Full Marks- 80
The figures in the margin indicate full marks for the questions.
1(a) Analyze the significance of Marketing Management. Discuss the various components of marketing mix. (6+10=16)
-> Importance of marketing can be studied as follows:
(1) Marketing Helps in Transfer, Exchange and Movement of Goods:
Marketing is very helpful in transfer, exchange and movement of goods. Goods and services are made available to customers through various intermediaries’ viz., wholesalers and retailers etc. Marketing is helpful to both producers and consumers.
To the former, it tells about the specific needs and preferences of consumers and to the latter about the products that manufacturers can offer. According to Prof. Haney Hansen “Marketing involves the design of the products acceptable to the consumers and the conduct of those activities which facilitate the transfer of ownership between seller and buyer.”
(2) Marketing Is Helpful In Raising And Maintaining The Standard Of Living Of The Community:
Marketing is above all the giving of a standard of living to the community. Paul Mazur states, “Marketing is the delivery of standard of living”. Professor Malcolm McNair has further added that “Marketing is the creation and delivery of standard of living to the society”.
By making available the uninterrupted supply of goods and services to consumers at a reasonable price, marketing has played an important role in raising and maintaining living standards of the community. Community comprises of three classes of people i.e., rich, middle and poor. Everything which is used by these different classes of people is supplied by marketing.
In the modern times, with the emergence of latest marketing techniques even the poorer sections of society have attained a reasonable level of living standard. This is basically due to large scale production and lesser prices of commodities and services. Marketing has infact, revolutionized and modernized the living standard of people in modern times.
(3) Marketing Creates Employment:
Marketing is complex mechanism involving many people in one form or the other. The major marketing functions are buying, selling, financing, transport, warehousing, risk bearing and standardization, etc. In each such function different activities are performed by a large number of individuals and bodies.
Thus, marketing gives employment to many people. It is estimated that about 40% of total population is directly or indirectly dependent upon marketing. In the modern era of large scale production and industrialization, role of marketing has widened.
This enlarged role of marketing has created many employment opportunities for people. Converse, Huegy and Mitchell have rightly pointed out that “In order to have continuous production, there must be continuous marketing, only then employment can be sustained and high level of business activity can be continued”.
(4) Marketing as a Source of Income and Revenue:
The performance of marketing function is all important, because it is the only way through which the concern could generate revenue or income and bring in profits. Buskirk has pointed out that, “Any activity connected with obtaining income is a marketing action. It is all too easy for the accountant, engineer, etc., to operate under the broad assumption that the Company will realize many dollars in total sales volume.
However, someone must actually go into the market place and obtain dollars from society in order to sustain the activities of the company, because without these funds the organization will perish.”
Marketing does provide many opportunities to earn profits in the process of buying and selling the goods, by creating time, place and possession utilities. This income and profit are reinvested in the concern, thereby earning more profits in future. Marketing should be given the greatest importance, since the very survival of the firm depends on the effectiveness of the marketing function.
(5) Marketing Acts as a Basis for Making Decisions:
A businessman is confronted with many problems in the form of what, how, when, how much and for whom to produce? In the past problems was less on account of local markets. There was a direct link between producer and consumer.
In modern times marketing has become a very complex and tedious task. Marketing has emerged as new specialized activity along with production.
As a result, producers are depending largely on the mechanism of marketing, to decide what to produce and sell. With the help of marketing techniques a producer can regulate his production accordingly.
(6) Marketing Acts as a Source of New Ideas:
The concept of marketing is a dynamic concept. It has changed altogether with the passage of time. Such changes have far reaching effects on production and distribution. With the rapid change in tastes and preference of people, marketing has to come up with the same.
Marketing as an instrument of measurement, gives scope for understanding this new demand pattern and thereby produce and make available the goods accordingly.
(7) Marketing Is Helpful In Development Of An Economy:
Adam Smith has remarked that “nothing happens in our country until somebody sells something”. Marketing is the kingpin that sets the economy revolving. The marketing organization, more scientifically organized, makes the economy strong and stable, the lesser the stress on the marketing function, the weaker will be the economy.
The various components of marketing mix:-
4 P of Marketing
Product in Marketing Mix:
A product is a commodity, produced or built to satisfy the need of an individual or a group. The product can be intangible or tangible as it can be in the form of services or goods. It is important to do extensive research before developing a product as it has a fluctuating life cycle, from the growth phase to the maturity phase to the sales decline phase.
A product has a certain life cycle that includes the growth phase, the maturity phase, and the sales decline phase. It is important for marketers to reinvent their products to stimulate more demand once it reaches the sales decline phase. It should create an impact in the mind of the customers, which is exclusive and different from the competitor’s product. There is an old saying stating for marketers, “what can I do to offer a better product to this group of people than my competitors”. This strategy also helps the company to build brand value.
Price in Marketing Mix:
Price is a very important component of the marketing mix definition. The price of the product is basically the amount that a customer pays for to enjoy it. Price is the most critical element of a marketing plan because it dictates a company’s survival and profit. Adjusting the price of the product, even a little bit has a big impact on the entire marketing strategy as well as greatly affecting the sales and demand of the product in the market. Things to keep on mind while determining the cost of the product are, the competitor’s price, list price, customer location, discount, terms of sale, etc.,
Place in Marketing Mix:
Placement or distribution is a very important part of the marketing mix strategy. We should position and distribute our product in a place that is easily accessible to potential buyers/customers.
Promotion in Marketing Mix:
It is a marketing communication process that helps the company to publicize the product and its features to the public. It is the most expensive and essential components of the marketing mix, that helps to grab the attention of the customers and influence them to buy the product. Most of the marketers use promotion tactics to promote their product and reach out to the public or the target audience. The promotion might include direct marketing, advertising, personal branding, sales promotion, etc.
7 P of Marketing:
The 7Ps model is a marketing model that modifies the 4Ps model. As Marketing mix 4P is becoming an old trend, and nowadays, marketing business needs deep understanding of the rise in new technology and concept. So, 3 more new P’s were added in the old 4Ps model to give a deep understanding of the concept of the marketing mix.
People in Marketing Mix:
The company’s employees are important in marketing because they are the ones who deliver the service to clients. It is important to hire and train the right people to deliver superior service to the clients, whether they run a support desk, customer service, copywriters, programmers…etc. It is very important to find people who genuinely believe in the products or services that the particular business creates, as there is a huge chance of giving their best performance. Adding to it, the organization should accept the honest feedback from the employees about the business and should input their own thoughts and passions which can scale and grow the business.
Process in Marketing Mix:
We should always make sure that the business process is well structured and verified regularly to avoid mistakes and minimize costs. To maximize the profit, it’s important to tighten up the enhancement process.
Physical Evidence in Marketing Mix:
In the service industries, there should be physical evidence that the service was delivered. A concept of this is branding. For example, when you think of “fast food”, you think of KFC. When you think of sports, the names Nike and Adidas come to mind.
(b) “Marketing Planning and Control can be considered as the nerve-centre of marketing management.”- Elucidate. (16)
-> A “nerve center” in business terms is the department from which the organization is directed. It is a center of control over multiple organizational factors. It is a source of information and action. Marketing is said to be the nerve center of any organization because it is through marketing that guidance comes in developing and producing new goods, as well as guidance in servicing existing goods and existing customers.
Marketing plays a central role in organizational communication because corporate objectives are funneled through marketing and interpreted in terms of needs, costs and customers for other departments’ determination of goals for meeting corporate objectives. Marketing is the spearhead, the force that drives profitable growth with an eye to gaining new and cultivating existing customers, supporting research and development of new products and supporting sales of existing products.
Marketing determines what customers the organization will reach through customer demographics, segmentation, and niche analysis. Marketing also determines the marketing strategy to be employed in reaching them. The organization’s objectives, vision, and profitable growth are optimized through marketing, which makes marketing the nerve center of any organization.
2. (a) Explain the motives of consumer. Why consumer reacts differently with different products? – Explain with examples. (8+8=16)
-> Product buying motives refer to those influences and reasons, which prompt (i.e. induce) a buyer to choose a particular product in preference to other products. They include the physical attraction of the product (i.e. the design, shape, dimension, size, color, package, performance, price etc. of the product) or the psychological attraction of the product (i.e. the enhancement of the social prestige or status of the purchaser through its possession), desire to remove or reduce the danger or damage to life or body of the possessor, etc. In short, they refer to all those characteristics of a product, which induce a buyer to buy it in preference to other products.
Product buying motives may be sub-divided into two groups, viz., (1) emotional product buying motives and (2) rational product buying motives.
A. Promotional Product Buying Motives:
When a buyer decides to purchase a product without thinking over the matter logically and carefully (i.e., without much reasoning), she is said to have been influenced by emotional product buying motives. Emotional product buying motives include the following:
1. Pride or Prestige:
Pride is the most common and strongest emotional buying motive. Many buyers are proud of possessing some product (i.e., they feel that the possession of the product increases their social prestige or status). In fact, many products are sold by the sellers by appealing to the pride prestige of the buyers. For instance, diamond merchants sell their products by suggesting to the buyers that the possession of diamonds increases their prestige or social status.
2. Emulation or Imitation:
Emulation, i.e., the desire to imitate others, is one of the important emotional buying motives. For instance, a housewife may like to have a silk saree for the simple reason that all the neighboring housewives have silk sarees.
Affection or love for others is one of the stronger emotional buying motives influencing the purchasing decisions of the buyers. Many goods are purchased by the buyers because of their affection or love for others. For instance, a husband may buy a costly silk saree for his wife or a father buy a costly watch for his son or daughter out of his affection and love.
4. Comfort or desire for comfort:
Desire for comfort (i.e., comfortable living) is one of the important emotional buying motives. In fact, many products are bought comfort. For instance, fans, refrigerators, washing machines, cushion beds, etc. are bought by people because of their desire for comfort.
5. Sex appeal or sexual attractions:
Sex appeal is one of the important emotional buying motives of the buyers. Buyers buy and use certain things, as they want to be attractive to the members of the opposite sex. Men and women buy cosmetics, costly dresses, etc., because of this emotional motive, i.e., sex appeal.
Ambition is one of the emotional buying motives. Ambition refers to the desire to achieve a definite goal. It is because of this buying motive that, sometimes, customers buy certain things. For instance, it is the ambition that makes many people, who do not have the facilities to pursue their college education through regular colleges, pursue their education through correspondence courses.
7. Desire for distinctiveness or individuality:
Desire for distinctiveness, i.e., desire to be distinct from others, is one of the important emotional buying motives. Sometimes, customers buy certain things, because they want to be in possession of things, which are not possessed by others. Purchasing and wearing a particular type of dress by some people is because of their desire for distinctiveness or individuality.
8. Desire for recreation or pleasure:
Desire for recreation or pleasure is also one of the emotional buying motives. For instance, radios, musical instruments, etc. are bought by people because of their desire for recreation or pleasure.
9. Hunger and thirst:
Hunger and thirst are also one of the important emotional buying motives. Foodstuffs, drinks, etc. are bought by the people because of this motive.
Habit is one of the emotional considerations influencing the purchasing decision of the customers. Many customers buy a particular thing because of habit, (i.e. because they are used to the consumption of the product). For instance, many people purchase cigarettes, liquors, etc. because of sheer habit.
B. Rational Product Buying Motives:
When a buyer decides to buy a certain thing after careful consideration (i.e. after thinking over the matter consciously and logically), s/he is said to have been influenced by rational product buying motives. Rational product buying motives include the following:
1. Safety or Security:
Desire for safety or security is an important rational buying motive influencing many purchases. For instance, iron safes or safety lockers are bought by the people because they want to safeguard their cash, jewelries etc., against theft. Similarly, vitamin tablets, tonics, medicines, etc., are bought by the people because of this motive, i.e. they want to safeguard their health and protect themselves against diseases.
Economy, i.e. saving in operating costs, is one of the important rational buying motives. For instance, Hero Honda bikes are preferred by the people because of the economy or saving in the operating cost, i.e. petrol costs.
3. Relatively low price:
Relatively low price is one of the rational buying motives. Most of the buyers compare the prices of competing products and buy things, which are relatively cheaper.
Suitability of the products for the needs is one of the rational buying motives. Intelligent buyers consider the suitability of the products before buying them. For instance, a buyer, who has a small dining room, naturally, goes in for a small dining table that is suitable, i.e. that fits in well in the small dining room.
5. Utility or versatility:
Versatility or the utility of a product refers to that quality of the product, which makes it suitable for a variety of uses. Utility of the product is one of the important rational buying motives. People, often, purchase things that have utility, i.e. that can be put to varied uses.
6. Durability of the product:
Durability of the product is one of the most important rational buying motives. Many products are bought by the people only on the basis of their durability. For instance, buyers of wooden furniture go in for teak or rosewood table, though they are costlier, as they are more durable than ordinary wooden furniture.
7. Convenience of the product:
The convenience of the product (i.e. the convenience the product offers to the buyers) is one of the important rational product buying motives. Many products are bought by the people because they are more convenient to them. For instance, automatic watches, gas stoves, etc., are bought by the people because of the convenience provided by them.
“Consumer behavior is the actions and the decision processes of people who purchase goods and services for personal consumption” – according to Engel, Blackwell, and Mansard,
Consumer buying behavior refers to the study of customers and how they behave while deciding to buy a product that satisfies their needs. It is a study of the actions of the consumers that drive them to buy and use certain products.
Study of consumer buying behavior is most important for marketers as they can understand the expectation of the consumers. It helps to understand what makes a consumer to buy a product. It is important to assess the kind of products liked by consumers so that they can release it to the market. Marketers can understand the likes and dislikes of consumers and design base their marketing efforts based on the findings.
Consumer buying behavior studies about the various situations such as what do consumers buy, why do they buy, when do they buy, how often do consumers buy, for what reason do they buy, and much more.
For example, consumer buying behavior is studied by consumer researchers and their aim is to know why women buy moisturizers (to reduce skin problems), the most preferred brand (Olay, L’Oréal), how often do they apply it (twice a day, thrice a day), where do the women prefer to buy it (supermarkets, online) and how many times do they buy it (weekly, monthly).
It’s insightful to listen to some of the first cut opinions on Vocalley from consumers on how they think about various brands and their expectations, when it comes to electronic products and gadgets.
Importance of Consumer Behavior
Understanding consumer behavior is essential for a company to find success for its current products as well as new product launches. Every consumer has a different thought process and attitude towards buying a particular product. If a company fails to understand the reaction of a consumer towards a product, there are high chances of product failure.
Due to the changing fashion, technology, trends, living style, disposable income, and similar other factors, consumer behavior also changes. A marketer has to understand the factors that are changing so that the marketing efforts can be aligned accordingly.
What is the importance of consumer buying behavior? This article outlines several of them.
1. Consumer Differentiation:
In marketing, consumer differentiation is a way to distinguish a consumer from several other consumers. This helps to make a target group of consumers with the same or similar behavior.
Though you have a targeted customer demographic in your business, you can still have variations between individual customers. Each group of consumers are different and their needs and wants differ from other groups. When a marketer is knowledgeable about differentiation of each group of consumers, he can design separate marketing programes.
Consumer differentiation will help to tailor your strategies to the needs of varying customer groups. When consumer differentiation is done, you can expand the width and breadth of your services. You will be able to effectively serve a wider group of people.
2. Retention of Consumers:
“Consumer behavior is of most importance to marketers in business studies as the main aim is to create and retain customers” says Professor Theodore Levitt (Kumar, 2004).
Consumer behavior is not just important to attract new customers, but it is very important to retain existing customers as well. When a customer is happy about a particular product, he/she will repeat the purchase. Therefore, marketing the product should be done in such a way that it will convince customers to buy the product again and again.
Thus, it is very evident that creating customer and retaining them is very important. This can be done only by understanding and paying attention towards the consumer’s buying behavior.
3. Design Relevant Marketing Programe:
Understanding consumer behavior allows you to create effective marketing campaigns. Each campaign can speak specifically to the separate group of consumers based on their behavior.
For example, while targeting kids market, you may have to look out for venues such as TV ads, school programes and blogs targeting young mothers. You will need to take different messaging approaches for different consumer groups.
A study of consumer behavior enables the marketers to understand what motives consumers to make purchases. Furthermore, the same motive can be utilized in advertising media to stir the desire to make a purchase. Moreover, marketers should take decisions regarding the brand logo, coupons, packing and gifts on the basis of consumer behavior.
4. Predicting Market Trend:
Consumer behavior analysis will be the first to indicate a shift in market trend. For example, the recent trend of consumers is towards environment friendliness and healthy food. This changing market trend was observed by many brands including McDonalds . Based on the consumer behavior, McDonald’s brought healthy food options.
By conducting consumer behavior study, a company saves a lot of resources that might otherwise be allocated to produce a product that will not be sold in the market. For example, in summer a brand will not waste its resources for producing a product that will not sell in summer. Based on consumer behavior the company decides on production strategy which will save on warehouse costs and marketing costs.
One of the most important reasons to study consumer behavior is to find out answers to some of the questions:
- Is the customer buying from your competitor?
- Why is a consumer buying from your competitor?
- What features attracts a consumer to your competitor products?
· What gaps are your consumers identifying in your products when compared to your competitors?
Studying consumer behavior facilitates in understanding and facing competition. Based on consumers’ expectations, your brand can offer competitive advantages.
6. Innovate New Products:
We all know some of the big names such as New Coke, Crystal Pepsi, Colgate Kitchen Entrées, Earring Magic Ken Doll, and Wheaties Dunk-a-Balls Cereal. Can you see the similarities in these products? Yes, they all failed!!
The sad truth is that most new products and new ideas end up in failure. There is an estimate of new product failures – they range from 33% to 90% based on the kind of industry.
Companies consistently strive hard to improve the success rate of their new products or new ideas. One of the most important ways is to conduct sound and thoughtful consumer behavior study.
With the help of consumer behavior analysis, Nike realized that most of its target audience is not professional athletes, but many of them were striving to be more like them. So at the 2012 Olympics in London, Nike introduced a campaign to encourage athletics called ‘Find Your Greatness’ . It aimed to promote the aspirations of being an athlete, not just with high-performing athletes, but wanted to include all people regardless of their physical capability. The campaign was well planned and was data-driven, of course, carefully analyzed before taking any action. This message inspired many consumers and had enormous appeal for target consumers.
7. Stay Relevant in the Market
When the world is changing as rapidly as it is happening today, the biggest challenge we all face is staying relevant to our target market. And do you know what is the main reason behind the rapid changes? It is the ever-changing behavior of our customers.
Today’s consumers have greater choices and opportunities, which means they can easily switch to a company that offers better products and services.
“ The pre-eminent skill required to shift ahead in the twenty-first century is the ability to see and seize. ” -Adamson and Steckel, authors of Shift Ahead.
Losing relevance will only cost the company its market share. Haven’t we seen Sony Walkman failing to stay relevant in the digital music era, and the taxi industry doom with no preparedness to battle the UBER uprise!!
8. Improve Customer Service
Consumers require different levels of customer service, and understanding the differences within your customer base will help you provide the most appropriate service for individual needs.
For example, if you own an electronics store, high school or college students who buy a new laptop are more likely to understand the features they’re looking for than a person buying his first computer. With the first demographic, your service goal will be to provide information about the latest trends in technology, while with the second demographic, you’ll need to spend more time educating the customer, finding out what his specific needs are, and even teaching him how to use the features of his new electronic device.
(b) What is Marketing Information System? Discuss the need for an orderly ongoing Marketing Information System. 8+8=16
-> The marketing information system refers to the use of technology for the arrangement of the relevant data related to the market, sales, promotion, price, competition and allocation of goods and service. This information is acquired after a proper analysis and understanding of the marketing environment to ensure effective decision making in the organization.
It majorly deals with the input (i.e., gathering appropriate internal and external data), generating useful information out of it (with the help of the various marketing information system components) and then communicating the outcome so acquired to the decision-makers.
Role of Marketing Information System:-
Proper Marketing Planning
Marketing information system helps in framing of marketing policies. It regularly supplies all market related information to management for regulating all market operations.
Various budgets are prepared in accordance with market conditions through information provided by this system for carrying out production, distribution and marketing activities. Proper availability of information helps in reducing the complexity of designing marketing activities which keeps on changing as per the requirements of market.
Anticipation of Customer Demands
Anticipation of customer needs and wants is important for every organisation. It helps in taking proper decisions regarding production activities and delivering the right product which may satisfy customers. If producers do not have an idea of what their customer wants then they may incur losses by producing product which may not be accepted by customers.
Adequate information about nature, size and character of consumer demands is necessary for manufacturing right product. It gives full details regarding changing tastes, fashions and likes of customers.
Helps in Analyzing Competition
Marketing information system helps organizations in analyzing the competitive environment around them. It enables the prediction of competitor’s behavior which helps in formulating strategies accordingly to gain advantage over them. Various decisions regarding nature of product, pricing and promotion are taken by business by considering their rivals activities.
Today’s market is very competitive and every business needs to face and overcome it. Through market intelligence system, organizations get regularly all information about market competition which helps in making plans for overcoming this.
Increase the Efficiency
Every organization strives to enhance its efficiency and overall profitability. Marketing information system helps in proper management and coordination of various departments within organization. It develops a proper communication network through which information can be easily circulated within whole organization among employees and employers. Employers can easily communicate employees about their role in accordance with market demand and trends.
Employees can also contact their employers in case of any problem so that it can be easily resolved. Proper communication between these two give clear pictures to employees regarding what is to be done so that they can focus on their activities attentively. This increase the overall productivity and efficiency of organization.
Better Understanding with Customers
Developing better understanding with customers is beneficial for retaining them for a longer term. Market information system aims at strengthening the relation of business with customers. It develops a proper channel through which business are able to interact with their customers.
Business can easily take their all queries and resolves them timely which help in satisfying them. As a part of marketing information system, business maintains an online website for providing various customer support services. Customers can contact them through their websites and send them feedback or their queries. A proper communication between customers and organization takes place which results in better understanding among them.
Recognizes Market Trends and Changes
Marketing information system recognizes all trends and changes prevailing in market. It monitors and acquires the current economic conditions and regularly updates the business about it. Business requires market intelligence system to keep in touch with market always.
They are able to frame better strategies to reflect these prevailing changes in their activities. By analyzing the current economic conditions of market, business can easily decide optimum production of its products. Overproduction or underproduction is both unfavorable for any organization. Proper analysis of market changes and trends helps in avoiding these situations and production of right quantity.
Enhances Management Performance
Marketing information system has an important role in improving the performance of management. Quality of information available with managers impacts their decision making ability. It collects data from both internal and external sources of organization and delivers it regularly to managers.
Management has clear idea of what is going inside the organization and can check whether it is in line with requirements of market. They can take all necessary steps as and when required to bring changes accordingly. By maintaining a systematic internal records managers can easily ensure that optimum amount of required resources are always maintained to avoid any crisis in organization.
Need of Marketing Information System:-
After understanding what Marketing Information System is, we move on to the need of Marketing Information System. Information Systems is growing at a fast pace to become one of the most promising career fields in today’s world. With everything happening digitally, the demand for Marketing Information System professionals is increasing more than ever. Marketing Information System involves performing a number of tasks simultaneously such as-
- Processing data
- Initiating transactions
- Responding to inquiries
- Producing reports and its summaries
· Manage the data created within the structure of a particular business
Marketing Information System acts in an organization just like a nervous system in a body by providing with the relevant information for ease in the process of decision making.
The purpose of Marketing Information System is to work towards satisfying the information needs of everyone in the business. It means providing the relevant information to those who need it.
Thus, Marketing Information System has a lot of potential to become one of the most promising careers for individuals interested in the workings of a business.
3. (a) What is Product Line? How does it differ from “Product Mix”? Discuss with suitable examples, the job of Product (Line) Manager. (4+6+6=16)
(b) Explain the importance of Pricing in Marketing. Analyze the price setting mechanism. (16)
-> Importance of Pricing in Marketing:-
1. Price is the Pivot of an Economy:
In the economic system, price is the mechanism for allocating resources and reflecting the degrees of both risk and competition. In an economy particularly free market economy and to a less extent in controlled economy, the resources can be allocated and reallocated by the process of price reduction and price increase.
Price policy is a weapon to realize the goals of planned economy where resources can be allocated as per planned priorities.
Price is the prime mover of the wheels of the economy namely, production, consumption, distribution and exchange. As price is a sacrifice of purchasing power, it affects the living standards of the society; it regulates business profits and, hence, allocates the resources for the optimum output and distribution. Thus, it acts as powerful agent of sustained economic development.
2. Price regulates demand:
The power of price to produce results in the market place is not equalled by any other component in the product-mix.
It is the greatest and the strongest ‘P’ of the four ‘Ps’ of the mix. Marketing manager can regulate the product demand through this powerful instrument. Price increases or decreases the demand for the products. To increase the demand, reduce the price and increase the price to reduce the demand.
Price has a special role to play in developing countries where the marginal value of money is high than those of advanced nations. De-marketing strategy can be easily implemented to meet the rising demand for goods and services.
As an instrument, it is a big gun and it should be triggered exclusively by those who are familiar with its possibilities and the dangers involved.
It is so because; the damage done by improper pricing may completely sap the effectiveness of the well-conceived marketing programme. It may defame even a good product and fame well a bad product too.
3. Price is competitive weapon:
Price as a competitive weapon is of paramount importance. Any company whether it is selling high or medium or low priced merchandise will have to decide as to whether its prices will be above or equal to or below its competitors. This is a basic policy issue that affects the entire marketing planning process. Secondly, price does not stand alone as a device for achieving a competitive advantage.
In fact, indirect and non-price competitive techniques often are more desirable because, they are more difficult for the competitors to copy. Better results are the outcome of a fine blend of price and non-price strategies. Thirdly, there is close relationship between the product life-cycle and such pricing for competition.
There are notable differences in the kinds of pricing strategies that should be used in different stages. Since the product life span is directly related to the product’s competitiveness, pricing at any point in the life-cycle should reflect prevailing competitive conditions.
4. Price is the determinant of profitability:
Price of a product or products determines the profitability of a firm, in the final analysis by influencing the sales revenue. In the firm, price is the basis for generating profits. Price reflects corporate objectives and policies and it is an important ingredient of marketing mix. Price is often used to off-set the weaknesses in other elements of the marketing-mix.
Price changes can be made more quickly than any other changes in the product, channel, and personal selling and sales-promotion includes advertising. It is because; price change is easily understood and communicating to the buyer in a precise way. That is why, price changes are used frequently for defensive and offensive strategies. The impact of price rise or fall is reflected instantly in the rise or fall of the product profitability, thinking that other variables are unaffected.
5. Price is a decision input:
In the areas of marketing management, countless and crucial decisions are to be made. Comparatively marketing decisions are more crucial because, they have bearing on the other branches of business and more difficult as the decision-maker is to shoot the flying game in the changing marketing environment.
Normally, profit or contribution is taken as a base for pay-off conditions. Price can be a better criterion for arriving at cut-off point because; price is the determinant of profit or contribution.
As pointed earlier, price as an indicator has a special role in the decision-making process in developing countries because, consumer response to price changes will be more quick and tangible as people have higher marginal value of money at their disposal. For instance, if it is a decision regarding selecting product improvement possibilities, select that possibility which gives the highest price as compared to the cost.
These five points make product pricing an important and major function of marketing manager. However, until recently, it has been one of the most neglected areas of marketing management.
In fact, we must have a specialist in pricing as we do have in other functions of marketing. This negligence is quite evident from the fact that even the well-known companies in the world price their products on simple concepts of costs market position competition and desired profit. Scientific pricing is much more than this easy exercise.
A price-setting mechanism refers to how the price of a commodity (or price relationship between multiple commodities) is determined by the market.
It is essentially the link between pricing behavior and the underlying physical behavior that affects pricing.
Common examples of price-setting mechanisms are:
· Marginal cost of production
· Value in use
· Substitution value (versus alternatives)
· Import parity pricing
· Export net-back pricing
Price-setting mechanisms can be determined either by market forces or by direct, explicit contract terms.
4. (a) What are the functions of Marketing Channel? Do you think that these functions are absolute for marketing success? (16)
-> A marketing channel consists of individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users.
Marketing channels are the ways that goods and services are made available for use by the consumers. All goods go through channels of distribution, and marketing depends on the way goods are distributed. The route that the product takes on its way from production to the consumer is important because a marketer must decide which route or channel is best for his particular product.
A marketing channel is the series of interdependent marketing institutions that facilitate transfer of title to a product as it moves from producer to ultimate consumer or industrial user. The title may be transferred directly, as and when the commodity is bought or sold outright, or indirectly, as and when the transaction is negotiated through a functional middleman such as an agent or broker who does not take credit to it.
Most Important Functions of Marketing Channel
1) Information Provider:
Middlemen have a role in providing information about the market to the manufacturer. Developments like changes in customer demography, psychography, media habits and the entry of a new competitor or a new brand and changes in customer preferences are some of the information that all manufacturers want. Since these middlemen are present in the market place and close to the customer they can provide this information at no additional cost.
2) Price Stability:
Maintaining price stability in the market is another function a middleman performs. Many a time the middlemen absorb an increase in the price of the products and continue to charge the customer the same old price. This is because of the intra-middlemen competition. The middleman also maintains price stability by keeping his overheads low.
Promoting the product/s in his territory is another function that middlemen perform. Many of them design their own sales incentive programmes, aimed at building customers traffic at the other outlets.
Middlemen finance manufacturers’ operation by providing the necessary working capital in the form of advance payments for goods and services. The payment is in advance even though the manufacturer may extend credit, because it has to be made even before the products are bought, consumed and paid for by the ultimate consumer.
Most middlemen take the title to the goods, services and trade in their own name. This helps in diffusing the risks between the manufacturer and middlemen. This also enables middlemen to be in physical possession of the goods, which in turn enables them to meet customer demand at very moment it arises.
6) Help in Production Function:
The producer can concentrate on the production function leaving the marketing problem to middlemen who specialize in the profession. Their services can best utilized for selling the product. The finance, required for organising marketing can profitably be used in production where the rate of return would be greater.
7) Matching Demand and Supply:
The chief function of intermediaries is to assemble the goods from many producers in such a manner that a customer can affect purchases with ease. The goal of marketing is the matching of segments of supply and demand.
In pricing a product, the producer should invite the suggestions from the middlemen who are very close to the ultimate users and know what they can pay for the product. Pricing may be different for different markets or products depending upon the channel of distribution.
9) Standardizing Transactions:
Standardizing transactions is another function of marketing channels. Taking the example of the milk delivery system, the distribution is standardized throughout the marketing channel so that consumers do not need to negotiate with the sellers on any aspect, whether it is price, quantity, method of payment or location of the product.
By standardizing transactions, marketing channels automate most of the stages in the flow of products from the manufacturer to the customers.
10) Matching Buyers and Sellers:
The most crucial activity of the marketing channel members is to match the needs of buyers and sellers. Normally, most sellers do not know where they can reach potential buyers and similarly, buyers do not know where they can reach potential sellers. From this perspective, the role of the marketing channel to match the buyers’ and sellers’ needs becomes very vital. For example, a painter of modern art may not know where he can reach his potential customers, but an art dealer would surely know.
5. Write brief notes on any four of the following: (4×4=16)
a) Basis of Market Segmentation.
-> Market segmentation is the process of dividing a target market into smaller, more defined categories. It segments customers and audiences into groups that share similar characteristics such as demographics, interests, needs, or location.
Basis of Market Segmentation:-
Demographic segmentation is one of the most popular and commonly used types of market segmentation. It refers to statistical data about a group of people.
Demographic Market Segmentation Examples
- Family Situation
- Annual Income
Where the above examples are helpful for segmenting B2C audiences, a business might use the following to classify a B2B audience:
- Company size
- Job function
Because demographic information is statistical and factual, it is usually relatively easy to uncover using various sites for market research .
A simple example of B2C demographic segmentation could be a vehicle manufacturer that sells a luxury car brand (ex. Maserati). This company would likely target an audience that has a higher income.
Another B2B example might be a brand that sells an enterprise marketing platform. This brand would likely target marketing managers at larger companies (ex. 500+ employees) who have the ability to make purchase decisions for their teams.
Psychographic segmentation categorizes audiences and customers by factors that relate to their personalities and characteristics.
Psychographic Market Segmentation Examples
- Personality traits
- Psychological influences
- Subconscious and conscious beliefs
Psychographic segmentation factors are slightly more difficult to identify than demographics because they are subjective. They are not data-focused and require research to uncover and understand.
For example, the luxury car brand may choose to focus on customers who value quality and status. While the B2B enterprise marketing platform may target marketing managers who are motivated to increase productivity and show value to their executive team.
While demographic and psychographic segmentation focus on who a customer is, behavioral segmentation focuses on how the customer acts.
Behavioral Market Segmentation Examples
- Purchasing habits
- Spending habits
- User status
- Brand interactions
Behavioral segmentation requires you to know about your customer’s actions. These activities may relate to how a customer interacts with your brand or to other activities that happen away from your brand.
A B2C example in this segment may be the luxury car brand choosing to target customers who have purchased a high-end vehicle in the past three years. The B2B marketing platform may focus on leads who have signed up for one of their free webinars.
Geographic segmentation is the simplest type of market segmentation. It categorizes customers based on geographic borders.
Geographic Market Segmentation Examples
· ZIP code
· Radius around a certain location
· Urban or rural
Geographic segmentation can refer to a defined geographic boundary (such as a city or ZIP code) or type of area (such as the size of city or type of climate).
An example of geographic segmentation may be the luxury car company choosing to target customers who live in warm climates where vehicles don’t need to be equipped for snowy weather. The marketing platform might focus their marketing efforts around urban, city centers where their target customer is likely to work.
b) Market Environment.
-> Marketing Environment is the combination of external and internal factors and forces which affect the company’s ability to establish a relationship and serve its customers.
The marketing environment of a business consists of an internal and an external environment.
- The internal environment is company-specific and includes owners, workers, machines, materials etc.
- The external environment is further divided into two components: micro & macro.
o The micro or the task environment is also specific to the business but is external. It consists of factors engaged in producing, distributing, and promoting the offering.
o The macro or the broad environment includes larger societal forces which affect society as a whole. It is made up of six components: demographic, economic, physical, technological, political-legal, and social-cultural environment.
Components of Marketing Environment
The marketing environment is made up of the internal and external environment of the business. While the internal environment can be controlled, the business has less or no control over the external environment.
The internal environment of the business includes all the forces and factors inside the organization which affect its marketing operations. These components can be grouped under the Five Ms of the business, which are:
- Men: The people of the organization including both skilled and unskilled workers.
- Minutes: Time taken for the processes of the business to complete.
- Machinery: Equipment required by the business to facilitate or complete the processes.
- Materials: The factors of production or supplies required by the business to complete the processes or production.
- Money: Money is the financial resource used to purchase machinery, materials, , and pay the employees.
The internal environment is under the control of the marketer and can be changed with the changing external environment. Nevertheless, the internal marketing environment is as important for the business as the external marketing environment. This environment includes the sales department, the marketing department, the manufacturing unit, the human resource department, etc.
The external environment constitutes factors and forces which are external to the business and on which the marketer has little or no control. The external environment is of two types:
- Micro marketing environment
- Macro marketing environment
The micro-component of the external environment is also known as the task environment. It comprises of external forces and factors that are directly related to the business. These include suppliers, market intermediaries, customers, partners, competitors and the public
- Suppliers include all the parties which provide resources needed by the organization.
- Market intermediaries include parties involved in distributing the product or service of the organization.
- Partners are all the separate entities like advertising agencies, market research organizations, banking and insurance companies, transportation companies, brokers, etc. which conduct business with the organization.
- Customers comprise of the target group of the organization.
- Competitors are the players in the same market who targets similar customers as that of the organization.
- Public is made up of any other group that has an actual or potential interest or affects the company’s ability to serve its customers.
The macro component of the marketing environment is also known as the broad environment. It constitutes the external factors and forces which affect the industry as a whole but don’t have a direct effect on the business. The macro-environment can be divided into 6 parts.
The demographic environment is made up of the people who constitute the market. It is characterized as the factual investigation and segregation of the population according to their size, density, location, age, gender, race, and occupation.
The economic environment constitutes factors which influence customers’ purchasing power and spending patterns. These factors include the GDP, GNP, interest rates, inflation, income distribution, government funding and subsidies, and other major economic variables.
The physical environment includes the natural environment in which the business operates. This includes the climatic conditions, environmental change, accessibility to water and raw materials, natural disasters, pollution etc.
The technological environment constitutes innovation, research and development in technology, technological alternatives, innovation inducements also technological barriers to smooth operation. Technology is one of the biggest sources of threats and opportunities for the organization and it is very dynamic.
The political & legal environment includes laws and government’s policies prevailing in the country. It also includes other pressure groups and agencies which influence or limit the working of the industry and/or the business in the society.
The social-cultural aspect of the macro-environment is made up of the lifestyle, values, culture, prejudice and beliefs of the people. This differs in different regions.
c) Mass Marketing.
-> Mass marketing is a market strategy whose aim is to appeal to the largest portion of the market while ignoring niche demographic differences, in order to reach the highest number of potential customers possible. This marketing strategy focuses on high sales volumes at lower price points, traditionally using radio, television and print media to gain maximum exposure for the product. This large market coverage strategy is the opposite of niche marketing and seeks to appeal to all customers regardless of niche or segmentation by offering products that are useful to a wide variety of consumers with different needs.
Mass marketing is most effective when used to advertise products that are considered necessities, products that a large number of people are already guaranteed to be shopping for anyway. By building brand awareness through memorable advertisements, mass marketing aims to alter the behavior of consumers so they will be directed towards the product being marketed. By producing goods that are needed by a large market and offering them at competitive prices, a mass marketing strategy increases the potential for high volume sales while reducing the costs of manufacturing through mass production.
Products that are mass marketed often practice planned obsolescence in order to reduce the cost of production and ensure that consumers will have to come back and buy the product again. By manufacturing products with low quality materials, companies can ensure consumers will need to replace their items, creating opportunity for future sales. A large number of these products are considered staples—items that customers regularly purchase after they wear out or are used up. Staples can be promoted as being cheaper, even they are a less durable product, because they are sold at a low enough cost to make recurring purchases affordable.
Mass Marketing Techniques
A number of techniques are used by mass marketers to appeal to the largest audience possible. The shotgun approach, which attempts to reach the audience with advertising on traditional mass media such as television, radio, and the internet, has been widely used and is likely the most familiar technique Advertisements utilizing the shotgun approach present a non-exclusive message that appeals to a broad range of customers.
Guerrilla marketing is another commonly used tactic in mass market strategies. This strategy aims to produce advertisements that capture the attention of a large market with exciting and memorable messages while engaging consumers in a positive way. By utilizing online distribution methods, this strategy tends to minimize the cost of advertising while offering companies the ability to interact with a large base of viewers. In theory, guerrilla marketing allows a company to leave a stronger impression with consumers by cutting through the noise of a saturated market.
Disadvantages of Mass Marketing
Although mass marketing is widely used, a number of disadvantages that can make this strategy less effective than market segmentation should be considered. An increasing number of consumers are dissatisfied with the “one size fits all” approach and seek out more specialized products than those offered under the mass marketing umbrella. The rise of online reviews has muted the swaying power of advertisements, taking the effectiveness of directing messages about their products away from companies and placing it in the hands of consumers. The effectiveness of mass marketing to attract customers has decreased as companies’ marketing strategies attempt to replicate traditional advertising efforts in the new world of online marketing.
Culture and location’s impact on how advertising messages are received by customers is another disadvantage of mass marketing. A mass marketing campaign may be successful in one region while failing to make an impression on consumers in another. The geographic location and culture of a consumer base have an impact on how those consumers respond to a message, and consumers in different regions will often require different services and products related to their locations. By targeting advertising in regions that may not have a need or interest in a type of product or service, companies can end up wasting money on marketing efforts that don’t attract new sales or customers.
Because of the high cost of mass market efforts, this strategy often yields a lower return on investment than other strategies, in spite of its potential to generate high volumes of sales. Production costs for advertising spots, as well as the cost of placing those ads on the radio, internet, and television mean that this strategy often requires a large marketing budget. While mass marketing can be successful for general products and is typically considered low risk, the potential of a company’s message not resonating with consumers could lead to money wasted on failed advertising.
d) International Marketing.
-> International marketing may be defined as an activity related to the sale of goods and services of one country in the other, subject to the rules and regulations framed by the countries concerned.
In simple words, it refers to marketing activities and operations among the countries of the world following different political and economic systems.
International marketing is marketing abroad i.e., beyond the political boundaries of the country. International marketing brings countries closer due to economic needs and facilitates understanding and co-operation among them.
International marketing, though it has certain distinct characteristics, is similar to domestic marketing in terms of certain technical attributes. Marketing can be concerned as an internal part of two processes, viz. technical and social. International marketing and Domestic marketing are identic.al, so far as technical process is concerned.
It includes non-human factors such as product, price, cost, brands etc. The basic principles regarding these variables are of universal applicability. But the social aspects of marketing are unique in any given stratum, because it involves human elements, namely, the behavior pattern of customers and the given characteristics of a society, such as consumers attitude, values etc. It is obvious that marketing, to the extent it is visualized as a social process, will be different from domestic marketing.
The scope of international marketing essentially includes exporting of goods and services in foreign markets. The exporter performs various activities, other than exporting the goods and services.
These activities are:
A branch in foreign market for processing, packaging or assembling the goods according to the needs of the markets. Sometimes complete manufacturing is carried out by the branch through direct investments.
2. Joint Ventures and Collaborations:
International marketing includes establishing joint ventures and collaboration in foreign countries with some foreign firms for manufacturing and/or marketing the product. Under these arrangements, the company works in collaboration with the foreign firm in order to exploit the foreign markets.
3. Licensing Arrangements:
The company, under the system, establishes licensing arrangements with the foreign term whereby foreign enterprises are granted the right to use the exporting company’s know- how, viz., patents, processes or trademarks according to the terms of agreement with or without financial investment.
4. Consultancy Services:
Offering consultancy services are also covered in international marketing scope. The exporting company offers consultancy services by undertaking turnkey projects in foreign countries. For this purpose, the exporting company sends its consultants and experts in foreign countries who guide and direct the manufacturing activities on the spot.
5. Technical and Managerial Know-How:
The scope of international marketing also includes the technical and managerial know-how provided by the exporting company to the importing company. The technicians and managerial personnel of the exporting company guide and train the technicians and managers of the importing company.
1. Different Legal System:
Every Country has its own legal system. Some of the countries follow English Common Law while others follow the civil law. Some of the European countries are having their own legal system. This difference in the legal system among different countries increases the difficulties of businessmen.
It is not sure for the businessmen that which legal system will be applicable to their business transactions. There must be uniform legal system. However some of the agencies are trying to make it uniform for all countries. The United Nations Commission on International Trade Law is also supporting the opinion of uniformity and is doing, its efforts to bring uniformity in International trade Law.
2. Market Characteristics:
The Market Characteristics of every Country is different due to the environmental factors, demand patterns, Government Controls etc. In some countries like India and USA the market characteristics are found different from state to state. It is because of all above factors responsible for the market characteristics.
3. Monetary System:
The monetary system of each country is decided by the government of that country and the exchange value of country’s currency is being determined by the forces of supply and demand.
4. Procedure and Documentation:
Every country has its own procedure of documentation requirements for the purpose of experts. Every business house has to comply with these rules and regulation for the purposes of export and imports.
e) Social Marketing.
-> Social marketing is marketing designed to create social change, not to directly benefit a brand. Using traditional marketing techniques, it raises awareness of a given problem or cause, and aims to convince an audience to change their behaviors.
So, instead of selling a product, social marketing “sells” a behavior or lifestyle that benefits society, in order to create the desired change. This benefit to the public good is always the primary focus. And instead of showing how a product is better than competing products, social marketing “competes” against undesirable thoughts, behaviors, or actions.
Social marketing is commonly used for causes like:
Health and safety, including:
- Promoting exercise and healthy eating
- Safe driving
- Railroad station safety
Environmental causes, including:
- Endangered species awareness
Social activism, including:
· Illuminating struggles that people of color, people with disabilities, etc. face, then inspiring people to fight against mechanisms that create inequality
- Fighting gender stereotypes
Who initiates these social marketing campaigns? Nonprofit organizations and charities run the majority of social marketing campaigns. Government organizations, highway safety coalitions, and emergency services (police, fire, ambulance) run them as well. But social marketing is not out of the question if you’re a commercial business. Commercial brands will sometimes run social marketing campaigns for causes they are passionate about.
The 4 Ps of Social Marketing
Now that we’ve thoroughly established the social marketing definition, let’s take a look at 4 essential elements for any marketing campaign— the “4 Ps” —and see how they work within the social marketing sphere. These “Ps” are product, price, place, and promotion, and they’re also known as the “marketing mix.” You’ll need to define these factors before you design your social marketing campaign, and keep them central when you design.
Product: With social marketing, the “product” is the desired social action and the benefits this action offers. Make sure that this change is presented as enticingly as possible…this may include framing the opposite behavior as negative. Also, clarity is key. Make sure your audience can quickly and easily understand your “product” and its benefits.
Price: Minimize the “price” that your audience believes they have to “pay” for the desired social action to take place.
This price isn’t all monetary. It’s also about minimizing the difficulty, time, and psychological/emotional costs that people will incur. So, when you’re designing a social marketing campaign, you’ll need to think about (and research) the obstacles that hinder your audience from performing the behavior.
Then, figure out intuitive, feasible ways to fight these obstacles. For example, if your campaign is aimed at encouraging more exercise in your community, but safe outdoor spaces are minimal and indoor class costs are a barrier, consider offering free indoor fitness classes.
Place: Where do you want your audience to perform the desired behavior? How can you reach them in ways that make it easier to perform the behavior in that location (and make that behavior more desirable than competing behaviors)? Do you need to recruit peers of your audience as “ambassadors,” to make the campaign more accessible to your audience?
f) Relationship Marketing.
-> Relationship marketing involves all those tools needed to inform the customers about the new offers and variants of the brand. It also takes to earn referrals from existing customers and make strong customer relations . It does not involve strategies only to increase the number of consumers, but a lot more things than this.
It involves processes or steps like customer experience management , lead generation management, targeted information, automation tools for marketing, interlinking of customer relationship management tools, etc. these processes blend together to give the desired relationship marketing strategies and tools. The effect is not specific to a product or service that the brand has to offer while it has its effect on the company as a whole. It is upon the company’s brand image and trust that relationship marketing can make or break.
Relationship marketing is all about making a long-term association with any customer. It is catering to the changing needs of the customer and making him/her happy. It takes into account every step that would lead to retaining and gaining new customers. It also has to be in sync with the company’s vision and ideation. The customers should feel it as a burden but should genuinely connect to the company and the brand. It is making meaningful, long-lasting with a relational approach towards customer retention .
5 Levels of Relationship Marketing
These five levels of relationship marketing are as follows
1) Basic Marketing
The salesperson sells to the final customers. This is also known as direct sales.
2) Reactive Marketing
The salesperson sells the product and encourages the customer to call for any comments or enquiries.
3) Accountable Marketing
The salesperson calls the customers to ensure whether the product is working as per satisfaction and if there is any problem in the product. Furthermore, he also asks the customer for any suggestions/feedback to improve the service/product. Thus he is taking responsibility for the sale.
4) Proactive marketing
The company works continuously with its large customers to help improve performance . This is especially seen in financial companies wherein the movement in the financial market induces the company to make changes regularly. However, at the same time, these financial companies have to take care of their customers as well. Thus they take regular feedback from their large customers thereby developing their products accordingly.
5) Partnership Marketing
The company works continuously with its large customers to improve its performance. An example would include General Electric which has stationed Engineers to its third party service centers to improve overall performance. Thus even in partnerships, GE is ensuring optimal relationship development with the parent brand.
-> Web marketing, digital marketing, internet marketing or online marketing; all of these words are synonymously used for E-Marketing. What it means is the marketing of products or services by using the internet. E-mails and wireless marketing also fall into the category of e-marketing.
We can say that it uses different technologies and media to connect customers and businesses. Especially in this era of technology , e-marketing has become a very important part of the marketing strategy of different companies.
Types of E-Marketing
When we talk about digital and email marketing, then there are different type and methods of e-marketing which are as follows;
Email marketing is considered very efficient and effective because you already have a database of your targeting customer. Now, sending emails about your product or service to your exact targeted market is not only cheap but also very effective.
Social Media Marketing
Social media is a great source of directly communicating with your customers to increase your product awareness. It could be done by any or all of the social media channels such as LinkedIn, Facebook, Instagram, Twitter, Google, and YouTube. Some of the important advantages of social media are as follows;
- Increase product awareness and reputation means more sales.
· Directly communicating with your customers can increase brand loyalty.
· You can increase the number of visits to your website and rank it up in the search engine.
· Targeting the exact audience will help you to know more about your customers’ needs.
It is said that a picture is worth a thousand words, and a video is worth thousands of pictures. You can catch the attention and emotions of your target market by showing them a video clip about your product or service. Video marketing is very effective if it conveys the right message to the right audience.
Engaging quality content by providing valuable information to your targeted market, what people are looking for over the internet to solve a certain problem? It is a consistent and ongoing process of delivering quality content to your readers. It is not always about selling; you’re educating your audience and helping them by adding some value in their lives.
Affiliate marketing is the process of promoting some products of certain brands and earning your commission out of every sale. It works for everyone; win, win situation.
Some of the important advantages of e-marketing are given below;
1. Instant Response. The response rate of internet marketing is instantaneous; for instance, you upload something and it goes viral. Then it’d reach millions of people overnight.
2. Cost-Efficient. Compared to the other media of advertising, it’s much cheaper. If you’re using the unpaid methods, then there’s almost zero cost.
3. Less Risky. When your cost is zero and the instant rate is high; then what one has to lose. No risk at all.
4. Greater Data Collection. In this way, you have a great ability to collect a wide range of data about your customers. This customer data can be used later.
5. Interactive. One of the important aspects of digital marketing is that it’s very interactive. People can leave their comments, and you’ll get feedback from your target market.
6. Way to Personalized Marketing. Online marketing opens the door to personalized marketing with the right planning and marketing strategy, customers can be made to feel that this ad is directly talking to him/her.
7. Greater Exposure of your Product. Going viral with one post can deliver greater exposure to your product or service.
8. Accessibility. The beauty of the online world and e-marketing is that it’s accessible from everywhere across the globe.
Disadvantages of E-Marketing
E-Marketing is not without disadvantages, some of them are as follows;
1. Technology Dependent. E-Marketing is completely dependent on technology and the internet; a slight disconnection can jeopardize your whole business.
2. Worldwide Competition. When you launch your product online, then you face a global competition because it’s accessible from everywhere.
3. Privacy & Security Issues. Privacy and security issues are very high because your data is accessible to everyone; therefore, one has to be very cautious about what goes online.
4. Higher Transparency & Price Competition. When privacy and security issues are high, then you have to spend a lot to be transparent. Price competition also increases with higher transparency.
5. Maintenance Cost. With the fast-changing technological environment, you have to be consistently evolved with the pace of technology and the maintenance cost is very high.