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 CBSE CLASS 12 BUSINESS STUDIES
CHAPTER – 11
MARKETING
REVISION NOTES

MEANING OF MARKET
The term ‘market’ refers to the place where buyers and sellers gather to enter into transactions
involving the exchange of goods and services. The term ‘Market’ has been derived from the
Latin word ‘Marcatus’ which means ‘to trade’.

MARKETING
Marketing as “a human activity directed at satisfying needs and wants through exchange
process”.
Philip Kotler
Marketing concept holds that a key to achieving organizational goals consists in determining
the needs and wants of target markets and delivering the desired satisfactions more efficiently
and effectively by competitors.

FEATURES OF MARKETING

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1. Needs and Wants:
• The process of marketing helps consumers in obtaining what they need and want.
• A need is a state of deprivation or a feeling of being deprived of something.
• Needs are basic to human beings and do not pertain to a particular product.

2. Creating a Market Offering:

Market offering refers to a process of offering and introducing a product or service, having given
features like size, quality, taste, etc. for the purpose of selling.

3. Customer Value:
The process of marketing facilitates exchange of products and services between the buyers and
the sellers.

4. Exchange Mechanism:
• The process of marketing works through the exchange mechanism.
• Exchange refers to the process through which two or more parties come together to
obtain the desired product or service from someone, offering the same by giving
something in return. For E.g. money is the mode of exchange used to buy/ sell a product
or a service.
• Conditions to be satisfied for exchange:
a. At least two parties
b. offering something of value to the other
c. communication
d. Freedom to accept or reject offer
e. Parties willingness to enter into a transaction

What can be Marketed?

1. Physical product
2. Services
3. Ideas
4. Person
5. Palace
6. Experience
7. Properties
8. Events
9. Information

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 10. Organisation

Marketer
• Marketer refers to any person who takes more efforts in identifying the needs of the
consumers, offer the product / service and persuade them to buy the product in the
process of exchange.
• Sellers as marketer are the providers of satisfaction. They makes available
products/services and offers them to customers with an intention of satisfying customer
needs and wants.
• They can be divided into:
a. Goods marketers (such as Hindustan Lever)
b. Services marketers (such as Indian Airlines)
c. Others marketing experiences (such as Walt Disney) or places (like tourist destinations).

• Marketing activities are the activities carried on by the marketers to facilitate exchange of
goods and services between the producers and the consumers.

MARKETING MANAGEMENT

Marketing management means management of the marketing functions. It is the process of

organizing, directing and controlling the activities related to marketing of goods and services to
satisfy customers’ needs & achieve organizational goals.
“Marketing management as the art and science of choosing target markets and getting, keeping
and growing customers through creating, delivering and communicating superior customer of
management.”
Philip Kotler

The process of management of marketing involves:

a. Choosing a target market

b. Demand creation by producing products as per the customers’ requirements and interests.
c. Create, develop and communicate superior values to the customers: To provide superior
value products/ services to prospective customers and they communicate these values to
other prospective buyers and persuade them to buy the product/ service.

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MARKETING AND SELLING

Marketing: It refers to a large set of activities of which selling is just one part. A marketer
before making the sale does a lot of other activities such as planning the type, design of the
product, fixing the price and selecting the distribution channels and choosing the right
promotional mix for the target market.

Selling: refers to the sale of goods or service through publicity, promotion and salesmanship.
The title of the product is transferred from seller to buyer. The main purpose of selling is to
convert product into cash.

DIFFERENCE BETWEEN MARKETING

Basis Marketing Selling
Scope It is a wide term consisting of a number It is only a part of process of
of activities such as identification of marketing.
customer needs, product development,
fixing of price, distribution and
promotion and selling.
Focus Achieving maximum satisfaction of the Transfer of the title from seller to
customers needs and wants. consumer.
Aim Profits through customer satisfaction. Profits through maximising sales
volume.
Emphasis Bending the customer according to the To develop the products as per the
product. customer needs.
Start and It start before a product is produced. It starts after a product is developed.
end
Activities
Strategies Involves efforts like product, promotion Involves efforts like Promotion and
pricing and physical distribution. persuasion

MARKETING MANAGEMENT PHILOSOPHIES

Marketing concept/ philosophies holds that a key to achieving organizational goals consists in
determining the needs and wants of target markets and delivering the desired satisfactions more
efficiently and effectively by competitors.
1. Production concept:

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In the earlier days of the industrial revolution, the number of producers were limited, so the
industrialists believed that, the consumers are only interested in easily and extensively available
goods at an affordable price.

2. Product concept:
• With passage of time, the supply improve and the customers started favouring the
products that were superior in performance, quality and features.
• Thus, product improvement became the key to profit maximization of a firm.

3. Selling concept:
• Increase in scale of production led to competition among the sellers. Product quality and
availability alone did not ensure survival, as a large number of firms were selling similar
products.
• The consumers on their own will not buy any products unless the enterprise take
aggressive sales and promotional activities.

4. Marketing concept :
• Marketing begins with finding what the consumers want and thus satisfy consumers and
make profits.
• Customer satisfaction is the precondition for realizing the firm’s goals and objectives.

5. Social marketing concept:

• Under this concept customer satisfaction is supplemented by social welfare.
• A company that adopts the societal concept has to balance the company’s profits,
consumer satisfaction and society’s interests.

Differences in the Marketing Management Philosophies

Philosophies/ Production Product Selling Marketing Societal
Basis concept concept concept concept concept

Starting Point Factory Factory Factory Market Market,

Society
Main focus Quantity of Quality, Existing Customer Customer
product performance, product needs needs and

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 features of society’s
product well being
Means Availability Product Selling and Integrated Integrated
and improvements promoting marketing marketing
affordability
of product
Ends Profits Profits Profits Profits Profits
through through through through through
volume of product sales customer customer
production quality volume satisfaction satisfaction
and social
welfare

FUNCTIONS OF MARKETING

1. Gathering And Analyzing Market Information:

• Systematic accumulation of facts and analysis of information.
• Analysing the strengths, weakness, opportunities, and threats of a business environment.
• Identifying customer needs and wants, identifying buying motives, choice of a brand
name, packaging and media used for promotion etc.
• Data is available from primary as well as secondary sources.

2. Marketing planning :
• To develop an appropriate marketing plan so that the marketing objectives can be
achieved.
• It should specify the action programs to achieve these objectives .
• E.g if a marketer tries to achieve a bigger market share in the country in the next three
years, then his marketing plan should include various important aspects like plan for
increasing level of production, promotion of products etc.

3. Product designing and development:

• Involves decisions regarding the product to be manufactured and it‘s attributes such as its
quality considerations, packaging, models and variations to be introduced etc.
• A good design can improve performance of a product and also give it a competitive
advantage in the market.
• Anticipate customer needs and develop new products or improve existing products to
satisfy their needs.

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4. Standardization and grading:
• Standardisation refers to producing goods of predetermined specifications, which helps in
achieving uniformity and consistency in the output E.g. ISI Mark etc.
• Grading is the process of classification of products into different groups, based on some
of its important characteristics such as quality, size, etc.

5. Packaging and labeling:

• Packaging‘ refers to designing and developing a package for a product.
• It protects the products from damage , risks of spoilage, breakage and leakage. It also
makes buying convenient for customers and serves as a promotional tool.
• Labeling refers to designing a label to be put on the package. It may vary from a
simple tag to complex graphics. For e.g. colgate, lays etc.

6. Branding
• It helps in differentiation of the product, builds customer loyalty and promote its sale.
• Important decision area is branding strategy, whether each product will have a separate
brand name or the same brand name to be used for all products.

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7. Customer Support Services:
• Customer support services are very effective in increasing sales from the prospective
customers and developing brand loyalty for a product.
• It aims at providing maximum satisfaction to the customer and building brand loyality.
• Eg. sales services, handling customer complaints and adjustments, procuring credit
services, maintenance services, technical services and consumer information.

8. Pricing of Product:
• Price of product refers to the amount of money customers have to pay to obtain a product.
• It is an important factor in the success/ failure of a product.
• Demand for a product/ service is related to its price, so price should be fixed after
analysing all the factors determining the price of the product.

9. Promotion:
• Promotion of products and services involves informing the customers about the firm’s
product, its features, etc. and persuading them to buy the products.
• Methods of promotion are advertising, Personal Selling, Publicity and Sales Promotion.

10. Physical Distribution:

• The two major decision areas under this function are
(a) Decision regarding channels of distribution or the marketing intermediaries to be used
e.g. wholesalers, retailers
(b) Physical movement of the product from where the place of production to the place of
consumption.

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11. Transportation:
• Transportation means physical movement of goods from one place to the other.
• Various factors like nature of the product, cost, location of target market etc. should be
considered in choosing the mode of transport.

12. Storage or Warehousing:

• To maintain smooth flow of products in the market, there is a need for proper storage of
the products.
• Storage and warehousing is used to protect against unavoidable delays in delivery or to
meet out contingencies in the demand.

MARKETING MIX

• A large number of factors affect the marketing decisions they are ‘Non-controllable
factors and Controllable factors’.
• Controllable factors are those factors, which can be influenced at the level of the firm.
• Certain factors which affect the decision but are not controllable at the firm’s level are
called environmental variables.
• To be successful, a firm needs to take sound decisions after analysing controllable factors
while keeping the environmental factors in mind.
• The set of marketing tools that a firm uses to pursue its marketing objectives in the target
market is described as Marketing Mix.
• Success of a market offer depend upon how well these ingredients are mixed to create
superior value for customers, simultaneously achieve their sales, and profit objective.

ELEMENTS OF MARKETING MIX

The marketing mix consists of four main elements

A. Product
B. Price
C. Place/Physical Distribution
D. Promotion
These elements are more popularly known 4 P’s of the marketing.

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1. Product: Product means goods or services or ‘anything of value’, which is offered to the
market for sale. E.g. colgate, Dove etc.
2. Price : is the amount of money a customer has to pay in order to obtain a product/ service.
3. Place : Physical distribution of products ie. Making the product available to the customers at
the point of sale.
4. Promotion: Informing the customers about the products and persuading them to buy the same

Marketing mix elements

•PROMOTION MIX •PRODUCT MIX
•ADVERTISING •PRODUCT QUALITY
•PERSONAL SELLING •NEW PRODUCT
•SALES PROMOTION •DESIGN AND
•PUBLICITY DEVELOPMENT
•PUBLIC RELATIONS •PACKAGING
•LABELLING
•BRANDING

PROMOTION PRODUCT

PLACE PRICE

•CHANNEL STRATEGY •PRICE LEVEL

•CHANNEL SELECTION •MARGINS
•CHANNEL CONFLICT •PRICING POLICY
•CHANNEL COOPERATION •PRICING STRATEGIES
•PHYSICAL DISTRIBUTION •PRICE CHANGE

I. PRODUCT
From the customer’s point of view, a product is a bundle of utilities, which is purchased because
of its capability to provide satisfaction of certain need.

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CLASSIFICATION OF PRODUCTS
Products can be classified into two categories:
(i) Consumers ‘products,
(ii) Industrial products.

A. Shopping Efforts Involved

On the basis of the time and effort of the buyers.
1. Convenience Products: Those consumer products, which are purchased frequently, for
immediate use are referred to as convenience goods. Medicines, newspaper, stationery items,
toothpaste. etc.
2. Shopping Products: Shopping products are those goods, in which buyers devote considerable
time, to compare the quality, price, style, suitability, etc., at several stores, before making final
purchase. E.g. electronic goods, vehicles etc.
3. Specialty Products: Specialty products are those goods which have certain special features
because of which people make special efforts in their purchase. E.g. art work, antiques etc.

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B. Durability of Products
1. Non-durable Products: The consumer products, which are consumed in a short span of time.
E.g. milk, soap, stationary etc.
2. Durable Products: Those tangible products which normally survive many uses, for e.g.
refrigerator, radio, bicycle etc.
3. Services: Services are intangible, it means those activities, benefits or satisfactions, which are
offered for sale, e.g., dry cleaning, watch repairs, hair cutting, postal services, services offered by
a doctor etc.

INDUSTRIAL PRODUCTS
Industrial products are those products, which are used as inputs in the production process.

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 Characteristics Classification

• Number of Buyers • Materials and Parts: goods that

• Channel Levels enter the manufacture’s
• Geographic Concentration products completely.
• Derived Demand • Capital Items: production of
finished goods, E.g.
• Role of Technical
installations and equipments.
Considerations
• Supplies and Business Services:
• Reciprocal Buying
short lasting goods and
• Leasing Out services that facilitate
developing or managing the
finished product. For e.g.
repairs and maintenance.

BRANDING:
Branding is creating a corporate brand identity for consumer, and getting that brand identity
imprinted on the minds of consumer, and this requires brand positioning and brand management.
Jeff Bezos
The process used to create a distinct identity of a product. It is the process of using a name, term,
symbol or design individually or in some combination to identify a product.

Brand : Name, term, sign, design or some combination of the above used to identify the products
of the seller and to differentiate them from those of competitors.

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 Characteristics of Good
Advantages to the Advantages to the Brand
Marketers Customers
Name
•Enables Marking Product •Helps in Product •Short, easy to pronounce,
Differentiation: It helps Identification:helps the spell, recognise and
in distinguishing its customers in identifying remember
product from that of its the products •Suggest the product’s
competitors. •Ensures Quality : Ensures benefits and qualities
•Helps in Advertising and quality of product •Distinctive from other
Display Programmes •Status Symbol: brands products
•Differential Pricing: It become status symbols •Adaptable to packing or
helps a firm to charge because of their quality labelling requirements, to
different price for its Eg: Benz cars different advertising
products. media and to different
•Ease in Introduction of languages.
New Product • Versatile to
accommodate new
products.
• Registered and
protected legally

PACKAGING

Packaging: An act of designing and developing the container or wrapper of a product. Good
packaging often helps in selling the product so it is called a silent salesman.

Levels of Packaging
1. Primary Package: refers to the product’s immediate container/ covering e.g. toffee in a
wrapper, a match box, a wrapper of soap etc.

2. Secondary Package: refers to additional layers of protection that are kept till the product is
ready for use e.g. a Colgate toothpaste usually comes in a red card board box.

3. Transportation Package: refers to further packaging components necessary for storage,

identification and transportation e.g. package of toffees are put into cardboard boxes for storing
at a manufacturer’s warehouse and for transportation.

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 Functions of Packaging

• Product Identification: Packaging • Rising Standards of Health And

helps in identification of the Sanitation: It is believed that,
product. there is minimum adulteration in
• Product Protection: The main packed goods
function of the packing is to • Self-Service Outlets: A product
provide protection. can be promoted by good and
• Facilitating Use of the product: It attractive packaging.
provides convenience in carriage, • Innovational Opportunities:
stocking and in consumption. Innovation in the area of
• Product Promotion: Packaging packaging has increased the shelf
simplifies the work of sales life of the products.e.g. tetra
promotion. packs for milk.
• Product differentiation: Colour,
size, material etc of packaging
makes a difference in perception
of customers about the quality of
the product.

LABELLING

Labelling means putting identification marks on the package. Label is a carrier of information &
provides information like - name of the product, name of the manufacturer, contents of the
product, expiry and manufacturing date, general information for use, weight etc.

Labels perform following functions:

1. Identify the product: It helps the customers to identify the product from different types of
product available. For e.g. We can easily identify a Cadbury chocolate from the various
chocolates by purple color of its label.

2. Describe the product and specify its contents: The manufacturer give all information related
to the contents of the product etc.

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3. Grading of products: With the help of label, products can be graded in to different categories
based on quality, nature etc. for example: Brook Bond Red Label, Brook Bond Yellow Label,
Green Label etc.
4. Helps in promotion of products: Attractive and colorful labels excite the customers and
induce them to buy the products. For example: 40%extra free, mentioned on detergent, buy 2 get
one free etc.
5. Providing information required by law: There is a legal compulsion to print batch no.
contents, max retail price, weight/volume on all the products and statutory warning on the packet
of cigarettes, “Smoking is injuries of health”: In case of hazard on/poisonous material
appropriate safety warnings should be put.

II. PRICING

Meaning of Price:
Sum of the values that consumers exchange for the benefit of having or using the product. Price
may therefore be defined as the amount of money paid by a buyer (or received by a seller) in
consideration of the purchase of a product or a service

FACTORS DEERMINING PRICE DETERMINATION:

1. Pricing Objectives

• The objective of the marketing firm is to maximize profits. Pricing objective can be
determined in the short run and in the long run.
• If the firm decides to maximise profits in the short run, it would charge maximum price
for its products. But if it is to maximise its total profit in the long run, it would opt for a
lower per unit price so that it can capture larger share of the market and earn greater
profits through increased sales.

2. Product cost:

• Price cover all costs and aim to earn a fair return over and above cost.
• It includes the costs of producing, distributing and selling the product.
• Costs sets the floor price that is the minimum price at which the product may be sold.

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 • Price should recover Total costs (Fixed costs/overheads + Variable costs+ Semi-variable
costs) in the long run, but in certain circumstances (introduction of a new product or due
to entry into a new market) product price may not cover all the costs for a short while.

3. Utility and demand:

• Utility provided by the product and the demand for the product set the upper limit of
price that a buyer would be willing to pay for a product.
• Buyers would be ready to pay to till the point, where the utility of the demand is more
than or equal to the utility derived from it.
• Law of demand states that consumers purchase more at a lesser price.
• Elasticity of demand is the responsiveness of demand to change in prices of a product.
Demand is elastic if a small change in price results in a large change in quantity
demanded.
• If demand is inelastic, firm can fix higher prices.

4. Extent of Competition in Market:

Prices of competitors and their anticipated actions need to be considered before fixing prices.

5. Government Policies:
In public interest, the government can intervene regulates the price of the products.
6. Marketing Methods Used:
Price fixation process is also affected by other elements of marketing such as distribution system,
sales promotion efforts, the type of packaging, product differentiation, credit facility etc.

III. PHYSICAL DISTRIBUTION

• A set of decisions needs to be taken to make the product available to customers for
purchase and consumption.
• The marketer needs to make sure that the product is available at the right quantity, at the
right time and at the right place.
• Channels of Distribution are set of firms and individuals that take title, or assist in
transferring title, to particular goods or services as it moves from the producers to the
consumers.

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 • Choice of appropriate channel of distribution is a very important marketing decision,
which affects the performance of an organisation. Whether the firm, adopt a direct
marketing channels or long channels involving a no. of intermediaries is a strategic
decision.

Components of physical distribution:

1. Order Processing: Provide accurate & speedy order processing in the absence of which
orders would reach late or in wrong quantity. As a result it will lead to customer dissatisfaction,
with the danger of loss of business and goodwill.
2. Transportation: It make the product available at the point of sale by transporting goods from
the manufacturers to the consumers.
3. Inventory control: Important decision in respect of inventory is deciding about the level of
inventory. Additional demand can be met in less time and the need for inventory will be low.
4. Ware housing: Warehousing refers to the act of storing and assorting products in order to
create time utility in them. It is required to fill the gap between the time when the product is
produced & time when it is distributed for consumption.

Functions of Distribution Channels

1. Sorting: Middlemen procure supplies of goods from a variety of sources, which is often not of
the same features.
2. Accumulation: accumulation of goods into larger homogeneous stocks, which help in
maintaining continuous flow of supply.
3. Allocation: breaking homogenous stock into smaller, marketable lots.
4. Assorting: assortment of products for resale.
5. Product Promotion: Middlemen participate in certain activities such as demonstrations,
special displays etc.
6. Negotiation: Manufacturers, intermediaries and customers negotiate the price, quality and
other matters.
7. Risk Taking: merchant middlemen take title of the goods and thereby assume risks on
account of price and demand fluctuations, spoilage, destruction, etc.

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CHANNELS OF DISTRIBUTION

• Includes a series of firms, individuals, merchants and functionaries who form a network, which
helps in the transfer of title to a product from the producer to the end consumer.

• The intermediaries help to cover a large geographical area and bring efficiency in distribution,
including transportation, storage and negotiation. And they also bring convenience to customers
as they make various items available at one store and also serve as authentic source of market
information as they are in direct contact with the customer.

TYPES OF CHANNELS:

Direct Channel ( Zero Level)

A direct relationship is established between the manufacturer and the customer.
Manufacturer-Customer. Eg. mail order, internet, door to door selling.

Indirect Channel
When a producer employs one or more intermediary to move goods from the point of production
to the point of sale, the distribution network is called indirect.

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1. Manufacturer-Retailer-Customer (One Level Channel).
In this one intermediary i.e., retailers is used between the manufacturers and the customers.
Usually used for specialty goods like expensive watches, appliances, Cars( Maruti Udyog) etc.

2. Manufacture-wholesaler-Retailer-customer (Two Level Channel):

This channel is mainly used for the distribution of consumer goods. Usually used for consumer
goods like soaps , salt etc.

3. Manufacture → Agent → Wholesaler → Retailer → Customer (Three Level Channel):

In this case, manufactures use their own selling agents or brokers who connect them with
wholesalers and then the retailer and the consumers.

Factors Determining Choice of Channels of Distribution

Choice of appropriate channel of distribution is a very important marketing decision.
1. Product Related Factors: the nature of the product, whether it’s a industrial goods or
consumer goods, perishable or a nonperishable product etc. determine the channels used in the
distribution.
2. Company Characteristics: The financial strength of the company and the degree of control it
wants to hold on other channel members. Short channels are used to have greater control on
intermediaries and vice versa.
3. Competitive Factors: Companies may imitate the channels used by its competitors.
4. Market Factors: Size of market and geographical concentration of potential buyers affects
the channel selection.
5. Environmental Factors: Legal constraints and economic condition of a country. In a
depressed economy marketers use shorter channels to distribution.

IV. PROMOTION
• Promotion refers to the use of communication with the twin objective of informing
potential customers about a product/ service and persuading them to buy it.
• Promotion is an important element of marketing mix by which marketers uses various
tools of communication to encourage exchange of goods and services in the market.

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 • It refers a combination of promotional tools/ techniques used by an organization to
induce and persuade customers to buy its products.

PROMOTION MIX
Promotion mix refers to combination of promotional tools used by an organisation to achieve its
communication objectives.
Promotion mix tools:
(i) Advertising,
(ii) Personal Selling,
(iii) Sales Promotion,
(iv) Publicity.

1. ADVERTISING
An identified sponsor can define advertising as a paid form of non- personal presentation and
promotion of goods, services or ideas.
Most commonly used tool of promotion. It is an impersonal form to communication, which is
paid by the marketers (sponsors) to promote goods and services. Common mediums are
newspaper, magazine, television & radio.

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 FEATURES MERITS LIMITATIONS

• Paid form: sponser • Mass Reach: a large • Less Forceful: there

has to bear a cost of number of people is no compulsion on
communicating with can be reached over the prospects to pay
consumers. a vast geographical attention to the
• Impersonality: No area. message.
direct face-to-face • Enhancing Customer • Lack of Feedback:
contact between the Satisfaction and • Inflexibility: It is
prospect and the Confidence. less flexible as the
advertiser. • Expressiveness: It is message is
• Identified sponser: one of the most standardised and
Advertising is done forceful medium of not tailor made.
by some identified communication. • Low Effectiveness:
individual or • Economy: is a very It is difficult to make
company. economical mode of advertisingmessages
communication heard by the target
because of its mass prospects.
reach.

OBJECTIONS TO ADVERTISING
Some opponents say that the expenditure on advertising is a social waste as it adds to the cost,
multiplies the needs of people and undermines social values.
1. Adds to Cost: Advertising unnecessarily adds to the cost of product which is passed on to the
buyer in the form of high prices.
2. Undermines Social Values: It undermines social values and promotes materialism.
3. Confuses the Buyers: Product of similar nature/ quality confuses the buyer.
4. Encourages Sale of Inferior Products: It does not distinguish between superior and inferior
products.
5. Some Advertisements are in Bad Taste: These show something which in not approved by
some people.

2. PERSONAL SELLING
Personal selling consists of contacting prospective buyers of product personally i.e by getting
involved in a face to face interaction between seller and buyer for the purpose of sale.

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Features of the Personal Selling
1. Personal contact is established under personal selling.
2. Development of relationship with the prospective customers which are important in making
sale.
3. Oral conversation.
4. Quick solution of queries.

Merits of Personal Selling

1. Flexibility
2. Direct Feedback
3. Minimum wastage

ROLE OF PERSONAL SELLING

Importance to Business Importance to
Importance to Society
Organisation Customers
• i) Effective • (i) Help in Identifying • (i) Converts Latest
Promotional Tool Needs Demand
• (ii) Flexible Tool • (ii) Latest Market • (ii) Employment
• (iii) Minimises Information Opportunities
Wastage of Efforts • (iii) Expert Advice • (iii) Career
• iv) Consumer • (iv) Induces Customers Opportunities
Attention • (iv) Mobility of Sales
• (v) Lasting People
Relationship • (v) Product
• (vi) Personal Rapport Standardisation
• (vii) Role in
Introduction Stage
• viii) Link with
Customers

3. SALES PROMOTION
Sales Promotion refers to short term incentives or other promotional activities that seek to
stimulate interest in purchasing a product.

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 Limitations Of Sales Commonly used Sales
Merits of Sales Promotion
Promotion Promotion Activities
•Attention Value: Attract •Reflects Crisis: A firm that •Product Combination:
attention of people through frequently relies on sales Offering another product as
the usage of incentives. promotion activities may gift along with the purchase
•Useful In New Product give the impression that it is of a product.
Launch: Sales promotion unable to manage its sales •Rebate: Offering products at
tools induce people to break and there are no takers for special prices
away from their regular its products. •Instant draws and assigned
buying behavior and try new gift: Scratch a card and
products. •Spoils Product Image: instantly win a prize with
•Synergy in Total Consumers may feel that the purchase of a TV, Tea,
Promotional Efforts: Sales the products are not of good Refrigerator etc.
promotion activities add to quality or arenot •Lucky Draw: lucky draw
the overall effectiveness of appropriately priced. coupon for free petrol on
the promotional efforts of a purchase of certain quantity
firm. etc.
•Usable Benefit: ‘Purchase
goods worth Rs 3000 and
get a holiday package worth
Rs 3000 free etc.
•Full finance @ 0%: Many
marketers of consumer
durables such as Electronic
goods, automobiles etc.
offer easy financing schemes
such as‘24 easy instalments
etc.
•Contests: Conducting
competitive events involving
application of skills or
lucketc.
•Quantity Gift: Offering extra
quantity of the product e.g.,
Buy three and get one free.
•Refunds: Refunding a part
of price paid by customer on
production of some proof of
purchase.
•Discount: Offering products
at less than list price.
•Sampling: Offer of free
samples of the product to
potential customers.
Generally used at the time
of introduction of a product.

4. PUBLICITY:
Publicity generally takes place when favourable news is presented in the mass media about a
product or service. For example, if a manufacturer achieves a breakthrough by developing a car

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engine and if this news is covered by television or radio or newspapers in the form of a news
item.
Features of publicity are:
I. Publicity is an unpaid form of Communication
II. No identified sponsor

5. PUBLIC RELATIONS

Public relations covers a wide range of tactics and is usually involved in providing information
to independent media sources in the hope of gaining favorable coverage. It also involves a mix of
promoting specific products, services and events and promoting the overall brand of an
organization, which is an ongoing tact.
Role of Public Relations:

1. Press Relations: A press release is an announcement of an event, performance, or other

newsworthy item that is issued to the press by a public relations professional of an organization.
It is written in the form of a positive story with an attractive heading so that the media quickly
grasp and circulates the message.
2. Product publicity: The company tries to draw attention to new products by arranging sports
and cultural events like news conferences, seminars and exhibitions etc.
3. Corporate Communication: The image of the organisation is promoted with the help of
newsletters, annual reports, brochures etc.
4. Lobbying: The organisation maintain cordial relations with government officials and
ministers in charge of corporate affairs, industry, finance in respect to policies relating to
business and the economy.
5. Counselling: public relations department advises the management on general issues which
affect the public and the position the company.

Maintaining good public relations also helps in achieving the following marketing
objectives:
(a) Building awareness
(b) Building credibility
(c) Stimulates sales force

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(d) Lowers promotion costs

DIFFERENCE BETWEEN ADVERTISING AND PERSONAL SELLING

ADVERTISING PERSONAL SELLING

• Impersonal form of communication • Personal form of communication

• Transmission of standardised • Non standardised messages
messages • Flexible
• Inflexible • limited reach
• Mass reach • Cost per person is quite high
• Cost per person reached is very low. • Efforts take a lot of time to cover the
• Cover the market in a short time. entire market.
• Makes use of mass media • Makes use of sales staff.
• Lacks direct feedback • Direct and immediate feed back
• Useful in creating and building • Plays important role at the
interest awareness stage
• Target market is mainly consumers • Taget market is industrial buyers.

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