International Marketing

The Back Drop

Where is Ambassador car now?

Brylcream has vanished?

Jawa Byke skidded?

Metal Box the blue chip co collapsed?

BSNL finds itself out of range?

Where is Garden Vareily sarees?

Kellogstruggles, but Maggie
smiles.Why?

HMT vs Titan

Dell zoomed ahead

Radio FM has picked up momentum
fm nowhere

Promise fm balsara, a small co had a
good start.USP of Clove , association
with grandma

Yesterday..............Today

Jawa/Yezdi motor 
Hero Honda,TVS
cycle 
Coffee day,

Indian Coffee Barista
house

Binny Fabrics 
Raymonds

Kores 
Modi Xerox
Photocopier

Brand is an expression of your
Personality....top brands

Coca cola 
Intel

Pepsi 
Disney

Microsoft 
Ford

IBM 
Mc Donald

GE 
AT&T

Celebrity Ads

Amitabh 
Snny
Bachan...ICICI,PEPS Deol...tractor
I,Reid&Taylor,Hajm
ola,Dabur

Akshay
Chyvanaprash,Park Kumar...genes
er 
Film stars(beauty

SRK..Santro platform)...Lux

Abhishek..Idea 
Sachin.boost

Hema Malini.Water 
Imran
filter Khan.cinthol

Brand perception..country
correlation?

UK.class 
India..spices,cas
,heritage hew

France..fashion

germany..sturdy,
qlty,reliability

Switzerland..wat
ches

Brand Associations
 Van 
Ad:Find a new
Heusen..aspirational,in
ner confidence, gove,Dance to a
stylishand new beat,Be
sophisticated bold.
 Saffola...association
with health has created

Maggie..covenien
a memorable ce platform,USP
association in the
psyche of consumers

Brand Associations
 Fair&Lovely..positioned 
Reynolds...reliabi
in the fairness platform
,now at marrid women lity,though high
 Cadburys...for children,
priced
now at adults(change 
scooty...tgt.youn
in the
imagery...Bachan g, upwardly
taking chocolate along mobile working
with diff girls
people..togetherness ...
for adults

Brand feelings

Warmth,pride.Com 
Socialappeal
plan..pride of ..Ford car for the
mother when child upcoming
carrying moher in professional
cycle.

Warmth..Johnsons
baby powder

Fun..cola

excitement..byke
ads

positioning

Titan's Nebula 
Product line
jeweellery watches extns..rasna with

Fastrack fm variants
titans.for the 
Johnsons
fashionable
extendin to baby

Dash for children soaps, powders
fm titans

Liril to powders

LG air
conditioners ..pure 
Nirma det to
air toilet soaps?

Brand attributes and benefits
 lifebuoy.germ killing action ia
the a, hygiene is the b

Cinthol.deodoren
 Samsung tv.extra space view t qlty is the a,
is the a enlarged clear tv view
is the b hygiene,
 Vguard.quality,tech is the a, socilisng is the b
relibility is the b
 ICICI.technology is the a ,
convenience is the b

Some stray thoughts

Relationship 
I make cream in
management...dog the factory , sell

Why kellog hope in the shop
failed,when maggie 
Ford ..refused to
won..cold milk is
the cobination for give what
corn flakes ,why consumer
hot milk here? wanted..failed

Culture plays ..subtly
 bru..taste of filter
coffee(why venket)

vicco..brides to
 margo.remembering hr
be complexion
childhood, mother's traditional
advice on neem tumeric
 MTR..traditional recipes
for modern busy 
Gorej Almirah
consumer in covenient, wedding gift
hygine form

Asian
paints..festivals
like Pongal

Charms and close up
 Heralding the arrival of a  vicks...emotional bond
new youth culture between mother and
 Life Buoy...family soap son.
 Big small functional  Matiz failed..big and
attribute.Johns Umbrella small confusion
succeeded  Maruti van ,,,spacious
 Lubricant..we sell more car ,family car
by selling less ,affection,family ties
revived it.

What is Marketing…??
Selling?
Advertising?
Promotions?
Making products available in stores?
Maintaining inventories?
All of the above, plus much more!
March 12, 2000 Private & Confidential 15
Marketing = ?
Marketing is the process of planning and executing the
conception, pricing, promotion, and distribution of
ideas, goods, services to create exchanges that
satisfy individual and organizational goals
American Marketing Association
Marketing = ?
Marketing management is the art and science of

choosing target markets and getting, keeping, and
growing customers through creating, delivering, and
communicating superior customer value.
Simple Marketing System
Communication
Goods/services
Industry Market
(a collection (a collection
of sellers) of Buyers)
Money
March 12, 2000 Information
Private & Confidential 18
Marketing = ?
 Marketing is the sum of all activities that take you to a
sales outlet. After that sales takes over.
 Marketing is all about creating a pull, sales is all about
push.
 Marketing is all about managing the four P’s –
 product
 price
 place
 promotion
The 4 Ps & 4Cs
Marketing Convenience
Mix
Place
Product
Customer
Solution Price Promotion
Customer Communication
Cost
Difference Between - Sales &
Marketing ?
Sales
trying to get the customer to want what the
company produces
Marketing

trying to get the company produce what the
customer wants
Scope – What do we market
 Goods
 Services
 Events
 Experiences
 Personalities
 Place
 Organizations
 Properties
 Information
 Ideas and concepts
Core Concepts of
Marketing
Based on :
 Needs, Wants, Desires / demand
 Products, Utility, Value & Satisfaction
 Exchange, Transactions & Relationships
 Markets, Marketing & Marketers.
Core Concepts of Marketing
Needs, wants Utility, Value &

Products
demands Satisfaction
Marketing & Xchange, Transaction

Markets
Marketers Relationships
Core Concepts of Marketing
 Need – food ( is a must )
 Want – Pizza, Burger, French fry's ( translation of a need
as per our experience )
 Demand – Burger ( translation of a want as per our
willingness and ability to buy )
 Desire – Have a Burger in a five star hotel
In order to understand Marketing let us begin
with the Marketing Triangle
Customers
Company Competition
Who is a Customer ??
CUSTOMER IS . . . . .
Anyone who is in the market looking at a product /
service for attention, acquisition, use or consumption
that satisfies a want or a need
Customer –
CUSTOMER has needs, wants, demands and
desires
Understanding these needs is starting point of the
entire marketing
These needs, wants …… arise within a framework
or an ecosystem
Understanding both the needs and the ecosystem is
the starting point of a long term relationship
How Do Consumers Choose Among
Products & Services?
Value the value or benefits the customers gain from
using the product versus the cost of obtaining the
product.
Satisfaction Based on a comparison of performance
and expectations.
 Performance > Expectations => Satisfaction
 Performance < Expectations => Dissatisfaction
Customers - Problem
Solution
As a priority , we must bring to our customers
“WHAT THEY NEED”
We must be in a position to UNDERSTAND their
problems
Or in a new situation to give them a chance to AVOID
the problems
Customer looks for Value
Value = Benefit / Cost
Benefit = Functional Benefit + Emotional
Benefit
Cost = Monetary Cost + Time Cost +
Energy Cost + Psychic Cost
Analysis Of Competition
Who are your competitors?
What are their strengths and weaknesses?
What have been their strategies?
How are they likely to respond to your
Marketing plan?
Strategic Marketing
Strategic marketing management is concerned with
how we will create value for the customer
Asks two main questions
 What is the organization’s main activity at a
particular time? – Customer Value
 What are its primary goals and how will these be
achieved? – how will this value be delivered
Strategic Planning
Strategic Planning is the managerial process of
creating and maintaining a fit between the
organization’s objectives and resources and the
evolving market opportunities.
 Also called Strategic Management Process
 All organizations have this
 Can be Formal or Informal
The StrategicPlanning, Implementation,
and Control Process
Business Strategic-Planning
Process
External environment
(Opportunity &
Threat analysis)
Business Mission Goal Formulation
Internal Environment
(Strength/ Weakness analysis)
Strategy Formulation
Environmental Analysis
Competitor Internal Analysis
Customer
Supplier Technology KnowHow
Regulatory Manufacturing KnowHow
Social/ Political Marketing KnowHow
Distribution KnowHow
Logistics
Opportunities & Threats
Strength & Weaknesses
Identity Core Competencies
Identify opportunity
Fit internal Competencies with external opportunities
Firm Strategies
The Marketing Plan
A written document that acts as a guidebook of
marketing activities for the marketing manager
CONTENTS of MARKETING PLAN
Business Mission Statement
Objectives
Situation Analysis (SWOT)
Marketing Strategy
 Target Market Strategy
 Marketing Mix
 Positioning
 Product
 Promotion
 Price
 Place – Distribution
 People
 Process
Implementation, Evaluation and Control
The Marketing Process
Business
Mission
Stateme
nt
Objectiv
es
Situation
or SWOT
Analysis
Marketing Strategy
Target Market
Strategy
Marketing Mix
Product Place/Distribution
Promotion Price
Implementation
March 12, 2000 Evaluation,
Private & Confidential 40
Control
Marketing Environment
Why a product like radio
declined and now once again
emerging as an entertainment
medium ?
What Were the Drivers of This Change ?
Technology ?
Government policy ?
Other media substitutes ?
Why Market Leaders
Suffered ?
 HMT vs. Titan
 HLL vs. Nirma
 Bajaj vs. Honda
 Dot.com boom, then bust and now resurgence
 Market leadership today cannot be taken for
granted.New and more efficient companies are able to
upstage leaders in a much shorter period.
Factors
Influencing
Company’s
Marketing
Strategy
External Marketing Environment
External Environment
Social EverChanging
is not controllable Change Marketplace
Demographics
Economic
Product Physical / Natural Conditions
Distribution
Promotion
Price
Competition
Target Market
Political &
Legal Factors
Technology
Environmental
Scanning
The macro-environment
is the assessment of the external forces that act upon the
firm and its customers, that create threats & opportunities
P r o d u c t
Product is . . . . .
Anything that is offered to the market for
attention, acquisition, use or consumption that
satisfies a want or a need
Types of Products
PRODUCTS
Consumer Industrial
Services
Products Products
Product Items, Lines, and Mixes
A specific version of a product
that can be designated as a
Product Item
distinct offering among an
organization’s products.
A group of closelyrelated
Product Line
product items.
All products that an
Product Mix
organization sells.
Product Mix
Width – how many product lines a company has
Length – how many products are there in a product line
Depth – how many variants of each product exist within a
product line
Consistency – how closely related the product lines are in
end use
Gillette’s Product Lines & Mix
Width of the product mix
Depth of the product lines
Blades and Writing
razors Toiletries instruments Lighters
Fusion – 5 blade
Mach 3 Turbo
Mach 3 Series Paper Mate Cricket
Sensor Adorn Flair S.T. Dupont
Trac II Toni S.T. Dupont
Atra Right Guard
Swivel Silkience
DoubleEdge Soft and Dri
Lady Gillette Foamy
Super Speed Dry Look
Twin Injector Dry Idea
Techmatic Brush Plus
What is a Service?
Defining the Essence
An act or performance offered by one party to another
(performances are intangible, but may involve use of
physical products)
An economic activity that does not result in ownership
A process that creates benefits by facilitating a desired

change in customers themselves, or their physical
possessions, or intangible assets
Some Industries - Service
Sector
Banking, stock broking Health care
Lodging Education
Restaurants, bars, Wholesaling and retailing
catering Laundries, drycleaning
Insurance Repair and maintenance
News and entertainment Professional (e.g., law,
architecture, consulting)
Transportation (freight and
passenger)
Classification of Services
Pure Intangible
Banking
Service
Good Transportation
Major Service with
Minor Product
Business Hotels
Product = Service
Computers
Major Product with
Minor Services
Materials / Components
Pure Tangible Product
Major Characteristic of Services
 Intangibility – Services are intangibility cannot be seen,
tasted, felt, heard or smelled before purchase.
 Inseparability Services are produced and consumed
simultaneously.
 Variability or Heterogeneity – Services are highly variable
 Perishability – Services cannot be stored.
 Non Ownership Services are rendered but there is no
transfer of title
The Marketing Mix
The conventional view of the marketing mix consisted of
four components (4 Ps): Product, Price, Place/
distribution and Promotion.
Generally acknowledged that this is too narrow today;
now includes , Processes, Productivity
[technology ]People [employees], Physical evidence
Marketers today are focused on virtually all aspects of
the firm’s operations that have the potential to affect
the relationship with customers.
The “8Ps” of Integrated Service
Management vs. the Traditional
“4Ps”
► Product elements
► Place, cyberspace, and time
► Process
► Productivity and quality
► People
► Promotion and education
► Physical evidence
► Price and other user outlays
The Give and Get of Marketing
Great Words on Marketing
1. “The purpose of a company is ‘to create a customer…The only

profit center is the customer.’”
2. “A business has two—and only two—basic functions: marketing
and innovation. Marketing and innovation produce results: all the
rest are costs.”
3. “The aim of marketing is to make selling unnecessary.”
4. “While great devices are invented in the Laboratory, great
products are invented in the Marketing department.”
5. “Marketing is too important to be left to the marketing
department.”
Drivers of Customer Satisfaction
Many aspects of the firm’s value proposition contribute
to customer satisfaction:
 The core product or service offered
 Support services and systems
 The technical performance of the firm
 Interaction with the firm and it employees
 The emotional connection with customers
Ability to add value and to differentiate as a firm focuses
more on the top levels
Marketers and Markets
Marketers are focused on stimulating
exchanges with customers who make up
markets – B2C or B2B.
The market is comprised of people who
play a series of roles: decision makers,
consumers, purchasers, and
influencers.
It is absolutely essential that marketers
have a detailed understanding of
consumers, their needs and wants.
Much happens before and after the sale
to affect customer satisfaction
Stages of Customer Interaction
What Changed in Marketing…
Old Economy New Economy
• Organize by product units • Organize by customer segments
• Focus on profitable transactions • Focus on customer lifetime value
• Look primarily at financial • Look also at marketing scorecard
scorecard
• Focus on shareholders • Focus on stakeholders
• Marketing does the marketing • Everyone does the marketing
• Build brands through advertising • Build brands through performance
• Focus on customer acquisition • Focus on customer retention
• No customer satisfaction • Measure customer satisfaction and
measurement retention rate
• Overpromise, underdeliver • Underpromise, overdeliver
Are Banks truly
marketing-savvy and
customer - centric?
Myth 1 – The larger the range of products, the
more customer-centric I am.
Mythbuster – The range of products has
emerged from being
competitioncentric.
Myth 2 – Better technology (read CRM) leads to
better customer service.
Mythbuster – Technology
alone does not deliver,
helps people do.
Myth 3 – Launch a product and the customer will start
using instantly.
- Give a customer a card and he will learn how to play
with it immediately
Mythbuster – Customers need
To be educated too…
Myth 4 – The only way to get a customer is
from
competition.
Mythbuster – Customers are
not only present where
competition is.
Myth 5 – Just advertise and - You will sell.
Mythbuster – Advertising will only sell,
Not retain customers.
Myth 6 – No difference between marketing &
selling
Mythbuster – “Selling focuses on the needs of the seller;
marketing on the needs of the buyer.
Myth 7 – In the absence of relationships ‘trust’
builds financial brands
Mythbuster – Trust is not a differentiator at all…
it is the very minimum that the customer expects!!
So what will the differentiators be :
• Technology ?
• Brand ?
The real differentiator of
customer – centricity in a
commoditised world of
financial products -
Customer Service !
Chapter 12: Channels and Distribution Strategies
Learning Objectives:
• Understand the channel structure and the linkages between the
buyer and the seller
• The Channel Design (11 C’s)
• Selection of Intermediaries
• Channel Management
• International Shipment
Documentation
Support Agencies for international shipment

• Importance of Distribution Channels
• Channels configurations
Consumer goods
Industrial goods
Services
• In international distribution, The firm sells to it’s customers
Through its own sales force
Through independent intermediaries
Through an outside distribution system with regional/global
coverage
• Channels structure should be designed to manage
Physical flow of goods and services
Transactional flows
Information flows

• Channels Design
Customer Characteristics
Distribution culture
Competition
Company objectives (for market share and profitability)
Character (nature of product, positioning of the product)
Capital (financial requirement)
Cost (cost incurred in maintaining the channel)
Coverage (intensive, selective, exclusive distributions)
Control (product/service presentations, quality, image)
Continuity
Communication

• The concept of channel captain and power
Reward
Coercive
Legitimate
Referent
Expert
• Type of “Distance” that cause communication problem
Social Distance
Culture Distance
Technological Distance
Time Distance

Geographical Distance
• Selection of Intermediaries
Agent
Foreign (Direct)
Brokers
Manufacturer’s Representative
Factors
Managing Agents
Purchasing Agents
Domestic (Indirect)
Brokers
Export Agent
EMCs
WebbPerformance Association
Commission Agents

Distribution
Foreign (Direct)
Distribution/Dealers
Import Jobbers
Wholesalers/retailer
Domestic (Indirect)
Domestic wholesalers
EMCs
ETCs
Complementary marketers
Types of Distributors
Indirect Exporting
Direct Exporting
Integrated Distribution

• Sources for finding Intermediaries
Govt. Agency
Private Sources
• Criteria for Screening Intermediaries
Performance
Professionalism
• Distributors agreement includes
Contract duration
Geographic boundaries
Compensation
Products and conditions of sale
Communication between parties

• Channel management
Coordination
Long term relationship
• Factor in channel management
Ownership
Geographic, culture and economic distance
Difference in rules of law
• Gray Market (Parallel Imports)
Why Gray markets occur
How to handle Gray markets
• Typical reasons for termination of channel relationship
Change in international marketer’s distribution strategy
Lack of performance by the intermediary
Make the terminators conditions explicit in the agreement

Documents Required for International Shipments
• Documents required by U.S Government
Shipper export declaration
Export license
• Commercial Documents
Commercial Invoice
Packing list
Inland bill of lading
Dock receipt
Bill of lading
Insurance Certificate
Shipper’s declaration of dangerous goods
• Import Documents
Import license
Foreign exchange license
Certificate of Origin
Consular Invoice
Customs Invoice
• Support Agencies for International Shipments
Freight forwarder
Customs broker
Common carrier

The Marketing Mix

The Marketing Mix

The Marketing Mix
• The tools available to a business to gain

the reaction it is seeking from its target
market in relation to its marketing
objectives
• 7Ps – Price, Product, Promotion, Place,
People, Process, Physical Environment
• Traditional 4Ps extended to encompass
growth of service industry

Price

Price
• Pricing Strategy
• Importance of:
– knowing the
market
– elasticity
– keeping an eye
on rivals
Image copyright: www.freeimages.co.uk

Pricing Strategies

Pricing Strategies

Penetration Pricing

Penetration Pricing
• Price set to ‘penetrate the market’

• ‘Low’ price to secure high volumes
• Typical in mass market products –
chocolate bars, food stuffs, household
goods, etc.
• Suitable for products with long anticipated
life cycles
• May be useful if launching into a new
market

Market Skimming

Market Skimming
• High price, Low volumes
• Skim the profit from the
market
• Suitable for products that
have short life cycles or
which will face
competition at some
point in the future (e.g.
after a patent runs out)
• Examples include:
Playstation, jewellery,
Many are predicting a firesale in
laptops as supply exceeds
digital technology, new
demand. DVDs, etc.
Copyright: iStock.com

Value Pricing

Value Pricing
• Price set in
accordance with
customer
perceptions about
the value of the
product/service
• Examples include
status
products/exclusive Companies may be able to set prices
products according to perceived value.
Copyright: iStock.com

Loss Leader

Loss Leader
• Goods/services deliberately sold below

cost to encourage sales elsewhere
• Typical in supermarkets, e.g. at
Christmas, selling bottles of gin at £3 in
the hope that people will be attracted to
the store and buy other things
• Purchases of other items more than
covers ‘loss’ on item sold
• e.g. ‘Free’ mobile phone when taking on
contract package

Psychological Pricing

Psychological Pricing
• Used to play on consumer

perceptions
• Classic example - £9.99 instead of
£10.99!
• Links with value pricing – high
value goods priced according to
what consumers THINK should be
the price

Going Rate (Price Leadership)

Going Rate (Price Leadership)
• In case of price leader, rivals have difficulty in
competing on price – too high and they lose
market share, too low and the price leader
would match price and force smaller rival out
of market
• May follow pricing leads of rivals especially
where those rivals have a clear dominance of
market share
• Where competition is limited, ‘going rate’
pricing may be applicable – banks, petrol,
supermarkets, electrical goods – find very
similar prices in all outlets

Tender Pricing

Tender Pricing
• Many contracts awarded on a tender basis
• Firm (or firms) submit their price for carrying
out the work
• Purchaser then chooses which represents best
value
• Mostly done in secret

Price Discrimination

Price Discrimination
• Charging a different
price for the same
good/service in
different markets
• Requires each
market to be
impenetrable
• Requires different
Prices for rail travel differ for the same
journey at different times of the day
price elasticity of
demand in each
Copyright: iStock.com market

Destroyer Pricing/Predatory Pricing

Destroyer/Predatory Pricing
• Deliberate price cutting or offer of ‘free

gifts/products’ to force rivals (normally
smaller and weaker) out of business or
prevent new entrants
• Anti-competitive and illegal if it can be
proved

Absorption/Full Cost Pricing

Absorption/Full Cost Pricing
• Full Cost Pricing – attempting to

set price to cover both fixed and
variable costs
• Absorption Cost Pricing – Price set
to ‘absorb’ some of the fixed costs
of production

Marginal Cost Pricing

• Marginal cost – the cost of producing ONE
extra or ONE fewer item of production
• MC pricing – allows flexibility
• Particularly relevant in transport where fixed
costs may be relatively high
• Allows variable pricing structure – e.g. on a
flight from London to New York – providing the
cost of the extra passenger is covered, the
price could be varied a good deal to attract
customers and fill the aircraft

• Example:
Aircraft flying from Bristol to Edinburgh – Total Cost (including

normal profit) = £15,000 of which £13,000 is fixed cost*
Number of seats = 160, average price = £93.75
MC of each passenger = 2000/160 = £12.50
If flight not full, better to offer passengers chance of flying at
£12.50 and fill the seat than not fill it at all!
*All figures are estimates only

Contribution Pricing

Contribution Pricing
• Contribution = Selling Price – Variable
(direct costs)
• Prices set to ensure coverage of
variable costs and a ‘contribution’ to the
fixed costs
• Similar in principle to marginal cost
pricing
• Break-even analysis might be useful in
such circumstances

Target Pricing

Target Pricing
• Setting price to ‘target’ a specified

profit level
• Estimates of the cost and potential
revenue at different prices, and
thus the break-even have to be
made, to determine the mark-up
• Mark-up = Profit/Cost x 100

Cost-Plus Pricing

Cost-Plus Pricing
• Calculation of the average cost

(AC) plus a mark up
• AC = Total Cost/Output

Influence of Elasticity

• Any pricing decision must be mindful of

the impact of price elasticity
• The degree of price elasticity impacts
on the level of sales and hence revenue
• Elasticity focuses on proportionate
(percentage) changes
• PED = % Change in Quantity
demanded/% Change in Price

• Price Inelastic:
• % change in Q < % change in P
• e.g. a 5% increase in price would be
met by a fall in sales of something less
than 5%
• Revenue would rise
• A 7% reduction in price would lead to a
rise in sales of something less than 7%
• Revenue would fall

• Price Elastic:
• % change in quantity demanded > %
change in price
• e.g. A 4% rise in price would lead to sales
falling by something more than 4%
• Revenue would fall
• A 9% fall in price would lead to a rise in
sales of something more than 9%
• Revenue would rise

Product

Product
• Methods used to
improve/differentiate
the product and increase
sales or target sales more
effectively to gain
a competitive advantage
e.g.
– Extension strategies
– Specialised versions
– New editions
– Improvements – real or
otherwise!
– Changed packaging
– Technology, etc. Image copyright: www.freeimages.co.uk

Promotion

Promotion
• Strategies
to make the
consumer aware
of the existence
of a product
or service
• NOT just
advertising

Place

Place
• The means by which products and

services get from producer
to consumer and where they can
be accessed by the consumer
– The more places to buy the product
and the easier it is made to buy it, the
better for the business (and the
consumer?)

People

People
• People represent the business

– The image they present can be important
– First contact often human – what is the lasting
image they provide to the customer?
– Extent of training and knowledge
of the product/service concerned
– Mission statement – how relevant?
– Do staff represent the desired culture
of the business?

Process

Process
• How do people consume services?
• What processes do they have to go through to
acquire the services?
• Where do they find the availability
of the service?
– Contact
– Reminders
– Registration
– Subscription
– Form filling
– Degree of technology

Physical Environment

Physical Environment
• The ambience, mood or physical

presentation of the environment
– Smart/shabby?
– Trendy/retro/modern/old fashioned?
– Light/dark/bright/subdued?
– Romantic/chic/loud?
– Clean/dirty/unkempt/neat?
– Music?
– Smell?

Sales Promotion

Whereas advertising gives a
reason to buy, SP gives an
incentive to buy
It is part of the Marketing spend of
all companies and these days SP
spends in many companies
exceed that of the adspends

Why?
• Internal
• External

Internal reasons
• Top management is more

conducive to spending on
promotions
• Line managers under greater
pressure to achieve targets
• Justification of expenditure is easy

External reasons
• Increase in number of brands

• Consumer is more price savvy
• Greater pressure from trade to
liquidate stocks
• Add effectiveness declining owing
to rising costs, media clutter and
legal constraints

SP is a push strategy
• Since it is at the last point where

the consumer is often at the point
of buying, the additional incentive
makes a last ditch effort to convert
the customer on to the
incentivised brand

SP is of two types
• Trade
• Consumer

Trade promotion
• Liquidating heavy inventories

• Persuade retailers to carry stock,
carry more than usual stock,
promote brand franchise

Consumer promotion
• Stimulate purchase
• Induce trial
• Create new users
• Increase repurchase from
occasional customers
• Reward loyal customers

Forms of trade promotion
• Bulk discounts
• Free materials
• Display windows
• Shelf hiring
• Lucky draws
• ‘Mystery’ customer
• Redistribution incentives
• Shop salesmen incentives

Forms of consumer promotion
• Free samples
• Free gifts
• Coupons
• In-packs
• Price packs
• Price-offs
• Sweepstakes
• Bundling offers

SP spurs action because they
are supposed to run for a
limited time
While the advertising budgets

are controlled by the brand
managers, SP budgets
usually are controlled by the
sales managers

The more the product’s
quality and its advertising
persuasiveness fail to meet
competition, the greater is
the need for promotion to
improve the price – value
relationship

Promotion at different stages
of the PLC
• Introduction – wise to use heavy promotion to
induce trials and promote brand franchise
• Growth – promotion should be limited ,if any
• Maturity – Higher promotions required since the
brand is under attack from competitors or product
quality or advertising effectiveness is tapering off
• Decline – Heavy promotions. Used only to retain
a set of loyal customers. Prior to withdrawal of the
product, it could be used as a one time stock
clearance from the trade

Essential elements for an
effective SP programme
• Significant value before promotion is effective
• Promotions must be part of an overall plan
• Every brand must have a promotion objective and a
strategy statement
• A written tactical plan – time frame, costs, evaluation
yardsticks
• Factual knowledge must be gathered to plan
• Specialised professional skill and knowledge must be
applied to every promotion operations

Final considerations
• Don’t promote if the product is not good

• Promotions rarely stop a declining sales curve
• It is very easy to lose the promotional gains made if
your promotion has not been effective in retaining new
customers. So the product has to speak for itself.
• The objective of the promotion is to wean away users
from competition and create new users.
• Excessive promotions lead to diminishing returns and
may devalue the brand

Cont’d
• Promotions may be used in conjunction with

advertising and other marketing
communication tools
• It should be novel and attractive
• Ensure supply lines are good and adequate
stock is available right through the promotion
• Cater for contingencies. Have escape routes
built into the plan
• Trade has to be handled tactfully
• Reimburse incentives/ rewards/ gifts promptly
• Must be within the legal boundaries

The Marketing Mix
• Blend of the mix depends upon:
• Marketing objectives
• Type of product
• Target market
• Market structure
• Rivals’ behaviour
• Global issues – culture/religion, etc.
• Marketing position
• Product portfolio
– Product lifecycle
– Boston Matrix

Strategic Marketing
1. Imperatives for MarketDriven Strategy
2. Markets and Competitive Space
3. Strategic Market Segmentation
4. Strategic Customer Relationship Management
5. Capabilities for Learning about Customers and Markets
6. Market Targeting and Strategic Positioning
7. Strategic Relationships
8. Innovation and New Product Strategy
9. Strategic Brand Management
10. Value Chain Strategy
11. Pricing Strategy
12. Promotion, Advertising and Sales Promotion
Strategies
13. Sales Force, Internet, and Direct Marketing Strategies
14. Designing MarketDriven Organizations
15. Marketing Strategy Implementation And Control
CHAPTER 12
Promotion, Advertising, and Sales
Promotion Strategies
Promotion Strategy
 Advertising Strategy
 Sales Promotion Strategy
McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies,

Inc. All rights reserved.
PROMOTION STRATEGY
 The Composition of Promotion Strategy
 Developing Promotion Strategy
 Communications Objectives
 Deciding the Role of the Promotion Components
 Determining the Promotion Budget
 Promotion Component Strategies
 Integrating and Implementing the Promotion Strategy
 Effectiveness of Promotion Strategy
Promotion Strategy:
planning, implementing, and

controlling an organization’s
communications to its customers
And other target audiences.
Composition of Promotion Strategy
Interactive/Internet
Marketing
Direct Advertising
Marketing
Promotion
Components
Personal Sales
Selling Promotion
Public
Relations
U. S. Annual Expenditures (billions)
$600
Sales Promotion
Personal Selling
$400
Advertising
$200
0
INTERNET Brand Advertising OnLine Has Taken
FEATURE Off
SEARCH WORKS
Google and Yahoo! Have demonstrated the power of the Web by using customers’ search queries to
connect them with advertisers.
CUSTOMERS ARE ONLINE
More than half of American households have alwayson Net connections. And the Web reaches
millions at the office. The Big Three portals—Yahoo, AOL, and MSN—reach a combined 50 million
a day–twice the TV audience of a World Series game.
VIDEO ROCKS
The adoption of broadband, which can handle videos, lets advertisers put TVlike ads online. Longer
spots by BMW and Adidas have reached cult status. As demand for video soars, portals sell choice
slots in advance, much like TV’s upfront sales.
FEEDBACK IS INSTANT
Marketers and online publishers have tools to track an ad’s performance in real time allowing them to
make quick adjustments if customers aren’t clicking. This turns the Net into a vast marketing lab. And
as video grows, it becomes a test bed for TV ads.
CUSTOMERS LEAVE TRAILS
It was an empty promise during the dotcom days, but now advertisers have the technology to follow
customers, click by click, and to hit them with relevant ads. The upshot? No wasted money peddling
dog food to cat owners.
Source: Stephen Baker, “The OnLine Ad Surge,” BusinessWeek, November 22, 2004, 79.
DESIGNING THE PROMOTION STRATEGY
MARKET TARGETING AND POSITIONING
STRATEGIES
COMMUNICATION
OBJECTIVES
ROLE OF PROMOTION
COMPONENTS
Advertising Sales Promotion Public Relations Personal Selling Direct Marketing Interactive/ Internet
Marketing
PROMOTION
BUDGET
Coordination
PROMOTION COMPONENT with Product,
STRATEGIES Distribution,
and Price
INTEGRATE AND IMPLEMENT PROMOTION Strategies
COMPONENT STRATEGIES
EVALUATE EFFECTIVENESS OF
PROMOTION STRATEGY
Illustrative Communications Objectives
Need Recognition
 Finding Buyers
 Brand Building
 Evaluation of Alternatives
 Decision to Purchase
 Customer Retention
Deciding the Role of the Promotion
Components
 Expected contribution for each of the
promotion components.
 Which communication objective(s) will be
the responsibility of each component?
 What part of the budget will go to each
component?
Factors Guiding the Role Assigned to Each
Component
Market Target(s)
 Desired Positioning
 Role of Promotion in Positioning
 Product Characteristics
 Stage of Life Cycle
 Situation Specific Factors
Determining the Promotion Budget
Objective and Task
All You Can Afford Budgeting Approaches Percent of Sales
Follow the
Competition
Budgeting Methods
Features Limitations
Percent of Sales Percent of Sales
 Fixed percent of sales, often based on past  The method is very arbitrary. Budget may be
expenditure patterns. too high when sales are high and too low
when sales are low.
Comparative Parity Comparative Parity
 Budget is based largely  Differences in marketing strategy may require
upon what competition is doing. different budget levels.
Objective and Task Objective and Task
 Set objectives and then determine tasks  The major issue in using this method is
(and costs) necessary to meet the deciding the right objectives so measurement
objectives. of results is important.
Integrating and Implementing Promotion
Strategy
Avoiding fragmentation
Difficulty in evaluating productivity
Differences in priorities
Separate organizational units
Assigning integration responsibility
Illustrative Factors Affecting Promotion
Strategy
Advertising/ sales Balanced Personal selling driven
promotion driven
Number and dispersion of buyers Small
Large
Buyers’ information needs High
Low
Size and importance of purchase Large
Small
Distribution
Channel Direct
Product Complexity High
Low
No Postpurchase contact required Yes
Promotion Strategy Issues
 Expense/Response Relationships
 Allocation
 Impact on Brand Equity
 Integration of Promotion Components
 Effectiveness of the Strategy
ADVERTISING STRATEGY
 Setting Objectives and Budgeting
 Creative Strategy
 Media/Scheduling Decisions
 Role of the Advertising Agency
 Program Implementation and Measuring
Effectiveness
The Internet is Shifting the Power
Position to the Customer
• How the Money is Spent is Changing.
• The Amount Spent on Internet Advertising is a
Small Fraction of the Total, but Very Powerful and
Growth is Accelerating.
• Consumers Spend 10 hrs/person/day with Media
of all Kinds—How Much is Media Multi-Tasking?
• Ad Spending Versus Consumers’ Time Allocations.
• Advertising Agency Consolidation and
Reorganization—the Big 4.
• Do Companies Recognize the Revolutionary
Implications of Newly Empowered Consumers?
• The Internet Will be the Most Prominent Medium
in the Lives of the 18-34 Age Group.
Source: The Economist, “Crowned at Last: A Survey of Consumer Power,” April 2, 2005, 116.
Advertising Strategy
Target Audience
Advertising
Objectives
Advertising Budget
Creative Strategy
Advertising Media and Programming
Schedules
Evaluate the Effectiveness of the Strategy
Advertising Objectives
Expose communication to target
audience
Create awareness
Change attitude(s)
Increase Sales
Generate profits
Alternative Levels for Setting Advertising
Objectives
Increasing Uncertainty
About Impact on
Purchasing Behavior
Type of Objective
• Exposure
• Awareness
• Attitude
Change
• Sales
Increasing Difficulty • Profit
of Measurement
Budget Determination
OBJECTIVE AND TASK METHOD HAS THE MOST
SUPPORT
Budget
Determination
Media/ Creative
Scheduling Strategy
Decisions
The Vuitton Machine*
Inside the world’s biggest, most profitable luxury brand
BENCHMARKING VUITTON
Brand 2003 SalesPercent Operating
Billions Change* Margin
Louis Vuitton $3.80 +16% 45.0%
Prada 1.95 0.0 13.0

Gucci** 1.85 1.0 27.0
Hermès 1.57 +7.7 25.4

Coach 1.20 +34.0 29.9
*At constant rate of exchange **Gucci division of Gucci Group Data: Company reports. BW
Vuitton increased advertising 20% in 2003—spends only 5% of
revenues on advertising—about half the industry average
*BusinessWeek, March 22, 2004, 98102.
CREATIVE STRATEGY
The creative strategy is guided by the market target and
the positioning strategy.
Product Distribution Price Promotion
Advertising
(How to communicate intended
positioning to buyers and others
influencing the purchase.)
Provide a unifying concept that binds
together the various parts of the
Creative Strategy
advertising campaign.
Media/Scheduling Decision
t Television
 Radio
 Magazines
 Online
 Website
 Outdoor
Relative access
to the target
audience
Favorable zone
Unfavorable zone
Relative cost of
reaching the target
group(s)
Advertising Agencies in Perspective
 Fast change has come to the advertising industry.
 Huge, integrated agencies face a challenging future.
 Do clients want a fullservice agency?
 The business model is in need of change.
 The basis of compensation continues to be debated and altered.
 Specialists (e.g. media buying services) are being used.
 Importantly, the core of the creative process is the agency.
 Several methods are available to evaluate advertising results.
Role of the Advertising Agency
Target Audience
Advertising Objectives
Advertising Budget
Creative Strategy
Advertising
Agency
Advertising Media and
Programming
Evaluate the Effectiveness of the Strategy
Advertising Strategy Implementation and
Effectiveness
Decide how to measure effectiveness before implementing
the strategy.
Assign responsibility for tracking performance.
Assessing the quality of advertising is important.
Exposure to advertising is not a very sensitive measure of
effectiveness.
Several methods are available to evaluate
advertising results.
Rating
Services
Sales and
Test Expense Analysis
Marketing MEASURING
ADVERTISING
EFFECTIVENESS
Controlled Recall
Tests Tests
SALES PROMOTION STRATEGY
SALES PROMOTION
consists of various incentives, mostly short term,
intended to stimulate quicker and/or greater purchase
of particular goods/services by consumers or the
trade.
STRATEGY
FEATURE
The Realities of Mailin
•
Rebates
Consumers hate the hassles, companies love unredeemed rebates,
and regulators are investigating the consumer complaints.
• As much as 40% of rebates never get redeemed.
• Some 400 million rebates are offered each year with a total value of
$6 billion.
• Unclaimed rebates translate into more than $2 billion of extra revenue
for retailers and their suppliers each year.
• Complex filing rules and long delays discourage consumers.
• Companies emphasize the filing processes are intended to discourage
fraud.
• The largest rebate processor monitors 10,000 addresses suspected of
submitting bogus rebates.
• Rebates offer companies an opportunity to promote small discounts
without marking the products down.
• Rebates have become very popular with computer and consumer-
electronics companies.
• The value of rebates has also increased.
• Regulators are intensifying their scrutiny of the companies offering
rebates.
• The developing back-lash against rebates is pushing some companies
to halt rebate strategies.
• Others are encouraging online filing.
• Fulfillment houses are revising their processing systems, using
computer technology to validate claims.
• Consumers would like mail-in rebates to go away but want the best
price they can get.
Source: Brian Grow, “The Great Rebate Runaround,” BusinessWeek, December 5, 2005, 34, 36, and 37.
Sales Promotion Activities and Targets
Activities include trade shows, specialty
advertising, contests, displays, coupons,
recognition programs, and free samples.
SALES
PROMOTION
TARGETS
Consumer Salespeople
Buyers
Business Value Chain
Buyers
Reliance & Retail
Jerry Jose
"Growth has no limit at Reliance.
I keep revising my vision.
Only when you can dream it, you can do
it."

Dhirubhai H. Ambani
Founder Chairman Reliance Group
December 28, 1932 July 6, 2002
Foundation
• The Reliance Group, founded by Dhirubhai

H. Ambani (1932-2002),
• India's largest private sector enterprise
• Businesses in the energy and materials

value chain.
• Group's annual revenues are in excess of

USD 22 billion.
Mukesh Ambani
• Chemical Engineer
from the University
of Bombay and
pursued MBA from
Stanford University,
USA.
• Joined Reliance in
1981 and initiated
backward
integration from
textiles into
polyester fibers and
further into
petrochemicals
Mukesh Ambani
• Conferred 'ET Business Leader of the Year'

Award by The Economic Times (India) in the
year 2006.
• Had the distinction and honor of being the

co-chair at the World Economic Forum
Annual Meeting 2006 in Davos, Switzerland.
• Ranked 42nd among the 'World's Most

Respected Business Leaders' and second
among the four Indian CEOs featured in a
survey conducted by Pricewaterhouse
Coopers and published in Financial Times,
London, November 2004.
Mukesh Anbani
Conferred the World Communication Award for the
'Most Influential Person in Telecommunications in
2004' by Total Telecom, October, 2004.
Chosen 'Telecom Man of the Year 2004' by Voice and
Data magazine, September, 2004.

Ranked 13th in Asia's Power 25 list of 'The Most
Powerful People in Business' published by Fortune
magazine, August, 2004. 30 Growth is Life
Mukesh Ambani
• Conferred the 'Asia Society

Leadership Award' by the Asia
Society, Washington D.C., USA,
May, 2004.
• Ranked No.1 for the second

consecutive year, in The Power
List 2004 published by India
Today, March, 2004.
Men Behind Reliance
• Anil D Ambani
joined Reliance in
1983 as Co-Chief
Executive Officer,
and was centrally
involved in every
aspect of the
company’s
management over
the next 22 years.
Anil Ambani
Credited with a number of pathbreaking
financial innovations in the Indian capital
markets.
Spearheaded the country’s first forays into the
overseas capital markets with international
public offerings of global depositary receipts,
convertibles and bonds.
1991, directed Reliance Industries in its efforts
to raise over US$ 2 billion.
Anil Ambani
• Steered the 100-year Yankee

bond issue for the company in
January 1997.
Why Reliance in Retail?
• Currently, selling through

company-owned stores currently
totals just $8 billion in India.
Industry estimates say that the
country’s retail industry is worth
$300 billion, that is about Rs
13,50,000 crore. This stands a
chance to blossom to $427
billion in the next four years.
Organised retail accounts for just
over Rs 35,000 crore.
Reliance Companies in Retail
• RIL's Retail Project will be through the following companies:
– Reliance Retail Limited
– Subsidiary of RILRanger Farms Private Limite
– Subsidiary of Reliance Retail Limited
– Retail Concepts and Services Private Limited
– Reliance Retail Insurance Broking Limited
– Reliance Dairy Foods Limited
– Reliance Retail Finance Limited
– RESQ Limited
– Reliance digital Retail Limited
– Reliance Service Solutions Limited
Reliance World
• Reliance World (formerly Reliance

WebWorld) is a world-class nationwide chain
of retail outlets for products and services of
the Reliance – Anil Dhirubhai Ambani Group.
• Digital world of information, communication,

entertainment and utility services.
• Connected to Reliance’s countrywide optic

fibre network.
Reliance world
The Broadband Centre
With 241 Reliance World outlets across
105 cities in the country.
Qwiky's, has 22 outlets, apart from 76
Java Green coffee outlets in the Reliance
Web World chain across the country.
Reliance communication
• In July 2003, Reliance Communications

joined hands with HDFC Bank to deploy
India’s first wireless Point of Sale (POS) for
processing credit card transactions.
• Wireless POS enables banks to significantly

expand the number of retail outlets
accepting credit cards.
• Caused expansion of credit cards & ATM

retail for banks in smaller towns.
Reliance money
“This is our effort to take financial
instruments to rural masses and give
them an opportunity to invest in various
financial products like mutual funds,
stocks and gold coins and secure their
lives and other valuables by taking
adequate insurance cover.
Reliance Money
• launched services in rural market
• Reliance Capital announced its

tie-up with the Rural Relations, a
rural consumer relations
organisation.
• first to deploy Internet-enabled

retail kiosks for trading
Present
The company, at present, has presence in
727 cities and towns across India.
1,000 talukas across five states in the
country.
The five states have been covered.
Madhya Pradesh, Maharashtra, Gujarat,
Andhra Pradesh and Karnataka.
Future
20,000 outlets and 10,000 kiosks across the
country by the end of this year.
10,000 outlets in over 5,165 talukas across the
country by the end of this fiscal in Rural Area.
Extend its presence in Tamil Nadu,
Chhattisgarh, Uttar Pradesh, Uttarakhand and
Rajasthan.
Reliance key Petrol Pumps
Dhabbas
Food restaurant aimed at anyone and
everyone.
Charpais, khats, and normal tables.
Separate sections for family.
Showers for the long distance riders
including truck drivers.
Reliance key Petrol Pumps
Dhabbas
Reliance Infocomm tower.
Soon Reliance WebWorld
Free lunch/dinner to truck drivers getting
in more than 100 litters of diesels and
other schemes like these.
Future Reliance Petrol pumps.
• Not going straight ahead with

expansion of its n/w for
distribution, instead going to be
export oriented company, to stay
away from govt. pump
competition.
Reliance Retail
• In talks to buy a stake in north-

India based Modern Dairies.
• agriculture to retail.
• Not successful to expectations.

Reliance Mart
Reliance Mart steps up realty deals
The hypermarket arm of Reliance Retail
Plans to set up mega retail stores.
Reliance Mart
Inked acquisition deals for over 50
million sq ft via franchise & direct routes.
Target of a 100 million sq ft by 2011 to
develop its hypermarket business.
• Reliance Mart’s first hypermarket

opened in Ahmedabad on Wednesday
15th of Agust.
Reliance Mart
Would cover areas ranging between 1,65,000 to
2,00,000 sq ft.
40 % floor space will be earmarked for garment
brands
The rest to stock home goods, white goods,
footwear and food products.
Reliance mart
a range of over 95,000 products
categories fresh produce, food and grocery,
home care products, apparel and accessories,
nonfood FMCG products, consumer durables
and IT, automotive accessories, lifestyle
products and footwear.
Unique services Tailoring, shoe repair, watch
repair, a photo shop, gifting services and
laundry services.
Reliance mart
automotive accessories, fine jewellery
and fashion jewellery in a retail format
for the first time.
The hypermarket also launched a host of
Reliance's inhouse brands
EDLP (every day low price) basis at
prices 1520% lower than market prices.
Reliance Mart
house a health and wellness store providing
pharmaceutical drugs and other wellness
products.
Reliance Mart will also sell as a part of its
Lifestyle section.
cafeteria providing quality food and beverages,
an ATM machine
consumer service / membership desk.
Reliance Mart.
61 check out counters
first time in India introduced the Mobile
POS system for faster check outs.
The store planning, atmospheres and
layout has been designed to provide “a
complete solution”
Reliance mart
open from 10:00 a.m. to 10:00 p.m. seven days
a week.
Reliance One, a common membership and
loyalty program, Earn Anywhere, Spend
Anywhere.
Attractive finance options, including 0%
financing for your purchases on select products.
Future
Plan to open one or two new stores every
month during this financial year.
Reliance Mart is a part of the Reliance group’s
$5.5billion retail initiative, targeting revenues
of 1 trillion rupees ($24.6 billion) by March
2011.
Reliance Retail is expecting a topline of
Rs1,000 per sq ft/month.
Future
a panIndia presence
opening 30 Stores by the end of the year
500 by the end of 2010.
Reliance fresh.
• RIL’s Rs 25,000 crore venture

Reliance Fresh
Reliance Retail 240 neighbourhood and
convenience stores under the Reliance Fresh
chain.
1.31 lakh Reliance loyalty customers, across
Punjab, Andhra Pradesh, Rajasthan, Tamil
Nadu, Delhi, Jharkhand, Karnataka, Gujarat,
Maharashtra, Madhya Pradesh and Kerala.
Introducing retail apparel, footwear, women
wear and lingerie at its stores.
Reliance Fresh
‘Reliance One’, customers can earn 1
RelianceOne point for every Rs 100
spent.
Open from 8 am to 9 pm, 7 days a week.
Fresh fruits and vegetables, staples, top
up grocery and ‘Reliance Select’, the
Reliance brand of products.
Reliance Fresh
Unmatched affordability, quality, and
service to the consumers.
Prosperity to the farmers.
Diageo, the world’s leading premium
Drinks Company has announced a tieup
with Reliance Fresh to retail its
international wines portfolio in India.
Reliance Fresh
20 trained sales
associates attending
to the customers.
Provide direct
employment to 5
lakh young Indians
and indirect job
opportunities to a
million people
Future
Plans to add more stores across different
geographies, and eventually have a pan
India footprint by year 2011.
seamless supply chain infrastructure,
unprecedented even by world standards.
Reliance is aiming to touch almost every
Indian customer and supplier.
Reliance Retail Future
Aims to launch 700 Reliance Town Centre
(RTC) in the country to cater to population
below 3 lakh.
These centres will house everything that a town
needs. first Centre by December.
More centres next year across the country and
the company aims to introduce first RTC in
north India.
Future
From health centre to vocational training
to multiplexes and retail, RTC is poised
to become a centre point for various
segments dwelling in town.
an autocentre
60,000 to 2 lakh sq ft depending on the
size of the town,
Future
plans to introduce rural business hubs (RBH)
for the rural population and it aims to add 1,600
RBHs in the next few years.
Reliance Retail will soon have around 100
private labels across product categories
cheaper than mainstream brands.
Pharma major Cipla is in talks with Reliance
Retail for an outsourcing arrangement
Future
Reliance Retail is getting ready for the launch
of its pharma retail business next month.
The first pharma retail outlet in Reliance
Retail hypermarket in Ahmedabad.
The group’s first exclusive Reliance Health and
Wellness store will come up in Hyderabad.
Reliance Textiles.
• Reliance has roped in world famous

Italian Designer, Mr. Maurizio Bonas of
"Made in Italy“.
• Plan to introduce Bonas Designer label in

India through Reliance and Vimal Retail
outlets.
• Only Vimal Retail Outlets:
• Provide customers with the best designs

and surprise them with prices.
Thank You!!!

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The Back Drop

All of the above, plus much more!

Marketing management is the art and science of

Needs, wants Utility, Value &

Marketing & Xchange, Transaction

A process that creates benefits by facilitating a desired

1. “The purpose of a company is ‘to create a customer…The only

• The tools available to a business to gain

• Price set to ‘penetrate the market’

• Goods/services deliberately sold below

• Used to play on consumer

• Deliberate price cutting or offer of ‘free

• Full Cost Pricing – attempting to

Aircraft flying from Bristol to Edinburgh – Total Cost (including

• Setting price to ‘target’ a specified

• Calculation of the average cost

• Any pricing decision must be mindful of

• The means by which products and

• People represent the business

• The ambience, mood or physical

• Top management is more

• Increase in number of brands

• Since it is at the last point where

• Liquidating heavy inventories

While the advertising budgets

• Don’t promote if the product is not good

• Promotions may be used in conjunction with

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies,

planning, implementing, and

All You Can Afford Budgeting Approaches Percent of Sales

Prada 1.95 0.0 13.0

Hermès 1.57 +7.7 25.4

Product Distribution Price Promotion

• The Reliance Group, founded by Dhirubhai

• India's largest private sector enterprise

• Businesses in the energy and materials

• Group's annual revenues are in excess of

• Conferred 'ET Business Leader of the Year'

• Had the distinction and honor of being the

• Ranked 42nd among the 'World's Most

• Conferred the 'Asia Society

• Ranked No.1 for the second

• Steered the 100-year Yankee

• Currently, selling through

• Reliance World (formerly Reliance

• Digital world of information, communication,

• Connected to Reliance’s countrywide optic

• In July 2003, Reliance Communications

• Wireless POS enables banks to significantly

• Caused expansion of credit cards & ATM

• launched services in rural market

• Reliance Capital announced its

• first to deploy Internet-enabled

• Not going straight ahead with

• In talks to buy a stake in north-

• Not successful to expectations.

• Reliance Mart’s first hypermarket

• RIL’s Rs 25,000 crore venture

• Reliance has roped in world famous

• Plan to introduce Bonas Designer label in

• Only Vimal Retail Outlets:

• Provide customers with the best designs