small businesses and
entrepreneurs, retail stores, restaurants and doctor's offices. B2C most often
refers to e-commerce businesses, which use online platforms to connect their
products with consumers.
 It allows companies to engage in direct commercial activities with
consumers, enabling the latter to have greater accessibility to the former’s
products and services.

Business-to-busines
 Business-to-business (B2B), also called B-to-B, is a form of transaction
between businesses, such as one involving a manufacturer and wholesaler,
or a wholesaler and a retailer. Business-to-business refers to business that is
conducted between companies, rather than between a company and
individual consumer.
 Business-to-business is a situation where one business makes a commercial
transaction with another. This typically occurs when: A business is sourcing
materials for their production process for output, i.e. providing raw material
to the other company that will produce output.
 Business-to-business (B2B) is a transaction or business conducted between
one business and another, such as a wholesaler and retailer.
 B2B transactions tend to happen in the supply chain, where one company
will purchase raw materials from another to be used in the manufacturing
process.
 B2B transactions are also commonplace for auto industry companies, as well
as property management, housekeeping, and industrial cleanup compani
 Business-to-business (B2B) is a transaction or business conducted between
one business and another, such as a wholesaler and retailer.
  B2B transactions tend to happen in the supply chain, where one company
will purchase raw materials from another to be used in the manufacturing
process.
2 What is Consumer’s behaviour and how it affects
purchase decision?
 Consumer behavior is the actions and decisions that people or households
make when they choose, buy, use, and dispose of a product or service. Many
psychological, sociological, and cultural elements play a role in how
consumers engage with the market.
 It is a multi-stage process that involves identifying problems, collecting data,
exploring options, making a decision to buy, and evaluating the experience
afterward. Consumers may be impacted during these stages by things
including personal views and values, social conventions, marketing
campaigns, product features, and environmental conditions.
 Understanding consumer behavior is essential for businesses to create
marketing plans that work and to supply goods and services that satisfy
customers’ wants and needs. To see trends and patterns, forecast demand,
and make wise choices regarding product design, price, promotion, and
distribution, marketers must analyze and understand data on customer
behavior.
 Consumer behavior is important in marketing because it explains how
consumers make decisions about what products to buy when to buy them,
and from whom to buy them.
 Marketers can develop effective marketing strategies that target the right
consumers with the right message at the right time by understanding
consumer behavior.
how it affects purchase decision?
 Consumer behavior is influenced by many external factors and internal
factors such as situational, psychological, environmental, and marketing
factors, personal factors, family, and culture.
 Businesses try to collect data so that they can make decisions on how they
can reach their target audience in the most efficient way. While some
influences may be temporary and others can be long-lasting, these factors
can influence a person to buy or not buy. Let’s now look at some of these
factors in detail.
Situational factors
  They are temporary in nature and include physical factors such as a store’s
location, layout, colors, music, lighting, and even scent. Companies try to
make these factors as favorable as possible. Other situational factors include
holidays, time, and moods of the consumer.
Personal factors
 These factors include demographic factors such as age, gender, income,
occupation, etc. It also depends on one’s interests and opinions. To further
understand consumers, companies also look more closely at their lifestyles –
their daily routine, leisure activities, etc.
Social factors
 This factor also includes social class, level of education, religious and ethnic
background, sexual orientation, customer orientation, and people around you
– family, friends, or social network. Different cultures have varying customs
and rituals that influence how people live their lives and what products they
purchase.
 Generally, consumers in the same social class exhibit similar buying
behavior. Most market researchers believe a person’s family is one of the
biggest determinants of buying behavior.
Psychological factor

 A person’s ability to understand information, perception of needs, and

mindset influence consumer behavior. One’s reaction to a marketing
campaign will depend on one’s beliefs and state of mind.
4 What is product and its association with service?
What is product
 Product: People satisfy their needs and wants with products.
 A product is anything that can be offered to satisfy a need or want.It can be
physical goods,services,ideas or a combination of physical product along
with services.
For example,a computer manufacturer is supplying goods
(computer,monitor,and printer), services(delivery,installation,training,
maintenance and repair) and an idea (computational power).5
 A product is a tangible or intangible item or service that is offered to
customers in the marketplace. It can be a physical object, such as a car or a
smartphone, or it can be an intangible service, such as consulting or
 banking. Products are created to fulfill a specific need or want of customers
and are designed to provide value and benefits. They can be manufactured,
developed, or sourced by a company and are typically marketed and sold to
customers as part of a business's offerings.
 We can define a product anything – goods, services and ideas – that can be
offered in a market to satisfy customer needs and wants
 The association between a product and a service often occurs when a
business offers a combination of both to meet customer needs. For example,
when purchasing a car, the product is the physical vehicle itself, but the
associated services could include warranty coverage, maintenance and repair
services, or roadside assistance. Similarly, when purchasing a smartphone,
the product is the device itself, but the associated services could include
technical support, software updates, or data plans.
 The association between a product and a service is important for businesses
as it allows them to enhance the overall value of their offerings. By
providing additional services or support alongside their products, businesses
can create a more comprehensive and satisfying customer experience. This
can lead to increased customer loyalty, positive word-of-mouth
recommendations, and ultimately, higher sales and profitability.
 In many industries, businesses recognize the importance of providing
excellent customer service to enhance the overall value of their products.
This can involve offering support, guidance, or assistance to customers
before, during, and after the purchase of a product. By providing exceptional
service, businesses aim to create a positive customer experience and build
long-term relationships with their customers. This can result in repeat
purchases, customer loyalty, and positive brand reputation.
4 Explain each (4p, 7p and 12p) of marketing mix elements in
association with Ethical-corporate responsibilit
 The marketing mix consists of various elements that businesses use to
promote their products or services. These elements include the 4Ps (Product,
Price, Place, Promotion), the 7Ps (Product, Price, Place, Promotion, People,
Process, Physical Evidence), and the 12Ps (Product, Price, Place, Promotion,
People, Process, Physical Evidence, Packaging, Positioning, Politics, Public
Relations, and Performance). In association with ethical corporate
responsibility, each of these elements can be explained as follows:
A. Product: Ethical corporate responsibility in relation to the product involves
ensuring that the product itself is produced and marketed in an ethical manner.
This includes considerations such as using sustainable materials, avoiding harmful
ingredients or practices, and ensuring the product meets safety and quality
standards.

B. Price: Ethical corporate responsibility in pricing involves setting fair and

transparent prices for products or services. This means avoiding price gouging or
misleading pricing strategies and ensuring that the price reflects the value
provided to customers.

C. Place: Ethical corporate responsibility in terms of place refers to the

distribution and availability of the product or service. This includes ensuring that
the product is accessible to all customers and avoiding discriminatory practices in
terms of distribution. It also involves considering environmental impacts in terms
of transportation and logistics.

D. Promotion: Ethical corporate responsibility in promotion involves ensuring

that marketing and advertising efforts are truthful, transparent, and do not
mislead or deceive customers. It also means avoiding unethical marketing
practices such as false claims or targeting vulnerable populations.

E. People: In the 7Ps framework, people refer to the employees or staff

involved in delivering the product or service. Ethical corporate responsibility in
relation to people involves treating employees fairly, providing a safe and
inclusive work environment, and offering opportunities for growth and
development.

F. Process: Ethical corporate responsibility in process refers to the procedures

and systems used to deliver the product or service. This includes ensuring that
processes are efficient, environmentally friendly, and comply with relevant laws
and regulations. It also involves considering the impact of processes on
stakeholders and communities.

G. Physical Evidence: Physical evidence refers to the tangible aspects that support
the delivery of a service or the use of a product. In terms of ethical corporate
responsibility, physical evidence involves ensuring that any physical materials or
assets used in delivering the product or service are obtained and used ethically.
This includes considerations such as using sustainable packaging materials or
ensuring the proper disposal of waste.

H. Packaging: Packaging is an additional element in the 12Ps framework. Ethical

corporate responsibility in packaging involves using sustainable materials,
minimizing waste, and providing clear information to customers about the
environmental impact of the packaging.

I. Positioning: Positioning refers to how a company positions its product or

service in the market. Ethical corporate responsibility in positioning involves
ensuring that the company's positioning aligns with its values and does not
mislead or deceive customers.

J. Politics: Politics refers to the influence and engagement of businesses in

political matters. Ethical corporate responsibility in politics involves engaging in
transparent and ethical political activities, avoiding bribery or corruption, and
supporting policies that align with ethical principles.

K. Public Relations: Public relations refers to managing the reputation and

relationship of a company with the public. Ethical corporate responsibility in
public relations involves being transparent, honest, and accountable in
communication with stakeholders and the public.

L. Performance: Performance refers to the overall performance of a company in

terms of financial, socialand environmental aspects. Ethical corporate
responsibility in performance involves measuring and reporting on these aspects,
setting goals for improvement, and ensuring transparency and accountability in
performance metrics.

6 List down distinguishing features of consumer buying decision

making and industrial buying decision making. Why difference
is there?
The distinguishing features of consumer buying decision making and industrial
buying decision making.

A. Nature of the purchase: Consumer buying decisions typically involve

purchasing products or services for personal use or consumption, while industrial
buying decisions involve purchasing goods or services for business purposes, such
as production or operations.

B. Decision-making process: Consumer buying decisions are often influenced by

personal preferences, emotions, and individual needs. Industrial buying decisions,
on the other hand, are typically more rational and based on objective criteria such
as price, quality, and supplier reliability.

C. Complexity of the decision: Consumer buying decisions are often simpler and
less complex compared to industrial buying decisions. Industrial purchases often
involve multiple decision-makers, extensive research, and evaluation of technical
specifications and performance requirements.

D. Relationship with the supplier: In consumer buying decisions, the relationship

between the buyer and the seller is often transactional and short-term. In industrial
buying decisions, there is usually a long-term relationship between the buyer and
the supplier, as industrial purchases often involve ongoing contracts and
partnerships.

F. Purchase volume: Industrial buying decisions often involve larger quantities or

volumes of products or services compared to consumer buying decisions. This can
impact factors such as negotiation power, pricing, and delivery logistics.

G. Decision-making unit: Consumer buying decisions are typically made by

individuals or small groups, while industrial buying decisions involve a larger
decision-making unit within the organization. This unit may include multiple
stakeholders such as managers, engineers, finance personnel, and procurement
specialists.

The differences between consumer buying decision making and industrial buying
decision making arise due to the distinct characteristics and objectives of
consumer and industrial markets. Consumer markets are driven by individual
needs, preferences, and emotions, while industrial markets focus on meeting
business objectives such as cost-efficiency, productivity, and profitability.
Additionally, industrial purchases often involve higher financial stakes and more
complex considerations due to the impact on business operations and performance.

7 What is market segmentation, targeting and

positioning? Why is it important?
What is market segmentation?
 Market segmentation is the process of dividing a market into distinct groups
of consumers or businesses with similar needs, characteristics, or behaviors.
This segmentation allows companies to better understand their target
audience and tailor their marketing strategies and offerings to meet the
specific needs and preferences of each segment.
What is market targeting?
 Targeting refers to the selection of one or more segments that a company
wants to focus its marketing efforts on. By targeting specific segments,
companies can allocate their resources more effectively and efficiently,
ensuring that their products or services are reaching the right customers who
are most likely to be interested and make a purchase.

what is market Positioning?

 Positioning is the process of creating a distinct image or perception of a
product or brand in the minds of the target market. It involves developing a
unique selling proposition and communicating it effectively to differentiate
the product or brand from competitors and create a strong and favorable
perception among the target audience.
Market segmentation, targeting, and positioning are important for several
reasons:
A. Efficient use of resources: By understanding the needs and preferences of
different market segments, companies can allocate their resources more
effectively, focusing their efforts on the segments that offer the greatest potential
for success.
B. Customized marketing strategies: Market segmentation allows companies to
develop customized marketing strategies for each segment, tailoring their
messaging, promotions, and distribution channels to resonate with the specific
needs and preferences of each segment.
C. Competitive advantage: Through effective positioning, companies can
differentiate themselves from competitors and create a unique and favorable
image in the minds of consumers. This helps them stand out in a crowded market
and gain a competitive advantage.
D. Improved customer satisfaction: By targeting specific segments and meeting
their unique needs, companies can provide more relevant and personalized
products or services, leading to higher levels of customer satisfaction and loyalty.
E. Increased profitability: By focusing on high-potential segments and delivering
tailored offerings, companies can increase their sales and profitability. They can
also identify opportunities for new products or services that cater to specific
segments, further driving growth and profitability.
Overall, market segmentation, targeting, and positioning help companies
understand their customers better, develop effective marketing strategies,
differentiate themselves from competitors, and ultimately drive business success.

8 What necessitates market segmentation?

Market segmentation is necessitated by the following factors:

A. Diverse Customer Needs: Customers have diverse preferences, needs, and

behaviors. Market segmentation helps businesses identify and understand these
differences, allowing them to develop targeted marketing strategies and offerings.

B. Resource Optimization: By segmenting the market, businesses can allocate

their resources more efficiently and effectively. They can focus their marketing
efforts on the most promising segments, resulting in better utilization of time,
money, and other resources.

C. Increased Competition: In highly competitive markets, it is crucial for

businesses to differentiate themselves. Market segmentation enables companies to
identify niche markets or segments where they can stand out and offer unique value
to customers.

D. Customization and Personalization: Segmentation allows businesses to

customize their products, services, and marketing messages to specific customer
segments. This personalization enhances customer satisfaction, loyalty, and
ultimately drives business growth.

E. Improved Marketing Effectiveness: Targeted marketing efforts based on

segmentation yield higher response rates and conversion rates. By tailoring
marketing activities to specific segments, businesses can deliver more relevant and
impactful messages to their target audience.

Overall, market segmentation is necessitated by the need to understand customers

better, optimize resources, differentiate from competitors, and deliver personalized
experiences that lead to business success.

9 What is positioning and why is it important?

 Positioning refers to the way a company or brand is perceived in the minds
of consumers relative to its competitors. It is the process of creating a
distinct and favorable image or identity for a product or brand in the target
market.
Positioning is important for several reasons:
A. Differentiation: Positioning helps a company differentiate its products or
services from competitors. It highlights unique features, benefits, or attributes that
set the brand apart and make it more appealing to consumers.

B. Competitive Advantage: Effective positioning can give a company a

competitive advantage by establishing a strong and favorable perception in the
minds of consumers. It allows the company to stand out and attract customers even
in a crowded marketplace.

C. Target Market Focus: Positioning helps a company target specific customer

segments by aligning its product or brand with their needs, preferences, and
values. It ensures that marketing efforts are directed towards the right audience,
increasing the chances of success.

D. Brand Image and Reputation: Positioning plays a crucial role in shaping

the brand image and reputation. It helps create a positive perception of the brand,
build trust, and establish credibility among consumers.

E. Pricing Power: Effective positioning can also give a company the ability to
command premium prices for its products or services. When a brand is perceived
as unique, valuable, and superior, consumers are often willing to pay more for it.

F. Communication Consistency: Positioning provides a clear framework for

marketing communication. It ensures that all marketing messages and activities
are aligned with the desired brand image and consistently convey the intended
positioning to consumers.

 In summary, positioning is important because it allows a company to

differentiate itself from competitors, target specific customer segments, build
a strong brand image, and ultimately achieve a competitive advantage in the
market.
10. What is product and explain categories of product based on
purpose for which they are purchased.
 A product is a tangible or intangible item that is offered for sale to
consumers. It can be a physical object, such as a car or a smartphone, or it
can be a service, such as a haircut or a software application. Products are
created to fulfill a specific need or desire of consumers.
Based on the purpose for which they are purchased, products can be categorized
into three main categories:
A. Consumer Products: Consumer products are purchased by individuals for
their personal use or consumption. They can be further divided into four
subcategories:
 Convenience Products: These are everyday items that consumers buy
frequently and with minimal effort. Examples include toothpaste, bread, and
soft drinks.
 Shopping Products: Shopping products are purchased less frequently and
require more research and comparison before making a purchase decision.
Examples include clothing, furniture, and electronics.
  Specialty Products: Specialty products are unique or high-end items that
consumers are willing to make a special effort to obtain. They often have
brand loyalty and are not easily substituted. Examples include luxury cars,
designer clothing, and high-end jewelry.
 Unsought Products: Unsought products are items that consumers may not
actively seek out or think about purchasing. They usually require aggressive
marketing efforts to generate demand. Examples include life insurance,
funeral services, and blood donation.
B. Industrial Products: Industrial products are purchased by businesses to be
used in the production of other goods or services. They can be categorized into two
subcategories:

 Materials and Parts: These are raw materials, components, or assemblies

that are used in the manufacturing process. Examples include steel, plastic,
and electronic components.
 Capital Items: Capital items are long-lasting goods that are used in the
production process but do not become part of the final product. Examples
include machinery, equipment, and buildings.
C. Services: Services are intangible offerings that provide value to customers.
They are activities performed by individuals or businesses to fulfill a specific need
or desire. Examples include healthcare services, financial services, and
transportation services.

By categorizing products based on their purpose, companies can better understand

their target market and tailor their marketing strategies accordingly. It helps them
identify the unique characteristics and needs of each category and develop
effective marketing campaigns to reach their intended audience.

11.What is price and how is it different from other traditional

marketing mix elements?
 Price is the amount of money that customers are willing to pay in exchange
for a product or service. It is one of the four traditional marketing mix
elements, along with product, promotion, and place (distribution).
 Price is unique from the other elements because it directly affects the
revenue and profitability of a company.
Here are some ways in which price differs from the other marketing mix
elements:

A. Tangibility: Unlike the product, promotion, and place, which are tangible
elements thatcan be seen, touched, or experienced, price is an intangible concept.
It represents the value that customers perceive in a product or service.

B. Flexibility: Price is more flexible compared to other marketing mix elements.

Companies can adjust the price of a product or service to respond to changes in
market conditions, competition, or customer demand. This flexibility allows
companies to attract customers, increase sales, and maximize profits.
C. Perceived Value: While the other marketing mix elements contribute to the
perceived value of a product or service, price plays a significant role in shaping
customers' perception of value. A higher price may create the perception of higher
quality or exclusivity, while a lower price may suggest affordability or a bargain.

D. Profitability: Price directly impacts a company's revenue and profitability.

Setting the right price is crucial for generating sufficient sales volume and
maximizing profit margins. The price must cover the costs of production,
distribution, and promotion while still providing a reasonable return on
investment.

E. Competitive Advantage: Price can be a source of competitive advantage for a

company. By offering lower prices than competitors, a company can attract price-
sensitive customers and gain market share. Alternatively, a company can
differentiate itself by offering higher prices and positioning its products or services
as premium or luxury options.

In summary, price is a critical element of the marketing mix that influences

customer perception, profitability, and competitive advantage. It is distinct from
other traditional marketing mix elements due to its intangibility, flexibility, impact
on perceived value, and direct link to revenue and profitability.

12 Clearly explain market penetration pricing and market

skimming pricing?
  Market penetration pricing is a strategy in which a company sets low initial
prices for its products or services to gain a larger share of the market. The
goal is to attract a significant customer base by offering lower prices
compared to competitors. This can create a sense of value for customers,
drawing them to the company's offerings.
 The purpose of market penetration pricing is to quickly spread awareness
about the brand and increase the adoption of the product. It aims to entice
customers who are price-sensitive and capture market share from existing
competitors. This strategy can help in building a customer base and
generating early revenue, creating a strong foundation for future growth.
 market skimming pricing is a strategy in which a company sets high initial
prices for its products or services. The intention is to target customers who
are willing to pay a premium for a unique or innovative offering. This
strategy is commonly employed for products with distinctive features and
benefits that differentiate them from competitors.
 Market skimming pricing helps a company maximize its profits during the
initial phase when demand is high and customers are willing to pay a
premium. Over time, as the market becomes more competitive and rivals
introduce similar products, the company gradually lowers prices to attract a
broader customer base.

In summary, market penetration pricing involves setting low prices to gain

market share and attract price-sensitive customers, while market skimming
pricing sets high prices initially to target customers willing to pay a
premium for unique or innovative products.
13. State criteria that necessitate and state penetration pricing
and market skimming pricing.
 Penetration pricing and market skimming pricing are two strategies used by
companies to set the initial price for their products or services. The decision
to employ either of these pricing strategies depends on several criteria.
 The criteria that necessitate penetration pricing include:
A. Market entry: When entering a new market, especially one that is highly
competitive,penetration pricing can help a company quickly gain market share
and establish a presence.
B. Demand elasticity: If the demand for the product or service is highly elastic,
meaning that customers are price-sensitive and readily switch brands,
penetration pricing can be used to attract these price-conscious customers.

C. Cost advantage: If a company has a significant cost advantage over its

competitors, penetration pricing can be employed to undercut competitors'
prices, attract customers, and gain market share.

D. Short-term profitability: A company might prioritize short-term profitability

over long-term profits by setting a low initial price to capture market share quickly
and generate high sales volumes.

market skimming pricing is justified by different criteria, including :

A. Unique or superior product: If a company offers a unique or superior product

that is not easily replicated by competitors, market skimming pricing can be
employed to capitalize on the perceived value and willingness of early adopters to
pay a higher price.

B. Limited target market: If the target market for a product or service is relatively
small or niche, market skimming pricing can be used to maximize profits from
these early adopters or enthusiasts who are willing to pay a premium for the
exclusive offering.

C. Innovation or technological advancement: If a product incorporates advanced

technology or innovation, market skimming pricing allows a company to recoup
high research and development costs and maintain profitability before
competitors enter the market.

D. Brand image and prestige: Companies that have established a strong brand
image and a reputation for premium products may opt for market skimming
pricing to reinforce their brand's exclusivity and maintain a high-quality
perception among customers.
It is important to note that while these criteria may justify the use of either
penetration pricing or market skimming pricing, companies should carefully
evaluate their specific market conditions, customer behavior, competition, and
long-term business goals before implementing these pricing strategies.

14 .Explain what promotion is and promotional mix element is.

 Promotion refers to the various marketing activities undertaken by a
company to communicate, inform, persuade, and influence the target
audience about its products or services. It is one of the crucial components
of the marketing mix and aims to increase awareness, generate interest,
stimulate demand, and ultimately drive sales.
 Promotional mix elements, on the other hand, are the different tools or
tactics a company utilizes to achieve its promotional objectives.

These elements are typically classified into five categories:

A. Advertising: This involves communicating company messages and promoting

products or services through paid non-personal channels such as television, radio,
print media, outdoor billboards, online banners, and social media ads. Advertising
aims to create brand awareness and reach a wide audience.

B. Personal Selling: It involves one-on-one interaction between the company's

salesperson and potential customers. This approach focuses on building
relationships, understanding customer needs, and conveying product benefits.
Personal selling is commonly used in situations where the product needs
explanation or customization.

C. Sales Promotion: This element includes short-term incentives or activities

designed to spur immediate sales. Examples of sales promotion tactics include
coupons, discounts, free samples, contests, loyalty programs, and point-of-
purchase displays. Sales promotions are often used to encourage trial, create
urgency, and boost sales within a specific time frame.

D. Public Relations: PR activities focus on managing the company's public image

and maintaining positive relations with various stakeholders. This may involve
press releases, media interviews, sponsorships, events, community engagement,
and crisis management. Public relations aim to generate positive publicity,
enhance brand reputation, and build trust.

E. Direct Marketing: This entails reaching out to potential customers directly,

usually through personalized channels like direct mail, email marketing,
telemarketing, or text messages. Direct marketing allows for customization and
targeting specific segments while providing an avenue for direct response from
consumers.

The selection and combination of these promotional mix elements depend on

factors such as the target audience, marketing objectives, budget, competition, and
the nature of the product or service. A well-designed promotional mix ensures that
the right message is delivered to the right audience through the most effective
channels to achieve desired marketing outcomes.

15. What is relation between push strategy and pull strategy of

promotion? Which is included under each and why?
 The push strategy and pull strategy of promotion are two different
approaches to marketing and promotion.
 The push strategy involves pushing the products or services directly to the
target market. It focuses on pushing the products through a distribution
channel in order to create demand. This strategy is primarily aimed at the
resellers or the channel partners who then promote the products to the end
consumers. The push strategy includes activities such as personal selling,
trade shows, sales promotions, direct marketing, advertising to resellers,
etc.
 On the other hand, the pull strategy focuses on creating demand among the
end consumers, pulling them towards the products or services. Unlike the
push strategy, the pull strategy aims to create a desire or demand among the
consumers, which in turn drives the resellers or channel partners to stock
and promote the products. It relies heavily on marketing communication
techniques and activities aimed at the end consumers. This includes
activities such as advertising to consumers, public relations, social media
marketing, content marketing, etc.
 In terms of inclusion, under the push strategy, activities such as personal
selling, trade shows, and sales promotions are included, as these directly
 target the resellers or channel partners. These activities help in persuading
and incentivizing the resellers to promote and sell the products.
 Under the pull strategy, activities such as advertising to consumers, public
relations, social media marketing, and content marketing are included, as
these focus on creating awareness, interest, and desire among the end
consumers. The goal is to pull the consumers towards the products or
services.
 Overall, the push strategy primarily targets the resellers or channel
partners, while the pull strategy focuses on directly influencing the end
consumers. Both strategies are often used together in integrated marketing
campaigns to achieve marketing objectives.
16. Explain placing and channels of distribution.
 Placing and channels of distribution are concepts related to the distribution
of goods and services from producers to consumers. Let's break down each
concept:
A. Placing: Placing refers to the location or point where a product or service is
made available for purchase by consumers. It is the physical or virtual space
where customers can access and buy the product. Placing can include various
outlets such as retail stores, supermarkets, online platforms, or even direct selling
from the producer to the customer. The goal of placing is to ensure convenient
access to the product or service for the target market.
B. Channels of distribution: Channels of distribution, also known as marketing
channels, are the routes or paths through which goods or services move from
producers to consumers. These channels include all the intermediaries involved in
the process of transferring products from the manufacturer to the end-user. The
key players in a distribution channel can be wholesalers, distributors, retailers,
agents, and even online marketplaces. The purpose of channels of distribution is
to bridge the gap between producers and consumers, making products available
in the right place and at the right time.
There are several types of channels of distribution:
A. Direct Distribution: In this channel, products are sold directly from the
manufacturer to the end consumer without involving any intermediaries. This can
be done through company-owned stores, e-commerce websites, or direct sales
representatives.
B. Indirect Distribution: This channel involves one or more intermediaries
between the manufacturer and consumer. Intermediaries can include
wholesalers, distributors, retailers, agents, and brokers who help in distributing
products to a wider market.
C. Dual Distribution: This channel involves using both direct and indirect
distribution methods simultaneously. It allows manufacturers to reach a larger
customer base by selling directly to some customers while using intermediaries
for others.
D. Intensive Distribution: This strategy aims at making a product available in as
many outlets as possible. It is commonly used for low-cost and frequently
purchased items like snacks or soft drinks.
E. Selective Distribution: This strategy involves selecting specific outlets or
retailers that meet certain criteria for selling a product. It is commonly used for
products that require more specialized knowledge or customer service.

F. Exclusive Distribution: This strategy involves granting exclusive rights to a

single retailer or distributor in a particular geographic area or market segment. It
is often used for luxury brands or high-end products.

 The choice of placing and channels of distribution depends on various

factors such as target market characteristics, product type, competition, cost
considerations, and marketing objectives. Companies need to carefully
analyze these factors before deciding on their distribution strategy to ensure
efficient delivery and maximum customer reach
 The selection and management of placing and channels of distribution play a
crucial role in the success of a product or service. Companies need to
consider factors like target market characteristics, competition, cost-
effectiveness, and consumer buying behavior in order to determine the most
suitable placing and distribution channels to reach their customers
effectively.
17. Explain conflict of channels of distribution and why it
occurs?
 Conflict in channels of distribution refers to disagreements or disputes that
arise between different members of the distribution channel - such as
 manufacturers, wholesalers, retailers, and even customers - regarding
various aspects of how products or services move from producers to
consumers.
 This conflict can occur due to a variety of reasons:
A. Goal Incompatibility: Different channel members may have different objectives
and goals. For example, manufacturers may want to increase sales volume, while
retailers may prioritize profit margins. These conflicting goals can lead to
disagreements and conflict.
B. Power Imbalances: The distribution channel is often characterized by power
imbalances, where one member has more control or influence over others. This
can lead to conflicts as the more powerful member may dictate terms and policies
that others may disagree with.
C. Resource Scarcity: Limited resources (e.g., shelf space, advertising budgets)
may be a cause of conflict, as channel members compete for these resources to
maximize their own interests, often at the expense of others.
D. Intermediary Margins: Disagreements may arise due to the profit margins that
each member of the channel expects. Manufacturers may feel retailers are
charging excessive margins, while retailers may argue that their margins are
necessary to cover their costs and provide value-added services.
E. Communication Breakdown: Poor communication or lack of effective
communication between channel members can lead to misunderstandings and
conflicts. For example, if a manufacturer introduces a new product without
informing or consulting retailers, they may feel overlooked and resentful.
F. Channel Control: Conflict can arise when one member tries to exert control
over others. For instance, manufacturers may want to enforce specific pricing
policies or dictate how retailers display their products, leading to resistance and
conflicts.
G. Channel Overlapping: Competing members of the same distribution channel
can create conflicts. For instance, when a manufacturer directly sells to end
consumers by bypassing intermediaries, it can undermine the profits and roles of
traditional channel members.
H. Structural Changes: Changes in the distribution system can create conflicts. For
example, if a manufacturer decides to switch from wholesalers to direct
distribution, it can disrupt existing relationships and cause conflict among
intermediaries affected by the change.
Overall, conflicts occur in channels of distribution due to differences in goals,
power dynamics, resource allocation, communication issues, control disputes, and
changes in the distribution structure. These conflicts can negatively impact the
efficiency and effectiveness of the entire distribution channel, affecting the overall
success of the product or service.
18. List down steps to come up with appropriate penetration pricing
and market skimming pricing
 Conflict in channels of distribution refers to disagreements or disputes that
arise between different members of the distribution channel - such as
manufacturers, wholesalers, retailers, and even customers - regarding
various aspects of how products or services move from producers to
consumers. This conflict can occur due to a variety of reasons:
A. Goal Incompatibility: Different channel members may have different objectives
and goals. For example, manufacturers may want to increase sales volume, while
retailers may prioritize profit margins. These conflicting goals can lead to
disagreements and conflict.
B. Power Imbalances: The distribution channel is often characterized by power
imbalances, where one member has more control or influence over others. This
can lead to conflicts as the more powerful member may dictate terms and policies
that others may disagree with.
C. Resource Scarcity: Limited resources (e.g., shelf space, advertising budgets)
may be a cause of conflict, as channel members compete for these resources to
maximize their own interests, often at the expense of others.
D. Intermediary Margins: Disagreements may arise due to the profit margins that
each member of the channel expects. Manufacturers may feel retailers are
charging excessive margins, while retailers may argue that their margins are
necessary to cover their costs and provide value-added services.
F. Communication Breakdown: Poor communication or lack of effective
communication between channel members can lead to misunderstandings and
conflicts. For example, if a manufacturer introduces a new product without
informing or consulting retailers, they may feel overlooked and resentful.
G. Channel Control: Conflict can arise when one member tries to exert control
over others. For instance, manufacturers may want to enforce specific pricing
policies or dictate how retailers display their products, leading to resistance and
conflicts.
H. Channel Overlapping: Competing members of the same distribution channel
can create conflicts. For instance, when a manufacturer directly sells to end
consumers by bypassing intermediaries, it can undermine the profits and roles of
traditional channel members.

I. Structural Changes: Changes in the distribution system can create conflicts.

For example, if a manufacturer decides to switch from wholesalers to direct
distribution, it can disrupt existing relationships and cause conflict among
intermediaries affected by the change.
Overall, conflicts occur in channels of distribution due to differences in goals,
power dynamics, resource allocation, communication issues, control disputes, and
changes in the distribution structure. These conflicts can negatively impact the
efficiency and effectiveness of the entire distribution channel, affecting the overall
success of the product or service.

19. Elaborate intensive and selective and exclusive

distribution.
Intensive Distribution:
 Intensive distribution is a distribution strategy where a product is made
available through as many channels as possible, with the aim of maximizing
its exposure and availability to customers. In other words, the product is
widely distributed across multiple outlets, such as supermarkets,
 convenience stores, online marketplaces, and specialty stores. This approach
is commonly used for products with high demand and low customer loyalty,
such as fast-moving consumer goods (FMCG) like soft drinks, snacks, and
toiletries.
 The benefits of intensive distribution include widespread availability,
convenience for customers, and the potential for increased sales volume.
However, this strategy also comes with challenges, such as maintaining
consistent product quality across various outlets and managing potential
conflicts among distributors.
Selective Distribution:
 Selective distribution is a distribution strategy where a product is made
available through a limited number of carefully chosen outlets. It is typically
used for products with specific target markets or unique selling propositions.
Manufacturers or suppliers carefully select retailers or distributors based on
their ability to cater to the specific segment and uphold the brand image.
 Selective distribution allows manufacturers to maintain more control over
the product's positioning, pricing, and overall brand experience. It also
allows them to build stronger relationships with selected distributors,
providing better support and training to ensure the success of the product.
Selective distribution is often seen with products like high-end consumer
electronics, luxury goods, or niche products.
Exclusive Distribution:
 Exclusive distribution is the most restrictive approach, where a product is
made available through a single outlet or a limited number of exclusive
outlets. This strategy is commonly used for products that require a high level
of specialization, have limited supply, or cater to a very specific target
market. For example, luxury fashion brands often adopt exclusive
distribution to maintain a sense of exclusivity and prestige.
 By granting exclusive distribution rights to specific outlets or partners,
manufacturers can control the product's positioning, pricing, and brand
image to a greater extent. This strategy can also help maintain the product's
perceived value, as it is not readily available everywhere. However, the
limited availability may restrict reach and potentially limit sales volume.
 It's important to note that the choice of distribution strategy depends on
various factors, including the nature of the product, target market,
competition, and the manufacturer's overall marketing objectives. Each
distribution strategy has its advantages and considerations, and finding the
 right balance requires careful analysis and understanding of the product,
market dynamics, and customer preferences.
20 Assume that you are marketing specialist. If you are given advising
chance in both in developing country Ethiopia and developed country
like USA, in which country is the service is back bone of country? And
Why?
 As a marketing specialist, if I were given the opportunity to advise in both
Ethiopia and the United States, I would consider the service sector as the
backbone of the United States, which is considered a developed country.
The Service Sector in the United States:
 The United States has a well-established and diverse service sector, which
contributes significantly to its GDP and employment. In developed countries
like the United States, the service sector often plays a vital role in driving
economic growth and development. Industries such as finance, healthcare,
information technology, professional services, tourism, and entertainment
are significant contributors to the country's economy.
Several factors contribute to the service sector's prominence in the
United States:
A. Economic Transition: Over the decades, the United States has undergone a
significa shift from a predominantly manufacturing-based economy to a
services-based economy.This transition has been driven by various factors such as
globalization, technological advancements, and evolving consumer preferences.
B. High Income and Consumer Spending: The United States has a high-
income population with considerable purchasing power. Consumers in the United
States have a strong demand for various services, seeking convenience,
personalized experiences, and specialized expertise. This consumer behavior
fosters the growth of service-oriented businesses.

C. Technological Innovation: The United States has been at the forefront of

technological innovation, particularly in the service sector. Many American
companies have pioneered digital technologies, online platforms, and software
solutions, transforming industries and creating new service-based opportunities.
D. Knowledge-based Economy: The United States places great emphasis on
education, research, and development. This focus has led to the growth of
knowledge-intensive industries such as software development, consulting, and
scientific research, further strengthening the service sector.
E. Changing Demographics: The aging population and shifting lifestyles in the
United States have increased the demand for healthcare services, senior care, and
other service-based industries that cater to specific needs.
The combination of these factors has made the service sector a backbone of the
United States' economy. The sector drives innovation, contributes to
employment, and plays a crucial role in shaping the country's economic
landscape.

The Case in Ethiopia:

 In developing countries like Ethiopia, the service sector is in the early stages
of development and may not yet be considered the backbone of the
economy. Developing countries typically rely on other sectors such as
agriculture, manufacturing, and natural resources for their economic
development. However, this does not diminish the potential or importance of
the service sector in Ethiopia's future growth.
 Ethiopia has been experiencing significant economic growth and
diversification in recent years. The government has recognized the potential
of the service sector and has been taking measures to promote its
development. Areas such as tourism, telecommunications, transportation,
and financial services are witnessing growth and attracting foreign
investments.
 While the service sector in Ethiopia is growing, it may not be as pronounced
or dominant as in developed countries like the United States due to various
factors, including infrastructure challenges, limited access to technology,
and the need for skill development. However, the government's focus on
infrastructure development, education, and improving the business
environment creates favorable conditions for the growth of the service sector
in Ethiopia.0
 It's important to note that the development of the service sector takes time,
and each country's unique socio-economic factors contribute to its growth
and prominence. While the service sector may currently be the backbone of
the United States, it doesn't mean it will be the same for Ethiopia or other
dev