Marketing management module 4 uma k

Marketing Management MODULE 4
UMA K, Assistant Professor. Page 1
Module 4: Marketing Research & Trends in Marketing-Marketing Information System –
Research Process – Concepts and Applications: Product – Retail Research – Customer Driven
Organizations - Ethics in marketing –Online marketing trends.
MARKETING RESEARCH & TRENDS IN MARKETING
Marketing Research• Marketing research involves collecting, organizing, analyzing and
communicating information that can be used in order to make an informed marketing decision.•
Performing market research will complement your marketing mix strategy as it enables you to
make educated decisions regarding selecting markets, your image or branding and products or
services.
Online Research• Online research: the use of computer networks, including the Internet, to
assist in any phase of the marketing research process including development of the problem,
research design, data gathering, analysis, and report writing and distribution
Key steps in Marketing Research:
1. Define the Problem
2. Collect the Data
3. Analyze and interpret the data
4. Reach a conclusion
5. Implement your research
Define the Problem• In this stage you need to identify the actual problems that are relating to
the apparent symptoms.• What information is needed in order to solve the problem?• For
example, poor sales within a business are not the problem, they are the symptom of a larger issue
such as a weak marketing strategy.
Further business problems may include: • Who are your target customers?• What method
could be implemented to reach these customers?• Who are your customers and what advantages
and disadvantages do they have over your business?• What size is the consumer market you are
trying to engage?
Collect the Data There are two types of market research that can be performed:
1. Primary research - involves collecting information from sources directly by conducting
interviews and surveys, and by talking to customers and established businesses.

2. Secondary research - involves collecting information from sources where the primary
research has already been conducted. Such information includes industry statistics, market
research reports, news paper articles, etc.
Collection methods and techniques:
• Qualitative research is where you seek an understanding of why things are a certain way.
For example, a researcher may stop a shopper and ask them why they bought a particular
product or brand.
• Quantitative research refers to measuring market phenomena in a numerical sense, such
as when a bank asks consumers to rate their service on a scale of one to ten.
3. Analyze and interpret the data
• You must attach meaning to the data you have collected during your market research to make
sense of it and to develop alternative solutions that could potentially solve your business problem.
• You should determine how the knowledge you have gained through researching your market
can be applied and used to develop effective business strategies.
4. Reach a conclusion• With the alternatives you have developed to solve your problem in mind,
perform a cost- benefit analysis of each alternative keeping in mind the potentially limited
resources available to your business.• You may also need to perform further investigation into
each alternative solution to arrive at the best decision for your business in regards to meeting
consumer demands.
5. Implement your research
• Put your final solution into practice.
• Without completing this step your research could potentially have been a waste of your time
and resources.
Marketing Research Agencies in India
• IMRB International (“Indian Market Research Bureau”)
• IMRB has been responsible for establishing the first and television audience measurement
system and the first radio panel in the country
• IMRB Internationals specialized areas are consumer markets, industrial marketing, business to
business marketing, social marketing and rural marketing
Demand Forecasting

• Demand forecasting is the activity of estimating the quantity of a product or service that
consumers will purchase.
• Demand forecasting involves techniques including both Simple Survey Method such as
educated guesses, and Complex Statistical Methods such as the use of historical sales data or
current data from test markets.
Simple Survey Method
• Experts Opinion Poll
• Reasoned Opinion-Delphi Technique
• Consumers Survey- Complete Enumeration Method
• Consumer Survey-Sample Survey Method
• End-user Method of Consumers Survey
16. Complex Statistical Methods:
• Time series analysis or trend method• Barometric Techniques or Lead-Lag indicators method
• Correlation and Regression
Complex Statistical Methods:
• Time series analysis or trend method
• Barometric Techniques or Lead-Lag indicators method
• Correlation and Regression
NEW TRENDS IN MARKETING
The strategy and tactics behind marketing programs have changed dramatically in recent
years as firms have dealt with the enormous shift of the “new economy” in their external
marketing environment. Changes in economic, technological, political legal, socio-cultural, and
competitive environments have compelled marketers to develop new approaches and
philosophies. Kotler identifies five major forces of this new economy.
1. Digitalization and connectivity through Internet, Intranet and mobile services.
2. Disintermediation and re intermediation via new middlemen of various sorts.
3. Customization and customization through tailored products and by providing customers
ingredients to make products themselves.
4. Industry convergence through the blurring of industry boundaries.
5. New customers and company capabilities.

In the face of tighter budgets and the general demand for greater effectiveness in
marketing many marketers are starting to employ more creative and innovative ways to reach out
to their target customers. Many have started marketing cooperatively in order to share costs
among two or more marketers who are trying to reach the same consumers.
1 How Business Practices Are Changing
The change in technology and economy are eliciting a new set of beliefs and practices on the part
of business firms.
1. from organizing by product units to organizing by customer segments.
2. from focusing on Profitable transactions to focusing on customer lifetime value.
3. from focusing on Just the financial scorecard to focusing also on the marketing scorecard.
4. from focusing on shareholders to focusing on stakeholders.
5. From marketing does the marketing to everyone does the marketing. Every employee has an
impact on the customer and must see the customer as the source of company’s prosperity.
6. from building brands through advertising to building brands through performance.
7. from focusing on customer acquisition to focusing on customer retention.
8. from no customer satisfaction measurement to in-depth customer satisfaction measurements.
9. From over-promise, under-deliver to under promise, over-deliver.
2 How Marketing Practices Are Changing:
E-business: describes the use of electronic means and platform to conduct a company’s business.
The advent of Internet has greatly increased the ability of companies to conduct their business
faster, more accurately, more timely with reduced cost, and with the ability to customize and
personalize customer offerings.
E-commerce and E-marketing: are new strategies to meet the demand of consumers in new
economy.
E-commerce: is more specific than e-business, it means that in addition to providing
information to visitors about the company, its history, philosophy, product and job opportunities,
the company or site offers to facilitate the selling of product and services online.
E-purchasing means companies decide to purchase goods, services and information from
various online suppliers.

E-marketing describes company efforts to inform, communicate, promote and sell its products
and services over the internet. There are four major internet domains through which E-business
take place.
1. Business to consumer ( B2C)
2. Business to Business (B2B)
3. Consumer to Consumer (C2C)
4. Consumer to Business (C2B)
3 Setting Up Web Sites
A key challenge is designing a site that is attractive on first viewing and interesting enough to
encourage repeat visit. Early test-based web sites have increasingly been replaced by
sophisticated sites that provide text, sound and animation.
4 Cs as essential elements of effective web site
1. Context-layout and design
2. Content – Text, picture, sound, and video
3. Community – How the site enables user-to-user communication
4. Customization – site’s ability to tailor itself to different users or to allow users to personalize
the site.
5. Communication – site to user, user to site communication
6. Connection – degree to site is linked to other site
7. Commerce – capability to enable commercial transactions.
4 Customer Relationship Marketing (CRM)
In addition to e-marketing, CRM is used to improve quality of service and to meet the
requirement of consumer successfully. CRM enables company to provide excellent real-time
customer service by developing a relationship with each valued customer through the effective
use of individual account information. Customer relationship marketing holds that a major driver
of company profitability is the aggregate value of the company’s customer base winning
companies are more productive in acquiring, keeping and growing customers through various
strategies as:
• reducing the rate of customer defection
• increasing the longevity of the customer relationship

• Enhancing the growth potential of each customer through share-of wallet, Cross-selling
and up-selling. Making low profit customers more profitable. Focusing disproportionate
effort on high value customers.
5 One-to-One Marketing
Don Peppers and Martha Rogers have popularized the concept of one to- one marketing. In
rationalizing their approach, they cite a number of trends in the marketing environment such as
shift from transaction based marketing to relationship marketing, advances in communication
technologies and a continued fragmentation of mass media. One-to-One marketing is based on
several fundamental concepts.
• Focus on individual consumers through consumer data base
• Response to consumer dialogue via interactivity
• Customize products and services
6 Permission Marketing
The practice of marketing to consumers only after gaining their express permission, is gaining
popularity as a tool with which company can break through the clutter and build customer
loyalty. Today consumers are bombarded with large number of marketing communications every
day, marketers wants to get a attention of consumer, they first need to get his/her permission with
some kind of inducement like a free sample, sales promotion or discount, a contest, and so on.
By eliciting consumer cooperation in this manner, marketers can potentially develop stronger
relationships with consumers so as they will wish to receive further communication in future.
These various new approaches help to reinforce a number of important marketing concept and
techniques. From a brand point of view, they are particularly useful means of thinking how to
both elicit positive brand responses and create brand resonance to built customer based brand
equity. One-to-One, permission and experiential marketing are all potentially effective means of
getting consumers more actively involved with a brand.
Experiential Marketing
After economic reforms, marketing has changed the entire consumer behavior; it has intensified
more competition in brands. Now we are in net revolution. We have left behind traditional
marketing concepts. Earlier we were using product, feature based brands to induce consumers.
Now we have new differentiator in marketing. This is called EXPERIENTIALMARKETING.

This new marketing mix is trying to bring brands to life through experience. Experiential
marketing is to stimulate in active manner, to engage consumer in a personal life experience, to
allow them to be receptive with the brand in a personalized environment. Experiential marketing
is to create and add the value of life; they are to be involved in the product development process.
We have seen lots of marketers are doing this experience like Indica, Pepsodent, NIIT, Pepsi,
and Dish net. Experiential marketing is also about choosing customers, selling your dreams.
Heredreams are not a product it is about experience. Take the case of PEPSI theyare in business
of creating experiences for consumers through events, placement of visicoolers, everything.
Experience marketing is having mind shift approach in its delivery system ithas creative rules
and frame work. It has to be viewed as scientifically. It has the following objectives, these
objectives; these objectives can be used as new marketing mix strategy.
a) The company's core business activity
b) Marketing communication strategy
c) Consumer research
d) Promotional strategy
e) Integrated marketing strategy
f) All marketing tools, Advertising, Media interactive, Promotion, On site promotion, direct
response from consumers.
Experiential marketing focuses on customer experiences. Traditional marketing fails to
gauge sensory, motional, Cognitive behavioral relationship needs. But in the case of experiential
marketing it has philosophy neurobiology, psychology and sociological theory of the consumer.
MARKETING INFORMATION SYSTEM:
Introduction: Management perform five distinct functions, viz., planning, organizing, co-
coordinating, deciding and controlling and each function require support from an information
system. Marketing Information System is proposed to support such management decision
making. Three levels of decision-making can be distinguished from one another; strategic,
control and operational. Marketing information system supports each level. Strategic decisions
have inferences for changing structure of an organization and therefore, the marketing
information system must provide the precise and accurate information. Control decisions call for
the information to observe the implementation of plans and operations to assess performance as
well as to take corrective actions whenever needed. Operational decisions concern the

management of the company’s marketing mix. A marketing information system is intended to
carry together dissimilar items of data into a logical body of information. Every company should
systematize and channelize a continuous flow of market-related information to its marketing
managers, to help them to understand the changes happening in the marketing environment,
changes in buyer behavior, preferences, consumption patterns, competitors’ activities, etc.
Support of a good marketing information system will be a competitive advantage for a company.
According to Philip Kotler, “A Marketing Information System consists of people,
equipment, and procedures to gather, sort, analyze, evaluate and distribute needed, timely, and
accurate information to marketing decision makers.”
A marketing information system is developed from internal reporting systems, marketing
research systems and marketing intelligence systems.
3. Components of Marketing Information System
The major components of Marketing Information System, viz. Marketing environment,
its components and the types of decisions which the marketing information system helps are as
follows:
A. Marketing Environment: It covers markets, channels, competitors, political, legal economic
and technological factors.
B. Components: It covers internal reporting system, marketing research systems, marketing
intelligence systems and marketing models.
C. Types of decisions: It covers strategic decisions, control decisions and operational decisions.
1 Internal Reporting System: Every company will have a lot of information to be stored in
internal reporting system on its sales, orders, inventory, receivables and other sales invoices.
These can be Sources of valuable information to marketing managers. They can examine the
reports and identify the opportunities as well as threats. For example, some of the information
that could be derived from sales invoices is as follows:
Product type, size and pack type by territory.
Product type, size and pack type by account.
Product type, size and pack type by industry.
Product type, size and pack type by customers.

A company can determine the degree to which it is giving a satisfactory level of customer
service by comparing orders received with the sales invoices. Similarly, the company can
ascertain whether its stocks are in line with the present demand patterns by comparing
stockholding records with the orders received. Big stores and super markets determine sales in
the way by comparing the each and every product store-wise and total for the company every
evening so that the supplier can provide the delivery of replacement stocks.
2 Marketing Research System: Marketing research is a practical search for information. Such
study aims to solve supposed marketing problem that can be defined and solved within the
course of the study. Marketing research is the systematic design, collection, analysis and
reporting of the data relevant to a precise marketing situation facing an organization. It focuses
on practical research, which are conducted to answer questions about explicit marketing
problems or to make decisions about the particular courses of action, strategies or policies. Firm
must have timely admittance to the market information so that the competitive pressure, the cost
of making a strategic mistake and intricacy of domestic and foreign markets.
3 Marketing Intelligence Systems: A marketing intelligence systems is a set of methods and
data sources used by marketing managers to transfer information from the environment that can
be used in their decision-making. Marketing intelligence can be collected by reading books,
newspapers, and journals and by captivating information from the customers, suppliers and
distributors.
4 Marketing Models: A good marketing information system should have the means of
interpreting information to make possible by giving direction to decision making. This will
consist of marketing models, which could be computerized or manual. Some useful information
marketing models are Time series sales models, Brand switching models, Linear programming,
Elasticity models like price, demand, supply, income, Regression and correlation models,
Analysis of variance models, Sensitivity analysis models, Discounted cash flow and Spreadsheet
models. These are related mathematical, statistical, economic and financial models that are
analytical subsystem of the marketing information system, computers provide a great help for
this analysis. Some of these models used are stochastic means that including probabilistic
element, whereas others are deterministic models where chance plays no part. Brand switching
models are stochastic models since these eloquent choices in the probabilities where as linear

programming is deterministic in that the relationship between variables is expressed in the
mathematical terms.
4. Database Marketing: The marketing information system necessitates a large amount of data
on various aspects of the marketing functions which are collected from numerous sources both
internal and external sources. Then the data collected is accumulated, organized, stored and
updated in a computer. The updating of compiled, organized data relevant to specified areas such
as customers, market segments, competitors or modification and manipulation of information
from a database. A database system is a collection of programmes which permit storage,
modification and manipulation of information form a database. This ability to acquire, timely
data and managing data efficiency is important in database management. Any information
system should have accurate data, which will be useful for decision making. The data should be
timely available as if the data is not available on time then it is of no use. The timeliness of data
is of prime importance for the success of any information system.
The organizations use the database management system for managing the data in the database. A
database management system (DBMS) is an incorporated set of programmes used to define
databases, perform transactions that update databases, retrieve data from databases and establish
database efficiency. Some DBMSs for personal computers can be used directly by end users to
set up small information systems while other DBMSs are much more complex and require
professional programming. DBMSs embrace an enquiry language that allows end users to
retrieve data. DBMSs make data more of a resource and facilitate programming work, thereby
making accesses to data more consistent and vigorous.
1Customer Relationship Managements an important function of marketing management. For
better understanding a customer, the company must collect information about its customers and
store it in database and perform database marketing. According to Kotler, a customer database is
an organized collection of complete information about the individual customers or prospects that
is current, accessible and actionable for such marketing purpose as lead generation, lead
qualification, sale of product or service, or maintenance of customer relationships.
2 Database Marketingis the process of building, maintaining and using customer database and
other database (products, suppliers, resellers) for the purpose of contacting, transacting, and
building customer relationships. A customer database is totally diverse from customer mailing

list. A customer mailing list is simply a set of names, addresses and contact telephone numbers
of customers. A customer database contains much more information, collected by accumulated
through many customer transactions, registration, telephone or online queries, warranty cards
and every customer contact. A good customer base should contain the customer’s past purchase
history, demographics, psychographics, media graphics and other useful information.
3 Evaluation of Data as a Resource: The use of DBMS is a method for making data more of a
resource. The usefulness of the information is determined by the user and the way business
processes are organized. The three main factors related to the information usefulness are as
follows:
Information quality: it tells how good the information is and on what basis is it based on
accuracy, precision, completeness, timeliness and source.
Information accessibility: it tells how easy it is obtain and manipulate the information
regardless of how good it is.
Information presentation: it tells the level of summarization and format for presentation to
the use, regardless of how good the information is and how available it is.
4 Methods of Accessing the Data in a Computer System: A computer system finds stored data
either by knowing its exact location or by searching for the data. Different DBMSs contain
different internal methods for storing and retrieving the data. The following are the three
methods that can be used:
Sequential access: this is the earliest computerized data processing used sequential access in
which the individual records within the single file are processed in sequence until all records
have been processed or until the processing is terminated for some other reason. Sequential
access is the only methods for data stored on tape, but it can also be used for data on direct
access devices such as disk. Sequential processing makes it unnecessary to know the exact
location of each data item because the data are processed according to the other in which they are
sorted.
Direct Access: processing events as they occur requires direct access, the ability to find an
individual item in a file immediately. Magnetic disk storage was developed to provide this
capability. Example: a person needs phone number of Sameer Sharma. Then the user needing
Sameer Sharma’s telephone number enters the name into a computer system. The program uses a
mathematical procedure to calculate the approximate location on the hard disk where Sameer

Sharma’s phone number is stored. Another program instructs the read head to move to that
location to find the data. Using the same logic to change the number of Rahul Khanna, one
program calculates a location for phone number and another program directs the read head to
store the new data in that location.
Indexed access: third method of finding data is indexed access. An index is a table used to
find the location of data. The index indicated where alphabetical groups of names are stored. The
user enters a name which he is searching; the program uses the index to decide where to start
searching for the phone numbers. Using indexes makes it possible to perform both sequential
processing and direct access efficiently. Therefore, access to data using such indexes is often
called the indexed sequential access method. To perform a sequential processing task, such as
listing the phone directory in alphabetical order, a program reads each index entry in turn and
then reads all of the data pointed to by that index entry. If the index entries and the data pointed
to by the index entries are in alphabetical order, the listing will also be in alphabetical order.
5. Data Mining: Data mining is the process during which the marketing managers extort the
useful information about individual customers, trends in the market and market segments from
the mass of data. Data mining comprises of the use of sophisticated statistical and mathematical
techniques like cluster analysis, predictive modeling, neutral networking, decision trees, etc.
Data mining is the exploration and analysis of large quantities of data in order to discover
meaningful patterns and rules. Data mining needs substantial computing power. Companies are
inserting high emphasis on building second customer relationships, and for good sales.
Companies desire to understand how they can sell more to existing customers. They also desire
to determine of their customers will prove to be prove to be of long-term value to them.
Companies need to determine any existing natural classifications among their customers so that
each class could be properly targeted with products and services. Data mining enables companies
to find answers and discover patterns in their customer data. Competitive considerations also
appraise heavily on companies to get into data mining.
6. Data Mining Applications in Marketing
Data mining technology includes a rich collection of confirmed techniques that cover a wide
range of applications in marketing decision areas. In some cases, multiple techniques are used,
back to back, to greater advantage. For example, a cluster of customers can be followed by a

predictive algorithm applied to some of the recognized clusters to discover the expected behavior
of the customers in those clients.
• Customer segmentation: this is one of the most widespread applications. Companies use
data mining to understand their customers better. Cluster detection algorithms discover
sharing the same characteristics.
• Market based analysis: this is very useful applications for the organized retail business.
Association rule algorithms uncover sympathy between products that are bought as
assortment together.
• Risk management: insurance companies and mortgage businesses use mining to uncover
risks associated with potential customers.
• Fraud detection: credit card companies use data mining to discover abnormal spending
patterns of customers, such patterns can expose fraudulent use of the cards.
• Demand prediction: organization retail and other businesses use data mining to match
demand and supply trends to forecast for specific products.
7. Decision Support System: The Decision support system is an interactive information system
which provides information, models, and data manipulation tools to help to make decisions in
semi structured and unstructured situations where no one knows exactly what decision to be
made. The traditional decision support system approach includes interactive problem solving,
direct use of models and user-controllable methods for displaying and analyzing data,
formulating and analyzing the alternative decisions. This approach emerged due to limitations of
TPS and MIS. TPS only focused on the record keeping and control of repetitive clerical errors.
MIS provided the inflexible reports for the management and was unable to produce information
in such a manner which was flexible and desirable by the managers. DSS was intended to
support managers and professionals doing largely analytical work in less structured situations
with unclear criteria for success.
8. Marketing Information Sub-Systems
Marketing Information System in most companies with multiple consumer products and multiple
product lines will comprise of following sub-systems:
1. The sales information system
2. The market research and intelligence information system

3. Promotion and advertising information system
4. New product development information system
5. Sales forecasting information system
6. Product planning information system
7. Product pricing information system
8. Distribution information system
9. Budget/ Expenditure control information system
These sub-systems help the company to certify the identification and evaluation
potentially profitable sales opportunities, react speedily to changes in market situation, establish
profit maximization product prices, control marketing cost, organize sales personnel most
effectively and assist in allocating budget for advertising and other forms of promotion.
Computerized information systems automate the collection, maintenance and reporting of
information connecting the following activities:
1. The sales of goods and services to customers.
2. Customer support following these initial sales.
3. The initiation of customer contacts and potential markets.
4. Sales forecast
5. Sales performance of marketing personnel
6. Marketing research
7. Advertising and promotions
Strategic, tactical and operational information systems facilitate marketing managers in
product planning, pricing, decisions, advertising, sales promotion strategies and forecasting
decisions.
Summary: Marketing Information System is intended to support such management decision
making. Three levels of decision making can be distinguished from one another; strategic,
control and operational. Marketing information system supports each level. Strategic decisions
have implications for changing structure of an organization and therefore, the marketing
information system must provide the precise and accurate information. Control decisions call for
the information to monitor the implementation of plans and operations to assess performance as
well as to take corrective actions whenever needed.

Operational decisions concern the management of the company’s marketing mix. A
marketing information system is intended to bring together dissimilar items of data into a logical
body of information. A marketing information system is developed from internal reporting
systems, marketing research systems and marketing intelligence systems. Every company will
have a wealth of internal reporting system on sales, orders received, inventory levels, sales
proceeds receivable and sales invoices. These can be sources of valuable information to
marketing managers. They can analyze these reports and identify the opportunities as well as
threats. Marketing research is a proactive search for information. Such study aims to solve
perceived marketing problem which can be defined and solved within the course of the study.
Marketing research is the systematic design, collection, analysis and reporting of the data
relevant to a specific marketing situation facing an organization. It focuses on applied research
which are conducted to answer questions about specific marketing problems or to make
decisions about the particular courses of action, strategies or policies. The marketing information
system requires a large amount of data on various aspects of the marketing functions which are
collected from numerous sources both internal and external sources. Then the data collected is
compiled, organized, stored and updated in a computer. The updating of compiled, organized
data relevant to specified areas such as customers, market segments, competitors or modification
and manipulation of information from a database. A database system is a collection of
programmes which allows storage, modification and manipulation of information form a
database. Database Marketing is the process of building, maintaining and using customer
database and other database (products, suppliers, resellers) for the purpose of contacting,
transacting, and building customer relationships. A customer database is totally different from
customer mailing list. A customer mailing list is simply a set of names, addresses and contact
telephone numbers of customers. A customer database contains much more information,
collected by accumulated through many customer transactions, registration, telephone or online
queries, warranty cards and every customer contact. A good customer base should contain the
customer’s past purchase history, demographics, psychographics, media graphics and other
useful information. Data mining is the process through which the marketing managers extract the
useful information about individual customers, trends in the market and market segments from
the mass of data. Data mining involves the use of sophisticated statistical and mathematical
techniques like cluster analysis, predictive modeling, neural networking, decision trees, etc. Data

mining is the exploration and analysis of large quantities of data in order to discover meaningful
patterns and rules
RESEARCH PROCESS:
Marketing Research: Definition Many definitions of Marketing Research:
• “Marketing research is the systematic design, collection, analysis and reporting of data
and findings relevant to a specific marketing situation facing the company.”
• Marketing research is the process of designing, gathering, analyzing, and reporting
information that may be used to solve a specific marketing problem.
Need for Marketing Research:
- Why do businesses need accurate and up-to-date information?
- -To undertake marketing effectively
- Changes in technology
- Changes in consumer tastes
- Market demand
- A change in the product ranges of competitors
- Changes in economic conditions
- Distribution channels
Purpose of Marketing Research
• Gain a more detailed understanding of consumers’ needs:
-e.g., views on products’ prices, packaging, recent advertising campaigns
• Reduce the risk of product/business failure:
- There is no guarantee that any new idea will be a commercial success
- Can help to achieve commercial success
• Forecast future trends:
-it can also be used to anticipate future customer needs
Examples of Research in Marketing

USES of Marketing Research:
• Identify marketing opportunities and problems
• Generate, refine, and evaluate potential marketing actions
• Monitor marketing performance
• Improve marketing as a process
• Reduces uncertainty
• Reduces risk
• Helps focus decision making
Overview of the Marketing Research Process:
- Why should we do research?
- What research should be done?
- Is it worth doing the research?
- How should the research be designed to achieve the research objectives?
- What will we do with the research?

Stages of the Research Process
1) Define the decision problem or opportunity
2) Specify the research objectives
3) Develop a research design
4) Design the questionnaire
5) Manage and implement the data collection
6) Analyze Data
7) 7) Write a Final research report
Problem Definition:
• Problem means management problem
• “ A problem well-defined is half solved”
• Identifying and defining the problem or opportunity is a crucial first step in the marketing
research process.
• When defining the problem, it is important to think broadly about the possible causes.
• Defining the Problem Results in Clear Cut Research Objectives.
• Marketing problems may be difficulty-related or opportunity-related. For both, the
prerequisite of defining the problem is to identify and diagnose it.
Specify the Research Objectives:
• What specific information should the project provide?
• If more than one type of information will be developed from the study, which is the most
important? and
• What are the priorities?
• When specifying research objectives, development of hypotheses, might be very helpful.
• When achieved, objectives provide the necessary information to solve the problem.
Develop A Research Design:
A research design is a framework or blueprint for conducting the marketing research project.
1. Qualitative Research
2. Quantitative research
3. Exploratory research
- Focus Group

- Observation
- Others
4. Descriptive research
- -Survey research
5. Casual research
- -Laboratory research
- Field research
DESIGN THE QUESTIONNAIRE:
- Questionnaire design is one of the basic building blocks of marketing research.
- Its first and prime role is to draw accurate information from the respondent.
- There are 3 different types of Question Classifications:
- 1.Behavioral
- 2.Attitudinal
- 3.Classification
Behavioral questions address the following
- Have you ever........?
- • Do you ever........?
- • Who do you know........?
- • When did you last........?
- • Which do you do most often........?
- • Who does it........?
- • How many........?
- • Do you have........?
- • In what way do you do it........?
- • In the future will you........?
They determine people's actions in terms of what they have eaten (or drunk), bought,
used, visited, seen, read or heard. Behavioral questions record facts and not matters of
opinion.
Attitudinal questions address the following:
- What do you think of........?

- Why do you........?
- Do you agree ofdisagree........?
- How do you rate........?
- Which is best (or worst) for........?
Attitudes are opinions or basic beliefs which people have about the products they buy,
the companies they deal with and it is an attitude that motivates people in their actions.
Classification questions: Classification questions are required to check that the correct quotas of
people or companies have been interviewed.
- Sex. There can be no other classifications other than- MALE and FEMALE.
- Household status. Most researchers classify adults into three groups which are:
- Head of household ( )
- Housewife ( )
- other adult ( )
Manage and Implement The Data Collection:
- This process includes field work and desk work for collecting all relevant data and
information
- Field work includes interviewing the personals by interacting them face to face by visiting
them in home or offices or arranging group meetings at any preferred place. Desk work
includes contacting personals over telephone or via series of emails and web meetings.
Analyze Data
- This process is the most important process in the research as the results are generated on the
basis of data preparation.
- After the data collecting stage the collected data is edited,
- Coded, transcribed
- Corrected if required and validated.
- Uni/multivariate techniques are used for analyzing data when there is a single/multiple
measurement of each element or unit in the sample data.
Write a Final Research Report
- The final report should addresses the
- specific research questions identified
- the research design

- data collection
- data analysis procedures adopted
- presents the results and the major findings
- The findings should be presented in a comprehensible format so that they can be readily
used in the decision making process.
- Oral presentation should be made to management using tables, figures, and graphs to
enhance clarity and impact.
CONCEPTS AND APPLICATIONS: PRODUCT
Product Decision: The first ‘P’ of marketing decisions deals with the Product. It is what is
actually being offered to the target consumers for their satisfaction in the form of goods/services
or ideas or any combination of the three.
Product: Defined American Marketing Association defines product as: “A bundle of attributes
(features, functions, benefits, and uses) capable of exchange or use; usually a mix of tangible and
intangible forms. Thus a product may be an idea, a physical entity (a good), or a service, or any
combination of the three. It exists for the purpose of exchange in the satisfaction of individual
and organizational objectives.”
New Product Development With passage of time, changes in tastes and innovation in
technology, products become out of date and inferior to those of the competition. They need to
be replaced with new features that are of value to the consumers. Every business needs to
innovate to stay ahead of the competition. If a company does not develop new products someone
else will and this will result in loss of customers for the company. The consumer’s needs are
every changing and so is the offering by the seller. Innovations are inevitable. Improvements,
enhancements, technological up gradation in the product or its process keep on happening and
hence no business can continue to offer the same unchanged product; otherwise sales would
decrease and profits will be reduced. The reasons why developing new products becomes
necessary are:
- Consumer’s "Needs and Wants" change continuously and the firms have to respond to these
changes through their products and services. Otherwise consumers will switch to competitor
products
- The existing products of the company may reach the end of their product life cycle so the
company may introduce new and improved updated versions.

- The existing products of the company may be at the maturity stage where the• sales have
already reached their full potential and there is no further scope of growth so it becomes
necessary to introduce new products or make changes in existing ones so that the decline
stage is pushed away.
- Environmental Changes can force the company to introduce new products as a• response to
changed environmental factors such as government regulations (ban on plastic bags) ,
changes in technology(music space, the progression of technology from cassettes to
downloading of e-music files).
- Competitors may force change for example the technology market, where new• products are
constantly being introduced to a target market that welcomes change and innovation.
Three levels of Product:
Augmented Product: Augmented product is the non-physical part of the product which is the
value addition made to the actual product to satisfy the consumer’s need effectively and
satisfactorily. For eg: the accessories, extended warranty, after sales services etc along with the
car are the augmented product.
Actual Product: Actual product is the tangible, physical product. For eg A car is a tangible
product that is solving the need for transportation.
Core Product: Core Product is the benefit from the product or service which makes it valuable
for the consumer. For e.g.: Car is a product and the core product is need for comfortable and
quick.
Product Classifications:
1. Consumer Products: Products and services bought by the final consumer for personal
consumption.
• Convenience Goods
• •Shopping Goods
• •Specialty Goods
• •Unsought Goods
2. Industrial Products
3. Other market offerings

• Organizations
• •Persons
• •Places and
• •Ideas
Consumer Products: Products and services bought by the final consumer for personal
consumption. Convenience Goods: these goods are
• Targeted for a very large market segment,
• Generally consumed regularly,
• Frequently purchased,
• Relatively low prices per item,
• Low involvement of consumers,
• Low profits for marketers so they have to sell more to earn more hence mass Distribution.
• The producer has to undertake mass promotion.
For e g: mostly household items such as packaged foods, soaps, detergents, personal care
products etc.
Shopping Goods: these are the goods that are:
• Less frequently purchased and consumed than convenience goods,
• Relatively high involvement goods as these are more expensive than convenience goods,
• Because of higher margins, these are sold from selective and fewer outlets.
• Promotion has to be collectively done by the producer and resellers.
For e.g.: clothing products, personal services, electronic products, and household furnishings etc.
Specialty Goods: these goods are:
• Very high involvement goods as the prices per item are high
• Selection is carefully done
• Strong brand loyalty and preference
• Distribution is widespread through many outlets in every market area.
• Promotion is collectively done by both producer and resellers for a carefully
• Targeted audience.
For e.g.: high-end luxury automobiles, expensive accessories like jewellery, watches, bags etc.
Unsought Goods: These are products whose:

• purchase is unplanned by the consumer but is a result of promotion by the producer,
• product awareness by the consumer is low
• Aggressive promotion is done by producer and resellers both.
For e.g.: Life insurance, Blood donations etc.
Industrial Products: these are the products that are used for further processing and for business
to business purpose. For e.g.: Raw Materials, Processed Materials, Equipment, Components,
Maintenance, Repair and Operating Products etc
Other Market Offerings: these are other than the tangible products and services that are being
offered to the consumers.
• The marketing activities are intended for moulding behavior of consumers towards a
particular organization (both profit and not-for-profit organizations). Examples include
public relations initiatives by organizations, fund raisers by NGO’s, religious institutions,
arts groups etc
• People as products mean marketing activities undertaken to mould attitudes for• certain
specific people. Examples include politicians, actors, sports persons and the like. They
become products when they endorse brands. They have to keep up their images and
maintain their attitudes towards them.
• When Indian tourism promotes Kerela as “God’s Own Country”, Kashmir as the•
“heaven on Earth”, it is making places as products.
• Ideas as products are initiatives intended for general public benefit. The ideas that•
encourage lifestyle changes for betterment of the society. Examples include: family
planning, eradicate polio, anti tobacco campaigns and more.
Key Product Decisions The actual product is designed to provide the core benefits sought by the
target market. The marketer offers these benefits through a combination of factors that make up
the actual product. These factors include: Consumable Product Features
• Branding
• Packaging
• Labeling
RETAIL RESEARCH
Meaning and Definition

Retailing is defined as a conclusive set of activities or steps used to sell a product or a
service to consumers for their personal or family use. It is responsible for matching individual
demands of the consumer with supplies of all the manufacturers. The word ‘retail’ is derived
from the French work retailer, meaning ‘to cut a piece off’ or ‘to break bulk’. A retailer is a
person, agent, agency, company, or organization which is instrumental in reaching the goods,
merchandise, or services to the ultimate consumer. Retailers perform specific activities such as
anticipating customer’s wants, developing assortments of products, acquiring market information,
and financing.
Retailing involves a direct interface with the customer and the coordination of business
activities - right from the concept or design stage of a product or offering, to its delivery and
post-delivery service to the customer. The retail industry has contributed to the economic growth
of many countries and is undoubtedly one of the fastest changing and dynamic industries in the
world today.
Activities Performed by Retailers
Retailers undertake various business activities and perform functions that add value to the
offerings they make to their target segments. The four major activities carried out by retailers are:
1. Arrange for assortments - An assortment is a retailer’s selection of merchandise which is
based on both the depth and breadth of products carried. Retailers have to select the combination
of assortments from various categories. The assortments must include substitutable items of
multiple brands and price points. They should be distinguished on account of physical
dimensions and attributes e.g., color or flavor.
2. Breaking quantity - Breaking bulk means physical repackaging of the products by retailers
by breaking or arranging the bulk into convenient units or in small unit sizes according to
customer’s convenience and stocking requirements. This entire function of the retailers adds
value to the offerings not only for the end customers but also for the suppliers in the value chain
3. Holding stock - Retailers, on periodic basis, maintain the required levels of stock to meet the
regular or seasonal fluctuations in the demand. Retailers need to maintain equilibrium between
the range of variety carried and the sales.
4. Extending services - Retailing provides multiple services to immediate customers and other
members of the value chain. These services may be part of retailers’ core product offerings or it

may be ‘add on’ to their product or service. Retailers offer credit, home delivery, after-sales
services and information regarding new products to their customers, thereby making the
shopping experience convenient and enjoyable.
Classification of Retail Formats
Classification on the Basis of Ownership
There are four basic legal forms of ownership for retailers:
i.) Sole proprietorship – The vast majority of small businesses start out as sole proprietorships.
These firms are owned by one person, usually the individual who has the day-to-day
responsibility for running the business.
ii. Partnership - A partnership is a common format in India for carrying out business activities
(particularly trading) on a small or medium scale. In a partnership, two or more people share
ownership of a single business.
iii. Joint venture – A joint venture is not well defined in the law. Unless incorporated or
established as a firm as evidenced by a deed, joint ventures may be taxed like association of
persons, sometimes at maximum marginal rates. It acts like a general partnership, but is clearly
for a limited period of time or a single project.
iv. Limited liability Company (public and private) - The Limited Liability Company (LLC) is
a relatively new type of hybrid business structure that is now permissible in most states. The
owners are members, and the duration of the LLC is usually determined when the organization
papers are filed.
Classification on the basis of Operational Structure
Retail firms can be classified into five heads on the basis of their respective operational
structures:
i. Independent retail unit – An independent retailer owns one retail unit. About 78% of these
are small family businesses utilizing only household labor.
ii. Retail Chain – A chain retailer operates multiple outlets (store units) under common
ownership; it usually engages in some level of centralized (or coordinated) purchasing and
decision making.
iii. Franchising – Franchising involves a contractual arrangement between a franchiser (which
may be a manufacturer, a wholesaler, or a service sponsor) and a retail franchisee, which allows

the franchisee to conduct a given form of business under and establishments name and according
to a given pattern of business.
iv. Leased Department or Shop-in-shop - It refers to department in a retail store that are rented
to an outside party. Usually this is done in case of department and specialty stores and also at
times, in discount stores.
v. Co-operative Outlets – Co-operative outlets are generally owned and managed by co-
operative societies. KendriyaBhandaris a very suitable example of co-operative stores in India.
Classification on the basis of Retail Location:
Classification of retailers on the basis of location is discussed below:
i. Retailers in a free-standing location – Retailers located at a site which is not connected to
other retailers depend entirely on their store’s drawing power and on the various promotional
tools to attract customers. This type of location has several advantages including no competition,
low rent, and better visibility from the road, easy parking and lower property costs. For example
the Haldiram’s outlet on the Delhi-Jaipur highway and the McDonald’s outlet on Delhi-Ludhiana
highway.
ii. Retailers in a Business-associated Location - In this case, a retailer locates his store in a
place where a group of retail outlets, offering a variety of merchandise, work together to attract
customers to their retail area, and also compete against each other for the same customers.
iii. Retailers in Specialized Markets - Besides the above location-based classification, there are
retailers who prefer specialized markets, particularly traditional independent retailers or chain
stores. In India, most of the cities have specialized markets famous for a particular product
category. For example, in Chennai, Godown Street is famous for clothes, BunderStreet for
stationery products, Usmanstreet for jewellery, T Nagar for ready-made garments, and so on.
iv. Airport Retailing – For quite some time, duty-free shops and newsstands dominated the
small amount of commercial space provided at airports. Lately, serious efforts are being made to
design new airport facilities in order to incorporate substantial amounts of retail space.
Emerging Sectors in Retailing
Retailing, one of the largest sectors in the global economy, is going through a transition
phase not only in India but the world over. For a long time, the corner grocery store was the only
choice available to the consumer, especially in the urban areas. This is slowly giving way to

international formats of retailing. The traditional food and grocery segment has seen the
emergence of supermarkets/grocery chains (Food World, Nilgiris, Apna Bazaar), convenience
stores and fast-food chains. This sector has expanded further into lifestyle/fashion segments
(Shoppers' Stop, Globus, LifeStyle, Westside), apparel/accessories (Pantaloon, Levis, Reebok),
books/music/gifts (Archies, MusicWorld, Crosswords, Landmark), appliances and consumer
durables (Viveks, Jainsons, Vasant& Co.), drugs and pharmacy (Health and Glow, Apollo).
The emergence of new sectors has been accompanied by changes in existing formats as well as
the beginning of new formats:
• Hypermarkets
• Large supermarkets, typically 3,500-5,000 sq. ft.
• Mini supermarkets, typically 1,000-2,000 sq. ft.
• Convenience stores, typically 750-1,000sq. Ft.
• Discount/shopping list grocery stores
Retail Store Operations
A retail manager has to ensure not only product availability but also make the shopping more
creative and pleasurable activity for its customers. He has to take care of various areas like:
Store administration and management
Inventory and stock management
managing of receipts
Theft management
Customer service
Sales promotion
Employee morale
Retailer Marketing Decisions:
Retailers, today, are redefining their marketing strategies for reasons such as (i)
competition from national brands which are found not only in department stores but also in
mass-merchandise and off-price discount stores, and (ii) erosion of service differentiation among
retailers. The retailers face major marketing decisions about their target markets and positioning,
product assortment and services, and price, promotion and place.

i. Target Market and Positioning Decision - Retailers must define their target markets and then
decide how they will position themselves in these markets. It is necessary in order to make
consistent decisions about product assortment, services, pricing, advertising, store décor, or any
other such decisions that must support their position.
ii. Product Assortment and Services Decision - Retailers must decide on three major product
variables: product assortment, services mix, and store atmosphere. The retailer's product
assortment should match target shoppers' expectations. The services mix is one of the key tools
of nonprime competition for setting one store apart from another. The store's atmosphere is
another element that suits the target market and moves customers to buy.
iii. Price Decision - A retailer's price policy is a crucial positioning factor and must be decided
in relation to its target market, its product and service assortment, and its competition. Most
retailers seek either high markups on lower volume (most specialty stores) or low markups on
higher volume (mass merchandisers and discount stores).
iv. Promotion Decision - Retailers use common and popular promotion tools viz. advertising,
personal selling, sales promotion, public relations, and direct marketing, to reach their target
consumers. Many retailers have also set up Websites, offering customers information and other
features and also sometimes selling merchandise directly.
v. Place Decision - A retailer's location is key to its ability to attract customers as the costs of
building or leasing facilities have a major impact on the retailer's profits. Retailers, small as well
as large, select the location for their business very cautiously keeping in mind their financial
constraints.
vi. Site Selection for Retail Location - Site selection is an important decision for retailers
planning to open new stores. It is essential for them to decide whether they want to locate in a
mall or as a standalone store. They also have to assess the site's potential in terms of likely sales
and profitability.
Future of Retailing: With the big giants entering the market, there is a grave competition in the
Indian Economy. After 1995 the great companies like Food world, Reliance, Planet M, Music
World and many others also entered the retail market. The visibility and the craze to remain in
the forefront of business has made many of the giant companies to move from manufacturing to

front line retailing. With this Retailing has become prominent giving world class shopping
experience to the customers under one roof.
Discussed below are some of the important factors that are playing a role in fuelling the
bright future of the Indian Retail:
The income of an average Indian is increasing and thus there is a proportional increase in the
purchasing power.
The infrastructure is improving greatly in all regions is benefiting the market.
Indian economy and its policies are also becoming more and more liberal making way for a
wide range of companies to enter Indian market.
Indian population has learnt to become a good consumer and all national and international
brands are benefiting with this new awareness.
Another great factor is the internet revolution, which is allowing foreign brands to understand
Indian consumers and influence them before entering the market. Due to the reach of media in
the remotest of the markets, consumers are now aware of the global products and it helps brands
to build themselves faster in a new region.
Wholesaling
Meaning and Functions of Wholesaling
Wholesaling includes all activities involved in selling goods and services to those buying for
resale or business use. Wholesalers buy mostly from producers and sell mostly to retailers,
industrial consumers, and other wholesalers. Wholesalers often perform one or more of the
following channel functions:
i. Selling and promoting - Wholesalers' sales forces help manufacturers reach many small
customers at a low cost. The wholesaler has more contacts and is often more trusted by the buyer
than the distant manufacturer.
ii. Buying and assortment building - Wholesalers can select items and build assortments
needed by their customers, thereby saving the consumers much work.
iii. Bulk-breaking - Wholesalers save their customers money by buying in carload lots and
breaking bulk (breaking large lots into small quantities).
iv. Warehousing - Wholesalers hold inventories, thereby reducing the inventory costs and risks
of suppliers and customers.

v. Transportation - Wholesalers can provide quicker delivery to buyers because they are closer
than the producers.
vi. Financing - Wholesalers finance their customers by giving credit, and they finance their
suppliers by ordering early and paying bills on time.
vii. Risk bearing - Wholesalers absorb risk by taking title and bearing the cost of theft, damage,
spoilage, and obsolescence.
viii. Market information - Wholesalers give information to suppliers and customers about
competitors, new products, and price developments.
ix. Management services and advice - Wholesalers often help retailers train their salespersons,
improve store layouts and displays, and set up accounting and inventory control systems.
Retail in India: Industrial sector:
Family-owned Mom & Pop stores.
Traditional retail chains like Nigeria & Akbarallys .
Public Distribution System (PDS).
High streets like Linking Road & Fashion Street in Mumbai.
Bombay Dyeing, Shopper’s shop, Pantaloons Retail India Ltd (PRIL).
FDI in single brand retailers (Tommy Hilfiger, Louis Vuitton) and cash & carry formats
(Tesco, Wal-Mart, Metro).
Types of Retail Outlets:
Department stores
Discount stores
Supermarket
Warehouse stores
Specialty stores
Malls Retailers
Dollar stores
Regulatory Framework:
No specific rules& regulations but certain laws aretheir:
Shop and Establishment Act

Standards of Weights and Measures Act
Provisions of the Contract Labor (Regulations and Abolition) Act
The Income Tax Act Customs Act
The Companies Act
Retailing in India- (Current Market size):
The present value of the Indian retail market is estimated to be around Rs. 12, 00,000crore.
The annual growth rate is 5.7 percent.
Retail market for food and grocery with a worth of Rs. 7, 43,900crore is the largest of the
different types of retail industries present in India.
Around 15 million retail outlets help India win the crown of having the highest retail outlet
density in the world.
Contributions to GDP:
Country Retail Sectors share in GDP (in %)
India 10 %
USA 10%
China 8%
Brazil 6%
Major Key Players in retail Marketing:
Shoppers’ Stop
Westside
Pantaloon
Lifestyle
RPG Retail
Crossword
Wills Lifestyle
Globus
Major challenges in retail marketing:
Global economic slowdown
Competition from the unorganized sector

Retail sector has no recognition as an industry
High real-estate costs
Lack of basic infrastructure
Supply-chain inefficiencies
Challenges with respect to human resources
Margin Pressure
Fraud in retail
Challenges with Infrastructure and Logistics
Types of Wholesalers
A. Merchant wholesalers. Independently owned businesses that take title to the merchandise
they handle. Two categories:
i. Full service wholesalers - they provide a full line of services. These are of two types:
a. Wholesale merchants – they sell primarily to retailers.
b. Industrial distributors – Industrial distributors sell to manufacturers.
ii. Limited-service wholesalers offer fewer services than full-service wholesalers. Several types:
a. Cash & carry wholesalers – They carry a limited line of fast moving goods. They sell to
small retailers and do not deliver.
b. Truck wholesalers (Truck jobbers) – They carry a limited line of semi-perishable products
(such as milk, bread, snack foods). They are also involved in selling & delivering the products.
c. Drop shippers – these wholesalers operate in bulk industries such as coal, lumber and heavy
machinery. Do not carry inventory but assumes title and risk from the time the order is accepted
to its delivery to the customer.
d. Rack jobbers – They serve grocery & drug retailers mostly in non-food items. They send
delivery trucks to stores, where the delivery people set up toys, paperbacks, hardware items,
health and beauty aids, or other items. Rack jobbers retain title to the goods and bill the retailers
only for the goods sold to consumers.
e. Producers' cooperatives - Owned by farmer members & assemble farm produce to sell in
local markets.
f. Mail-order wholesalers - Send catalogs to retail, industrial, and institutional customers
featuring jewelry, cosmetics, specialty foods, and other small items.

B. Brokers & Agents - Do not take title to goods. Main function is to facilitate buying and
selling, for which they earn a commission on the selling price. Generally, specialize by product
line or customer types.
i. Brokers – Brokers bring buyers & sellers together & assist in negotiation. They are paid by the
party who hired them, and do not carry inventory, get involved in financing, or assume risk.
ii. Agents – Agents represent either buyers or sellers on a more permanent basis than brokers do.
Agents are of several types:
a. Manufacturers' agents
b. Selling agents
c. Purchasing agents
d. Commission merchants
C. Manufacturers' & retailers' branches & offices - Branches & offices dedicated either to
either sales or purchasing.
D. Miscellaneous Wholesalers - A few specialized types of wholesalers are found in certain
sectors of the economy.
Wholesaler Marketing Decisions
The pressures on retailers like new technologies, more demanding customers, new sources of
competition, direct buying programs on the part of large industrial, institutional and retail buyers,
to name a few among others has forced them to improve their strategic decisions on target
markets and on positioning and also on marketing mix.
i. Target Market and Positioning Decisions - Wholesalers must define their target markets and
position themselves effectively, they cannot serve everyone. They can choose a target group by
size of customer (only large retailers), type of customer (convenience food stores only), need for
service (customers who need credit), or other factors. Further, they can identify the more
profitable customers within the target groups, design stronger offers, and build better
relationships with them and discourage less profitable customers.
ii. Marketing Mix Decisions – Wholesalers must decide on product assortment and services,
prices, promotion, and place. The wholesaler's ‘product’ is the assortment of products and
services that it offers. They carry only more profitable product lines and services that are
important in building strong customer relationships. Price is also an important wholesaler

decision. They may cut their margin on some lines in order to win important new customers.
They may also ask suppliers for special price break when they can turn them into an increase in
the supplier's sales. Promotion is critical to a wholesalers’ success. They need to adopt some of
the non-personal promotion techniques used by retailers and need to develop an overall
promotion strategy that helps them in making greater use of supplier promotion materials and
programs. Wholesalers typically locate in low-rent, low-tax areas and tend to invest little money
in their buildings, equipment, and systems. But most modern wholesalers are using computers to
carry out accounting, billing, inventory control, and forecasting. Orders are fed from the retailer's
system directly into the wholesaler's computer, and the items are picked up by mechanical
devices and automatically taken to a shipping platform where they are assembled. Actually,
wholesalers are adapting their services to the needs of target customers and finding cost-reducing
methods of doing business.
Summary:
The present module covers the roles of retailers and wholesalers in the distribution channel. It
includes classification of retailers on the basis of ownership, operational structure, and retail
location. It throws light on the future of retailing and also discusses the major types of
wholesalers and the marketing decisions facing retailers and wholesalers.
CUSTOMER DRIVEN ORGANIZATIONS:

A customer driven organization is one that:
• Listens to its customers
• Integrates customers into its business and vice versa
• Provides customer focused solutions
• Has a culture which positively embraces the customer
Benefits of Being Customer Driven: The organization gains the following benefits:
• Loyalty of Customers
o Customers will stay where they feel they are being valued
o Customers will receive what they require
o Customers will trust the organization
o Business will be protected from the competitors
• Focus on value added
o The organization will focus its resources on the activities which add value for the customer
o Customer driven operations focus on what the customer wants
o Core competencies can be identified and developed so as to deliver what the customer
values
o Black & Decker – Small Voltage Motors
• Service as a differentiator
o Quality of product or service is taken as a prerequisite for doing business - service is what
differentiates customer driven organizations
o Service will increase loyalty
o Service becomes a cultural aspect as well as a functional aspect of the organization

• Market information
o Having excellent links with customers provides an organization with access to information
on the market
▪ Market growth rate
▪ Competitor activity
▪ Customer buying trends
▪ Requirements for new products and services
• Higher profits
Internal Vs. External Customers:
• Internal Customers: Work in your company and rely on the work of others in order to do
their job effectively.
• External Customers: Buy your goods and/or services
Anticipating customers’ needs and how to effectively fulfill them is key to staying
competitive in today’s global marketplace. To do this, companies need to shift their focus away
from making sales and increasing their bottom line to building a customer-driven organization –
one that is focused on delighting customers through offerings and information that are available
when and where they need them. Creating a positive experience for customers before, during and
after the sale can add value to a company by differentiating it from less experience-oriented
competitors.
Traditional Business Model vs. Customer-Driven Business Model
Traditionally, most businesses have been built upon a sales-centric model and focus on
meeting sales numbers and increasing market share — placing complete emphasis on the
transaction. Although this may be a great short-term money-making approach, the customer is all
too often left high and dry after the sale, leaving them to search for a better experience and new
vendors the next time they buy. New-age organizations are quickly realizing customer
experience has a direct impact on both initial sales and customer retention, so they are shifting
their focus towards a customer-driven business model where customer care and product quality
are recognized as the foundations of competitive advantage.

While a customer-driven structure sounds intuitive, not all businesses are ready for the shift.
To prepare for success in an environment where sales are secondary and customer delight takes
top priority, businesses must first understand the customer.
Here are four tips to drive success in a customer-driven organization:
• 1. Build Customer Loyalty: Are a majority of your current customers not likely to
recommend you to a friend or colleague? If the answer is yes, it’s time to assess your
customer service initiatives and make changes – fast.
In the web-savvy, interconnected world, bad news travels quickly. Negative word of
mouth can be instantly broadcast over social networks, and your customers are listening! In
fact, it’s been reported that 80% of consumers say that opinions and recommendations from
people they don’t know influence what they buy and what they think about products and
services available in the market. Translation? You need to delight each customer — by
offering quality products and services both before and after the point of sale – in order to
nurture a community that sings your praises.
• 2. Track Your NPS: The Net Promoter Score (NPS) has become a standard tool for 21st
century businesses looking to monitor the level of delight they bring to their clientele and it is
a fundamental number in truly understanding how consumers view your brand. NPS
quantifies loyal consumers by tracking the ratio of past customers who are likely to
recommend a brand (they are known as “promoters”) to those who are not likely to do so
(they are known as “detractors”). Organizations can use customer feedback from NPS to
understand the motive for a promoter’s or detractor’s attitude towards their brand and in turn
make appropriate changes to their customer service approach.
Food for thought – Apple, Inc. one of the world’s most profitable companies, closely
monitors its NPS score and it plays a key role in the daily management of each of its stores.
Apple reports that the most common reason for a consumer to become a promoter is the way
store employees treat them.
• 3. Listen and React to Your Customers: Just as your company now meticulously measures
and manages profits, you must also closely measure and manage customer feedback. Surveys,
product and service reviews, blog comments and social media provide valuable knowledge
and insight into your company’s strengths and weakness and each response must be treated
as vital data.

As one of the most viral and most popular feedback forums on the web, conversations
about your brand on social media cannot be overlooked when it comes to your evolving
customer service strategy. Social media is a resource for harvesting personal data about your
client base and offers a sneak peek into a consumer’s head. Here you can view what they
want, who they converse with and the times they are most active online. Use this information
to anticipate their needs and connect with your customer’s at the most opportune times.
• 4. Employee Branding: You’ve heard that a happy employee makes a good employee, but
what if we took it a step further and said an employee who believes in your business is a
brand ambassador both inside and outside of the workplace? Fostering a positive attitude
within an organization is called employee branding and it’s all about working to enhance
your business’ image from the inside out by making your team members your best brand
champions.
Not only does a strong internal community create a happier workplace, but a January study
by LinkedIn and TNS Employee Insights reports that engaged and enthusiastic employees are
potentially a business’ best asset by way of productivity and customer satisfaction. The study
also indicates that employees have a direct impact on customer perception of a business, as well
as customer experience, advocacy and retention.
With a few changes in strategy, you can transform your company into a truly customer-
driven organization — where making money is the result, not the goal – and set yourself on the
path to long-term success all by putting the customer first. As the marketplace expands and
consumer options grow, buyers have begun to spread their purchasing power across brands. In
order to maintain a competitive advantage, businesses need to offer more than discounts and
shiny new products; they must recognize and anticipate their customers’ needs. So what’s the
bottom line? Delight the customer.
ETHICS IN MARKETING:
Introduction: While it may have been acceptable in the past for businesses to pursue profits
single-mindedly with little or no consideration for the wider social and environmental impact of
their activities, this is not the case today. The consumer movement and the environmental lobby
are now firmly established as vigilant and powerful watchdogs, and have successfully brought

about changes in business practice and in the laws which govern how businesses must operate.
This is not to
Ethics and Marketing: say that businesses have not responded to the criticisms leveled against
them. Many have voluntarily changed their ways of operating to take these wider concerns into
account. For example, in marketing, the 'marketing concept' has become synonymous with
having a consumer orientation, and the more recent societal marketing concept' extols the need
for marketers to consider the wants and long-run needs of both society and consumers. At first
glance it would appear that marketers at least are facing up to their responsibilities to the world
at large.
Ethical Issues Concerning Products
There are three major ethical issues connected with products and services: product safety,
planned obsolescence and deceptive packaging. Now you have to look at each of these in turn.
Product Safety: Recently, one of the major concerns about product safety has been that of the
safety of genetically modified (GM) products. Vociferous pressure groups such as Green peace
(www.greenpeace.org) lave spoken out about the dangers of genetic modification. Such concerns,
and the attendant publicity, have led one of the pioneers of genetic modification, Monsanto
(www.monsanto.com), to lack away from further development of GM foods, and supermarket
chains to ban such produce from heir shelves. Supporters state that many new, products are
introduced with a certain degree of risk being acceptable. For example, a new pharmaceutical
product may harm a tiny percentage of users but the utilitarianism principle of the greatest good
for the greatest number' would support its launch. It is the reality of modern day business that
new products such as cars, pharmaceuticals and foods undergo extensive safety testing before
launch. Anything less would violate the consumer's 'right to safety'.
Planned Obsolescence: Many of the products on the market have not been designed to last for a
longtime. From the producers' point of view this is sensible as it creates a repeat purchase
situation. Hence, cars rust, computer software is quickly outdated and fashion items are replaced
by the latest styles. Consumers accept that nothing lasts forever, but the main thrust of this issue
concerns what is an acceptable length of time before replacement is necessary. One driving force
is competition. To control the Japanese invasion, car manufacturers such as Ford (www.

ford.com)and Volkswagen (www.vw.com) have made the body shells of their cars much more
rust-resistant than they were before. Furthermore, it has to be recognized that many consumers
welcome the chance to buy new clothes, new appliances with the latest features and the latest
model of cars. Critics argue that planned obsolescence reduces consumers’ right to choose since
some consumers may be quite content to drive an old car so long as its body shell is free from
rust and the car functions well. As we have noted, the forces of competition may act to deter the
excesses of planned obsolescence.
Deceptive Packaging: This is something that can happen when, say, a product is presented in
an oversized package, giving the impression that the consumer is getting more than is actually
the case. This is known as ‘slack packaging’ and has the potential to deceive when packaging is
difficult. Products such as soap powders and breakfast cereals have the potential to suffer from
'slack packaging’. A second area where packaging may be deceptive is through misleading
labeling. This may take the form of the 'sin of omission', for example the failure of a package to
state that a product contains GM soya. This relates consumer's 'right to be informed', and can
include the stating of ingredients (including flavorings colorants), nutritional contents and
'country of origin on labels. Nevertheless, labeling can still be misleading. For example, in the
UK, the "country of origin is only the last country where the product was 'significantly changed'.
So oil pressed, Greek olives in France can be labeled 'French' and foreign imports that are packed
in the UK can be labeled 'produce of the UK'. Consumers should be cautious of loose
terminology. For example, smoked bacon may well have received its 'smoked flavor' from a
synthetic liquid solution, 'farm fresh eggs' are likely to be eggs of indeterminate age (with no
date mark) laid by battery hens, and 'farmhouse cheese may not come from farmhouses but from
industrial factories.
Ethical Issues in Pricing Strategy:
Some key ethical issues relating to pricing include price fixing, predatory pricing, deceptive
pricing, price discrimination and product dumping.
1 Price fixing: Competition is one of the driving forces towards lower prices. Therefore, it can
bein the interests of producers to agree among themselves not to compete on price. This is
known as the 'act of collusion' and is banned in many countries and regions, including the EU.
Article 83 of the Treaty of Rome is designed to ban practices preventing, restricting or distorting
competition, except where these contribute to efficiency without inhibiting consumers' fair share

of the benefit. Groups of companies that planned are said to be acting as a cartel, and these areby
no means easy to uncover. One of the European Commission's most famous success stories is the
uncovering of an illicit cartel among 23 of Europe's top chemical companies from the UK,
France, Germany, Belgium, Italy, Spain, The Netherlands, Finland, Norway and Austria.
Through collusion they were able to sustain levels of profitability for low density polyethylene
and PVC in the face of severe overcapacity. Quotas were set to limit companies' attempts to gain
market share through price competition, and prices were fixed to harmonize the differences
between countries in order to discourage customers from shopping around for the cheapest deals.
Opponents of price fixing claim that it is unethical because it restrains the consumer's freedom of
choice and interferes with each firm’s interest in offering high-quality products at the best price.
Its proponents argue that, under harsh economic conditions, price fixing is necessary to ensure a
fair profit for the industry and to avoid price wars that might lead to bankruptcies and
unemployment.
2 Predatory pricing: Predatory pricing refers to a situation that occurs when a firm reduces its
priceswith the aim of driving out the competition. The firm is content to incur losses with the
intent that high profits will be generated through higher prices once the competition has been
eliminated. Budget airline easy Jet (www.easyjet.com) has accused British Airways of predatory
pricing through its no-frills subsidiary Go; easy Jet claims that the low prices charged by Go are
being subsidized by the profits made by BA's other operations.
3 Deceptive pricing: Deceptive pricing occurs when consumers are misled by the price deals
offered by companies. Two examples are misleading price comparisons and 'bait and switch’.
Misleading price comparisons occur when a store sets artificially high prices for a short time so
that much lower 'sale' prices can be claimed later. The purpose is to deceive the customer into
believing they are being offered bargains. Some countries, such as the UK and Germany, have
laws that state the minimum period over which the regular price should have been charged
before it can be used as a reference price in a sale. Bait and switch is the practice of advertising a
very low price on a product (the bait) to attract customers to a retail outlet. Once in the store the
salesperson persuades the customer to buy a higher-priced product (the switch). The customer
may be told that the lower priced product is no longer in stock or that it is of inferior quality.

4 Price discrimination: Price discrimination occurs when a supplier offers a better price for the
same product to a buyer, resulting in that buyer gaining an unfair competitive advantage. Price
discrimination can be justified when the costs of supplying different customers vary, where the
price differences reflect differences in the level of competition, and where different volumes are
purchased. Price discrimination can be a particular issue in international marketing where price
levels vary across borders and parallel importing ensues. This is where importers buy products
from distributors in one country to sell them to distributors in another country who are not part of
the manufacturer's normal distributionchannel. A recent contentious case has been that between
Tesco (www.tesco.com)and Levi Strauss (www.levis.com), which has been before the European
court. Tesco claimed to be within its rights when it bought cheap, though genuine, Levi’s
products from countries outside the European Union for sale in its stores. Levi’s countered that,
as it is owner of the trademark, this practice amounted to breaking the law.
5 Product dumping: Product dumping involves products being exported at a much lower price
than that charged in the domestic market, sometimes below the cost of production. Products are
'dumped' for a variety of reasons. First, unsold stocks may be exported at a low price rather than
risk lowering prices in the home market. Second, products may be manufactured for sale
overseas at low prices to fill otherwise unused production capacity. Finally, products that are
regarded as unsafe at home may be dumped in countries that do not have such stringent safety
rules. For example, the US Consumer Product Safety Commission ruled that three-wheeled
cycles were dangerous. Many companies responded by selling their inventories at low prices in
other countries.
5 Ethical Issues in Promotion: The wide range of promotional techniques that we have
discussed in this chapter gives rise to several ethical questions. These are discussed below.
1 Misleading advertising: This can take the form of exaggerated claims and concealed facts.
For example, it would be unethical to claim that a car achieved 50 miles to the gallon when in
reality it was only 30 miles. Nevertheless, most countries accept a certain amount of puffery,
recognizing that consumers are intelligent and interpret the claims in such a way that they are not
deceptive. In the UK, the advertising slogan ‘Carlsberg-Probably the Best Lager in the World' is
acceptable because of this. Advertising can also deceive by omitting important facts from its
message. Such concealed facts may give a misleading impression to the audience. Many

industrialized countries have their own codes of practice that protect the consumer from
deceptive advertising. For example, in the UK the Advertising Standards Authority
(www.asa.org.uk) administers the British Code of Advertising Practice, which insists that
advertising should be 'legal, decent, honest and truthful. Shock advertising such as that pursued
by companies like Benetton and FCUK are often the subjects of many complaints to the
Advertising Standards Authority.
2 Advertising to children: One particularly controversial issue is that of advertising to children.
Critics argue that children are especially susceptible to persuasion and that they therefore need
special protection from advertising. Others counter by claiming that the children of today are
remarkably 'streetwise' and can look after themselves. They are also protected by parents who
can, to some extent, counteract advertising influence. Many European countries have regulations
that control advertising to children. For example, in Germany, advertising specific types of toy is
banned, and in the UK alcohol advertising is controlled. An example of self-regulation at work
was the dropping of an advertisement for a soft drink that featured a gang of ginger haired,
middle-aged men taunting a fat youth. The advertisement was withdrawn after numerous
complaints were received contending that it encouraged bullying in schools.
3 The intrusiveness of direct marketing: Direct marketing is criticized for being intrusive and
for invading people’s privacy. Receiving unsolicited calls from telemarketing companies can be
annoying, while many consumers fear that every time they subscribe to a club, society or
magazine their names, addresses and other information will be entered on to a database, and that
this will guarantee a flood of mail from the supplier. Poorly targeted mail, usually called junk
mail, also irritates many people. The direct marketing industry is responding to these concerns
and is becoming increasingly sophisticated in how it targets prospects. Many consumers are
registering with suppression files indicating that they do not want to be recipients of direct
marketing activities.
4 Use of trade inducements: To encourage their salespeople to push the manufacturers'
products, retailers sometimes accept inducements from manufacturers. This often takes the form
of bonus payments to salespeople. The result is that there is an incentive for salespeople, when
talking to customers, to pay special attention to those product lines that are linked to such
bonuses. Customers may, therefore, be subjected to pressure to buy products that do not best
meet their needs.

5 Third-party endorsements: The use of third-party endorsements to publicize a product is
another subject for ethical debate. In such cases, a person gives a written, verbal and/or visual
recommendation of a product. A well known, well-respected person is usually chosen, but given
that payment often accompanies the endorsement the questionarises as to its credibility.
Supporters of endorsements argue that consumers know that endorsers are usually paid, and are
capable of making their own judgments regarding their credibility.
6 Deception by salespeople: A dilemma that, sooner or later, is likely to face most salespeople
is the choice of telling the customer the whole truth and risk losing a sale, or misleading the
customer in order to wrap up a sale. Such deception may take the form of exaggeration, lying or
withholding important information that significantly reduces the appeal of a product. Such
actions can be avoided by influencing the behavior of salespeople through training, by sales
management that encourages ethical behavior, which is demonstrated through salespeople's own
actions and words, and by establishing codes of conduct for salespeople. Nevertheless, from time
to time evidence of malpractice in selling reaches the media. For example, in the UK it was
alleged that some financial services salespeople mis-sold pensions by exaggerating the expected
returns. This scandal cost the companies involved millions of pounds in compensation.
7 The hard sale; The use of high-pressure sales tactics to close a sale is another criticism leveled
at personal selling. Some car dealerships have been deemed unethical due to their use of hard-
sell tactics to pressurize customers into making a fast decision on a complicated purchase that
may involve expensive credit facilities. Such tactics encouraged Daewoo
(www.daewoocars.co.uk) to approach the task of selling cars in a fundamentally different way by
replacing salespeople with computer stations where consumers could gather product and price
information.
8 Bribery: Bribery is the act of giving payment, gifts or other inducements in order to secure a
sale. Bribes are considered unethical because they violate the principle of fairness in commercial
negotiations. A major problem is that, in some countries, bribes are an accepted part of business
life: bribes are an essential part of competing. When an organization succumbs, it is usually
castigated in its home country if the bribe becomes public knowledge. Yet, without the bribe, it
may have been operating a major commercial disadvantage. Companies need to decide whether
they are going to market those countries where bribes are commonplace. Taking an ethical stance

may cause difficulties in the short term but in the long run the positive publicity that can follow
may be of greater benefit.
6 Ethical Issues in Distribution
Five key ethical issues in distribution are the use of slotting allowances, grey markets, exclusive
dealing, restrictions on supply and fair dealing.
1 Slotting allowances
In the packaged consumer goods industry, the power shift from manufacturers to retailers has
meant that slotting allowances are often demanded before products are taken. A slotting
allowance is a fee paid to a retailer in exchange for an agreement to place a product on the
retailer's shelves. Critics argue that these represent an abuse of power and work against small
manufacturers who cannot afford to pay such fees. Retailers argue that they are simply charging
rent for a valuable scarce commodity: shelf space.
2 Grey markets
Nothing to do with the age-related 'grey market' (i.e. the burgeoning number ofolder people that
make up the consumer population), this type of grey market occurs when a product is sold
through an unauthorized distribution channel. When this occurs in international marketing the
practice is called 'parallel importing’. Usually a distributor buys goods in one country (where
prices are low) and sells them in another (where prices are high) at below the going market price.
This causes anger among members of the authorized distribution channel who see their prices
being undercut. Furthermore, the products may well be sold in down market outlets that discredit
the image of the product, which has been built up byhigh advertising expenditures. Levi's
recently won a court order against Tesco preventing it from sourcing cheaper products outside
the European Union.
3 Exclusive dealing: This restrictive arrangement involves a manufacturer prohibiting the
distributors that market its products from selling the products of competing suppliers. This action
may restrict competition and hamper the entry of new competitors and products into a market. It
may be found where a large supplier can exercise power over weaker distributors. The supplier
may be genuinely concerned that anything less than an exclusive agreement will mean that
insufficient effort will be made to sell its products by a distributor and that, unless such an
agreement is reached, it may be uneconomic to supply the distributor.

4 Restrictions in supply: A particular concern of small suppliers is that the power of large
manufacturers and retailers will lead to their being squeezed out of the supply chain altogether.
In the UK, farmers and small grocery suppliers have joined forces to demand better treatment
from large supermarket chains, which are forging exclusive deals with major manufacturers.
They claim the problem is made worse by the growth of category management, where retailers
appoint 'category captains' from their suppliers who act to improve the standing of the whole
product category, such as breakfast cereals or confectionery. The small suppliers believe this
forces them out of the category altogether as category captains look after their own
interests.They would like to see a system similar to that used in France where about 10 percent of
shelf space is given to small suppliers by law.
5 Fair trading: One problem that arises from free market forces is that, when small commodity
producers are faced with large powerful buyers, the result can be very low prices. This can bring
severe economic hardship to the producers who may be situated in developing countries. In the
face of a collapse in world coffee prices a fair trading brand, Cafédirect (www.cafedirect.co.uk),
was launched. The company was founded on three principles: to influence positively producers'
income security; to act as an example and catalyst for change; and to improve consumer
understanding of fair trade values. It pays suppliers a minimum price for coffee beans pegged
above market fluctuations, and provides tailor-made business support and development
programmes. There are now more than 50 fair trade products on sale in the UK including
Ridgeway’s tea and Divine chocolate, and sales are rising.
7. Ethical Issues In Internet and Online Marketing:
Although the growth of Internet and online marketing has had many beneficial effects-such as
increasing customer choice and convenience, and allowing smaller companies access to global
markets-there are also concerns about intrusions on privacy and social exclusion.
1 Intrusions on privacy: Some of those people using the Internet are extremely wary of online
shopping because of the use of cookies, and the information they store and provide about
consumers. Cookies are tiny computer files that a marketer can download on to the computer of
online shoppers who visit a company's website so that details of these visits may be recorded.
Cookies serve many useful functions: they remember users' passwords so they do not have to log
on each time they revisit a site; they remember users' preferences so they can be provided with
the right pages or data; and they remember the contents of consumers' shopping baskets from one

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