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SMU 3RD SEM ASSIGNMENTS ON MK0012 “RETAIL MARKETING.... ALL THE BEST TO YOU...

SMU 3RD SEM ASSIGNMENTS ON MK0012 “RETAIL MARKETING.... ALL THE BEST TO YOU...

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  • 1. Master of Business Administration Semester III MK0012 – Retail Marketing Assignment Set- 11. How has the growth of retail sector helped the Indian economy?Answer: Retail Sector and its GrowthBusiness Monitor Internationals India Retail Report provides industry professionals andstrategists, corporate analysts, retail associations, government departments and regulatory bodieswith independent forecasts and competitive intelligence on Indias retail industry.The Q112 BMI India Retail Report forecasts total retail sales will grow from INR20.26trn(US$422.09bn) in 2011 to INR31.78trn (US$825.46bn) by 2015. Strong underlying economicgrowth, population expansion, the increasing wealth of individuals and the rapid construction oforganized retail infrastructure are key factors behind the forecast growth.As well as an expanding middle and upper class consumer base, there will also be opportunitiesin Indias second- and third-tier cities. The greater availability of personal credit and a growingvehicle population providing improved mobility also contribute to a trend of 12.1% averageannual retail sales growth throughout the period.Tourism is also a major contributor to the Indian retail sector. Tourist arrivals rose by 8% in2010 to 5.40mn, from 4.99mn in 2009. Foreign exchange earnings from tourism during 2010were US$13.24bn, up 9.55% from US$12.08bn the year before.Indias nominal GDP is forecast at US$2.0trn in 2011. Average annual GDP growth of 7.6% is
  • 2. predicted by BMI through to 2015. With the population expected to increase from 1.24bn in2011 to 1.31bn by 2015, GDP per capita is forecast to rise 92.6% by the end of the forecastperiod, reaching US$3,063.The growth in the overall retail market will be driven largely by the explosion in the organizedretail sector. Domestic retailers such as Reliance Retail and Pantaloons Retail continue to investheavily in increasing their store networks and improving in-store offerings, and the impact theyhave on growth will be boosted by the arrival of expansion-oriented multinationals.Reliance Retail was looking to invest up to INR1.5bn (US$33mn) in 150 new stores by March2011, adding to its existing 1,050-store network. CEO Bijou Kurien said: ‗Now that therecession is over, several new and stalled projects will get started. BMI would focus on bothvalue retail as well as specialty, non-food retail stores. Reliance recently opened its 103rd VisionExpress optical outlet in India in partnership with GrandVision.Mass grocery retail (MGR) sales in India are expected to undergo enormous growth over theforecast period. BMI predicts that sales through MGR outlets will increase by 219% to reachUS$28.14bn by 2015. This is a consequence of Indias dramatic, rapid shift from smallindependent retailers to large, modern outlets, although it must also be noted that this growth isforecast to come from a very low starting point.BMI forecasts consumer electronic sales at US$29.44bn in 2011, with over-the-counter (OTC)pharmaceutical sales at US$3.03bn. The former sub-sector is expected to show growth of 78.5%between 2011 and 2015, reaching US$52.55bn, with projected double-digit growth of keyproducts such as notebooks, mobile handsets and TVs. OTC pharmaceuticals, meanwhile, shouldincrease by 87.9% throughout the forecast period, to reach US$5.69bn.Automotive sales are forecast to increase from 3.60mn units in 2011 to 5.21mn units by 2015, anincrease of 44.8%, with the premium segment in particular benefiting from higher levels ofpersonal wealth. Domestic vehicle sales surged by a phenomenal 45.9% year-on-year (y-o-y) inOctober 2010, driven by a 22.0% increase in commercial credit (the fastest pace since 2008).Retail sales for the BMI universe of Asian countries in 2011 are a forecast US$3.13trn. Chinaand India are predicted to account for nearly 91% of regional retail sales in 2011, and by 2015their share of the regional market is expected to be more than 92%. Growth in regional retailsales for 2011-2015 is forecast by BMI at 71.6%, an annual average 14.4%. India shouldexperience the most rapid rate of growth, followed by China. Indias forecast market share of13.2% in 2011 is expected to increase to 15.0% by 2015.
  • 3. Business Monitor Internationals India Retail Report provides industry professionals andstrategists, corporate analysts, retail associations, government departments and regulatory bodieswith independent forecasts and competitive intelligence on Indias retail industry.The Q212 BMI India Retail Report forecasts that total retail sales will grow from INR22.53trn(US$489.80bn) in 2012 to INR27.73trn (US$739.56bn) by 2016. Strong underlying economicgrowth, population expansion, the increasing wealth of individuals and the rapid construction oforganised retail infrastructure are key factors behind the forecast growth.As well as an expanding middle and upper class consumer base, there will also be opportunitiesin India‘s second- and third-tier cities. The greater availability of personal credit and a growingvehicle population providing improved mobility also contribute to a trend of 6.9% averageannual retail sales growth throughout the period.India‘s nominal GDP is forecast at US$2.10trn in 2012. Average annual GDP growth of 7.7% ispredicted by BMI through to 2016. With the population expected to increase from 1.26bn in2012 to 1.32bn by 2016, GDP per capita is forecast to rise 77.9% by the end of the forecastperiod, reaching US$2,980. The growth in the overall retail market will be driven largely by theexplosion in the organised retail sector. Domestic retailers such as Reliance Retail and PantaloonRetail continue to invest heavily in increasing their store networks and improving in-storeofferings, and the impact they have on growth will be boosted by the arrival of expansion-oriented multinationals.Reliance Retail was looking to invest up to INR1.5bn (US$33mn) in 150 new stores by March2011, adding to its existing 1,050-store network. CEO Bijou Kurien said, ‗Now that the recessionis over, several new and stalled projects will get started. BMI would focus on both value retail aswell as specialty, non-food retail stores.‘ Reliance recently opened its 103rd Vision Expressoptical outlet in India in partnership with GrandVision.Mass grocery retail (MGR) sales in India are expected to undergo enormous growth over theforecast period. BMI predicts that sales through MGR outlets will increase by 111% to reachUS$69.23bn by 2016. This is a consequence of India‘s dramatic, rapid shift from smallindependent retailers to large, modern outlets, although it must also be noted that this growth isforecast to come from a very low starting point.BMI forecasts consumer electronic sales at US$33.92bn in 2012, with over-the-counter (OTC)pharmaceutical sales at US$3.38bn. The former sub-sector is expected to show growth of 75.2%between 2012 and 2016, reaching US$59.44bn, with projected double-digit growth of keyproducts such as notebooks, mobile handsets and TVs. OTC pharmaceuticals, meanwhile, shouldincrease by 94.4% throughout the forecast period, to reach US$6.58bn.
  • 4. Retail sales for the BMI grouping of Asian countries in 2012 are a forecast US$3.78trn. Chinaand India are predicted to account for nearly 92% of regional retail sales in 2012, and by 2016their share of the regional market is expected to be more than 92%. Growth in regional retailsales for 2012-2016 is forecast by BMI at 31.2%, an annual average 9.0%.India should experience the most rapid rate of growth, followed by Singapore. India‘s forecastmarket share of 13.0% in 2012 is expected to increase to 14.9% by 2015.
  • 5. Q.2 Discuss different types of store based retailer. Give examples of each.Answer: Types of store based retailerRetail stores can be small, boutique operations that sell niche products or large, high-turnoveremporiums that sell everything from tires to garden hoses. These stores are good places to lookfor seasonal, summer and full-time employment.There are a number of levels of employment,from temporary stock clerk to career management, to consider.Specialty Stores Specialty stores sell just one category of merchandise, although that category may be further divided into particular departments. For example, a pet store may sell exotic fish and tanks in one area, and birds, cages and birdseed in another. A bookstore typically has sections for types of literature such as mysteries, classics, cookbooks and children, among others. To get a job at a specialty store, extensive knowledge of the product sold will give you an edge.Department Stores Department stores vary from discount (Kmart) to high-end (Bloomingdales) and everything in between. They are organized by divisions that include several clothing categories, cosmetics and accessories, jewelry, household goods, furniture, kitchenware. Each department has a manager, and there are store designers and decorators, plant maintenance and cleaning divisions, store security and more.Warehouse Stores Known as "big box" stores, these giants carry products in bulk. Products include clothing, automotive parts, sports equipment, nursery plants, toys, bedding, electronics--and even groceries. Some stores require annual memberships that offer discounts. Others are just huge discount operations. Warehouse stores may train employees for multiple departments and shift you from one area to another as needed.
  • 6. Grocery Stores Mom n pop groceries, national chains, organic specialists, corner delis--grocery stores come in all flavors. Departments may include a bakery, deli, produce, meat and floral. Grocery stores jobs vary, from bagging and stocking to working behind the deli counter, in customer service or at the cash register. Some grocers offer delivery services, and others have offices that prepare display signs, weekly newsletters with specials and recipes and handle other administrative duties.Resale Stores Resale or second-hand stores might be considered charity shops, antique stores or consignment. Items found in these stores vary from donated clothing to valuable antiques. Resale store employees accept and sort donations, stock racks and shelves, assist customers and answer questions about the items on display.Online Stores Online stores sell a large variety of products, some of which are specialized. They sometimes have real stores as well as virtual ones. But, even if they exist only online, the stores need a fulfillment division to take orders, find and pack purchased items from the warehouse, manage billing and shipping and deal with customer service questions and complaints.Retailing refers to a process where the retailer sells the goods directly to the end-user forhis own consumption in small quantities.  Department StoresA department store is a set-up which offers wide range of products to the end-users under oneroof. In a department store, the consumers can get almost all the products they aspire to shop atone place only. Department stores provide a wide range of options to the consumers and thusfulfill all their shopping needs.
  • 7. Merchandise:  Electronic Appliances  Apparels  Jewellery  Toiletries  Cosmetics  Footwear  Sportswear  Toys  Books  CDs, DVDs  Examples - Shoppers Stop, Pantaloons  Discount StoresDiscount stores also offer a huge range of products to the end-users but at a discounted rate. Thediscount stores generally offer a limited range and the quality in certain cases might be a littleinferior as compared to the department stores.Wal-Mart currently operates more than 1300 discount stores in United States. In India VishalMega Mart comes under discount store.Merchandise:Almost same as department store but at a cheaper price.  SupermarketA retail store which generally sells food products and household items, properly placed andarranged in specific departments is called a supermarket. A supermarket is an advanced form ofthe small grocery stores and caters to the household needs of the consumer. The various foodproducts (meat, vegetables, dairy products, juices etc) are all properly displayed at theirrespective departments to catch the attention of the customers and for them to pick anymerchandise depending on their choice and need.
  • 8. Merchandise:  Bakery products  Cereals  Meat Products, Fish products  Breads  Medicines  Vegetables  Fruits  Soft drinks  Frozen Food  Canned Juices  Warehouse StoresA retail format which sells limited stock in bulk at a discounted rate is called as warehouse store.Warehouse stores do not bother much about the interiors of the store and the products are notproperly displayed.  Mom and Pop Store (also called Kirana Store in India)Mom and Pop stores are the small stores run by individuals in the nearby locality to cater to dailyneeds of the consumers staying in the vicinity. They offer selected items and are not at allorganized. The size of the store would not be very big and depends on the land available to theowner. They wouldn‘t offer high-end products.Merchandise: Eggs Bread Stationery Toys Cigarettes Cereals Pulses Medicines
  • 9.  Specialty StoresAs the name suggests, Specialty store would specialize in a particular product and would not sellanything else apart from the specific range.Specialty stores sell only selective items of oneparticular brand to the consumers and primarily focus on high customer satisfaction.Example -You will find only Reebok merchandise at Reebok store and nothing else, thus makingit a specialty store. You can never find Adidas shoes at a Reebok outlet.  MallsMany retail stores operating at one place form a mall. A mall would consist of several retailoutlets each selling their own merchandise but at a common platform.  E TailersNow a days the customers have the option of shopping while sitting at their homes. They canplace their order through internet, pay with the help of debit or credit cards and the products aredelivered at their homes only. However, there are chances that the products ordered might notreach in the same condition as they were ordered. This kind of shopping is convenient for thosewho have a hectic schedule and are reluctant to go to retail outlets. In this kind of shopping; thetransportation charges are borne by the consumer itself.Example - EBAY, Rediff Shopping, Amazon  Dollar StoresDollar stores offer selected products at extremely low rates but here the prices are fixed.Example - 99 Store would offer all its merchandise at Rs 99 only. No further bargaining isentertained. However the quality of the product is always in doubt at the discount stores.
  • 10. Q.3 Explain the GAP Model of service quality.Answer: History of the Gaps Model The gaps model of service quality was first developed by a group of authors, Parasuraman, Zeithaml, Berry, at Texas A&M and North Carolina Universities, in 1985 (Parasuraman, Zeithaml& Berry). Based on exploratory studies of service such as executive interviews and focus groups in four different service businesses the authors proposed a conceptual model of service quality indicating that consumers‘ perception toward a service quality depends on the four gaps existing in organization – consumer environments. They further developed in-depth measurement scales for service quality in a later year (Parasuraman, Zeithaml, Berry, 1988). Theory of the Gaps Model Perceived service quality can be defined as, according to the model, the difference between consumers‘ expectation and perceptions which eventually depends on the size and the direction of the four gaps concerning the delivery of service quality on the company‘s side (Fig. 1; Parasuraman, Zeithaml, Berry, 1985). Customer Gap = f (Gap 1, Gap 2, Gap 3, Gap 4) The magnitude and the direction of each gap will affect the service quality. For instance, Gap 3 will be favourable if the delivery of a service exceeds the standards of service required by the organization, and it will be unfavourable when the specifications of the service delivered are not met. The Integrated Gaps Model of Service Quality (Parasuraman, Zeithaml, Berry 1985)
  • 11. The key points for each gap can be summarized as follows:Customer gap: The difference between customer expectations and perceptionsthe service quality gap.Gap 1: The difference between what customers expected and what management perceived about the expectation of customers.Gap 2: The difference between management‘s perceptions of customer expectations and the translation of those perceptions into service quality specifications and designs.Gap 3: The difference between specifications or standards of service quality and theactual service delivered to customers.Gap 4: The difference between the service delivered to customers and the promise ofthe firm to customers about its service quality.Applications of the Gaps ModelFirst of all the model clearly determines the two different types of gaps in servicemarketing, namely the customer gap and the provider gaps. The latter is considered asinternal gaps within a service firm. This model really views the services as astructured, integrated model which connects external customers to internal servicesbetween the different functions in a service organization.Important applications of the model are as follows:1. The gaps model of service quality gives insights and propositions regardingcustomers‘ perceptions of service quality.2. Customers always use 10 dimensions to form the expectation and perceptions ofservice quality (Fig. 2).3. The model helps predict, generate and identify key factors that cause the gap tobe unfavourable to the service firm in meeting customer expectations.The model provides a conceptual framework for academic and business researchers tostudy the service quality in marketing.
  • 12. Q.4 Define Retail store image & describe factors influencing it.Answer: Retail store imageRetail store image has been shown to play an important role in store patronage, and it is widelyaccepted that psychological factors have a significant role in store image formation. Past researchhas often involved the measurement of tangible attributes, or links between store images andconsumers‘ self-images. This study was undertaken to move to the next stage by exploring thelink between perceived store image and the personal values which underlie behavioral choices. Fashion retailing was selected as an appropriate research domain because of the well-establishedassociations between clothing choice, personality, self-concept, and personal values. Means-endtheory and laddering methodology were employed in interviews with 30 female respondents. Thehedonic values of ―enjoyment and happiness‖ and ―quality of life‖ were found to be the terminalvalues most sought by consumers in association with store image. These were linked through theconsequence ―nice feeling‖ to the tangible attributes of ―price‖, ―quality‖ and ―reputation‖. Thestudy illustrates an application of means-end methodology in a retail environment, and the resultsprovide a platform for fashion store image and positioning strategies. Factors influencingIn recent times retail Industries in India has emerged as very important sector in Indiacontributing significantly to GDP and fuelling the economic growth. Over the years, manyresearches have been carried out to understand the consumer‘s perceptions on various types ofretailers and their image. The review of literature indicates a gap in such studies in Indiancontext. This paper tries to construct a measure for store image in Indian context. A total of 32variables were considered for the study and their relative importance from customers‘ point ofview are identified. The study is carried out in eight major cities representing four major states ofthe eastern region of India. RIDIT analysis is used to identify the prioritization pattern thatcustomers assign to different variables. The result shows that cleanliness and tidiness of the storeis very important for attracting the customers and gives a positive image about the store. Nextimportant factor is décor of the store and layout of the store making movements easier for thecustomers.
  • 13. Retailing is a significant business required for states that the human mind can handle only acertain modernizing India and for smoothening in the process of number of complex situationsand stimuli; therefore it economic growth. In the existing scenario, it is attempts to oversimplifycircumstances and thus abstracts experiencing exceptional consumption boom because of such as―Joh Bull‖ (England) or ―Uncle Sam‖ (United remarkable advancement in the consumer income,States). These simple symbolic images are used to changing life style of the youth andexpenditure patterns summarize a vast complexity of values and meanings.By in turn providing new employment opportunities. All personalizing these symbols or objectswe allow these are pushing the retail growth trajectory to high ourselves an avenue forinteraction with them. Hence level. However, the journey for the organized retailers full groundsare found by humans to continue to either like or of bumps because of the cut throat competitionin the dislike these symbols in a manner similar to liking or organized retail industry. So, one ofthe success mantras disliking of a person is to have a distinct image for the retail shop or retailThe concept of image is an important variable in the chain.The role of image in economic activities and other of this position in the field of marketing hasbeen areas of man‘s interest were discussed by Boulding in the pervasive. Marketers areconcerned with the images mid 1950‘s1. He theorized that behaviour of human is consumers have of such entities as their products, notdirected by mere knowledge and information but the services, the corporation itself and the retailpoint of product of the image that a man perceives. He argues that consumer contacts. Nowretailers are seriously involved we function or react not in response to what is true but to withimage research them-both store image and what we believe to be true. He asserts further that weuse departmental stores.The retail image may be defined as the perception of positioning strategy leads to an image of avalue oriented, customers and others about a retail outlet. A retail outlet large retail store offeringlimited service but wide and deep may be viewed by consumers as up-market or down productassortment at an optimum price. On the other market, specialized or broad based, serviceoriented or hand, a niche retailer positioning approach creates an price oriented, modern ortraditional etc. A retail outlet image of a focused, up market retail outlets offering a attempts tocreate a desired image through its positioning narrow but deep product assortment supported bystrategy. Positioning may be defined as the act of customer friendly service. Retail outlets mayhave an designing a retailer‘s offering so as to occupy a distinct image somewhere in betweenthe two extremes. A retailer image in the mind of the target consumers. A carefully must choosea positioning strategy that would create an crafted positioning strategy leads to formation ofdesired image which is in synchronisation with the other image in the target consumer‘s mind.
  • 14. 2. Retail Image refers to how a retailer is perceived by image which helps the retail outlet inconnecting with its customers and others; and positioning refers to a firm‘s customers. The retailimage should be consistent with the devising its strategy in a way that projects an image withexpectations of the target market to facilitate association regards to its retail category and itscompetitors and the between retail outlet and target customers.3. To succeed, a firm must communicate a distinctive, clear and Perceptual Mapping in Relationto Competition: A retailer consistent image. Once its image is established in cannot exist by itselfin the consumer‘s perception consumer‘s minds, a retailer is placed in a niche relative toindependent of competing retail outlets. Depending upon competitors, It is rather difficult tobreak out of that niche its image, each retail outlet occupies a point in the if it is firmly implantedin people‘s mind. It is also consumer‘s mind in relation to other retail outlets. As a challenging toconvey a consistent image globally, given result, a perceptual map is created in the mind of thethe different background and expectations of consumers consumer in which different retailoutlets are stationed at around the world. Separate coordinates on the basis of their respectiveretail. Thus, a retail image enables a retailer to retail image creation takes place as a result of thedifferentiate it from other competing retail outlets by contribution by all components of retailmix, namely reflecting the essence of the retailer in terms of the product assortment andprocurement, service offered, functional and non-functional benefits it offers to its price charged,promotional campaigns, retail outlet target customers. atmosphere, location advantages and otherfactors such So, the way a store looks goes beyond its fixture, as dedication towards ethicalpractices and zeal to lighting, carpeting and decor treatment. It is the result of undertakecorporate social responsibility.4. The retail image should not be confused with retail store planners and designers are undergreat pressure to identity. Identity is the way a retail outlet aims to identify create winningenvironments that not only sell or position it or the products it sells. On the contrary,merchandise but also attract and entertain people. Such image is the way the public perceives aretail outlet and designs take the retail experience beyond buying and the products it offers.A carefully crafted positioning strategy leads to attitude to keep busy shoppers coming back formore useful ways: consumer friendly value proposition and than 12 million street corner momand pop stores have perceptual mapping in relation to competitors.These retail outlets are engulfed with diametrically opposite concepts in practice-mass problemslike operational inefficiency, shortage of capital, merchandise and niche retailer. A massmerchandise untrained manpower, poor selection of merchandise, contribute 8 percent ofthe GDP and 12 percent of theAsian J. Business Manage.
  • 15. Q.5 What is positioning? Discuss various positioning approaches.Answer: PositioningPositioning is the process by which marketers try to create an image or identity in the minds oftheir target market for its product, brand, or organization.Re-positioning involves changing the identity of a product, relative to the identity of competingproducts.De-positioning involves attempting to change the identity of competing products, relative to theidentity of your own product.The original work on positioning was consumer marketing oriented, and was not as muchfocused on the question relative to competitive products as much as it was focused on cuttingthrough the ambient "noise" and establishing a moment of real contact with the intendedrecipient. In the classic example of Avis claiming "No.2, We Try Harder," the point was to saysomething so shocking (it was by the standards of the day) that it cleared space in your brain andmade you forget all about who was #1 and not to make some philosophical point about being"hungry" for business.The growth of high-tech marketing may have had much to do with the shift in definition towardscompetitive positioning. An important component of hi-tech marketing in the age of the worldwide web is positioning in major search engines such as Google, Yahoo and Bing, which can beaccomplished through Search Engine Optimization, also known as SEO. This is an especiallyimportant component when attempting to improve competitive positioning among a youngerdemographic, which tends to be Web oriented in their shopping and purchasing habits as a resultof being highly connected and involved in social media in general.DefinitionsAlthough there are different definitions of brand positioning, probably the most common is:identifying a market niche for a brand, product or service utilizing traditional marketingplacement strategies (i.e. price, promotion, distribution, packaging, and competition).Positioning is also defined as the way by which the marketers create an impression in thecustomers mind.Positioning is a concept in marketing which was first introduced by Jack Trout ( "IndustrialMarketing" Magazine- June/1969) and then popularized by Al Ries and Jack Trout in theirbestseller book "Positioning - The Battle for Your Mind." (McGraw-Hill 1981)
  • 16. This differs slightly from the context in which the term was first published in 1969 by JackTrout in the paper "Positioning" is a game people play in today’s me-too market place" in thepublication Industrial Marketing, in which the case is made that the typical consumer isoverwhelmed with unwanted advertising, and has a natural tendency to discard all informationthat does not immediately find a comfortable (and empty) slot in the consumers mind. It wasthen expanded into their ground-breaking first book, "Positioning: The Battle for Your Mind," inwhich they define Positioning as "an organized system for finding a window in the mind. It isbased on the concept that communication can only take place at the right time and under the rightcircumstances" (p. 19 of 2001 paperback edition).What most will agree on is that Positioning is something (perception) that happens in the mindsof the target market. It is the aggregate perception the market has of a particular company,product or service in relation to their perceptions of the competitors in the same category. It willhappen whether or not a companys management is proactive, reactive or passive about the on-going process of evolving a position. But a company can positively influence the perceptionsthrough enlightened strategic actions.A company, a product or a brand must have positioning concept in order to survive in thecompetitive marketplace. If you dont position your business, your competitor will which islikely not what you desire. (According to the book "Marketing Concepts that Win! Copyright2011 by Martha Guidry, Live Oak Book Company) Many individuals confuse a core ideaconcept with a positioning concept. A Core Idea Concept simply describes the product orservice. Its purpose is merely to determine whether the idea has any interest to the end buyer. Incontrast, a Positioning Concept attempts to sell the benefits of the product or service to apotential buyer. The positioning concepts focus on the rational or emotional benefits that buyerwill receive or feel by using the product/service. A successful positioning concept must bedeveloped and qualified before a "positioning statement" can be created. The positioning conceptis shared with the target audience for feedback and optimization; the Positioning Statement (asdefined below) is a business persons articulation of the target audience qualified idea that wouldbe used to develop a creative brief for an agency to develop advertising or a communicationsstrategy.Positioning Statement As written in the highly revered book Crossing the Chasm (Copyright1991, by Geoffrey Moore, HarperCollins Publishers), the position statement is a phrase soformulated: For (target customer) who (statement of the need or opportunity), the (product name)is a (product category) that (statement of key benefit – that is, compelling reason to buy). Unlike(primary competitive alternative), our product (statement of primary differentiation).Differentiation in the context of business is what a company can hang its hat on that no otherbusiness can. For example, for some companies this is being the least expensive. Othercompanies credit themselves with being the first or the fastest. Whatever it is a business can useto stand out from the rest is called differentiation. Differentiation in today‘s over-crowded
  • 17. marketplace is a business imperative, not only in terms of a company‘s success, but also for itscontinuing survival.*Brand positioning processEffective Brand Positioning is contingent upon identifying and communicating a brandsuniqueness, differentiation and verifiable value. It is important to note that "me too" brandpositioning contradicts the notion of differentiation and should be avoided at all costs. This typeof copycat brand positioning only works if the business offers its solutions at a significantdiscount over the other competitor(s).Generally, the brand positioning process involves: 1. Identifying the businesss direct competition (could include players that offer your product/service amongst a larger portfolio of solutions) 2. Understanding how each competitor is positioning their business today (e.g. claiming to be the fastest, cheapest, largest, the #1 provider, etc.) 3. Documenting the providers own positioning as it exists today (may not exist if startup business) 4. Comparing the companys positioning to its competitors to identify viable areas for differentiation 5. Developing a distinctive, differentiating and value-based positioning concept 6. Creating a positioning statement with key messages and customer value propositions to be used for communications development across the variety of target audience touch points (advertising, media, PR, website, etc.)Product Positioning ProcessGenerally, the product positioning process involves: 1. Defining the market in which the product or brand will compete (who the relevant buyers are) 2. Identifying the attributes (also called dimensions) that define the product space
  • 18. 3. Collecting information from a sample of customers about their perceptions of each product on the relevant attributes 4. Determine each products share of mind 5. Determine each products current location in the product space 6. Determine the target markets preferred combination of attributes (referred to as an ideal vector) 7. Examine the fit between:  The position of your product  The position of the ideal vectorPositioning conceptsMore generally, there are three types of positioning concepts: 1. Functional positions  Solve problems  Provide benefits to customers  Get favorable perception by investors (stock profile) and lenders 2. Symbolic positions  Self-image enhancement  Ego identification  Belongingness and social meaningfulness  Affective fulfillment 3. Experiential positions  Provide sensory stimulation  Provide cognitive stimulation
  • 19. Measuring the positioningPositioning is facilitated by a graphical technique called perceptual mapping,various survey techniques, and statistical techniques like multi dimensional scaling, factoranalysis, conjoint analysis, and logit analysis.Repositioning a companyIn volatile markets, it can be necessary - even urgent - to reposition an entire company, ratherthan just a product line or brand. When Goldman Sachs and Morgan Stanley suddenly shiftedfrom investment to commercial banks, for example, the expectations of investors, employees,clients and regulators all needed to shift, and each company needed to influence how theseperceptions changed. Doing so involves repositioning the entire firm.This is especially true of small and medium-sized firms, many of which often lack strong brandsfor individual product lines. In a prolonged recession, business approaches that were effectiveduring healthy economies often become ineffective and it becomes necessary to change a firmspositioning. Upscale restaurants, for example, which previously flourished on expense accountdinners and corporate events, may for the first time need to stress value as a sale tool.Repositioning a company involves more than a marketing challenge. It involves making harddecisions about how a market is shifting and how a firms competitors will react. Often thesedecisions must be made without the benefit of sufficient information, simply because thedefinition of "volatility" is that change becomes difficult or impossible to predict.Positioning is however difficult to measure, in the sense that customer perception on a productmay not tested on quantitative measures.
  • 20. Q.6 Explain the various elements of communication mix included in retail chain.Answer: Communication MixCommunication is an integral part of the retailer‘s marketing strategy. Primarily, communicationis used to inform the customers about the retailer, the merchandise and the services. It also servesas a tool for building the store image. Retail communication has moved on from the time whenthe retailer alone communicated with the consumers. Today, consumers can communicate orreach the organizations. Examples of this include toll free numbers, which retailers provide forcustomer complaints and queries. Another example is the section called Contact Us on thewebsites of many companies.It is believed that every brand contact delivers an impression that can strengthen or weaken thecustomer view of the company. The retailer can use various platforms / channels forcommunication.The most common tools are:1) Advertising2) Sales Promotion3) Public Relations4) Personal Selling5) Direct MarketingThe tools are illustrated in Figure belowRetail Communication Mix >>Sales promotion>> Advertising >> Direct marketing>> Personal Selling >> Public RelationsLet us now examine each of these tools in detail:Advertising can be defined as any paid form of non-personal presentation and communicationthrough mass media. It is popularly believed that one of the main aims of advertising is to sell toa wide mix of consumers and also to induce repeat purchases.However, a retailer may use advertising to achieve any of the following objectives:1) Creating awareness about a product or store2) Communicate information in order to create a specific image in the customer‘s mind in termsof the store merchandise price quality benefits etc.
  • 21. 3) Create a desire to want a product.4) To communicate the store‘s policy on various issues.5) Help to identify the store with nationally advertised brands.6) Help in repositioning the store in the mind of the consumer.7) To increase sales of specific categories or to generate short term cash flow – by way of a sale,bargain days, midnight madness etc.8) Help reinforce the retailer‘s corporate identity.The retailers for advertising may use any one or a combination of the following mediums:1) Press advertisements2) Posters and leaflets, brochures booklets3) Point of purchase displays4) Advertising can also be done through mediums like radio, television, outdoor hoardings andthe internet.Determining the Advertising / Promotional budgetWhile there is no definite formula for determining the advertising or the overall promotionbudget the following are the main methods that may be employed to determine the advertisingbudget. ‗The percentage of Sales method:This is perhaps the most commonly used method for determining the budget. Here, the budget isa fixed percentage of sales. The biggest advantage of this method is that it is simple to apply andit allows he retailer to set an affordable limit on promotional activity. This method however,takes little consideration of the market conditions of any special advertising needs.The Competitive Parity MethodHere the budget is based on the estimated amount spent by the competition. There is risk that itcould be based on wrong information and again there is little consideration for market conditionsor growth opportunities.
  • 22. The research approach or the Task and objective MethodThe budget is determines on the basis of a study of the best forms of advertising media and thecosts of each. The retailer formulates advertising goals and then defines the tasks necessary toaccomplish these goals. Next, the management determines the cost for each task and adds up thetotal to arrive at the required budget. Here, he advertising expenses are linked to the retailer‘sobjectives and the effectiveness of some forms of advertising can be measured and compared tocosts.The incremental MethodThe budget is simply based on the previous expenditure.What can be afforded?The budget allocated for advertising or for promotion is based on the basis of the money that canbe allocated by the retailer for this purpose.While determining which methods to be adopted, a retailer needs to take into consideration themarket that the firm is operating in , its current market position and how important advertising isin that market.
  • 23. Set- 2Q.1 How does advertising help in retail promotions? Discuss the various appeals beingused.Answer: AdvertisingAdvertising is a form of communication for marketing and used to encourage or persuade anaudience (viewers, readers or listeners; sometimes a specific group) to continue or take somenew action. Most commonly, the desired result is to drive consumer behavior with respect to acommercial offering, although political and ideological advertising is also common. The purposeof advertising may also be to reassure employees or shareholders that a company is viable orsuccessful.Advertising messages are usually paid for by sponsors and viewed via various traditional media;including mass media such as newspaper, magazines, television, commercial, radioadvertisement,outdoor advertising or direct mail; or new media such as blogs, websites or textmessages.Commercial advertisers often seek to generate increased consumption oftheir products or services through "branding," which involves the repetition of an image orproduct name in an effort to associate certain qualities with the brand in the mindsof consumers. Non-commercial advertisers who spend money to advertise items other than aconsumer product or service include political parties, interest groups, religious organizations andgovernmental agencies. Nonprofit organizations may rely on free modes of persuasion, such asa public service announcement (PSA).Modern advertising was created with the innovative techniques introduced with tobaccoadvertising in the 1920s, most significantly with the campaigns of Edward Bernays, which isoften considered the founder of modern, Madison Avenue advertising.In 2010, spending on advertising was estimated at $142.5 billion in the United States and $467billion worldwide. Advertising help in retail promotionsRetail Advertising and Promotion explores how todays retailers can effectively reach theirexisting consumer base, attract new shoppers to their companies, and turn those shoppers intocustomers. The book provides an overview of advertising and promotion as they relate toretailing, including historical perspectives, ethics, regulations, and current trends.
  • 24. Covering all forms of advertising media - from newspapers and magazines to television andradio, outdoor advertising, and the Internet - it features practical information on planning andbudgeting, as well as how to work with advertising agencies. The book discusses promotionaltools available to retailers, including special events, visual merchandising, and public relations.This is not be a book on how to make advertising; rather, it focuses on the information thatretailing students need to know in order to coordinate these endeavors to improve their business.Features:1) Timely projects and exercises that ask students to apply the concepts in practical ways2) Case problems drawn from the industry3) Articles from journals and trade periodicals4) Coverage of the growing multi-cultural consumer marketplace and how retailers can useadvertising to reach this demographic.Instructors Resources:1) Instructors Guide provides suggestions for planning the course and using the text in theclassroom2) PowerPoint® Presentation provides a framework for classroom lectures and discussions foreach chapter; compatible with PC and Mac platforms
  • 25. Q.2 What is the significance of proper merchandise presentation? What is cross-merchandising?Answer: Merchandise presentationVisual merchandising expert Jose Maria Bustos highlights the importance of store presentationand outlines its fundamentals.It has been said that the simple things in life are often the most meaningful. We often relish thesimple home-cooked meal or, better still, a simple truth: "Simple is as simple does".As we enter into 1998, we should continue to be innovative and creative in the never-endingquest for differentiation. We should strive for excellence in one of the most overlooked but vitalcustomer service issues: Merchandise presentation.In many stores throughout Asia, merchandise presentation is often overlooked. The reasons arenot clear. Yet, it might be safe to say that strong merchandise presentation guidelines can belikened to the new IMF guidelines being imposed on some emerging markets. They can bepainful to implement because they demand change, requiring us to step out of our comfort zonewhich can seem painful at times. In fact, change is not painful but, rather, the resistance tochange is.As part of a total commitment to excellence, strong merchandise presentation skills arerequired to differentiate a store from the competition. This can be accomplished in thefollowing ways: Develop a series of strong merchandising guidelines, in written and drawn formats. Train the entire company in regard to these guidelines (so that everyone, including senior executives, can identify the correct from the incorrect). Implement your merchandising guidelines in every possible product category, all the time.Over the next few months, I will attempt to share with you some of the most basic, yet oftenneglected, presentation guidelines and sales merchandising techniques, and my insights into theworld of visual merchandising. If implemented, these techniques can improve your customerservice levels by 100 per cent.If you own one store, there are benefits in having clear guidelines to follow. If you have manystores, guidelines and techniques become buying guides and training tools, ensuring consistencybetween stores and creating familiarity between the customer and your stores. All this adds up toincreased sales.
  • 26. Topics like understanding lifestyles, identifying trends, and developing sales strategies andhow to present them will be reviewed with the intention of building a new understanding of howvisual merchandising can help you get through a difficult time.While visiting Chicago last June, I ran into an old visual merchandising buddy at a majordepartment store. He was with nine other members of the company, from buyer to top-levelexecutives. They were discussing and exploring how best to re-merchandise a ready-to-wear(RTW) wall. I returned to this department later in the day and they were still rolling racks about,moving fixtures, coordinating the wall presentation for hours into the day.Whats my point? Walls are important. Regardless of what type of business you are in, wallsshould be well planned and never randomly used. How often do you rotate your walls and howmuch manpower and experience are you wiling to commit?Walls are either feature walls or back walls.Feature wallsFeature walls are located at focal points at the end of an aisle, at the entrance to a department orat junction points, usually heavy-traffic areas. They should be used to highlight trends and itemswith unique selling points and should be treated with the most consideration.Feature walls within many stores are often wasted by not being identified as a feature wall, butused to house general-type merchandise which does not make for exciting presentation, thereforerobbing you of interesting interior stimuli and sales.A main-floor wall should be used for promoting focused theme presentations, like identifying atrend. With a catchy title like Mad about Plaid, for example, and featuring a totally plaidpresentation ranging from socks to dresses to mens ties, you can create a complete shop concept.The addition of some badpipes or stuffed Scottish terrier dogs will give you visualreinforcement.A big category now is Museum Shops selling art-related stationery, museum notes with artgraphics, and wrapping paper, calendars and envelopes depicting famous art works.By creating a strong wall presentation and adding a few floor fixtures, you can create your ownmuseum store.Back wallsBack walls should draw the customer into the department. One common mistake with RTW backwalls is that they are used to display uninteresting merchandise, usually in dark tones. To addinsult to injury, these walls are generally hung two tiers high. This is truly boring for the shopper.Walls are most interesting when they are a combination of shelves (for folded merchandise and
  • 27. visual forms for displaying the product), short hang-rail sections (for shoulder hanging smallgroups of related bottoms) and face-outs or waterfalls (to show tops). Stagger the heights forinterest and mix in accessories like handbags, costume jewellery and shoes to show an entirelook. This will also create excitement and interest for your various departments. Your brightestcolours should be featured on back walls; this will draw your customer into the department. (Youare guaranteed multiple sales!)Hard-line walls should feature small-scale items on the top shelves, interestingly arranged withsome display worked in. Larger items should be placed on the lower shelves.Walls take on a completely different look when painted, a very inexpensive way to update yourdepartments without having to renovate. The colours can be changed as often as you wish.An important component of good wall presentation is sizing. In fact, sizing is a majormerchandising fundamental as it allows the customer to save time. However, if you walk out ofyour office and on to your selling floor right this minute, how many items would you find whichare properly sized?Hard-line items, generally, are displayed small to large, left to right and top to bottom as shownin the ceramics illustration.Folded RTW is usually sized from small to large, top to bottom and left to right in a snakepattern (see illustration on dress shirt cube presentation). Hanging RTW is usually sized small tolarge and front to back on a face-out or floor fixture and small to large, left to right within eachstyle and colour when shoulder hung.When sizing anything, we usually size within each colour.Colorizing is not an exact science, but many studies have proved that customers tend to look atwalls and merchandise from left to right. So when we colouranything,the general rule is left toright and light to dark, regardless if it is on a wall, floor fixture or table. Simple enough, yes. Yet,many retailers never fully institute the regulation into staff, thereby not ensuring the necessaryconformity needed to excel.So, by identifying feature walls with strong merchandising themes (supported by in-depthproducts) and implementing guidelines for sizing/ colourising, shopping becomes quicker andmore pleasant.It has been said that the shopper of the future will have considerably less shopping time, possiblyintervals of minutes, not hours. Remember: "Simple is as simple does".
  • 28. Cross merchandising:Cross merchandising is a marketing strategy that makes it possible to generate sales for productsthat fall into different categories by linking them in the minds of consumers. In a retail setting,this can mean setting up displays that include two or more products that are different, but canlogically be used together. The idea is to entice customers who came in to purchase a particularitem to also purchase additional items that are on display in the same area and can be used intandem with the first item.One of the best examples of cross merchandising is in the electronics section of a retail store. Ina section where stereo sound systems are on display, the management of the store may choose todisplay such items as batteries, universal remotes, speaker wire, or possibly even a smallselection of popular music CDs. Thus, a customer who comes in to buy a new compact stereosystem may choose to also pick up a universal remote that will operate the system as well asother electronic devices that the consumer already owns. At the same time, the customer can alsopick up batteries for the remote and purchase one or two new CDs to play on the stereo system.Employing the concept of cross merchandising has benefits for both consumers and for retailers.For consumers, the ability to pick up everything that is needed to go with a product withoutgoing down multiple aisles saves time. At the same time, the retailer has the opportunity to selladditional items at one time, while also building customer loyalty with those who appreciate thefact that they could get what they wanted in one aisle, rather than traveling down several aisles.The end result is that retailers increase sales, and consumers are more satisfied overall with theshopping experience.In order for cross merchandising to work, it is important that the products displayed together dohave some sort of logical connection. For example, a clothier would not display men‘s necktiesnext to women‘s lingerie and expect to increase sales. However, if those neckties are displayedwith a selection of men‘s suits and accompanied with items like dress shirts, cuff-links and crisphandkerchiefs for jacket lapel pockets, the possibility to cross-sell items increases significantly.The strategy of cross merchandising can be used in just about any retail setting. Movie rentalstores may create a display featuring a specific group of movies, and include candy bars, softdrinks, and popcorn in the same display. Perfume counters in department stores may also displayscented lotions and soaps along with the bottles of perfume. Sporting goods stores may displayhelmets, tire repair kits, and biking gloves near a rack of bicycles. As long as the items displayedtogether have a logical relationship to one another, the strategy is highly likely to work.
  • 29. Q.3 What is psychological pricing? Determine its effectiveness.Answer: Psychological pricingPsychological pricing is a business concept supported by the idea that customers respond betterto certain types of prices and will more likely to buy items with these prices. Most often, suchprices have end digits of nine, 99 or 95, which it is believed make people more assured they aregetting a savings on what they buy. For some companies, pricing something at $19.99 instead ofat $20 US Dollars (USD) will result in consumers believing they‘re getting a savings, and even ifthat savings is only one penny, customers may feel more confident about making a purchase.There are plenty of historical examples of psychological pricing, dating back to the late 19thcentury where newspaper salesmen sometimes exploited this tactic. In the 20th century, it beganto be used with more regularity, and now there are stores that seem always to use it. A walk intoa Walmart® will reveal many examples of these psychological prices, where it appears thatalmost every price ends at .98, .99 or .49 USD.According to those who believe psychological pricing is effective, this lowered number mayinfluence consumers in numerous ways. They might only look at dollar value and in the heat ofthe particular purchasing moment, they could fail to acknowledge that the cents portion might beonly a penny or two off another dollar. A $9.99 price might be read as $9.00 instead of almost$10.00. This is sometimes called the left-digit effect. The lack of a round solid price alsosuggests the price is on sale or discounted, even when this isn‘t the case.The deliberate and somewhat blatant attempt at fixing prices is to make certain consumers areattracted by the prices and purchase whatever available goods there are attached to. Interestingly,some companies price differently to appeal to what they think might be the other needs ofcustomers. Some companies set whole number prices to convey that they have dependable,unalterable attitudes toward customers, and this may be appealing to certain shoppers who aren‘treally looking for a bargain.For the person who feels influenced by psychological pricing, there are some good ways to getaround this. First, people should shop with a calculator in hand so they can ring up purchases andsee the real cost of things before they buy. This is especially important in regions where sales taxapplies. Simply adding sales tax can be a wake up call.
  • 30. The next thing that may be of use is to read prices backwards. Always focus on the cents portionfirst, which is often printed smaller, and round it up to the nearest dollar. Then, add it to thelisted dollar price to see a more real estimate of price. Consumers are fairly accustomedto psychological pricing, and with a few tricks they can easily minimize its power, especiallywhen they‘re aware this is the merchant‘s attempt to influence them and usually not an attempt tosave consumers money.
  • 31. Q.4 Differentiate relationship marketing and transaction marketing.Answer: Relationship marketing and transaction marketingRelationship marketing is company focusing on existing customer base and building longlasting relationships with them and merely trying to attract new customers to organization.Assumption here is that customer retaining expenses are lower than expenses on attracting newcustomers. So that building effective relationships with existing customer base increases theprofitability of the organization.Relationship marketing is one aspect of modern marketing where the traditional aspect ofrelationship marketing was known as transaction marketing. Transaction marketing wheremarkets build relationships with customers with the focus of performing single sale where therelationship with customers is terminated soon after the sale is made and then focus on attractingmore new customers.The difference between relationship marketing and transactional marketing can beexplained as follows:  Transactions marketing focuses on single transaction/sale where the relationship marketing aims to make more than one sale to the customer through customer retention and building customer loyalty.  Transactions marketing focuses on short term time scale where they aims to make a little profit on the spot and move on to other customers whereas relationship marketing focuses on longterm time scale with making high profits in long run even though short run cost is high and profits are low.  Standardized products are sold in transactions marketing as they do not wish to serve the customer in long term basis and retain the customer through customer satisfaction. Relationship marketing offers customized products to retain customers through providing high quality customer service which will eventually build a loyal customer base.  Transactions marketers do no commit themselves to customer service nor the customer do commit themselves to the firm to purchase goods in the future and they will always shift between competing firms. But relationship markets always commit themselves to serve the customer to retain them in long run and customers also will commit themselves to firm and will not be shifting to competitors.
  • 32.  Transactional marketing do not encourage high customer contacts where as relationship marketing rely on high customer contacts to identify, anticipate and satisfy customer need and retain them in the long run.  In transactions marketing quality is seen as a concern/responsibility of the production department which only affects the single sale performed. But in relationships marketing quality is viewed as concern/responsibility of each and everyone in the organization where they commit themselves to avoid mistakes and preserve customer satisfaction in order to build customer loyalty.Relationship Marketing is a relatively new concept in marketing. The concept is catching moreattractions by organizations day by day because of the longevity of relationship with customersand low cost of retaining customers.Marketing has moved from customer acquisition to customer retention to customer selection.The importance of relationship marketing in retention of few profitable customers has becomeeven more important than ever. Smith and Taylor in their book ―Marketing Communication: anintegrated approach‖ are of the view that organizations today do not look at customers as buyingone can of beans, one car or photocopying machine but they think of them as buying thousandsof cans of beans, dozens of cars and photocopiers during their life time. Today selling has movedaway from short term, quick scale scenario and selling today is more about ―partnering‖ andrelationship building, you don‘t sell to people you partner with them.Relationship Marketingvs. Transactional MarketingTransactional marketing is a business strategy that focuses on ―single point of sale‖ transactions.The emphasis is on maximizing the efficiency and volume of individual sales rather thandeveloping a relationship with buyer. On the other hand relationship marketing is a businessstrategy that seeks to establish long term relationship with its customers rather than focusing onsingle transaction, not only does it focus on individual customers but on all the stakeholders inorder to manage a relationship that adds value to each person.Varey and Lewis in their book ―Internal Marketing Directions for Management‖ describe indetail how transactional marketing differs from relationship marketing.- Focus: The transactional marketing focus on recruitment of customers for single sale;Relationship marketing focus on customer retention
  • 33. - Orientation: Transactional marketing is oriented on product features; Relationship Marketingorientation is on product benefits and system solutions Time Horizon: Transactional marketing has short time horizon: Relationship marketing has longterm horizon- Customer Focus: Transactional Marketing has little customer focus: Relationship Marketinghas high customer focus- Information: Transactional Marketing information is content of communication; RelationshipMarketing information is product of communication.- Contact: In Transactional Marketing there is low contact with customers; In Relationshipmarketing there is high contact with customersEgan in his book ―Relationship Marketing 3rd Edition‖ says that relationship marketing has adual focus both on customer retention and acquisition strategies. It has become underpinningconviction of relationship marketing that it encourages retention marketing first and acquisitionmarketing later on. The academics are of the view that customer retention offers significantadvantage than customer acquisition, particularly in saturated markets.Benefits of Relationship marketing over transactional marketingRelationship Marketing is rooted in the idea that it is cheaper to retain an existing customer thanto recruit a new one. There are many benefits of relationship marketing. The first and foremost isthat it focuses on providing value to its customers and places a great emphasis on customerretention. Secondly relationship marketing approach is an integrated approach to marketing,service and quality and therefore it helps in gaining competitive advantage. The long termcustomer may do the word of mouth promotions and referrals and many studies have revealedthat cost to retain existing customer is just fraction of the cost to acquire new customers. Mudieand Perrie in their third edition of their book ―Services Marketing Management‖ assert thatrelational customer also tend to increase their purchases overtime either because they areconsolidating their purchasing onto preferred supplier due to grown business/ family and it hasalso been found that there is less need to offer price promotions to this group as these customersare likely to be less price sensitive than others.
  • 34. Trend towards Relationship MarketingNowadays more and more organizations are adapting relationship marketing approach. The bigexamples in this case are Club Card by Tesco and Nectar Card by Sainsbury and other partnerorganisation. The points scored are not only tempting to customers for repeat buying but the datacollected also gives the organizations an insight into the buying habits of their customers. It helpsin making a more customised marketing strategy directed at individual customers and time totime customers are sent information on promotions and new products. Some organizations goeven further and send gifts and cards on birthdays or other such special occasion of customers.With time organizations have realized that the cost of attracting new customers is very high andretaining customer results not only in increased profits but word of mouth marketing and positivereferrals also help in generating more business leads. Relationship marketing has become theapproach for 21st century and soon enough longevity of relationship with customers will be keyin determining success of businesses in today‘s highly competitive environment.
  • 35. Q.5 Explain the concept of social marketing. Discuss the P’S under social marketing.Answer: Social marketingSocial marketing is the systematic application of marketing, along with other concepts andtechniques, to achieve specific behavioral goals for a social good.Social marketing can beapplied to promote merit goods, or to make a society avoid demerit goods and thus to promotesocietys well being as a whole. For example, this may include asking people not to smoke inpublic areas, asking them to use seat belts, or prompting to make them follow speed limits.Although "social marketing" is sometimes seen only as using standard commercial marketingpractices to achieve non-commercial goals, this is an oversimplification.The primary aim of social marketing is "social good", while in "commercial marketing" the aimis primarily "financial". This does not mean that commercial marketers can not contribute toachievement of social good.Increasingly, social marketing is being described as having "two parents"—a "social parent" =social sciences and social policy, and a "marketing parent" = commercial and public sectormarketing approaches.Beginning in the 1950s when Weibe asked "Why can‘t you sell brotherhood and rationalthinking like you can sell soap?‖, it has in the last two decades matured into a much moreintegrative and inclusive discipline that draws on the full range of social sciences and socialpolicy approaches as well as marketing.Shaklee Coorporation, who pioneered social marketing over 50 years ago, has trademarked theterm "Social Marketing."Social marketing must not be confused with social media marketing.Application of social marketing:Health promotion campaigns in the late 1980s began applying social marketing in practice.Notable early developments took place in Australia. These included the Victoria Cancer Councildeveloping its anti-tobacco campaign "Quit" (1988), and "SunSmart" (1988), its campaignagainst skin cancer which had the slogan Slip! Slop! Slap!.WorkSafe Victoria, a state-run Occupational Health and Safety organization in Australia hasused social marketing as a driver in its attempts to reduce the social and human impact of
  • 36. workplace safety failings. In 2006, it ran "Homecomings", a popular campaign that was lateradopted in New South Wales, Queensland and Western Australia, and named the 2007Australian Marketing Institute Marketing Program of the Year.DanceSafe followed the ideas of social marketing in its communication practices.On a wider front, by 2007, Government in the United Kingdom announced the development ofits first social marketing strategy for all aspects of health.Two other public health applications include the CDCs CDCynergy training and softwareapplication, and SMART (Social Marketing and Assessment Response Tool).Social marketing theory and practice has been progressed in several countries such as the US,Canada, Australia, New Zealand and the UK, and in the latter a number of key Governmentpolicy papers have adopted a strategic social marketing approach. Publications such as"Choosing Health" in 2004, "Its our health!" in 2006; and "Health Challenge England" in 2006,all represent steps to achieve both a strategic and operational use of social marketing. InIndia, AIDS controlling programs are largely using social marketing and social workers arelargely working for it. Most of the social workers are professionally trained for this particulartask.In the U.S. the Washington D.C. based organization "Men Can Stop Rape" Anti-RapeMovement have successfully used social marketing in anti-rape posters and other media targetinga rape-prevention message at boys and young men.A variation of social marketing has emerged as a systematic way to foster more sustainablebehavior. Referred to as Community-Based Social Marketing (CBSM) by Canadianenvironmental psychologist Doug McKenzie-Mohr, CBSM strives to change the behavior ofcommunities to reduce their impact on the environment. Realizing that simply providinginformation is usually not sufficient to initiate behavior change, CBSM uses tools and findingsfrom social psychology to discover the perceived barriers to behavior change and ways ofovercoming these barriers. Among the tools and techniques used by CBSM are focus groups andsurveys (to discover barriers) and commitments, prompts, social norms, social diffusion,feedback and incentives (to change behavior). The tools of CBSM have been used to fostersustainable behavior in many areas, including energy conservation, environmental regulation andrecycling.
  • 37. Types of social marketing:Social marketing uses the benefits of doing social good to secure and maintain customerengagement. In social marketing the distinguishing feature is therefore its "primary focus onsocial good, and it is not a secondary outcome. Not all public sector and not-for-profit marketingis social marketing.Public sector bodies can use standard marketing approaches to improve the promotion of theirrelevant services and organizational aims. This can be very important, but should not beconfused with social marketing where the focus is on achieving specific behavioral goals withspecific audiences in relation to different topics relevant to social good (e.g.: health,sustainability, recycling, etc.). For example, a 3-month marketing campaign to encourage peopleto get a H1N1 vaccine is more tactical in nature and should not be considered social marketing.Whereas a campaign that promotes and reminds people to get regular check-ups and all of theirvaccinations when theyre supposed to encourages a long-term behavior change that benefitssociety. It can therefore be considered social marketing.As the dividing lines are rarely clear it is important not to confuse social marketing withcommercial marketing.A commercial marketer selling a product may only seek to influence a buyer to make a productpurchase.Social marketers, dealing with goals such as reducing cigarette smoking or encouraging condomuse, have more difficult goals: to make potentially difficult and long-term behavioral change intarget populations.It is sometimes felt that social marketing is restricted to a particular spectrum of client—the non-profit organization, the health services group, the government agency.These often are the clients of social marketing agencies, but the goal of inducing social change isnot restricted to governmental or non-profit charitable organizations; it may be argued thatcorporate public relations efforts such as funding for the arts are an example of social marketing.Social marketing should not be confused with the Societal Marketing Concept which was aforerunner of sustainable marketing in integrating issues of social responsibility into commercialmarketing strategies. In contrast to that, social marketing uses commercial marketing theories,tools and techniques to social issues.Social marketing applies a "customer oriented" approach and uses the concepts and tools used bycommercial marketers in pursuit of social goals like Anti-Smoking-Campaigns or fund raisingfor NGOs.
  • 38. Q.6 Discuss the advantages and disadvantages of E-Tailing.Answer: E-TailingIf few years back technology brought the shopping information on to the laptops, today it bringsthe products right to the doorstep. With the use of internet as a medium a person can buyproducts from a virtual store (shopping website). Though detractors to this technologicaladvancement thought that this would take the joy off shopping, it has only added a whole newperspective to shopping.Meaning of E-Tailing:-The word E-tail has its roots in the word ‗retail‘. Here the letter E stands for ‗electronic‘ sincethe shopping process happens through the electronic media (internet). With the use of a web-space a virtual shop is created and the products are displayed through images in this space withthe features and price tags. By accessing this shopping site a customer can choose his / herproducts into a cart. The payment to this product can be done in various modes as mentioned bythe shopping site. The product would be delivered to the address specified by the customer.Steps involved in E-tailing:-The shopping process through internet media happens in 5 steps generally.Customer visit: The customer accesses the website of the e-tailer through his/her mobile or PCor laptop. This visit is very critical to the e-tailer because it is this visit that would create anopportunity for a business. The simplicity of the site, the arrangements of the products in the siteand various other factors decide the first impression of the customer.Choice of product: Once the customer visits the site he/she would choose a product based on theimage and valid information available on the web page. This information can include the pricetag, details about the product, availability/deliverable time span and even customer reviews onthe product.Payment online: Once the customer chooses the product the next step would be to go through asecure process of data exchange. The e-tailer may provide a unique user account to the customerto keep the transaction safe. Payments to the product can be made online through credit or debitcard or even cash on delivery basis where the customer pays the e-tailer when the product isdelivered to him/her.
  • 39. Product delivery: Once the order is placed with the e-tailer the next process would test theefficiency of supply chain network of the e-tailer. The delivery of the product would be based onthe availability of the product in the inventory closest to the customer‘s delivery address. Thisprocess may also involve shipment of the product. There are different methods used in thisprocess. Some e-tailers just create a platform through a website where the business actually takesplace between the customer and a company (or business) who is a client to the e-tailer. Here thee-tailer would just take the commission on each product sold. Typically an e-tailer may alsochoose to buy products that have potential demand and then display it on the site. In this case thee-tailer would have to take care of inventory expenses and also the entire procurement anddisbursement cycle.Customer feedback: Once the product is delivered to the customer the feedback from thecustomer is very much important. This is primarily because of the absence of a real shoppingstore environment. The entire experience of the customer during the process would be anindicator of the efficiency of e-tailing. This experience of the customer can be accessed throughproper customer service for feed backs and the problems faced by the customer should becorrected by the e-tailer. Late delivery, wrong product, damaged product etc can be some of thecustomer complaints which the e-tailer would have to sort out.Benefits of e-tailing:- It reduces the space occupied by retail outlets in the real world. It gives quick and easy access to a shopping space at any time and from any place where there is access to internet. It saves time of the customer that is spent on travelling to a shopping place in real world. It creates a new platform for goods from different parts of the world which could be imported by placing an order.Advantages & Disadvantages of E-tailingWhat can an e-tail site do for your business? Give your business global exposure Expand your customer base and increase your sales Provide a more even and efficient use of your resources because the site is in use 24 hours a day (no downtime) Increase your profit in the long run, as the cost of servicing an online sale should be less than a face-to-face sale
  • 40. Provide a new distribution channel directly to the end user (if you previously used intermediaries) Provide flexibility of where you locate your base of operations Offer your customers more company and product/service information Allow for easy updates of company and product/service information Save on the labour and time costs of manual processing by automating many services Test new products and services amongst specialist customer groups Provide a more accessible and cost effective way of starting a businessWhat are the drawbacks of e-tailing? Your site must be available and operational 24 hours a day. This may mean employing a night shift of customer service operators or maintenance staff You must be ever more aware of actions of your competition as they are only a "click" away The Internet market is still only small in comparison to the traditional market Many products are difficult to ship to far away locations. For example perishables are difficult to market to across broad geographical locations and furniture is expensive to ship overseas. Many foreign markets have restrictions on imports Your buyers remain largely anonymous to you, and you to them. You dont have the chance of face-to-face discussions or product demonstrations You must be vigilant maintaining your site. Update offers, prices, specials and products regularly. Check for errors and working links. Answer queries promptly.
  • 41. THANK YOU

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