Table of content

I. Introduction
1. Product strategy
1.1. What is a product?
1.2. Levels of product
1.3. Product classifications
1.4. Product decisions
2. Price strategy
2.1 What is price?
2.2 Factor to consider when setting price
2.3 General price approach
3. Promotion (marketing communication) strategies
3.1 What is marketing communication?
3.2 Five elements of promotion mix (with diagram)
3.3 Placement (distribution) strategy
3.4 What are placement (distribution) strategies?
3.5 Types of middlemen
3.6 Roles of middlemen
Summery
 I. Introduction

Introduction every organization works with certain objectives and these are to be achieved. To
achieve the pre-decided objectives a number of activities are to be performed. It is not necessary
that one all organizations would perform one type of activities. The activities may include
production, marketing, human resource, finance, transportation, service, research, logistics,
purchasing, and storage, trading, assembling, distribution and others. These activities are
performed and these are related to each other so that the objectives can be fulfilled effectively.
Similar way the marketing activities are performed in some of the company those are interested
in marketing the products or services for use of customers. Marketing is one of the important
activities of an organization. It is through marketing the products or services of the company are
reaching to the customers. The company gets the money back when the products are sold out in
the market. So the business cycle keeps on going further. It is required to coordinate the
marketing activities without activities also. It is necessary to work in close coordination with
production. Production alone is not going to serve the purpose. Production without marketing
become useless for the company and marketing without production is not possible. Similarly,
marketing is related to other activities like finance, research and human resource activities. So
the main concerned here is with the marketing activities.
Marketing mix is the combination of the elements of marketing and what roles each element
plays in promoting products and services and delivering those products and services to the
customers. The elements of the marketing mix are also referred to as the 5 P's of marketing. In
the beginning For years together marketers accepted the 4 P's of marketing. The experts have
added the fifth P recently and hat is people. Now, there are five P”s of marketing mix. These Ps
are called elements of marketing mix. These are elaborated further in the next paragraph. The
original 4 P's of marketing mix are: product, Price, Promotion and Placement.in this chapter we
discuss about product strategy , Price strategy , Promotion (marketing communication ) strategy
and Placement (distribution) strategy.
 1. PRODUCT STRATEGY
1.1. WHAT IS A PRODUCT?

 Anything that can be offered to a market for attention, acquisition, use or consumption that
mightsatisfy a want or need. It includes physical objects, services, persons, places,
organizations and ideas.
 Something that can be offered to a market for attention, acquisition, use, or consumption that
might satisfy a want or a need.

Product: Product is the heart and core of the marketing mix. It is the strategic element of the
marketing mix. Without the product, it is rather challenging for the marketers to plan a place
approach, choose on advertising movement or fix the value in absence of the knowledge of the
product to be promoted. Packaging, service contract, service after sales, brand name, image of
company, value and many other factors comes under the arena of product along with the physical
unit. Products are tangible goods like television, a book or a car. It can also be intangible like
services offered by a consultancy firm.
According to Philip Kotleris an economist and a marketing guru, a product is more than a
tangible ‘thing’. A product meets the needs of a consumer and in addition to a tangible value this
product also has an abstract value. For this reason Philip Kotlerthat there are five product levels
that can be identified and developed. In order to shape this abstract value, Philip Kotlerfive
product levels in which a product is located or seen from the perception of the consumer. These 5
Product Levels indicate the value that consumers attach to a product. The customer will only be
satisfied when the specified value is identical or higher than the expected value.

1.2. LEVELS OF PRODUCT

Product planners need to think about the product on three levels. Each level adds more customer
value. The most basic level is the core product, which addresses the question: Whatis the buyer
really buying? As Figure 1.1 illustrates, the core product stands at the center of the total product.
It consists of the core, problem-solving benefits that consumers seek. A woman buying lipstick
buys more than lip colour. Charles Revson of Revlon saw this early: ‘In the factory, we make
cosmetics; in the store, we sell hope.’ Theodore Levitt has pointed out that buyers ‘do not buy
quarter-inch drills; they buy quarter-inch holes’. thus when designing products, marketers must
first define the core of benefits that the product will provide to consumers.
At the second level, product planners must turn the core benefit into an actual product. Actual
products may have as many as five characteristics: a quality level, product and service features,
styling, a brand name and packaging. For example, Sony’s cam camcorder is an actual product.
Its name, parts, styling, features, packaging and other attributes have all been combined carefully
to deliver the core benefit – a convenient, high-quality way to capture
important moments. Finally, the product planner must build an augmented product around the
core and actual products by offering additional consumer services and benefits. Sony must offer
more than a camcorder. It must provide consumers with a complete solution to their picture-
taking problems. Thus when consumers buy a Sony camcorder, Sony and its dealers might also
give buyers a warranty on parts and workmanship, instructions on how to use the camcorder,
quick repair services when needed and a free phone number to call if they have problems or
questions. To the consumer, all of these augmentations become an important part of the total
product.
Therefore, a product is more than a simple set of tangible features. Consumers tend to see
products as complex bundles of benefits that satisfy their needs. When developing products,
marketers must first identify the core consumer needs that the product will satisfy. They must
then design the actual product and finally find ways to augment it in order to create the bundle of
benefits that will best satisfy consumers. Today, most competition takes place at the product
augmentation level. Successful companies add benefits to their offers that will not only satisfy,
but also delight the customer. However, each augmentation costs the company money, and the
marketer has to ask whether customers will pay enough to cover the extra cost. Moreover,
augmented benefits soon become expected benefits. For example, hotel guests now expect cable
television, Internet access, trays of toiletries and other amenities in their rooms. This means that
competitors must search for still more features and benefits to differentiate
their offers.
1. Core Product

This is the basic product and the focus is on the purpose for which the product is intended. For
example, a warm coat will protect you from the cold and the rain. The more important benefits
the product provides, the more that customers need the product. A key element is the uniqueness
of the core product. This will benefit the product positioning within a market and effect the
possible competition.

2. Generic Product

This represents all the qualities of the product. For a warm coat this is about fit, material, rain
repellent ability, high-quality fasteners, etc.

3. Expected Product

This is about all aspects the consumer expects to get when they purchase a product. That coat
should be really warm and protect from the weather and the wind and be comfortable when
riding a bicycle.

4. Augmented Product

The Augmented Product refers to all additional factors which sets the product apart from that of
the competition. And this particularly involves brand identity and image. Is that warm coat in
style, its colour trendy and made by a well-known fashion brand? But also factors like service,
warranty and good value for money play a major role in this. The goal is to deliver something
that is beyond an expected product. It’s the translation of the desire that is converted into reality.

5. Potential Product

This is about augmentations and transformations that the product may undergo in the future. For
example, a warm coat that is made of a fabric that is as thin as paper and therefore light as a
feather that allows rain to automatically slide down

Added value of the Five Product Levels

Each level of the five product levels adds value for the customer. The more efforts production
companies make at all levels, the more likely they are to stand a chance to be distinctive. At
the Augmented Product level, the competition is observed in order to copy certain techniques,
tricks and appearance of each other’s products. This makes it increasingly difficult for a
consumer to define the distinctiveness of a product. To be able to tower over the competition,
production companies focus on factors which consumers attach extra value to such as extreme
packaging, surprising advertisements, customer-oriented service and affordable payment terms.
This is not just about satisfying the customers and exceeding their expectations but also about
surprising them.

1.3. PRODUCT CLASSIFICATIONS

Products can be classified according to their durability and tangibility. Non-durable products
are goods that are normally consumed quickly and used on one or a few usage occasions,such as
beer, soap and food products. Durable products are products used over an extendedperiod of
time and normally survive for many years. Examples are refrigerators, cars
andfurniture.Marketers have also divided products and services into two broad classes based on
thetypes of customer that use them – consumer products and industrial products.

Consumer products are those bought by final consumers for personal consumption. Marketers
usually classify these goods based on consumer shopping habits. Consumer products include
convenience products, shopping products, specialty products and unsought products. These
products differ in the way consumers buy them, so they differ in how they are marketed.
 Convenience products are consumer goods and services that the consumer usually buys
frequently, immediately and with a minimum of comparison and buying effort. Examples
are soap, sweets, newspapers and fast food. Convenience goods are usually low priced,
andmarketers place them in many locations to make them readily available when
customers need them.
 Shopping products are less frequently purchased and consumers spend considerable
time and effort gathering information and comparing alternative brands carefully on
suitability, quality, price and style. Examples of shopping products are furniture, clothing,
used cars and major household appliances. Shopping products marketers usually
distribute their products through fewer outlets but provide deeper sales support to give
customers information and advice to help them in their comparison efforts.
 Specialty products are consumer goods with unique characteristics or brand
identification for which a significant group of buyers is willing to make a special
purchase effort. Examples include specific brands and types of car, high-priced home
entertainment systems and photographic equipment, luxury goods, designer clothes and
the services of medical or legal specialists. A jukebox, for example, is a specialty good
because buyers are usually willing to travel great distances to buy one. Buyers normally
do not compare specialty goods. They invest only the time needed to reach dealers
carrying the wanted products.
 Unsought products are consumer goods that the consumer either does not know about or
knows about but does not normally think of buying. Most major new innovations are
unsought until the consumer becomes aware of them through advertising. Classic
examples of known but unsought goods are life insurance, home security systems, funeral
services and blood donations. By their very nature, unsought goods require a lot of
advertising, personalselling and other marketing efforts.
Industrial products are those bought for further processing or for use in conducting a business.
Thus the distinction between a consumer product and an industrial product is based on the
purpose for which the product is purchased. If a consumer buys a lawnmower for home use, the
lawnmower is a consumer product. If the same consumer buys the same lawnmower for use in a
landscaping business, the lawnmower is an industrial product. There are three groups of
industrial product: materials and parts, capital items and suppliesand services (see Figure 13.2).
 Materials and parts are industrial goods that become a part of the buyer’s product,
through further processing or as components. They include raw materials and
manufactured materials and parts. Raw materials consist of farm products (wheat, cotton,
livestock, fruits, and vegetables) and natural products (fish, timber, crude petroleum, iron
ore).Manufactured materials and parts include component materials (iron, yarn, cement,
wires) and component parts (small motors, tyres, castings). Component materials are
usuallyprocessed further – for example, pig iron is made into steel, and yarn is woven
into cloth. Component parts enter the finished product complete with no further change in
form, as when Electrolux puts small motors into its vacuum cleaners and Volvo adds
tyres to its automobiles. Most manufactured materials and parts are sold directly to
industrial users. Price and service are the most significant marketing factors, while
branding and advertising tend to be less important.
 Capital items are industrial products that help in the buyers’ production or operations.
They include installations and accessory equipment. Installations consist of buildings
(factories, offices) and fixed equipment (generators, drill presses, large computer
systems, lifts). Accessory equipment includes portable factory equipment and tools (hand
tools, lift trucks) and office equipment (fax machines, computers, desks). These products
do not become part of the finished product. They have a shorter life than installations and
simply aid in the production process.
 Supplies and services are industrial products that do not enter the finished product at all.
Supplies include operating supplies (lubricants, coal, computer paper, pencils) and repair
and maintenance items (paint, nails, brooms). Supplies are the convenience goods of the
industrial field because they are usually purchased with a minimum of effort or
comparison. Business services include maintenance and repair services (window
cleaning, computer repair) and business advisory services (legal, management consulting,
advertising). Such services areusually supplied under contract.

1.4. PRODUCT DECISIONS

Marketers make product decisions at three levels: individual product decisions, product line
decisions and product mix decisions.

Individual product decisions

Here, we look at decisions relating to the development and marketing of individual products,
namely product attributes, branding, packaging, labelling and product-support services.
 Product attributes
Developing a product involves defining the benefits that the product will offer. These
benefits are communicated and delivered by tangible product attributes, such as quality,
features, style and design. Decisions about these attributes are particularly important as
they greatly affect consumer reactions to a product.
 Branding
Brand is name, term, sign, symbol or design, or a combination of these, intended to
identify the goods or services of one seller or group of sellers and to differentiate them
from those of competitors. Perhaps the most distinctive skill of professional marketers is
their ability to create, maintain, protect and enhance brands of their products. A brand is
a name, term, sign, symbol, design or a combination of these, that identifies the maker or
seller of the product or service. Consumers view a brand as an important part of a
product, and branding can add value to a product. For example, most consumers would
perceive a bottle of Chanel perfume as a high quality, expensive product. But the same
perfume in an unmarked bottle would probably be viewed as lower in quality, even if the
fragrance were identical. A brand can provide a guarantee of reliability and quality. For
example, a book buyer might not entrust her credit card details with an unknown online
book store, but would have little hesitation doing so when buying from Amazon.com as
experience had taught her to trust the Amazon brand.

 Packaging involves designing and producing the container or wrapper for a product. The
package may include the product’s primary container (the tube holding and protecting
Aqua fresh toothpaste); a secondary package that is thrown away when the product is
about to be used (the cardboard box containing the tube of Aqua fresh); and the shipping
package necessary to store, identify and ship the product (a corrugated box carrying six
dozen tubes of Aqua fresh toothpaste). Labelling, printed information appearing on or
with the package, is also part of packaging.

 Labeling
Labels may range from simple tags attached to products to complex graphics that are part
of the package. They perform several functions. At the very least, the label identifies the
product or brand, such as the name ‘Sunkist’ stamped on oranges. The label might also
grade the product, or describe several things about the product – who made it, where it
was made, when it was made, its contents, how it is to be used and how to use it safely.
Finally, the label might promote the product through attractive graphics.

 Product-support services
Customer service is another element of product strategy. A company’s offer to the
marketplace usually includes some services, which can be a minor or a major part of the
offer.
Product-line decisions
The major product line decision involves product line length – the number of items in the
product line. The line is too short if the manager can increase profits by adding items; the line is
too long if the manager can increase profits by dropping items. Product line length is influenced
by company objectives and resources. Companies that want to be positioned as full-line
companies or that are seeking high market share and market growth, usually carry longer lines.
Companies that are keen on high short-term profitability generally carry shorter lines consisting
of selected items. Another objective may be to allow upselling. For example, BMW seeks to
move customers from its 3-series models to 5- and 7-series models. Still another objective might
be to allow cross-selling.
 2. PRICE STRATEGY

2.1. WHAT IS PRICE?

Definition: Price means the monetary value of the product has been fixed for exchange purpose.
The price is the amount a customer pays for the product. It is fixed after considering various
factors such as market share, competition, material costs, product identity and the customer's
perceived value of the product. The business may increase or decrease the price of product if
other stores have the same product. It is through price the company gets its money back in
business. It should be fixed in such a way the company is in position to recover the costs and
earn profits also. If it is fixed very low then it may be difficult to come to the breakeven point
and if fixed very high then it may have deterrent effect on the sale. The prix decision is very
sensitive and for that special care is to be taken so that you may get the competitive edge due 22
to price decision. Place (Also referred to as Distribution) – Where your business sells its products
or services and how it gets those products or services to your customers.

2.2. FACTOR TO CONSIDER WHEN SETTING PRICE

Pricing is often one of the most difficult things to get right in business. There are several factors
a business needs to consider in setting a price: The price a business charges needs to take account
of, and be consistent with, the objectives of the business.
For example, it may be that the objective is to position the business as the highest quality
provider – in this case, a higher price should be used to signal high quality to the consumer.
Exclusive designer fashion labels and luxury holiday businesses apply this strategy (using
"premium" or luxury prices).
At the other end of the pricing scale, a business that positions itself as a low-cost or discount
provider will look to set prices that are lower or as low as any rival. The strategy is to gain
advantage by offering the lowest prices (not just in the short-term). The battles in the discount
supermarket and low-cost airline markets are great examples of this strategy in action.
 Competitors – a huge impact on pricing decisions. The relative market shares (or market
strength) of competitors influences whether a business can set prices independently, or
whether it has to follow the lead shown by competitors
 Costs – a business cannot ignore the cost of production or buying a product when it
comes to setting a selling price. In the long-term, a business will fail if it sells for less
than cost, or if its gross profit margin is too low to cover the fixed costs of the business.
 The state of the market for the product – if there is a high demand for the product, but a
shortage of supply, then the business can put prices up.
 The state of the economy – some products are more sensitive to changes in
unemployment and workers’ wages than others. Makers of luxury products will need to
drop prices especially when the economy is in a downturn.
  The bargaining power of customers in the target market – who are the buyers of the
product? Do they have any bargaining power over the price set? An individual consumer
has little bargaining power over a supermarket (though they can take their custom
elsewhere). However, an industrial customer that buys substantial quantities of a product
from a business may be able to negotiate lower or special prices.
 Other elements of the marketing mix – it is important to understand that prices cannot be
set without reference to other parts of the marketing mix. The distribution channels used
will affect price – different prices might be charged for the same product sold direct to
consumers or via intermediaries. The price of a product in the decline stage of its product
life-cycle will need to be lower than when it was first launched.

2.3. General Price Approach

I. Cost Based Pricing Approach:

These pricing approaches are the simplest one in which the cost of product or service is added
with a certain proportion of markup as profit to ascertain a certain price. Examples include
construction businesses that estimate the cost of any project and submit their bid by adding a
certain portion of profit to their estimated cost. Moreover Accountants, Lawyers and other
professionals charge a price of their services by adding the cost of work with a certain proportion
of markup. Markup pricing is not regarded as an effective pricing model as it ignores both
demand and the pricing of competitors. Therefore, it is almost impossible for a business to keep
its price as best one by adopting this category of pricing. But still Cost based pricing is popular
due to the following reasons.
It makes pricing simpler so the marketers do not change the price of their product or service with
the changing demand.
When the majority of businesses in the market adopt this pricing model, there would be
minimum price competition due to similarity in prices.
Generally cost based pricing looks fairer for both buyers and sellers as buyers are not exploited
under condition of higher demand and also the seller can earn a reasonable profit in such pricing.
Target Profit Pricing and Break-Even Analysis
Target profit pricing is also called break-even analysis in which the total cost and total revenue
are forecasted at different levels of sales. In this way a reasonable profit can be availed at a
reasonable price. The fixed cost remains unchanged even at zero level of production and sales.
On the other hand variable cost changes with the level of production and sales. Both of these
costs are combined to ascertain the expected total cost at certain sales volumes. When the sales
volume increases the total cost decreases and the total revenue increases. Break-even is that point
of sales volume where cost is equalized by the revenue and the profit is zero. The estimated
demands, break -even points and profits are compared with different prices by the management
of business.
 II. Buyer Based Pricing Approach:
These pricing approaches are extensively applied by many organizations in which the perceived
value of buyer is regarded as a base for Setting Price for a product or service. In this pricing
model the value of product or service is perceived by customers that give the guideline for the
price of that product or service. In other words the price is not set after the production of product,
but before the production. This means that the organization considers the customers along with
their perception about certain product or service. On this basis, the business sets a certain price
and then starts manufacturing that product. The expected value and price provide guideline for
the cost and design of the product so that it can match the perceptions of the customers.
It is difficult for a business organization to ascertain the different perceived value by the
customers on different products. For this purpose these organizations conduct surveys and
experiments. If a business keeps the price of its product higher than the perceived value of
customers, then its sales are affected. On the other hand, if a business keeps its product’s price
lower, then maybe its sales increase, but the profit does not increase accordingly. Therefore,
those organizations, which want to adopt this value-based pricing strategy, should keep the price
of their products in accordance with their perceived value by customers. But more effective
strategy is that the businesses should try to deliver more value to the customers than they
perceived in order to retain them as loyal customers.
3. Competition-Based Pricing Approach
In this pricing model, businesses keep the price of their products or services on the basis of the
prices of their competitors. Also, customers in the market perceived value to any product or
service in relation to prices of similar products of competitors. So there is some sort of going rate
pricing in which the prices of products are altered according to changes in the prices of
competitors. For example, steel or fertilizer manufacturing businesses face oligopolistic
competition in which they charge almost similar prices in the market same like the competitors.
There is a market leader whose price is followed by all other smaller competitors. When the
price of market leader is changed, other competitors in the market also adjust their prices
accordingly. Some smaller business may keep a slight difference in their price as compared to
the market leader, but this slight difference remains constant in different conditions. There is one
big advantage of adopting this ongoing rate of competition based pricing, which is the prevention
of price wars in the market among competitors. Another form of competition, pricing model is
sealed bid pricing in which the price of a job is raised by keeping in view the prices set by
competitors. In this case the pricing also ignores the cost and demand factor, but the businesses
try to keep their prices little higher than their cost in order to earn a revenue. Pricing is not
confined to only above categories rather there are other factors that affect the pricing decisions
like environmental etc.

3. Promotion (Marketing Communication) Strategies

3.1. What is Marketing Communication?
Promotion (Marketing Communication)refers to the means adopted by the companies to
convey messages about the products and the brands they sell, either directly or indirectly to the
customers with the intention to persuade them to purchase.
Marketing communication is a fundamental and complex part of a company’s marketing efforts.
Loosely defined, can be described as all the messages and media you deploy to communicate
with the market
In other words, the different medium that company adopts to exchange the information about
their goods and services to the customers is termed as Marketing Communication.
The marketer uses the tools of marketing communication to create the brand awareness among
the potential customers, which means some image of the brand gets created in their minds that
help them to make the purchase decision.
Marketing communication offer solutions to the following questions:
 Why shall the product be used?
 How can the product be used?
 Who can use the product?
 Where can the product be used? And
 When can the product be used?
Marketing communication includes Advertising, Sales Promotion, Events and Experiences
(sponsorship), Public Relations and Publicity, Direct Marketing, Interactive Marketing, Word-of-
Mouth Marketing, Personal Selling. These tools of communication are collectively called as
Marketing Communication Mix.
Marketing communication includes advertising, direct marketing, branding, packaging, your
online presence, printed materials, PR activities, sales presentations, sponsorships, trade show
appearances and more.

The complexity of the topic makes it too broad to cover in one article. This article is one in a
series of six that covers the field of marketing communication. The full list of the titles in this
series includes:
• What is marketing communication ?—outlines the basic marketing communication
concepts and provides the foundation for rest of the series
• Positioning—discusses the ins and outs and importance of claiming the most attractive
position in your customer’s mind
• Your marketing message—provides the framework for planning your marketing message
throughout the technology adoption lifecycle (TALC)
• Marketing communication for tech startups—describes the process and methods to
develop word-of-mouth marketing in the marketplace
• Marketing communications: Reaching early adopters of technology products—focuses on
how (and why) you should tailor your message for technology enthusiasts and visionaries
• Successful market communication across the Chasm and in the Bowling Alley—explains
the tactics that will help you cross the Chasm

Marketing communication objectives

Marketing communication has two objectives. One is to create and sustain demand and
preference for the product. The other is to shorten the sales cycle.
Creating preference
Creating preference is often a longer-term effort that aims at using communication tools to help
position your product or company in the minds of the target customer.
Positioning and building a brand takes time and requires a certain consistency (not just in the
communication efforts themselves, but also in regards to the core elements of product, pricing,
and distribution) and therefore represents a significant commitment for the company.
Remember, establishing preference by building a brand will impact market share, profitability
and even your access to talent—and thus provides long-term value for the company.
Shortening the sales cycle
Shortening the sales cycle means assisting your sales and channel partner in their efforts to
identify, engage and deliver a customer. Understanding the customer’s buying process brings
critical insight into how one can shorten the sales cycle.
The figure below illustrates the process the buyer goes through when buying a product. Through
market research and conversations with salespersons, MarCom staff must identify how they can
help speed up the process.
In the case of high-tech products, the sales cycle involves considerable amounts of customer
education in the early stages of the process. MarCom must focus on creating, packaging and
delivering relevant information to the buyer throughout the buying process in order to sales meet
this education need.
n general, the communication techniques employed to shorten the sales cycle are by nature more
tactical than those used in building a brand. Nevertheless, your strategy to achieve the two
MarCom objectives must be balanced, or the legitimacy of your plan will be questioned if one
objective takes priority over the other. You must have close collaboration with sales and
customer-facing channel partners in order to get this balance right.
Marketing communication process

3.2 Five Elements of Promotion Mix (With Diagram)

Elements of promotional mix are also called as tools, means, or components. Basically, there are
five elements involved in promotional mix. Some authors have considered more elements, too.
However, we will consider five elements as shown in Fig
1. Advertising:
Advertising is defined as any paid form of non-personal presentation and promotion of ideas,
goods, and services by an identified sponsor. It is a way of mass communication. It is the most
popular and widely practiced tool of market promotion. Major part of promotional budget is
consumed for advertising alone. Various advertising media – television, radio, newspapers,
magazines, outdoor means and so forth – are used for advertising the product.
ADVERTISEMENTS:
Characteristics of advertising are as follow:
i. Adverting is non-personal or mass communication. Personal contact is not possible.
ii. It is a paid form of communication.
iii. It is a one-way communication.
ADVERTISEMENTS:
iv. Identifiable entity/sponsor-company or person gives advertising.
v. It is costly option to promote the sales.
vi. It can be reproduced frequently as per need.
vii. Per contact cost is the lowest.
viii. Various audio-visual, print, and outdoor media can be used for advertising purpose.
ix. It is a widely used and highly popular tool of market promotion.
2. Sales Promotion:
Sales promotion covers those marketing activities other than advertising, publicity, and personal
selling that stimulate consumer purchasing and dealer effectiveness. Sales promotion mainly
involves short-term and non-routine incentives, offered to dealers as well consumers. The
popular methods used for sales promotion are demonstration, trade show, exhibition, exchange
offer, seasonal discount, free service, gifts, contests, etc.
Characteristics of sales promotion are as follows:
i. The primary purpose of sales promotion is to induce customers for immediate buying or dealer
effectiveness or both.
ADVERTISEMENTS:
ii. Excessive use of sale promotion may affect sales and reputation of a company adversely.
iii. It is taken as supplementary to advertising and personal selling efforts.
iv. It involves all the promotional efforts other than advertising, personal selling, and publicity.
v. It consists of short-term incentives, schemes, or plans offered to buyers, salesmen, and/ or
dealers.
vi. It involves non-routine selling efforts.
3. Personal Selling:
Personal selling includes face-to-face personal communication and presentation with prospects
(potential and actual customers) for the purpose of selling the products. It involves personal
conversation and presentation of products with customers. It is considered as a highly effective
and costly tool of market promotion.
Characteristics of personal have been listed below:
i. Personal selling is an oral, face-to-face, and personal presentation with consumers.
ii. Basic purpose is to promote products or increase sales.
iii. It involves two-way communication.
iv. Immediate feedback can be measured.
v. It is an ability of salesmen to persuade or influence buyers.
vi. It is more flexible way of market communication.
vii. Per contact cost is higher than advertising.
viii. It involves teaching, educating, and assisting people to buy.
4. Publicity:
Publicity is also a way of mass communication. It is not a paid form of mass communication that
involves getting favorable response of buyers by placing commercially significant news in mass
media. William J. Stanton defines: “Publicity is any promotional communication regarding an
organization organization benefiting from it.”
It is the traditional form of public relations. Publicity is not paid for by the organization.
Publicity comes from reporters, columnists, and journalists. It can be considered as a part of
public relations. Publicity involves giving public speeches, giving interviews, conducting
seminars, charitable donations, inauguration by film actor, cricketer, politician or popular
personalities, stage show, etc., that attract mass media to publish the news about them.
Main characteristic of publicity include:
i. Publicity involves obtaining favorable presentation about company or company’s offers upon
radio, television, or stage that is not paid for by the sponsor.
ii. It is a non-paid form of market promotion. However, several indirect costs are involved in
publicity.
iii. It may include promotion of new product, pollution control efforts, special achievements of
employees, publicizing new policies, etc., for increasing sales. It is primarily concerns with
publishing or highlighting company’s activities and products. It is targeted to build company’s
image.
iv. Mostly, publicity can be carried via newspapers, magazines, radio or television.
v. Company has no control over publicity in terms of message, time, frequency, information, and
medium.
vi. It has a high degree of credibility. Publicity message is more likely to be read and reacted by
audience.
vii. Publicity can be done at a much lower cost than advertising. Company needs to spend a little
amount to get the event or activity publicized.
viii. Frequency or repetition of publicity in mass media depends upon its social significance or
the values for news. Mostly, it appears only once.
5. Public Relations:
The public relations is comprehensive term that includes maintaining constructive relations not
only with customers, suppliers, and middlemen, but also with a large set of interested publics.
Note that public relations include publicity, i.e., publicity is the part of public relations.
William Stanton defines:
“Public relations activities typically are designed to build or maintain a favorable image for an
organization and a favorable relationship with the organization’s various publics. These publics
may be customers, stockholders, employees, unions, environmentalists, the government, and
people in local community, or some other groups in society.” Thus, public relations include
organization’s broad and overall communication efforts intended to influence various groups’
attitudes toward the organization. Some experts have stated that the public relations are an
extension of publicity.
Main characteristic of publicity are as under:
i. Public relations is a paid form of market promotion. Company has to incur expenses.
ii. Public relations activities are designed to build and maintain a favorable image for an
organization and a favorable relationship with the organization’s various publics.
iii. It is an integral part of managerial function. Many companies operate a special department for
the purpose, known as the public relations department.
iv. It involves a number of interactions, such as contacting, inviting, informing, clarifying,
responding, interpreting, dealing, transacting, and so forth.
v. Public relations covers a number of publics – formal and informal groups. These publics may
be customers, stockholders, employees, unions, environmentalists, the government, people of
local community, or some other groups in society.
vi. Public relations activities are undertaken continuously. It is a part of routine activities.
vii. All the officials, from top level to supervisory level, perform public relations activities.
Viii. In relation to modern management practices, the public relations is treated as the profession.
Thus, there are five major elements or promotion mix. Each tool/element has its advantages,
limitations, and applicability. Depending upon company’s internal and external situations, one or
more tools are used. Mostly, company’s promotional program involves more elements, each
element supplements others.
4. Placement (Distribution) Strategy

4.1 What are placement (Distribution) strategies?

Placement (Distribution) strategies are concerned with the channels a firm may employ to make
its goods and services available to customers. Channels are organized structures of buyers and
sellers that bridge the gap of time and space between the manufacturer and the customer.
Marketing is defined as an exchange process. In relation to distribution, exchange poses two
problems. First, goods must be moved to a central location from the warehouses of producers
who make heterogeneous goods and who are geographically widespread. Second, the goods that
are accumulated from diversified sources should represent a desired assortment from the
viewpoint of customers.
You may have developed a great product but your business will not generate any revenue unless
you find a way to get the product to your clients. According to business experts, the marketing
and distribution of your firm's products should form a central part of your business plan. You
must set up a supply chain so that you can quickly move the product from your work location to
your clients. If you set up an inefficient distribution system, you may lose business to your
competitors.
Identify your target market. The federal Small Business Administration (SBA) recommends that
you research your potential client base before you start the marketing process. Provide a market
research firm with details of your product. Ask the firm to conduct research so that you can find
out the type of demographic groups that are most likely to buy your offerings.
Review the market research to determine your likely sales volume. If you can only produce
enough products to satisfy the likely demand in your local area then you should contact a local
distribution firm. If you can produce the products quickly enough to meet the demand of the
entire state or nation, contact firms with larger distribution networks.
Consider marketing your product directly, without the services of market research firms,
especially at the outset of your business. Marketing experts at Purdue University suggest that
when you first start your business you should minimize your costs by making direct sales calls to
clients. You can physically deliver the product if you operate within a small area so you should
not involve outside firms until it becomes logistically difficult for your or your employees to do
so.
Negotiate with distributors and shippers to obtain the best possible terms for moving your
product from factory to consumer. Provide trucking companies or couriers with the dimensions
of the packaged product, its weight and the projected sales volume. Ask for pricing plans that
include discounts based on volume so that you can lower your per-product cost as your
distribution expands.
Contact retailers and advertising firms within your proposed sales market. Find out how much
the advertisers will charge to promote your product in print or broadcast media or on websites
that your targeted clients are likely to read. Find out how much retailers will charge to stock your
product or how much commission they will charge for each product sale.
Be prepared for growth. As your company expands you may have to hire more workers, rent
larger facilities and pay more taxes. If your operating costs rise then you should raise the price of
your product so that your profit margin remains the same. If you do not raise prices in
accordance with inflation and other factors then your distribution costs and other operating
expenses may entirely deplete the company's revenues. Always give your business partners
advance notice of price changes. The Ontario Ministry of Food, Agriculture and Rural Affairs
says that the most successful suppliers are those that regularly update retailers about changes in
pricing, packaging, distribution and other important information.
Distribution Channel
The distribution channels is the term given to describe the typical movement of products from
original manufacturing to the end customer. In a normal product flow, the manufacturer sells to a
wholesaler, who then distributes or sells to the retailer. Retailers typically hold inventory on hand
and resell to customers as needed. This is the conventional movement of products through a
brick-and-mortar retail store channel.
Physical Location
While the Internet, catalogs and other channels of retail have emerged, a physical store remains
the most prevalent means for retailers to get product to customers in 2012. The retailer needs to
collaborate with supply chain partners to provide quality products at affordable prices to
customers. While retailers hold, market and sell products directly to consumers, each member in
the process needs consumer demand to exist for long-term success.
Order Fulfillment
The emergence of the Internet in the late 20th century presented a new format through which to
present products to consumers. Retailers, along with some wholesalers and manufacturers, now
market products through Internet sites to consumers who want online convenience as opposed to
buying from a store. Despite its conveniences, only about 7 percent of all retail sales happened
online in 2010, according to Forrester Research. This is because of the order fulfillment and
distribution requirements. When customers order online, your business must have a process in
place to quickly and economically get products to the customer through the mail.
Warehouse or Direct Vendor Ship
Retailers selling through websites or buying products for stores generally have two options:
distribution centers and direct ship from vendors. Distribution centers are warehouses maintained
by retailers to store goods before they are needed at stores or ordered online or through catalogs
by customers. Distribution centers offer more control and shipping efficiency for stores
concentrated in certain areas. When you need to get products to consumers quickly or when
demand is unpredictable, having vendors ship directly to your stores or customers makes sense.
While direct ship systems have higher shipping costs, you don't have to pay for the storage and
management of goods.
The main objective of marketing is to create valuable exchanges between consumers and
producers. The market consists of those consumers who are willing and able to purchase
products, hence creating exchanges that satisfy both parties. Middlemen, also referred to as
intermediaries, play a vital part in ensuring that the distribution channel between the producer
and the consumer is complete. The more intermediaries there are in the supply chain, the higher
the distribution channel
4.2 Types of Middlemen
Examples of middlemen include wholesalers, retailers, agents and brokers. Wholesalers and
agents are closer to the producers. Wholesalers buy goods in bulk and sell them to the retailers in
large quantities. Retailers and brokers acquire the goods from the wholesalers and sell them in
small quantities to the consumers. Consumers may also choose to bypass the intermediaries and
buy goods directly from the producers. This is referred to as disintermediation.
4.3 Roles of Middlemen
The core function of intermediaries is to deliver goods to the consumers when and where they
want them. To achieve this, they buy the products from the producers, store them as they search
for viable markets, and then transport them to the consumers. In the process, they assume any
risks facing the goods -- for instance, theft, perishability and other potential hazards. In addition,
middlemen promote the goods to the consumers on behalf of the producers.
Importance of Intermediaries
Intermediaries are very important players in the market. Both the consumers and producers gain
immensely from the roles of middlemen, who ensure that there is a seamless flow of goods in the
market by matching supply and demand. Intermediaries provide feedback to the producers about
the market, thus influencing the decisions made by the manufacturers. Buyers, on the other hand,
gain from the services offered by intermediaries, such as promotion and delivery. Buyers can get
the right quantity they want, as intermediaries are able to sell in small units.
Effect on Price
Regardless of the important role they play, there are some disadvantages to having intermediaries
in the distribution channel. As the goods are exchanged from one intermediary to the other, their
prices inflate. The rationale behind higher prices is to cover expenditures on the goods such as
warehousing, insurance and transportation costs. Intermediaries are also out to make profits,
hence they have to include some profit markup in the sales. Consumers then bear the price of
having intermediaries in the channel Producers.

ROLE OF MIDDLEMEN
Middlemen perform several roles and functions in the market place. Their utility is best judged
from commodity markets. Besides making the product available to the customer, they also take
the responsibility for the payment from the buyer to the seller. Some of their key roles are
summarized below.
Information
Middlemen have a role in providing information about the market to the manufacturer.
Developments like changes in customer demography, psychology, media habits and the entry of
a new competitor or a new brand and changes in customer preferences are some kind of
information that all manufacturers want. Since these middlemen are close to the customer and
present in the market place they can provide this information at no additional cost.
Price Stability
Maintaining price stability in the market is another function a middleman performs. Many a time
the middleman absorbs an increase in the price of the products and continues to charge the same
old price to the customer. This is because of the intra middlemen competition. The middleman
also maintains price stability by keeping his overheads low.
Promotion
Promoting the product /s in his territory is another function that the middlemen perform. Many of
them design their own sales incentive programs aimed at building customer traffic at their
outlets.
Financing
Middlemen finance manufacturer operations by providing the necessary working capital in the
form of advance payments for goods and services. The payment is in advance even though credit
may be extended by the manufacturer, because it has to be made even before the products are
bought and consumed and paid for by the ultimate customer.
Title
Most middlemen take title to the goods and services and trade in their own name. This helps in
diffusing the risks between the manufacturer and middlemen. This also enables middlemen being
in physical possession of the goods, which enables them to meet customer demand at the very
moment it arises.
Thus, the role and functions of any marketing channel can be viewed from five different
perspectives or marketing flows. The definition of a channel member goes beyond the traditional
one of middlemen. Today it has come to include even suppliers of inputs (like raw material,
components, capital and even labor) and other institutions like transport companies and banks
that facilitate the distribution process. It is in this sense that the marketing channels have to be
viewed as sets of interdependent organizations involved in the process of making a or service
available for use or consumption.
TYPE AND NATURE OF MIDDLEMEN
There are three types of middlemen that facilitate the flow of goods and services from the
manufacturer to the customer.
Merchant Middlemen
These are the intermediaries who take title to the goods and services and resell them. We know
them as dealers, wholesalers and retailers. These middlemen get margins and bonuses as
compensation. They share the risk with the manufacturers when they take title and physical
possession of the goods.
Agents
These are those intermediaries who do not take title to the goods and services but help in
identifying potential customers and even help in negotiations. The typical example is that of
C&F agents, brokers, jobbers, etc. who act on behalf of the producer only to the limited extent of
prospecting, warehousing and redistributing the products. They do not share risk with the
manufacturers as they do not take the title to goods and services.
Agents earn a commission and are reimbursed for all expenses by the manufacturer.
Facilitators
These are independent business units that facilitate the flow of goods and services from the
producer to the customer without taking a title to them or negotiating for them on behalf of the
producer. Transport companies, banks and independent warehouses are an example of these
institutions. These institutions are paid for their service charges. For example, a transporter get
paid in the form of freight charges, while a banker gets paid service charges in the form of bank
commission and warehouses and cold storages earn rent.
Number of Channel levels
One of the important decisions that the firms have to often take is the number of channel levels
appropriate to serve a given market. The channels level represents channel members who have a
specific role to play. From as low as zero, i.e. directly from manufacturer to the customer, one
can have as high as 4 to 5 levels involved in distribution.
Typically, zero level exits in most industrial product marketing, particularly in capital equipment
or project marketing. This type of distribution works well in product markets characterized by
few and large customers concentrated in a specific geographical area. These customers want
prompt after sales services and they are considered to have high service expectations. In such
cases most products require service support and the point of differentiation between competing
firms is the service quality. Furthermore, these customers buy in large lots or in other words their
average order size in value terms is high and hence these purchase decisions have high perceived
risk. To reduce any post purchase dissonance in the customers mind, the firm uses direct
marketing or zero level of distribution.
When the number of customers is high and they are concentrated in specific geographical areas
without any uniform pattern in their order lot size, i.e. some buy in smaller volumes and others in
bulk, the firm adopts a one channel level of distribution. Here the firms sells its goods to a
wholesaler or large dealer or transfers them to an agent. This channel member then distributes
the product in his area. An example of this pattern of distribution is industrial chemicals.
Economical for the company and the buyer to deal through the middlemen. The customer prime
requirement in such cases is the ready availability of the product in the desired lot size.
To reach to the customers all over the country, the firm increases length of the channel i.e.
through four levels of distribution i.e. from firm, to wholesaler, to retailer, and finally to the
customers. In most consumer goods, their availability often becomes the reason to buy.
In the Rural Markets there is a increase in income levels and demand for branded and packaged
goods. The awareness level is on the increase following the spread of television. Therefore the
firms have to ensure that their products are readily available even in the remotest corner of the
markets. For this purpose the company has to take care of sufficient retailing outlets and
distributors. This will eliminate speculation by the distributors (if very few) hoarding and selling
the goods in demand at higher prices. This will also preclude the increase in the market share of
competitors. Thus adequate distribution system will sort out all the availability and market share
problems.
Increasing the length of the distribution often distances the customer from the manufacturer. This
can affect the quality of feedback to overcome this problem of feedback, most firms now insist
on their channel members to give information on customer preferences and expectations. Some
of them even directly contact opinion leaders among customers to get a direct feedback. In the
automobile component industry, a mechanic meet is a common promotional tool used by many
firms. These firms also use these meets to understand how their products are working
competition and gauge the expectations of these mechanics. These meets are also used to
generate new product ideas. In consumer product companies, this problem is sought to be
overcome through periodic market researchers, consumer panels and the likes.
Examples of middlemen include wholesalers, retailers, agents and brokers. Wholesalers and
agents are closer to the producers. Wholesalers buy goods in bulk and sell them to the retailers in
large quantities. Retailers and brokers acquire the goods from the wholesalers and sell them in
small quantities to the consumers. Consumers may also choose to bypass the intermediaries and
buy goods directly from the producers. This is referred to as disintermediation.
 Summary
All great products start with a clear strategy that is customer and market-driven. Your strategy
defines the direction of your product and what you want to achieve. Establishing this first aligns
the organization and keeps everyone focused on the work that matters the most. It tells the team
where the product is headed and what needs to be done to get there.
The main purpose of a strategy is to align executives and other key stakeholders around how the
product will achieve the high-level business objectives. It also provides the product manager
with a clear direction to guide the team through implementation and to communicate the value of
the product to cross-functional teams, such as sales, marketing, and support.
A product strategy is the foundation for the entire product lifecycle. As product leaders develop
and adjust their product strategy, they zero in on target audiences and define the key product and
Marketing Communication refers to the means adopted by the companies to convey messages
about the products and the brands they sell, either directly or indirectly to the customers with the
intention to persuade them to purchase.
Marketing communication is a fundamental and complex part of a company’s marketing efforts.
Loosely defined, can be described as all the messages and media you deploy to communicate
with the market
Distribution strategies are concerned with the flow of goods and services from manufacturers to
customers. The discussion in this chapter was conducted from the manufacturer’s viewpoint. Six
major distribution strategies were distinguished: channel-structure strategy, distribution-scope
strategy, multiple-channel strategy, channel-modification strategy, channel-control strategy, and
conflict management strategy.
Elements of promotional mix are also called as tools, means, or components. Basically, there are
five elements involved in promotional mix. Some authors have considered more elements, too.
However, we will consider five elements
Advertising is defined as any paid form of non-personal presentation and promotion of ideas,
goods, and services by an identified sponsor. It is a way of mass communication. It is the most
popular and widely practiced tool of market promotion
You may have developed a great product but your business will not generate any revenue unless
you find a way to get the product to your clients. According to business experts, the marketing
and distribution of your firm's products should form a central part of your business plan

REFFERENCE

Principle of marketing management authors Philip kotter and gram Armstrong

Evan Esar (Modern Marketing)
Marketing Module:Sandra Cuellar-Healey, MFS MA
Internet source
lecture module