UNIT III

Merchandise

Merchandise refers to the manufactured goods bought and sold in any business or the stock of
goods in a store.

The AMA has defined merchandising as “the planning involved in marketing the right merchandise at
the right place at the right time in the right quantities at the right price.”

Merchandise management can be termed as the analysis, planning, acquisition, handling, and
control of the merchandise investments of retail operations. It involves various activities such as
assortment planning, inventory management, pricing, promotions, and visual merchandising.

Merchandise Mix

Merchandise mix refers to the variety of products or services offered by a business or retailer. It
includes the range of items available for sale, taking into account factors such as product categories,
brands, sizes, colors, and price points. A well-balanced merchandise mix is crucial for attracting and
retaining customers, maximizing sales, and effectively managing inventory.

Key dimensions of Merchandise Mix

 The number of different product lines that retailer stocks in the store
 The number of different product items retailer stock within a particular product category
 The planning and control of number of units that retailer should have at hand to meet the
expected sales for particular product

Inventory Plan

Inventory is the raw materials, component parts, work-in-process, or finished products that are held
at a location in the supply chain.

Inventory planning is the process of determining the optimal quantity and timing of inventory for the
purpose of aligning it with sales and production capacity.

Inventory management plan provides information regarding sales velocity, inventory availability,
ordered quantity, inventory turnover, sales forecast and the quantity to order for a specific stock
keeping units (SKUs).

The inventory plan helps a business devise the stock support levels for a specific sales period. Most
widely used methods to determine the stock support levels are: beginning-of-the month ratio,
week’s supply method, the percentage variation method, and the basic stock method.

Benefits of Inventory:

 Hedge against uncertain demand

 Hedge against uncertain supply
 Economizing ordering costs
 Smoothing

Types of Inventory Model:

1. Multi-period Model – This model is used when a business needs to make decisions about
inventory replenishment over multiple time periods. The objective is typically to determine
optimal inventory levels and reorder points over time to minimize costs while meeting demand.

2. Single-period Model – This model is used when a business needs to make a one-time decision on
how much inventory to stock for a single selling season or period. The objective is to determine
the optimal order quantity that maximizes expected profit or minimizes expected costs,
considering uncertain demand and costs.

Beginning of the Month Ratio Method

The BOM method also known as the stock/sales ratio method, relates inventory on the first of the
month to the planned sales of that month. This method is quite easy to apply, but requires retailers
to have a BOM stock to sales ratio. This ratio informs the retailers about the quantity of inventory
needed at the beginning of the month to support the month’s estimated sales.

BOM Inventory = Planned monthly sales X Desired stock/sales ratio

For instance, If the desired stock/sales ratio is 1.5 and the planned monthly sales is 10,000 SKUs, the
BOM would be 15,000 SKU.

Week’s Supply Method

According to this method, the inventory level should be set equal to a predetermined number of
weeks’ supply, which is directly related to the desired rate of stock turnover. It is most widely used by
retailers in India both in urban and rural.

This method sets stock levels in direct proportion to sales. It is computed according to the following
calculations:

Number of Weeks ∈the period

Number of weeks for which Inventory is to be stocked =
Stock turnover rate for the period
Estimated total sales for the period
Average weekly sales =
Number of weeks∈the period
BOM stock = Average weekly sales X Number of weeks to be stocked

Percentage Variation Method

This method is used for planning necessary stock support in which stock levels are adjusted on the
basis of actual variation in sales. It is more appropriate for the product categories which experience
frequent fluctuation and high yearly turnover rates such as six or more times a year. This also
assumes that percentage fluctuations in monthly stock from average stock should be half as much as
the percentage of fluctuations in monthly sales from average sales.

1 Planned sales for themonth

BOM Stock = Average inventory X [1+ ]
2 Average monthly sales
Basic Stock Method
This method is preferred when retailers believe that it is necessary to have a given level of inventory
available at all times. It is the most compatible approach for retailer with low inventory turnover
rates such as less than 6.0 annually.

BOM Stock = Planned sales for month + Average Inventory – Average monthly sales

Barcode

A barcode is a visual representation of data that is scanned and interpreted for information. Each
barcode contains a certain code which works as a tracking technology for products, and is
represented in a sequence of lines or other shapes. Initially, this technology was symbolized by the
width and spaces between the parallel lines that were one dimensional. This then evolved into other
geometrical shapes such as rectangles and hexagons that were two dimensional.

Advantages of Barcode

 Much smaller and lighter than RFID tags and therefore easier to use
 Less expensive than RFID tags, as barcodes are directly printed on to plastic or paper
materials and therefore the only cost involved is the ink
 Barcode work with the same accuracy on various materials in which they are placed
 Barcode are universal technology in that they are the norm for retail product, stores that
own a barcode reader can process barcode from anywhere in the world
 In many cases, barcode accuracy has been said to be the same or even better than RFID tag
 Today barcode are found on almost every item and there no privacy issues involved with its
use
Disadvantages of Barcode
 Barcode scanners need a direct line of sight to the barcode to be able to read
 In order to read the barcode, the barcode scanner needs to be quite close
 Barcode have no read/write capabilities, they do not contain any added information search
as expiry date, etc. they only contain the manufacturer and product.
 They are labour intensive, as they must be scanned individually
 Barcode have less security then are fid as they can be more easily reproduced or forged
 Barcode are more easily damaged, as the line of side is needed to scan, the printed barcode
has to be exposed on the outside of the product.
 If a barcode is ripped or damaged there is no way to scan the product.

Radio Frequency Identification (RFID)

Radio Frequency Identification technology (RFID) involves a tag affixed to a product via radio waves.
These tags can carry up to 2,000 bytes of data. This technology has three parts: a scanning antenna,
a transceiver with a decoder to interpret the data, and a transponder (RFID tag) pre-set with
information. The scanning antenna sends out a radio-frequency signal providing a means of
communication with the RFID tag. When the RFID tag passes through the frequency field of the
scanning antenna: it detects the activation signal and can transfer the information data in holds to be
picked up by the scanning antenna.

Advantages of RFID
 Can read RFID tax from a greater distance than barcode
 RFID tags don't need to be position in a line of sight with the scanner
  RFID tags can be read at a faster rate than barcode, as approximately 40 RFID tags can be
read at the same time
 RFID tax can work within much greater distances; information can be read from a tag at up
to 300 ft.
 RFID tags are read/write devices
 RFID contain high levels of security, data can be encrypted, password protected or set to
include a kill feature to remove data permanently
 RFID tags carry large data such as product maintenance, shipping histories and expiry dates,
which can all be programmed to the tag.
 once these are set up, it can be run with minimal human participation
 RFID tags are more reusable and rubbed as they are protected by a plastic cover

Disadvantages of RFID

 RFID involves assembling and inserting a computerised chip which works out to be more
expensive
 RFID readers struggle picking up information when passing through metal or liquid
 reader collision can occur where two signals from different readers overlap and the tag is
unable to respond to both
 tag collision can occur when humorous tags in the same area respond at the same time
 RFID is still has two separate chips which cannot be read by the same machine

ABC Analysis

ABC analysis also known as Pareto analysis, is a technique used in inventory management, operations
management, and procurement to categorize items based on their importance. The analysis helps in
identifying which items contribute the most to the overall value or impact within a system, allowing
organizations to prioritize their efforts and resources accordingly. In other words, an ABC analysis
identifies the performance of individual stock keeping units (SKUs) in the assortment plan.

 A Items: These are the most valuable items, typically representing a small portion of the total
number of items but accounting for a significant portion of the overall value. A rigorous control
and management strategy are often applied to these items because any issues with them can
have a substantial impact on the organization's performance.

 B Items: These items are of moderate importance. They are not as critical as A items but still
require a considerable amount of attention and control. B items usually constitute a moderate
portion of the total items and value.

 C Items: These are the least important items, often referred to as the "trivial many." While they
may represent a significant portion of the total number of items, their individual value
contribution is relatively low. Management of C items may be less rigorous compared to A and B
items.

The ABC analysis process typically involves the following steps:

1. Gathering data on inventory including their usage, demand, cost or other metrics.
2. Calculating metrics such as annual consumption value, usage frequency, or contribution to
overall operations to determine the importance of each item.
3. Ranking the items based on their calculated metrics, often in descending order.
4. Assigning items to the A, B, or C categories based on predetermined thresholds or using
statistical techniques such as the Pareto principle.
5. Developing strategies and policies for managing each category of items effectively. This could
involve different inventory control methods, procurement strategies, or allocation of resources.

By conducting an ABC analysis, organizations can optimize their inventory management practices,
allocate resources efficiently, reduce costs, and improve overall operational performance.
 Category Management

Category is a distinct, manageable group of products or services that consumers perceive to be

interrelated and/or substitutable in meeting a consumer’s needs.

Category management is the distributor or supplier process of managing categories as strategic

business units, producing enhanced business results by focusing on delivering consumer value.
Category management represents a significant and proven opportunity to achieve substantial
business improvements across the entire value chain for consumers, distributors, and suppliers.

Category Management Cycle

The category management cycle is a strategic approach used by retailers and suppliers to effectively
manage product categories within their business. It involves several key steps to ensure that the
category meets its objectives and delivers value to the business and its customers.

Step 1: Define category

This step involves identifying and defining the product category that will be managed. A category can
be broadly defined (e.g., snacks) or more narrowly defined (e.g., potato chips). It is essential to have
a clear understanding of what products fall within the category.

Step 2: Assess role of category

This step involves understanding the importance of the category within the overall business strategy.
It also involves assessing how the category contributes to sales, profitability, and customer
satisfaction.

Step 3: Assess performance

This step involves evaluating the current performance of the category by analysing sales data, market
trends, customer feedback, and other relevant metrics. Identify strengths, weaknesses,
opportunities, and threats (SWOT analysis) to understand the factors influencing the category's
performance.

Step 4: Set objectives and targets

This step involves establishing specific objectives and targets for the category based on the
assessment of the category’s role and performance. These objectives should be aligned with the
overall business goals and should be measurable and achievable within a defined timeframe.

Step 5: Devise strategies

This step involves developing strategies to achieve the objectives and target set for the category. This
may involve product assortment optimization, pricing strategies, promotional activities,
merchandising tactics, and supplier partnerships.

Step 6: Set category tactics

This step involves determining the specific tactics and action plans needed to implement the
category strategies effectively. This includes detailed plans for product selection, pricing decisions,
promotional campaigns, shelf layouts, and inventory management.
Step 7: Implementation

This step involves executing the category tactics according to the defined plans and implementing
changes to product assortment, pricing, promotions, and merchandising strategies as necessary.

Step 8: Review

The final step involves regularly reviewing and evaluating the performance of the category against
the objectives and targets set, and using insights gained from the review process to refine category
strategies and tactics for continuous improvement.

Consumer-based Category Role

There are four consumer-based category roles:

1. Destination category: This is a category with which the retailer wants to profile himself towards
his target consumers and differentiate himself from competition. It aims to offer superior value
to consumers and define the retailer as store of choice. This is the main selling category of the
store. Such categories have high purchase frequency and high activity.

2. Routine category: It is a type of category that aims to provide consistent and competitive value
for the consumer’s everyday needs. This category assists to develop the target consumer’s image
of the retailer. With the help of these categories, the owner/brand builds a distinct image of
itself in the minds of the customers.

3. Seasonal category: This category refers to products which are not purchased on a regular basis
but occasionally. Seasonal categories play a secondary role in delivering profit but can be used by
a retailer to differentiate himself from competition during a certain period of the year. This
category meets the seasonal/occasional needs of the consumer.

4. Convenience category: A convenience category completes the retailer's assortment with

products that are not usually found on a routine shopping list. This category aims to guarantee a
one-stop-shopping and plays an important role in margin enhancement. This category only adds
to the bill value of the customer as customer pick up this category unplanned. Such category
have low purchase frequency and low penetration.
 Retail Pricing

Retail pricing refers to the process of determining the selling price of goods or services to end
consumers in a retail environment. The goal of retail pricing is to set prices that are attractive to
customers while also ensuring profitability for the retailer.

Importance of Pricing

 Pricing decision is important because customers have alternatives to choose from and are
better informed
 Customers are in a position to seek good value
perceived benefits
Value=
price

 So that retailers can increase value and stimulate sales by increasing benefits or reducing
price

Considerations in setting retail prices

 Price sensitivity
Understanding the price sensitivity of your target market is crucial for setting optimal prices.
Therefore, it is important to analyse how the customers perceived the value of the product
or service, the income level of the consumer, availability of substitutes, and loyalty towards
the brand.

 Competition
Competitor pricing heavily influences a retailer's pricing strategy. It is important for retailers
to understand how they should position their offerings in the market and the unique feature
or value propositions of their products so that the pricing can be justified even if it is higher
than their competitors.

 Cost
Cost considerations are essential for ensuring profitability. Retailers must consider the direct
costs associated with producing the product, the indirect costs (overhead expenses), and
must also determine the level of profit they aim to achieve while pricing their product or
service.

 Legal constraint
Retailers must comply with various legal regulations related to pricing. Retailers must
consider the pricing law, taxation, and discriminatory pricing practices during the pricing
process. Legal compliance is essential to avoid fines, lawsuits, and damage to reputation.
 Customer Relationship Management

Customer Relationship Management (CRM) is a business philosophy and set of strategies, programs,
and systems that focus on identifying and building loyalty with a retailer’s most valuable customers.
In other words, CRM as a set of strategy and technology used by businesses to manage interactions
with current and potential customers. The primary goal of CRM is to improve relationships with
customers, streamline processes, and increase profitability.

CRM Process Cycle

Customer Loyalty

Customer loyalty refers to the tendency of customers to continue purchasing products or services
from a particular brand or company over time. It's a measure of how committed and satisfied
customers are with a brand, which leads them to repeatedly choose that brand over competitors.

Q. Can offering price discounts achieve customer loyalty?

Ans: Offering price discounts can certainly attract customers and encourage them to make a
purchase, but whether it leads to customer loyalty is a more complex question. While discounts may
initially entice customers to buy from you, they may not necessarily foster long-term loyalty on their
own. Retail strategies like these can be copied by competitors and also encourage customers to be
always looking for the best deal rather than developing a relationship with a retailer.

RFM Analysis

RFM analysis is a powerful marketing technique used by businesses to analyze and segment their
customers based on their past behavior. The acronym "RFM" stands for Recency, Frequency, and
Monetary.

 Recency – This refers to how recently a customer has made a purchase. Customers who have
purchased more recently are often considered more valuable because they are likely still
engaged with the brand. (When did the customer make their last purchase?)
 Frequency – Frequency measures how often a customer makes a purchase. Customers who
buy frequently are generally more loyal and valuable to the business. (How often does the
customer make a purchase?)
 Monetary – This is the amount of money a customer has spent over a given period of time.
Customers who spend more money are obviously valuable to the business. (How much
money does the customer spend?)

RFM Analysis helps companies decide which customers to give select offers and promotional items. It
is a way for companies to find ways to increase customer spending. Companies can use it to target
lost customers and give them incentives to purchase items. RFM Analysis can also help companies
keep track of their customers and build a relationship that can increase sales and productivity.
Example of RFM Analysis –

Suppose you own an online retail business selling electronics, and you want to analyze your
customer base using RFM analysis.

Recency

You calculate the number of days since each customer’s last purchase.

 Customer A made a purchase 10 days ago

 Customer B made a purchase 20 days ago
 Customer C made a purchase 30 days ago

Frequency

You calculate the total number of purchases made by each customer within a specific period, such as
the last year.

 Customer A made 5 purchases in the last year

 Customer B made 2 purchases in the last year
 Customer C made 1 purchase in the last year

Monetary

You calculate the total amount of money spent by each customer within the same period.

 Customer A spent ₹1,000 in the last year

 Customer B spent ₹500 in the last year
 Customer C spent ₹200 in the last year

After calculating these metrics, you assign scores or rankings to each metric based on your business's
criteria. For example, you could assign scores from 1 to 5, with 5 indicating the highest value.

Then, you segment your customers into categories based on their RFM scores. For instance:

 High-Value Customers: Customers who have high scores in all three metrics (e.g., R=5, F=5,
M=5).
 Medium-Value Customers: Customers who have moderate scores in one or more metrics.
 Low-Value Customers: Customers who have low scores in all three metrics (e.g., R=1, F=1,
M=1).

By segmenting customers in this way, you can tailor your marketing strategies to each segment. For
example, you might offer special promotions to high-value customers to encourage repeat
purchases, while targeting low-value customers with incentives to increase their engagement and
spending.

Advantages of RFM Analysis

 Companies have data that can be used for target marketing

 Marketing budgets will be focused on customer who are more recent, more frequent, and
spend more
 Specific targeting can increase profit and reduce costs; companies gain by not spending on
customers who will not add value
 Companies can offer incentives to middle scoring customers to increase their purchase
  Analysis is quick and easy to interpret

Disadvantages of RFM Analysis

 It only looks at three variables and there may be others that are more important
 Customers with low RFM scores may be ignored, even though they may have legitimate
reasons for spending more with other vendors
 Opportunities may be missed to solidify business relationships leading to loss of future sales
and referrals
 A customer with a low recency value and high spending could be ranked lower than a
customer who made a recent purchase and spends 10 times less

Customer Pyramid

The customer pyramid is a conceptual framework used in marketing and customer relationship
management to categorize customers based on their value to the business. It typically consists of
different tiers or levels, each representing a segment of customers with varying levels of importance
and profitability. The pyramid is often visualized with the most valuable customers at the top and the
least valuable at the bottom.

Platinum

Gold

Iron

Lead
1. Platinum – These are the top-tier customers who contribute the most to the company's revenue
and profitability. They are typically a small percentage of the total customer base but are
extremely valuable due to their high spending, loyalty, and potential for repeat business.
2. Gold – Gold customers are the next level down from platinum customers but still hold significant
value to the company. They may not spend as much as platinum customers, but they are loyal,
frequent purchasers who contribute consistently to the company's revenue stream.
3. Iron – Iron customers represent the middle tier of the customer pyramid. They are generally
average or moderate spenders who make regular purchases from the company but may not
exhibit the same level of loyalty as platinum or gold customers.
4. Lead – Lead customers are at the bottom of the pyramid and typically represent the largest
segment of the customer base. They may only make occasional purchases or transactions with
the company and tend to be less engaged and loyal compared to customers in higher tiers.
Retail Promotion Programme

Retail Promotion Programme refers to a strategic plan devised by retailers to boost sales, attract
customers, and enhance brand visibility. In order to achieve these goals, retailers adopt various
methods like informing, persuading, and reminding target customer about their existence and their
products or services.

 Information
This is the primary function of the retail promotion programme. Retailers provide
information to the customers about themselves and their offerings. For example, the most
common tool for disseminating information is the advertisements placed by supermarkets.
 Persuading
This is an important function of the retail promotion program. It involves asking people to
visit the store and purchase its merchandise or services. For example, a supermarket might
offer discount coupons to customers through newspapers and motivate them to buy.
 Reminding
It involves reminding its customers frequently about its products and its benefits, so that
customers loyalty towards the store increases. Though a retailer may be liked by customers,
it could be very difficult for the former to retain its customer due to its competitors appeals.
Hence, an increasing number of retailers, as a part of their reminding task, are developing
promotional strategies like loyalty programme or frequent shoppers programme for their
customers.

Methods of communication with customer

Methods of communication with customers can be categorized based on whether they are paid or
unpaid, and whether they are impersonal or personal.

1. Paid Impersonal Communication

This involves communication methods where the company pays to deliver messages to a large
audience without targeting specific individuals. The paid impersonal communication is not
personalized. Examples include advertising, sales promotion, store atmosphere, website, etc.

2. Paid Personal Communication

This type of communication involves paying to directly communicate with individual customers in
a personalized manner. The communication is personalized to some extent and aims to engage
with specific customers based on their preferences or past interactions with the company.
Example include paid promotion on social media platforms, sponsored emails, etc.

3. Unpaid Impersonal Communication

This category encompasses communication methods that do not involve direct payment and
target a broad audience without personalization. While the communication is not personalized, it
still reaches a wide audience and may contribute to brand awareness and engagement. Examples
include organic social media posts, content marketing, public relations efforts, etc.

4. Unpaid Personal Communication

This type of communication involves interacting with individual customers without direct
payment, focusing on personalized engagement. The communication is tailored to the specific
needs and concerns of individual customers, aiming to build relationships and enhance customer
satisfaction. Examples include customer service interactions via phone, word of mouth, etc.
ATL and BTL Advertising

Above the Line (ATL) and Below the Line (BTL) advertising are regular buzzwords in an ad arena. ATL
and BTL are essentially advertising techniques targeted towards specific audiences and for specific
purposes.

Above the Line Media Below the Line Media

They are tailored to reach a wise audience.
They establish brand identity or reinforce
emotional concepts surrounding a product or
brand.
They may or may not drive consumer response.
These cater to the mass market.
They are targeted to individual consumers,
based on their expressed needs and
preferences.
They issue a ‘call-to-action’, inspiring specific
customer activity or tailored messages about a
product or brand.
They drive individual responses.
These establish one-to-one relationships
between consumers and marketers.

Retail Communication Mix

Communication is an integral part of the retailer’s marketing strategy. Primarily, communication is

used to inform the customers about the retailer, the merchandise and the services. It also serves as a
tool for building the store image.

Retail communication mix refers to the various elements and channels that retailers use to
communicate with their target audience and promote their products or services. These elements are
strategically combined to create an effective communication strategy that helps retailers reach their
marketing objectives.

The retail communication mix typically includes the following components:

1. Advertising
2. Sales Promotion
3. Public Relations
4. Personal Selling

Advertising

Advertising is the form of communication intended to promote the sales of the product or services to
influence the public opinion, to get political support or to advance a particular cause.

Features of Advertising:

 It is mass communication process

 It is informative action
 It is persuasive act
 It is competitive act
 It is not the part of product
 It is paid for
 It is non-personal presentation
Retailers may use advertising to achieve any of the following objectives:

 To create awareness about a product or store

 To communicate information in order to create a specific image in the customer’s mind
 To create a desire to want a product
 To communicate the store’s policy on various issues
 To help identify the store with nationally advertised brands
 To help in repositioning the store in the mind of the consumer
 To increase sales of specific categories or to generate short-term cash flow

Steps in designing Advertising campaign

1. Identify the target audience

2. Set the advertising Objectives
3. Determine the advertising budget
4. Design the message
5. Evaluate and select the media
6. Create an advertisement
7. Measure the impact

Advantages of Advertising

 Advantages to Manufacturer
o It increases sales volume
o It increases the net profit
o It controls product price
o It helps in opening new market
o It maintains existing market
 Advantages to Salesman
o Reduces the burden of the salesman job
o Less effort
 Advantages to wholesalers and retailers
o Create easy sales
o Attracts more customers
o Increase turnover
 Advantages to customers
o Easy purchasing
o Saves time
o Choose best quality product
o Educates the customers

Disadvantages of Advertising

 Less persuasive
 High level of wastage
 Not targeted well
 Difficult to evaluate
 Little interactive
 Costly
Classification of Advertising

 According to geographical spread

o National advertising
o Local advertising
o Global advertising
 According to target group
o Consumer advertising
o Industrial advertising
o Trade advertising
o Professional advertising

Types of Advertisement

1. Consumer oriented or Persuasive Advertisement

2. Informative Advertisement
3. Institutional or Corporate Advertising
4. Financial Advertising
5. Classified Advertising

Sales Promotion

According to Philip Kotler, “Sales Promotion consist of diverse collection of incentive tools, mostly
short term designed to stimulate quicker or greater purchase of particular product or services by
consumers or the trade.”

In other words, sales promotion is mostly short-term in nature which is done with channel partners
as well as the customers, and its only objective is to promote sales quickly.

Sales Promotion encompasses all promotional activities and materials other than personal selling,
advertising and publicity.

Types of Sales Promotion

1. Coupons – Coupons are vouchers or codes that offer discounts or special deals on products or
services.
2. Demonstrations – Demonstrations involve showcasing a product's features or benefits to
potential customers.
3. Incentives – Incentives are rewards offered to customers to encourage them to make a purchase.
4. Free samples – Free samples are small portions of a product given to customers to try before
they buy.
5. Money refunds – Money refunds, also known as rebates, involve offering customers a refund or
partial refund after they purchase a product.
6. Premium items – Premium items are free gifts or bonuses given to customers who make a
purchase.

Advantages of Sales Promotion

 It often has eye catching appeal

  Themes and tools can be distinctive
 The consumer may receive something of value, such as coupons or free merchandise
 It helps to draw customer traffic and maintain loyalty to the retailer
 Impulse purchases are increased
 Customers can have fun, particularly with contests and demonstrations

Personal Selling

In personal selling there is a direct contact between the buyer of the product and the seller of the
product. Feedback is received very quickly and the seller can change the message according to the
needs of the consumer. This is basically used in Business-to-Business models.

Public Relations

Public relation is a subset of marketing that focuses on building relationships with the public in order
to create a positive public image for a company or organization. Unlike advertising, which tries to
create favorable impressions through paid messages, public relations do not pay for attention and
publicity. Instead, PR strives to earn a favorable image by drawing attention to newsworthy and
attention-worthy activities of the organization and its customers.