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11.Price strategies
Competition-based pricing
Setting the price based upon prices of the similar competitor products.
Competitive pricing is based on three types of competitive product:
Products have lasting distinctiveness from competitor's product. Here we can assume
The product has low price elasticity.
The product has low cross elasticity.
The demand of the product will rise.
Products have perishable distinctiveness from competitor's product, assuming the
product features are medium distinctiveness.
Products have little distinctiveness from competitor's product. assuming that:
The product has high price elasticity.
The product has some cross elasticity.
No expectation that demand of the product will rise.
Cost-plus pricing
Cost-plus pricing is the simplest pricing method. The firm calculates the cost of producing the
product and adds on a percentage (profit) to that price to give the selling price. This method
although simple has two flaws; it takes no account of demand and there is no way of determining
if potential customers will purchase the product at the calculated price.
This appears in 2 forms, Full cost pricing which takes into consideration both variable and fixed
costs and adds a % markup. The other is Direct cost pricing which is variable costs plus a %
markup, the latter is only used in periods of high competition as this method usually leads to a
loss in the long run.
Creaming or skimming
Selling a product at a high price, sacrificing high sales to gain a high profit, therefore ‘skimming’
the market. Usually employed to reimburse the cost of investment of the original research into the
product: commonly used in electronic markets when a new range, such as DVD players, are
firstly dispatched into the market at a high price. This strategy is often used to target "early
adopters" of a product or service. These early adopters are relatively less price-sensitive becauseeither their need for the product is more than others or they understand the value of the product
better than others. In market skimming goods are sold at higher prices so that fewer sales are
needed to break even.
This strategy is employed only for a limited duration to recover most of investment made to build
the product. To gain further market share, a seller must use other pricing tactics such as
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Predatory pricing
Aggressive pricing intended to drive out competitors from a market. It is illegal in some places.
Contribution margin-based pricing
Contribution margin-based pricing maximizes the profit derived from an individual product, basedon the difference between the product's price and variable costs (the product's contribution
margin per unit), and on one’s assumptions regarding the relationship between the product’s
price and the number of units that can be sold at that price. The product's contribution to total firm
profit (i.e., to operating income) is maximized when a price is chosen that maximizes the
following: (contribution margin per unit) X (number of units sold)..
Psychological pricing
Pricing designed to have a positive psychological impact. For example, selling a product at $3.95
or $3.99, rather than $4.00.
Dynamic pricing
A flexible pricing mechanism made possible by advances in information technology, and
employed mostly by Internet based companies. By responding to market fluctuations or large
amounts of data gathered from customers - ranging from where they live to what they buy to how
much they have spent on past purchases - dynamic pricing allows online companies to adjust the
prices of identical goods to correspond to a customer’s willingness to pay. The airline industry is
often cited as a dynamic pricing success story. In fact, it employs the technique so artfully that
most of the passengers on any given airplane have paid different ticket prices for the same flight.
Price leadership
An observation made of oligopic business behavior in which one company, usually the dominant
competitor among several, leads the way in determining prices, the others soon following.
Target pricing
Pricing method whereby the selling price of a product is calculated to produce a particular rate of
return on investment for a specific volume of production. The target pricing method is used most
often by public utilities, like electric and gas companies, and companies whose capital investment
is high, like automobile manufacturers.
Target pricing is not useful for companies whose capital investment is low because, according to
this formula, the selling price will be understated. Also the target pricing method is not keyed to
the demand for the product, and if the entire volume is not sold, a company might sustain an
overall budgetary loss on the product.
Absorption pricing
Method of pricing in which all costs are recovered. The price of the product includes the variable
cost of each item plus a proportionate amount of the fixed costs. A form of cost plus pricing
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High-low pricing
Method of pricing for an organization where the goods or services offered by the organization are
regularly priced higher than competitors, but through promotions, advertisements, and or
coupons, lower prices are offered on key items. The lower promotional prices are targeted to
bring customers to the organization where the customer is offered the promotional product as wellas the regular higher priced products.[3]
Premium Decoy pricing
Method of pricing where an organization artificially sets one product price high, in order to boost
sales of a lower priced product.
Marginal-cost pricing
In business, the practice of setting the price of a product to equal the extra cost of producing an
extra unit of output. By this policy, a producer charges, for each product unit sold, only the
addition to total cost resulting from materials and direct labor. Businesses often set prices close tomarginal cost during periods of poor sales. If, for example, an item has a marginal cost of $1.00
and a normal selling price is $2.00, the firm selling the item might wish to lower the price to $1.10
if demand has waned. The business would choose this approach because the incremental profit
of 10 cents from the transaction is better than no sale at all.
Value Based pricing
Pricing a product based on the perceived value and not on any other factor. Pricing based on the
demand for a specific product would have a likely change in the market place.
Pay what you want pricing
Pay what you want is a pricing system where buyers pay any desired amount for a given
commodity, sometimes including zero. In some cases, a minimum (floor) price may be set, and/or
a suggested price may be indicated as guidance for the buyer. The buyer can also select an
amount higher than the standard price for the commodity.
Giving buyers the freedom to pay what you want may seem to not make much sense for a seller,
but in some situations it can be very successful. While most uses of pay what you want have
been at the margins of the economy, or for special promotions, there are emerging efforts to
expand its utility to broader and more regular use.
Freemium pricing
Freemium is a business model that works by offering a product or service free of charge (typically
digital offerings such as software, content, games, web services or other) while charging a
premium for advanced features, functionality, or related products and services. The word
"freemium" is a portmanteau combining the two aspects of the business model: "free" and
"premium". It has become a highly popular model, with notable success.
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12.Focus groupA focus group is a form of qualitative research in which a group of people are asked about their perceptions, opinions, beliefs and attitudes towards a product, service, concept, advertisement,
idea, or packaging.[1] Questions are asked in an interactive group setting where participants arefree to talk with other group members.
In marketing
In the world of marketing, focus groups are seen as an important tool for acquiring feedback
regarding new products, as well as various topics. In particular, focus groups allow companies
wishing to develop, package, name, or test market a new product, to discuss, view, and/or test
the new product before it is made available to the public. This can provide invaluable information
about the potential market acceptance of the product.
Focus Group is an interview, conducted by a trained moderator among a small group of
respondents. The interview is conducted in an unstructured and natural way where respondents
are free to give views from any aspect.
Benefits/strengths of focus group discussions
Group discussion produces data and insights that would be less accessible without
interaction found in a group setting—listening to others’ verbalized experiences stimulates
memories, ideas, and experiences in participants. This is also known as the group effect
where group members engage in “a kind of ‘chaining’ or ‘cascading’ effect; talk links to, or
tumbles out of, the topics and expressions preceding it” (Lindlof & Taylor, 2002, p. 182) [6]
Group members discover a common language to describe similar experiences. This
enables the capture of a form of “native language” or “vernacular speech” to understand the
situation
Focus groups also provide an opportunity for disclosure among similar others in a settingwhere participants are validated. For example, in the context of workplace bullying, targeted
employees often find themselves in situations where they experience lack of voice and
feelings of isolation. Use of focus groups to study workplace bullying therefore serve as both
an efficacious and ethical venue for collecting data (see, e.g., Tracy, Lutgen-Sandvik, &
Alberts, 2006) [7]
15.Advertising
is a form of communication used to persuade an audience (viewers, readers or listeners) to take
some action with respect to products, ideas, or services. Most commonly, the desired result is to
drive consumer behavior with respect to a commercial offering, although political and ideological
advertising is also common. Advertising messages are usually paid for by sponsors and viewed
via various traditional media; including mass media such as newspaper , magazines, television
commercial, radio advertisement, outdoor advertising or direct mail; or new media such
as websites and text messages.
Commercial advertisers often seek to generate increased consumption of
their products or services through "Branding," which involves the repetition of an image or product
name in an effort to associate certain qualities with the brand in the minds of consumers. Non-
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commercialadvertisers who spend money to advertise items other than a consumer product or
service include political parties, interest groups, religious organizations and governmental
agencies. Nonprofit organizations may rely on free modes of persuasion, such as a public service
announcement (PSA).
Modern advertising developed with the rise of mass production in the late 19th and early 20th
centuries.
Public service advertising
The advertising techniques used to promote commercial goods and services can be used to
inform, educate and motivate the public about non-commercial issues, such as HIV/AIDS, political
ideology, energy conservation and deforestation.
Advertising, in its non-commercial guise, is a powerful educational tool capable of reaching and
motivating large audiences. "Advertising justifies its existence when used in the public interest—it
is much too powerful a tool to use solely for commercial purposes." Attributed to Howard
Gossage by David Ogilvy.
Public service advertising, non-commercial advertising, public interest advertising, cause
marketing, and social marketing are different terms for (or aspects of) the use of sophisticated
advertising and marketing communications techniques (generally associated with commercial
enterprise) on behalf of non-commercial, public interest issues and initiatives.
In the United States, the granting of television and radio licenses by the FCC is contingent upon
the station broadcasting a certain amount of public service advertising. To meet these
requirements, many broadcast stations in America air the bulk of their required public service
announcements during the late night or early morning when the smallest percentage of viewers
are watching, leaving more day and prime time commercial slots available for high-paying
advertisers.
Public service advertising reached its height during World Wars I and II under the direction of
more than one government. During WWII President Roosevelt commissioned the creation of The
War Advertising Council (now known as the Ad Council) which is the nation's largest developer of
PSA campaigns on behalf of government agencies and non-profit organizations, including the
longest-running PSA campaign, Smokey Bear.
Types of advertising
Virtually any medium can be used for advertising. Commercial advertising media can include wall
paintings, billboards, street furniturecomponents, printed flyers and rack cards, radio, cinema and
television adverts, web banners, mobile telephone screens, shopping carts,
webpopups, skywriting, bus stop benches, human billboards, magazines, newspapers, towncriers, sides of buses, banners attached to or sides of airplanes ("logojets"), in-flight
advertisements on seatback tray tables or overhead storage bins, taxicab doors, roof mounts
and passenger screens, musical stage shows, subway platforms and trains, elastic bands on
disposable diapers,doors of bathroom stalls,stickers on apples in supermarkets, shopping cart
handles (grabertising), the opening section of streaming audio and video, posters, and the backs
of event tickets and supermarket receipts. Any place an "identified" sponsor pays to deliver their
message through a medium is advertising.
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Television advertising / Music in advertising
The TV commercial is generally considered the most effective mass-market advertising
format, as is reflected by the high prices TV networks charge for
commercial airtime during popular TV events. The annual Super Bowl football game in
the United States is known as the most prominent advertising event on television. The
average cost of a single thirty-second TV spot during this game has reached US$3
million (as of 2009). The majority of television commercials feature a song or jingle that
listeners soon relate to the product. Virtual advertisements may be inserted into regular
television programming through computer graphics. It is typically inserted into otherwise
blank backdrops[13] or used to replace local billboards that are not relevant to the remote
broadcast audience.[14] More controversially, virtual billboards may be inserted into the
background[15] where none exist in real-life. This technique is especially used in televised
sporting events.[16][17] Virtual product placement is also possible.[18][19]
Infomercials
An infomercial is a long-format television commercial, typically five minutes or longer. The
word "infomercial" combining the words "information" & "commercial". The main objective
in an infomercial is to create an impulse purchase, so that the consumer sees the
presentation and then immediately buys the product through the advertised toll-free
telephone number or website. Infomercials describe, display, and often demonstrate
products and their features, and commonly have testimonials from consumers
and industry professionals.
Radio advertising
Radio advertising is a form of advertising via the medium of radio. Radio
advertisements are broadcast as radio waves to the air from a transmitter to an antenna
and a thus to a receiving device. Airtime is purchased from a station or network in
exchange for airing the commercials. While radio has the limitation of being restricted to
sound, proponents of radio advertising often cite this as an advantage. Radio is an
expanding medium that can be found not only on air, but also online. According to
Arbitron, radio has approximately 241.6 million weekly listeners, or more than 93 percent
of the U.S. population.
Online advertising
Online advertising is a form of promotion that uses the Internet and World Wide Web for
the expressed purpose of delivering marketingmessages to attract customers. Online ads
are delivered by an ad server . Examples of online advertising include contextual ads that
appear on search engine results pages, banner ads, in text ads, Rich Media Ads, Social
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network advertising, online classified advertising,advertising networks and e-mail
marketing, including e-mail spam.
Product placements
Covert advertising, also known as guerrilla advertising, is when a product or brand is
embedded in entertainment and media. For example, in a film, the main character can
use an item or other of a definite brand, as in the movie Minority Report , where Tom
Cruise's character John Anderton owns a phone with the Nokia logo clearly written in the
top corner, or his watch engraved with the Bulgari logo. Another example of advertising in
film is in I, Robot , where main character played by Will Smith mentions
his Converse shoes several times, calling them "classics," because the film is set far in
the future. I, Robot and Spaceballs also showcase futuristic cars with
the Audi andMercedes-Benz logos clearly displayed on the front of the
vehicles. Cadillac chose to advertise in the movie The Matrix Reloaded , which as a result
contained many scenes in which Cadillac cars were used. Similarly, product placement
for Omega Watches, Ford, VAIO, BMWand Aston Martin cars are featured in
recent James Bond films, most notably Casino Royale. In "Fantastic Four: Rise of the
Silver Surfer ", the main transport vehicle shows a large Dodge logo on the front. Blade
Runner includes some of the most obvious product placement; the whole film stops to
show a Coca-Cola billboard.
Press advertising
Press advertising describes advertising in a printed medium such as
a newspaper, magazine, or trade journal. This encompasses everything from media with
a very broad readership base, such as a major national newspaper or magazine, to more
narrowly targeted media such as local newspapers and trade journals on very specialized
topics. A form of press advertising is classified advertising, which allows private
individuals or companies to purchase a small, narrowly targeted ad for a low fee
advertising a product or service. Another form of press advertising is the Display Ad,
which is a larger ad (can include art) that typically run in an article section of a
newspaper.
Billboard advertising
Billboards are large structures located in public places which display advertisements to
passing pedestrians and motorists. Most often, they are located on main roads with a
large amount of passing motor and pedestrian traffic; however, they can be placed in any
location with large amounts of viewers, such as on mass transit vehicles and in stations,
in shopping malls or office buildings, and in stadiums.
Mobile billboard advertising
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Mobile billboards are generally vehicle mounted billboards or digital screens. These can
be on dedicated vehicles built solely for carrying advertisements along routes preselected
by clients, they can also be specially equipped cargo trucks or, in some cases, large
banners strewn from planes. The billboards are often lighted; some being backlit, and
others employing spotlights. Some billboard displays are static, while others change; for
example, continuously or periodically rotating among a set of advertisements. Mobile
displays are used for various situations in metropolitan areas throughout the world,
including: Target advertising, One-day, and long-term campaigns, Conventions, Sporting
events, Store openings and similar promotional events, and Big advertisements from
smaller companies.
In-store advertising
In-store advertising is any advertisement placed in a retail store. It includes placement of
a product in visible locations in a store, such as at eye level, at the ends of aisles and
near checkout counters (aka POP—Point Of Purchase display), eye-catching displays
promoting a specific product, and advertisements in such places as shopping carts and
in-store video displays.
Coffee cup advertising
Coffee cup advertising is any advertisement placed upon a coffee cup that is distributed
out of an office, café, or drive-through coffee shop. This form of advertising was first
popularized in Australia, and has begun growing in popularity in the United States, India,
and parts of the Middle East.[citation needed ]
Street advertising
This type of advertising first came to prominence in the UK by Street Advertising Services
to create outdoor advertising on street furniture and pavements. Working with products
such as Reverse Graffiti, air dancer's and 3D pavement advertising, the media became
an affordable and effective tool for getting brand messages out into public spaces.
Celebrity branding
This type of advertising focuses upon using celebrity power, fame, money, popularity to
gain recognition for their products and promote specific stores or products. Advertisers
often advertise their products, for example, when celebrities share their favorite products
or wear clothes by specific brands or designers. Celebrities are often involved in
advertising campaigns such as television or print adverts to advertise specific or general
products. The use of celebrities to endorse a brand can have its downsides, however.
One mistake by a celebrity can be detrimental to the public relations of a brand. For
example, following his performance of eight gold medals at the 2008 Olympic Games in
Beijing, China, swimmer Michael Phelps' contract with Kellogg's was terminated, as
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Consumer behaviour is the study of when, why, how, and where people do or do not buy
a product. It blends elements from psychology,sociology, social anthropology and economics. It
attempts to understand the buyer decision making process, both individually and in groups. It
studies characteristics of individual consumers such as demographics and behavioural variables
in an attempt to understand people's wants. It also tries to assess influences on
the consumer from groups such as family, friends, reference groups, and society in general.
Customer behaviour study is based on consumer buying behaviour, with the customer playing the
three distinct roles of user, payer and buyer. Relationship marketing is an influential asset for
customer behaviour analysis as it has a keen interest in the re-discovery of the true meaning of
marketing through the re-affirmation of the importance of the customer or buyer. A greater
importance is also placed on consumer retention, customer relationship management,
personalisation, customisation and one-to-one marketing. Social functions can be categorized
into social choice and welfare functions.
19.Direct marketing
Direct marketing is a channel-agnostic form of advertising that allows businesses and nonprofitsto communicate straight to the customer, with advertising techniques such as mobile messaging,
email, interactive consumer websites, online display ads, fliers, catalog distribution, promotional
letters, and outdoor advertising.
Direct marketing messages emphasize a focus on the customer, data, and accountability.
Characteristics that distinguish direct marketing are:
1. Marketing messages are addressed directly to customers. Direct marketing relies
on being able to address the members of a target market. Addressability comes in a
variety of forms including email addresses, mobile phone numbers, Web browser
cookies, fax numbers and United States and international postal addresses.2. Direct marketing seeks to drive a specific "call to action." For example, an
advertisement may ask the prospect to call a free phonenumber or click on a link to a
website.
3. Direct marketing emphasizes trackable, measurable responses from customers
— regardless of medium.
Direct marketing is practiced by businesses of all sizes — from the smallest start-up to the
leaders on the Fortune 500. A well-executed direct advertising campaign can prove a positive
return on investment by showing how many potential customers responded to a clear call-to-
action. General advertising eschews calls-for-action in favor of messages that try to build
prospects’ emotional awareness or engagement with a brand. Even well-designed generaladvertisements rarely can prove their impact on the organization’s bottom line.
Direct Marketing Channels
Any medium that can be used to deliver a communication to a customer can be employed in
direct marketing, including:
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[edit]Email Marketing
Sending marketing messages through email is one of the most widely used direct-marketing
methods. According to one study,[12] email is used by 94% of marketers, while 86% use direct
mail. One reason for email marketing's popularity is that it is relatively inexpensive to design, test,
and send an email message. It also allows marketers to deliver messages around the clock, and
to accurately measure responses.
[edit]Online Tools
With the expansion of digital technology and tools, direct marketing is increasingly taking place
through online channels. Most online advertising is delivered to a focused group of customers
and has a trackable response.
Display Ads are interactive ads that appear on the Web next to content on Web pages
or Web services. Formats include static banners, pop ups, videos, and floating units.
Customers can click on the ad to respond directly to the message or to find more detailed
information. According to research by eMarketer, expenditures on online display ads rose
24.5% between 2010 and 2011. [13]
Search: 49% of US spending on Internet ads goes to search, in which advertisers pay for
prominent placement among listings in search engines whenever a potential customer enters
a relevant search term, allowing ads to be delivered to customers based upon their already-
indicated search criteria. [14] This paid placement industry generates more than $10 billion
dollars for search companies. Marketers also use search engine optimization to drive traffic to
their sites.
Social Media Sites, such as Facebook and Twitter, also provide opportunities for direct
marketers to communicate directly with customers by creating content to which customerscan respond.
[edit]Mobile
Through mobile marketing, marketers engage with prospective customers and donors in an
interactive manner through a mobile device or network, such as a cellphone, smartphone, or
tablet. Types of mobile marketing messages include: SMS: (short message service) — marketing
communications are sent in the form of text messages, also known as texting. MMS:(multi-media
message service) — These messages use elements such as images, video, and audio; Mobile
Applications: Smartphone-based mobile apps contain several types of messages. Push
Notifications are direct messages sent to a user either automatically or as part of a campaign.
They include transactional, marketing, geo-based, and more. Rich Push Notifications are full
HTML Push Notifications. Mobile apps also contain Interactive ads that appear inside the mobile
application or app; Location-Based Marketing: marketing messages delivered directly to a
mobile device based on the user's location; QR Codes (quick-response barcodes): This is a type
of 2D barcode with an encoded link that can be accessed from a smartphone. This technology is
increasingly being used for everything from special offers to product information. Mobile Banner
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Ads: Like standard banner ads for desktop Web pages but smaller to fit on mobile screens and
run on the mobile content network
[edit]Direct Mail
Main article: Advertising mail
See also: Direct mail fundraising The term "direct mail" is used to refer to communications sent to potential customers or donors
via the postal service and other delivery services. Direct mail is sent to customers based on
criteria such as age, income, location, profession, buying pattern, etc.
Direct mail includes advertising circulars, catalogs, free-trial CDs, pre-approved credit card
applications, and other unsolicited merchandising invitations delivered by mail to homes and
businesses. Bulk mailings are a particularly popular method of promotion for businesses
operating in the financial services, home computer, and travel and tourism industries.
In many developed countries, direct mail represents such a significant amount of the total volume
of mail that special rate classes have been established. In the United States and United Kingdom,
for example, there are bulk mail rates that enable marketers to send mail at rates that aresubstantially lower than regular first-class rates. In order to qualify for these rates, marketers must
format and sort the mail in particular ways – which reduces the handling (and therefore costs)
required by the postal service. In the US, marketers send over 90 billion pieces of direct mail per
year [15]
Advertisers often refine direct mail practices into targeted mailing, in which mail is sent out
following database analysis to select recipients considered most likely to respond positively. For
example, a person who has demonstrated an interest in golf may receive direct mail for golf-
related products or perhaps for goods and services that are appropriate for golfers. This use of
database analysis is a type of database marketing. The United States Postal Service calls this
form of mail "advertising mail" (admail for short).
[edit]Telemarketing
Another common form of direct marketing is telemarketing, in which marketers contact customers
by phone. The primary benefit to businesses is increased lead generation, which helps
businesses increase sales volume and customer base. The most successful telemarketing
service providers focus on generating more "qualified" leads that have a higher probability of
getting converted into actual sales.
The National Do Not Call Registry was created in 2003 to offer consumers a choice whether to
receive telemarketing calls at home. The FTC created the National Do Not Call Registry after a
comprehensive review of the Telemarketing Sales Rule (TSR).[16] The do-not-call provisions of the
TSR cover any plan, program, or campaign to sell goods or services through interstate phone
calls. The provisions do not cover calls from political organizations, charities, telephone
surveyors, or companies with which a customer has an existing business relationship. [17]
Canada has its own National Do Not Call List (DNCL). In other countries it is voluntary, such as
the New Zealand Name Removal Service.
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form of direct marketing, since responses are in the form of calls to telephone numbers given on-
air. This allows marketers to reasonably conclude that the calls are due to a particular campaign,
and enables them to obtain customers' phone numbers as targets for telemarketing. One of the
most famous DRTV commercials was for Ginsu Knives by Ginsu Products, Inc. of RI. Several
aspects of ad, such as its use of adding items to the offer and the guarantee of satisfaction were
much copied, and came to be considered part of the formula for success with short-form direct-response TV ads (DRTV)
[edit]Direct Response Radio
In direct response radio, ads contain a call to action with a specific tracking mechanism. Often,
this tracking mechanism is a "call now" prompt with a toll-free phone number or a unique Web
URL. Results of the ad can be tracked in terms of calls, orders, customers, leads, sales, revenue,
and profits that result from the airing of those ads.
[edit]Insert Media
Another form of direct marketing, insert media are marketing materials that are inserted into other
communications, such as a catalog, newspaper, magazine, package, or bill. Coop or shared mail,where marketing offers from several companies are delivered via a single envelope, is also
considered insert media.
[edit]Out-of-Home
Out of home direct marketing refers to a wide array of media designed to reach the consumer
outside the home, including transit, bus shelters, bus benches, aerials, airports, in-flight, in-store,
movies, college campus/high schools, hotels, shopping malls, sport facilities, stadiums, taxis —
that contain a call-to-action for the customer to respond.
[edit]Direct Response Magazines and Newspapers
Magazine and newspaper ads often include a direct response call-to-action, such as a toll-freenumber, a coupon redeemable at a brick-and-mortar store, or a QR code that can be scanned by
a mobile device — these methods are all forms of direct marketing, because they elicit a direct
and measurable action from the customer.
[edit]Direct Selling
Direct selling is the sale of products by face-to-face contact with the customer, either by having
salespeople approach potential customers in person, or through indirect means such
asTupperware parties.
[edit]Grassroots/Community Marketing
The door-to-door distribution of flyers and leaflets within a local community is a business-to-consumer form of direct marketing used extensively by restaurants, fast food companies, and
many other business focusing on a local catchment. Similar to direct mail marketing, this method
is targeted purely by area and community, and costs a fraction of the amount of a mailshot, since
it is not necessary to purchase stamps, envelopes, or address lists with the names of home
occupants.
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17.Distribution (business)Product distribution (or place) is one of the four elements of the marketing mix. An organization
or set of organizations (go-between) involved in the process of making a product or service
available for use or consumption by a consumer or business user.
Managerial concerns
The channel decision is very important. In theory at least, there is a form of trade-off: the cost of
using intermediaries to achieve wider distribution is supposedly lower. Indeed, most consumer
goods manufacturers could never justify the cost of selling direct to their consumers, except by
mail order. Many suppliers seem to assume that once their product has been sold into the
channel, into the beginning of the distribution chain, their job is finished. Yet that distribution chain
is merely assuming a part of the supplier's responsibility; and, if they have any aspirations to be
market-oriented, their job should really be extended to managing all the processes involved in
that chain, until the product or service arrives with the end-user. This may involve a number of
decisions on the part of the supplier:
Channel membership
Channel motivation
Monitoring and managing channels
[edit]Type of marketing channel
1. Intensive distribution - Where the majority of resellers stock the 'product' with
convenience products, for example, and particularly the brand leaders in
consumer goods markets (price competition may be evident).
2. Selective distribution - This is the normal pattern (in both consumer and industrialmarkets) where 'suitable' resellers stock the product.In this case retailers can keep the
competitors products in their outlets e.g. furniture etc.
3. Exclusive distribution - Only lam-bard specially selected resellers or authorized
dealers (typically only one per geographical area) are allowed to sell the 'product'.
In this retailers are restricted to keep only one manufacturers products e.g. exclusive outlets of
cars,apparels and jewellery etc. Marketing plans
[edit]Channel motivation
It is difficult enough to motivate direct employees to provide the necessary sales and service
support. Motivating the owners and employees of the independent organizations in a distributionchain requires even greater effort. There are many devices for achieving such motivation.
Perhaps the most usual is `incentive': the supplier offers a better margin, to tempt the owners in
the channel to push the product rather than its competitors; or a compensation is offered to the
distributors' sales personnel, so that they are tempted to push the product. Julian Dent defines
this incentive as a Channel Value Proposition or business case, with which the supplier sells the
channel member on the commercial merits of doing business together. He describes this as
selling business models not products.
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[edit]Monitoring and managing channels
In much the same way that the organization's own sales and distribution activities need to be
monitored and managed, so will those of the distribution chain.
In practice, many organizations use a mix of different channels; in particular, they may
complement a direct sales-force, calling on the larger accounts, with agents, covering the smaller customers and prospects. These channels show marketing strategies of an organization.
Effective management of distribution channel requires making and implementing decision in
these areas.
14.Brand
Brand is the personality that identifies a product, service or company (name, term, sign, symbol,or design, or combination of them) and how it relates to key constituencies: customers, staff,
partners, investors etc.
Some people distinguish the psychological aspect, brand associations like thoughts, feelings,
perceptions, images, experiences, beliefs, attitudes, and so on that become linked to the brand,
of a brand from the experiential aspect.
The experiential aspect consists of the sum of all points of contact with the brand and is known as
the brand experience. The brand experience is a brand's action perceived by a person. The
psychological aspect, sometimes referred to as the brand image, is a symbolic construct created
within the minds of people, consisting of all the information and expectations associated with a
product, service or the company(ies) providing them.
People engaged in branding seek to develop or align the expectations behind the brand
experience, creating the impression that a brand associated with a product or service has certain
qualities or characteristics that make it special or unique. A brand is therefore one of the most
valuable elements in an advertising theme, as it demonstrates what the brand owner is able to
offer in the marketplace. The art of creating and maintaining a brand is called brand
management. Orientation of the whole organization towards its brand is called brand orientation.
The brand orientation is developed in responsiveness to market intelligence.
Careful brand management seeks to make the product or services relevant to the target
audience. Brands should be seen as more than the difference between the actual cost of a
product and its selling price - they represent the sum of all valuable qualities of a product to theconsumer.
A brand which is widely known in the marketplace acquires brand recognition. When brand
recognition builds up to a point where a brand enjoys a critical mass of positive sentiment in the
marketplace, it is said to have achieved brand franchise. Brand recognition is most successful
when people can state a brand without being explicitly exposed to the company's name, but
rather through visual signifiers like logos, slogan's, and colors.[6] For example, Disney has been
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