Unit 4

Distribution: Channels of distribution - meaning and functions; Types of distribution channels;

Wholesaling and retailing; Channel Management Decisions.

Recent developments in marketing: Social Media Marketing, Internet Marketing, Direct Marketing,
Services Marketing, Green Marketing, Relationship Marketing.
Channels of Distribution - Meaning and Functions
In business, a distribution channel refers to means or route through which products or services are
transferred from the producer or manufacturer to the end consumer. It encompasses a series of
intermediaries, such as wholesalers, retailers, and distributors, who facilitate the movement and
exchange of goods in the marketplace.
It plays a crucial role in ensuring that products reach the right place at the right time, connecting
producers with consumers and maximizing the availability and accessibility of goods in the market.
Role of distribution channel in businesses
Distribution channels play a vital role in business by ensuring efficient product distribution,
expanding market reach, and enhancing customer satisfaction. They facilitate the movement of goods
from manufacturers to consumers, handling tasks such as warehousing, transportation, and inventory
management.
What’s more, they also serve as platforms for product promotion and marketing, creating awareness
and generating demand. They provide convenience and accessibility to customers, making products
readily available when and where they need them. Intermediaries in distribution channels gather
market feedback and information, contributing valuable insights for business strategies. Additionally,
distribution channels offer cost efficiency, economies of scale, and customer support services.
Different Types of Distribution Channels
There are three major distribution channels and they are:

 Direct distribution channels

 Indirect distribution channels
 Hybrid distribution channels
Let’s take a look at each one of them individually.
Distribution channel types
1. Direct distribution channels
Direct distribution channels refer to the method of selling products directly from the producer or
manufacturer to the end consumer without the involvement of intermediaries. In this channel, the
producer takes on the responsibility of marketing, sales, and distribution.
Types

 Company-owned online stores

 Direct sales representatives:
 Company-owned physical outlets
Characteristics
Direct distribution channels are characterized by a direct relationship between the producer and the
end consumer. The producer retains control over the entire sales process, from marketing to
distribution. It often involves a shorter supply chain, resulting in faster decision-making, reduced
costs, and increased control over brand image and customer experience.
Advantage
Greater control: The producer has direct control over branding, pricing, and customer interactions,
allowing for better brand management.
Higher profit margins: Eliminating intermediaries can lead to higher profit margins as there are no
middlemen to share the revenue.
Direct customer feedback: Direct channels enable direct communication and feedback from
customers, facilitating product improvement and personalized customer service.
Disadvantages
Increased responsibilities: The producer must handle all aspects of marketing, sales, and
distribution, which can be resource-intensive and time-consuming.
Limited market reach: Direct channels may have limitations in reaching a broader customer base,
especially in geographically dispersed markets.
Higher upfront costs: Setting up and managing direct channels may require significant investments
in infrastructure, technology, and marketing.
Examples

 Automotive industry
 Tech industry
 Fashion and apparel
 Food and beverage
 Cosmetics industry
2. Indirect distribution channels
Indirect distribution channels refer to the method of selling products where intermediaries, such as
wholesalers, retailers, distributors, agents, or brokers, are involved in the distribution process between
the producer and the consumer. These intermediaries handle tasks like warehousing, transportation,
marketing, and selling the products to the end customers.
Types

 Wholesalers
 Retailers
 Distributors
 Agents and brokers
Characteristics
Indirect distribution channels involve multiple stages in the distribution process, with each
intermediary playing a specific role. The producer transfers the products to the intermediaries, who
then take responsibility for storing, marketing, and selling the products to reach the end consumer. It
allows for wider market coverage, as intermediaries often have established networks and expertise in
specific markets or industries.
Advantage
Market expertise: Intermediaries possess in-depth knowledge of the market, consumer preferences,
and distribution networks, enabling producers to leverage their expertise for effective product
placement and promotion
Expanded market reach: By partnering with intermediaries, producers can access a broader
customer base, especially in markets where intermediaries have an established presence
Cost efficiency: Intermediaries can consolidate orders, handle logistics, and provide marketing
support, resulting in cost savings for producers
Disadvantages
Reduced control: Producers have less control over product positioning, pricing, and customer
interactions as intermediaries are involved in the distribution process
Profit sharing: Producers may need to share profits with intermediaries, reducing overall profit
margins
Communication challenges: Managing communication and maintaining consistent branding and
messaging across multiple intermediaries can be complex
Examples
Retailers like Walmart sources products from various manufacturers and sells them through its
extensive network of physical stores and online platforms.
3. Hybrid distribution channels
Hybrid distribution channels combine elements of both direct and indirect channels. It involves a
combination of selling products directly to consumers while also utilizing intermediaries to distribute
and sell products on behalf of the producer.
Types

 Manufacturer-owned retail stores

 Online marketplaces
 Dual distribution
Characteristics
Hybrid distribution channels offer flexibility and diversity in reaching customers. They allow
producers to maintain control over certain aspects of the sales process while also leveraging the
market reach and expertise of intermediaries. In this channel there is often a combination of company-
owned retail outlets, online sales, and partnerships with distributors or retailers.
Advantages
Increased market coverage: Hybrid channels provide access to a wider customer base by combining
direct and indirect distribution methods.
Control over branding and customer experience: Direct channels allow producers to maintain
control over branding, pricing, and customer interactions.
Leveraging intermediaries’ expertise: Indirect channels enable the use of intermediaries’
knowledge and resources to expand market reach and improve distribution efficiency.
Disadvantages
Increased complexity: Managing multiple distribution channels and coordinating activities between
direct and indirect channels can be complex and challenging.
Potential channel conflicts: Conflict may arise between company-owned channels and
intermediaries, particularly in terms of pricing, competition, and customer relationships.
Higher costs: Maintaining and managing a hybrid distribution strategy may involve higher costs
compared to relying solely on direct or indirect channels.
Example
The biggest example is Amazon that functions as an online marketplace, selling products directly to
customers through its platform, while also allowing third-party sellers to offer their products to
consumers.
Components of Distribution Channels
The components of distribution channels include:
Producers/Manufacturers: Producers or manufacturers are the originators of the products. They
create, manufacture, and supply the goods to be distributed through the channel. Also, producers may
have their own distribution channels or work with intermediaries.
Intermediaries: Intermediaries, also known as middlemen, play a crucial role in the distribution
process. They facilitate the movement of products from the producer to the end consumer.
Wholesalers, retailers, distributors, agents, brokers, or even online marketplaces are some of the
examples of intermediaries.
Customers: Customers are the ultimate recipients of the products or services offered by the
distribution channel. They can be individuals, businesses, or organizations who purchase and consume
or utilize the products.
Channel partners: Channel partners are entities or organizations that collaborate with the producer to
distribute and sell products. They can include wholesalers, retailers, distributors, or other
intermediaries who actively participate in the distribution process.
Logistics: Logistics involves the physical movement and management of products throughout the
distribution channel. It includes activities such as transportation, warehousing, inventory
management, order fulfillment, and packaging. Efficient logistics ensure that products are delivered
timely and in good condition.
Marketing and promotion: Marketing and promotional activities are essential components of
distribution channels. They aim to create awareness, generate demand, and promote products to the
target customers.
Information and communication: Information and communication flow within the distribution
channel is crucial for its effective functioning. It involves the exchange of data, feedback, and market
intelligence between the producer, intermediaries, and customers. Clear and efficient communication
ensures smooth coordination and enables timely decision-making.
Payment: Financial transactions and payment occur between the different entities within the
distribution channel. Producers receive payments from intermediaries or customers, and
intermediaries handle financial transactions related to the purchase and distribution of products.
Levels of Distribution Channels
1. Zero-level channel or direct marketing
In this there are no intermediaries involved between the producer and the end consumer. The producer
directly sells products to customers through methods such as company-owned online stores, direct
sales representatives, or physical outlets. This level of distribution provides the producer with
maximum control over the marketing and distribution process.
2. One-level channel or retail
In this channel there is one intermediary between the producer and the consumer. Typically, this
intermediary is a retailer who purchases products from the producer and sells them directly to
customers. Retailers can operate through physical stores, e-commerce platforms, or a combination of
both.
3. Two-level channel or wholesale and retail
In the two-level channel there are two intermediaries between the producer and the consumer. The
first intermediary is a wholesaler who purchases products in bulk from the producer and sells them in
smaller quantities to retailers. The second intermediary is the retailer who then sells the products to
the end consumer. Wholesalers help in distribution, storage, and breaking down larger product
quantities, while retailers focus on selling to individual customers.
4. Three-level channel or agent, wholesaler, and retailer
In a three-level channel, there are three intermediaries involved in the distribution process. The first
intermediary is an agent or broker who acts on behalf of the producer, connecting them with
wholesalers. The wholesalers purchase products from the producer and sell them to retailers. Finally,
the retailers sell the products to consumers. This channel structure is common in industries where
specialized agents or brokers assist in connecting producers with wholesalers.
Functions of Distribution Channels
The functions of distribution channels involve a range of activities and tasks that facilitate the
efficient flow of products from the producer to the end consumer.
Here are the key functions of distribution channels:

 Product distribution
 Market coverage
 Inventory management
 Order processing and fulfillment
 Promotion and marketing
 Market intelligence
 After-sales service
Examples of Distribution Channels
Distribution channels can vary based on the industry, product type, and target market. Here are some
examples of distribution channels in various sectors:
1. Consumer goods

 Supermarkets and grocery stores

 Department stores
 Online marketplaces (e.g., Amazon, eBay)
 Direct sales through company-owned stores or websites
2. Fashion and apparel

 Specialty clothing stores

 Fashion boutiques
 Online clothing retailers
 Department store concessions
3. Electronics

 Electronics retail chains (e.g., Best Buy)

 Online electronics stores
 Manufacturer-owned flagship stores
 Authorized resellers or distributors
4. Automotive

 Car dealerships
 Authorized service centers
 Online car sales platforms
 Parts distributors and retailers
5. Food and beverage

 Restaurants and cafes

 Food delivery services
 Wholesale food distributors
 Grocery stores and supermarkets
6. Pharmaceuticals

 Pharmacies and drugstores

 Online pharmacies
 Hospital and clinic supply chains
 Pharmaceutical wholesalers
7. Technology

 Telecommunication service providers

 Online technology retailers
 Authorized resellers and distributors
 Company-owned flagship stores
Wholesaling
A distributor who provides merchandise to a retailer. Retailers can benefit from a lower price than if
they were to purchase individual things when a wholesaler sells their product to them in large
quantities.
Although a reseller is another option, the wholesaler will often purchase items directly from the
manufacturer. In either scenario, the wholesaler receives significant savings for purchasing a huge
volume of items. Rarely does the distributor actually make a product; instead, they concentrate on
distribution.
Characteristics of Wholesaler
Wholesalers have the following characteristics:

 Wholesalers buy products from manufacturers or producers directly.

 They buy products in bulk and dispense them in smaller quantities.
 They provide various iterations of a particular range or product. A paper wholesaler, for
example, must stock all types of paper, cardboard, and card.
 Wholesalers may use a variety of representatives or employees to distribute their goods.
 They invest in business products and demand a lot of funds.
 They provide retailers with credit facilities.
 They support the makers or producers financially by making mass purchases.
 Wholesalers typically congregate in a single location. For instance, there are gur mandis
(markets for sugar and related goods) and anaj mandis in numerous Indian towns (markets for
food grains). Retailers can easily approach cloth or paper merchants because they are grouped
together in one place.
Importance of Wholesaler
Position of the Retailer in the Absence of the Wholesaler- We may come to appreciate someone's
absolute necessity much more when they are not present and actively assisting us. This is true in the
case of the wholesaler, who acts as a liaison between the manufacturer and the retailer.
Without a wholesaler, the retailer will face the following annoyances:

 He will need to keep massive inventories of a wide range of goods, so he will need enough
space and money to do so. Only a few retailers can command both capital and space.
 He'll have to put together stocks from various manufacturers.
 He will have to arrange for their transportation, packaging, and storage, among other things.
 He will be vulnerable to price changes as well as shifts in public preferences and demand.
Few shops are willing to take such a significant risk.
Types of Wholesaler
Wholesalers are classified into six types -
Merchants Who are Retailers
These are the most commonly used wholesalers in the private label, FMCG, and agricultural
industries. Simply put, merchant wholesalers are individuals who buy products directly from
manufacturers, store them, and then resell them to customers. They are not restricted to selling only to
retail customers or only to online customers, and they can sell through any channel. Any losses
incurred during the purchase and resale of the product must be borne by the merchant wholesaler.
Full-service Wholesalers in Retail are Wholesalers.
They are most commonly found in engineering or consumer durable products. Full-service
wholesalers, as the name implies, provide complete service to the final retailer. These wholesalers,
who primarily work in the retail sector, sell the products to a reseller (in this case, a retailer). Except
for product service, the full-service wholesaler is in charge of everything.
Distributors of Limited Services
A limited service wholesaler is someone who supplies the company's products but only sells them
through a specific channel. He doesn't cover all of the company's channels or has a low turnover rate.
Brokers and Agents
Most commonly observed in the chemical or real estate sectors. Brokers do not take any chances. He
has the manufacturer or producer on one side and the customer on the other. The broker's job is to
close the deal and earn a commission.
Small Offices and Divisions
Although there are various types of wholesalers, branches and small offices are traditional ways for
businesses to start selling their products in a specific area. A branch is sometimes referred to as a type
of wholesaling because it collects bulk orders from end customers and ensures supply as well as client
reorders.
Specialized Wholesalers
These are wholesalers who specialize in a single product. A used car wholesaler, for example, may
sell directly to consumers or to other used car dealers. He is an expert in used cars and is well-versed
in all aspects of selling or restoring used vehicles to customers. Some wholesalers specialize in a
specific product and are well-known for it.
Those mentioned above were among the various types of wholesalers in the market. As e-commerce
sales increase, the demand for wholesalers in developing countries is decreasing.

Concept of Retailing

The word retail comes from the Old French verb tailler, meaning "to cut off, clip, pare,
divide in terms of tailoring" (c. 1365). It was first recorded as a noun in 1433 with the
meaning of "a sale in small quantities" from the Middle French verb retailler meaning
"a piece cut off, shred, scrap, paring". At the present, the meaning of the word retail (in
English, French, Dutch, German and Spanish) refers to the sale of small quantities of
items to consumers (as opposed to wholesale).

Retailing, the selling of merchandise and certain services to consumers. It ordinarily involves
the selling of individual units or small lots to large numbers of customers by a business set up
for that specific purpose. In the broadest sense, retailing can be said to have begun the first
time one item of value was bartered for another. In the more restricted sense of a specialized
full-time commercial activity, retailing began several thousand years ago when peddlers first
began hawking their wares and when the first marketplaces were formed.

Retail involves the sale of goods from a single point (malls, markets, department stores etc)
directly to the consumer in small quantities for his end use. In a layman’s language, retailing
is nothing but transaction of goods between the seller and the end user as a single unit (piece)
or in small quantities to satisfy the needs of the individual and for his direct consumption.
Let us understand the concept with the help of an example.

Mr. A. wanted to purchase a mobile handset. He went to the nearby store and purchased one
for himself.

In the above case, Mr. A is the buyer who went to a fixed location (in this case the nearby
store). He purchased a mobile handset (Quantity - One) to be used by him. An example of
retail.

The store from where Mr. A purchased the handset must have shown him several options for
him to select one according to his budget and need.

From where do you think the store owner (also called the retailer) purchased all the handsets?

Here the manufacturers and the wholesalers come into the picture.

The retailers purchase goods in bulk quantities (huge numbers) to be sold to the end-users
either directly from the manufacturers or through a wholesaler.

Functions performed by retailers:

(1) Buying and Assembling:

It has been said that a retailer stocks wide variety of products to meet the requirements of a
large number of customers. For this purpose, the retailer has to assemble products of different
manufacturers from different wholesalers through the process of buying. In buying these
products he has to be cautious. He has to find out the best and cheapest source of supply.
Then he has to select only such of the goods offered which would suit the need of his
customers. He must purchase only in quantities enough to meet the demands of his
customers.

(2) Warehousing or Storing:

After assembly of goods from different suppliers, the retailers preserve them in stores and
supply these goods to the consumers as and when required by them. The goods are kept as
reserve stocks in order to ensure uninterrupted supply to the consumers.

(3) Selling:

The end objective of the retailer is to sell the goods to consumers. He undertakes various
methods to sell goods to the ultimate consumers. he ultimate purpose of retailing business is
to sell these products to the consumers. Though a retailer is sometimes referred to as buying
agent of consumers, producers and manufacturers regard retailer as a means of dispersing
goods to the market and drawing income into their hands so that they can continue their
business of production.

(4) Credit Facilities:

He caters to the needs of the customers even by supplying them goods on credit. He bears the
risk of bad debts on account of non-payment of amount by the customers.
(5) Risk Bearing:

A retailer has to bear different type of risks in relation to goods. While in stores, goods are
exposed to various risks like deterioration in quality, spoilage and perishability etc. The
products are confronted to natural risks viz; fire, flood, earthquake and other natural
calamities. Other type of risks like change in customer’s tastes also adversely affects the
sales.

(6) Grading and Packing:

The retailer grades the goods which are left ungraded by the manufacturers and the
wholesalers. He packs the goods in small packages and containers for the convenience of the
customers.

(7) Collection and Supply of Market Information:

The retailers are in direct touch with the consumers. They gather invaluable information with
regard to likes dislikes tastes and demands of the consumers and pass on this information to
the wholesalers and the producers which are very helpful to them.

(8) Helps in Introducing New Products:

Without the services of retailers, new products cannot be introduced properly in the market.
This is so because a retailer has a direct link with the consumer. He can explain nicely about
the utility and the characteristics of a new product to the customer.

(9) Window Display and Advertising:

The retailer displays the products in show windows in order to attract the customers. This
leads to immense publicity for the product.

Types of Retailers
Types of Retailers

On the basis of the size of the business, product mix, pricing and service level and ownership
of the business, it can be classified into the following categories:

 Itinerant or Mobile Traders

 Fixed shop small retailers
 Fixed shop large scale retailers

1. Itinerant or Mobile Traders

The traders who have no fixed place of sale are called Itinerants. They move from one place
to another place in search of customers. They are also known as Mobile traders. Mobile
traders deal in low price, daily usable items such as fruits, vegetables, fish, clothing, books,
etc. They require small amount of investment. The types of itinerants are as follows:

a. Peddlers and Hawkers

Peddlers are individuals who sell their goods by carrying on their head or shoulders moving
from place to place on foot. Hawkers are petty retailers who sell their goods at various places
such as bus stop, railway station, Public Park and gardens, residential areas and other public
places using a convenient vehicle to carry goods from place to place.

b. Street Vendors

The traders sit on the footpath of the road or at the end of the road (pavement) and sell their
goods such as fruits, vegetables, books, etc. are called Street vendors.

c. Market Traders

Small traders open their shops at different places on fixed days or dates such as every Sunday
or alternative Wednesdays and so on (Varasandhai - weekly market). They deal in one
particular line of merchandise and in low priced consumer items of daily use. Examples
Pollchi, Manapparai, Ranipet, etc.

d. Cheap Jacks

Those retailers who have independent shops of temporary nature in a business locality are
depending upon the potentiality of the area. They deal in consumer goods and services such
as shoes and chappals, plastic items, repair of watches, etc.

2. Fixed Shop Retailers

The retailers who maintain permanent establishment to sell their goods are called Fixed Shop
Retailers. They do not move from place to place to serve their customers. The fixed shop
retailers can be classified into two types on the basis of the size of their operations.

They are: a. Fixed Shop Small Retailers and b. Fixed Shop Large Retailers

Fixed shop small retailers are of the following categories:

a. Street Stalls

These small shop-keepers are commonly found at street crossings or other busy street corners
attract floating customers and deal in cheap variety of goods like hosiery products, toys, soft
drinks, etc. They get their supplies from local suppliers and wholesalers.

b. General Stores

General Stores sell a wide variety of products under one roof, most commonly found in a
local market and residential areas to satisfy the day-to-day needs of the customers residing in
nearby localities. They remain open for long hours at convenient timings and often provide
credit facilities to their regular customers. For example, a provision store deals in grocery,
bread, butter, toothpaste, soaps, washing powder, soft drinks, confectionery, stationery,
cosmetics, etc.

c. Single-line Stores

Single-line Stores are small shops which deal in a particular line of products such as
garments, stationery, textiles, medicines, shoes, etc. They are generally situated in market
places and deal in a variety of goods in that line of product.

d. Speciality Stores

Speciality Stores deal in a particular type of product under one product line only.For
example, Sweets shop specialised in Tirunelveli Halwa, Bengali Sweets, etc.

e. Seconds Shops (AKA second hand /used goods shop)

These shops deal with second-hand goods or used articles in a low price such as books,
furniture, utensils, clothes, automobiles, etc. and also new defective goods.

3. Fixed Shop Large Retailers

The retailers having permanent establishment and dealing in large scale are called Fixed
shop large scale retailers. They are popular due to urbanisation, modernisation and other
reasons. The most common forms of large scale retailers are as follows:

1. Departmental Stores
2. Chain Stores or Multiple Stores
3. Super Markets
4. Consumer Cooperative stores
5. Hire purchase and Instalment Traders
6. Shopping Malls
7. Mail order houses
8. Automatic Vending Machines
9. Tele-marketing
10. Online Shopping
1. Departmental Stores

A Departmental Store is a large retail establishment offering a wide variety of products,

classified into well-defined departments. Each department specialise in one particular line of
product aimed at satisfying every customers’ needs under one roof. Each department is like a
separate shop with centralised purchasing, selling and accounting. Administrative activities of
the departmental stores are managed by a General Manager. The General Manager appoints
department managers of each department.

2. Chain Stores or Multiple Shops

A number of identical retail shops with similar appearance normally deal in standardised and
branded consumer products established in different localities owned and operated by
manufacturers or intermediaries are called as Chain stores or Multiple shops. In USA, these
are known as chain stores but these are popular as multiple shops in Europe. They deal only
in particular line of product and specialise in the same. Many such shops are in India.

For example: Bata.

3. Super Markets

A Super market is a large retail store selling a wide variety of consumer goods on the basis
of low price appeal, wide variety and assortment, self-service and heavy emphasis on
merchandising appeal. The goods traded are generally food products and other low priced,
branded and widely used consumer products such as grocery, utensils, clothes, house hold
goods, electronic appliances and medicines. For example: The Nilgiris

4. Cooperative Store

A consumer’s cooperative store is a retail organisation owned, managed and controlled by

the consumers themselves to obtain products of daily use at reasonable low prices. Its
objective is to eliminate profits to middlemen by establishing a direct contact with the
manufacturers. People belonging to middle and low income groups, at least 25 persons have
to come together to form a voluntary association and get it registered under the Cooperative
Societies Act.

The capital of a cooperative store is raised by issuing shares to members. The management of
the store is democratic and entrusted to an elected managing committee, where one man one
vote is the rule. The cooperative stores are very famous in Tamilnadu. For example,
Kamadhenu and Chinthamani cooperative supermarkets in Chennai, Karpagam in Vellore,
etc.

5. Hire purchase and Instalment Trade

Hire purchase trading is a system by which the seller agrees to sell the articles to the buyer on
condition that the payment of the article will be made in a fixed number of instalments till the
sale price is paid. Though the buyer gets possession of the goods immediately on signing the
contract the ownership does not pass on till the payment of last instalment. The buyer prefers
to pay a lump sum or a part of the price initially i.e., down payment and the balance in
instalments as per the contract. The seller continues to be the owner of the article till then. If
the buyer commits a default in payment, the seller is entitled to repossess the article. It is also
a form of credit sale. Only durable articles like television, air conditioner, refrigerator,
washing machines, etc., are suitable for hire sale.

Instalment system is a type of purchase in which the price amount of the product is not paid
initially but in instalments. It is also called as deferred payment system. Under this system,
title or ownership of articles as well as possession is passed on to the buyer as soon as the
first instalment is paid. On default of payment, the seller cannot seize the article but recover
the dues through court.

6. Mail Order Houses

Mail order houses are the retail outlets that sell their merchandise through mail. There is
generally no direct personal contact between the buyers and the sellers in this type of trading.

Procedure

1. Advertisements provide information about the products to consumers

2. Order receiving and processing- On receiving the orders, the goods are sent to the
customers through the post office by Value Payable Post (VPP).
3. Receiving Payments

The customers may be asked to make full payment in advance or at the time of receiving the
goods in this arrangement, there is no risk of bad debt. Perishable goods like milk are not
suitable for sale by mail order. Suitable goods are books, watches, etc.

7. Automatic vending machine

Automatic vending machine is a new form of direct selling. It is a machine operated by coins
or tokens. The buyer inserts the coin or the tokens into the machine and receives a specified
quantity of a product from the machine. AVMs are placed at a convenient location such as
railway stations, airports, petrol pumps, etc.

Example Aavin Dairy Milk through AVMs

8. Shopping malls

Shopping malls are developed due to change in departmental stores in modern time. A
shopping mall functions in a multi-storey building. Many small to big shops are commenced
under the separate ownership. Various types of branded goods of daily requirement and
luxurious products are available. Modern facilities such as refreshment hall, entertainments
for children, Wi-Fi, auditorium, etc. are provided in shopping mall.

For example – JHV , PDR , VINAYAK PLAZA

9. Telemarketing

Telemarketing can be divided into two parts.

i. Telephonic Marketing
Potential Customers are contacted through telephone or mobile to provide information about
the products. Willing customers visit the office and place the orders. This method is useful
for loan, financing, insurance services, credit card, etc. No middlemen in this marketing and
cost reduced accordingly.

ii. Television Marketing

In this method, customers are attracted by providing full information of product or service
through TV demonstrations. Customers are given either phone number or name of the
website to place the order. Payments for these products are made through two methods.

i. Advance payment by debit/credit card. ii. Payment in cash at the time of delivery.

For example- Tablemate and other home appliances

10. Online Shopping or Internet Marketing

The manufacturers or the intermediaries place the advertisement of their products on

different media of internet like e-mail, portal and browser. Sometimes, they have their own
website like Flipkart, Amazon, Snap deal. etc. The customers compare the products of
competitors by observing such advertisements and select the product through internet and
make the payment through online or cash on delivery.

Because of the absence of middlemen, showroom expenses, etc. products are available at
cheaper price in comparison to local market. Customers also get after sales services.

Factors Influencing Distribution Channel Decisions

Multiple factors play a huge role in influencing the decisions regarding the right distribution channels
in business. Here are the key factors influencing distribution channel decisions:

 Product characteristics
 Target market and customer preferences
 Competition and industry practices
 Cost and efficiency
 Resources and capabilities
 Channel partnerships and relationships
 Legal and regulatory considerations
Channel management and optimization
1. Establishing channel objectives and strategies
This involves defining the goals and objectives that the distribution channel should achieve. It
includes determining factors such as market coverage, sales targets, customer satisfaction, and brand
positioning. Channel strategies outline the approach to be taken in terms of channel structure, partner
selection, and resource allocation to meet the objectives.
2. Selecting and evaluating channel partners
Choosing the right channel partners is critical for successful channel management. Companies need to
identify potential partners that align with their objectives, have a strong market presence, possess
relevant capabilities, and share a commitment to mutual success.
3. Implementing effective channel communication and coordination
Communication and coordination are essential for seamless collaboration between the company and
its channel partners. Establishing clear lines of communication, sharing information, providing
training and support, and fostering strong relationships help in aligning strategies, addressing
challenges, and optimizing channel performance.
4. Monitoring and measuring channel performance
Regular monitoring and measurement of channel performance enable companies to assess the
effectiveness of their distribution channels. Key performance indicators (KPIs) such as sales volume,
market share, customer satisfaction, inventory turnover, and partner performance are tracked to
identify areas of improvement and take corrective actions.
5. Adapting and optimizing distribution channels
The business environment is dynamic, and distribution channels need to adapt and evolve
accordingly. This involves continuously analyzing market trends, customer preferences, competitive
landscape, and technological advancements. Companies need to be flexible and responsive in
adjusting their channel strategies, partner relationships, and operational processes. This can help
optimize the performance and efficiency of the distribution channels.
Distribution channel impact on price
Distribution channels can have a significant impact on the price of products or services. Here are a
few ways in which distribution channels influence pricing:
1. Margins and markup
Each intermediary in the distribution channel adds its own markup or margin to the product’s cost. As
the product passes through different levels of the channel, each intermediary applies their desired
profit margin, increasing the final price paid by the end consumer.
2. Channel costs
Distribution channels involve costs such as transportation, warehousing, marketing, and sales
commissions. These costs incurred by intermediaries are factored into the pricing of products.
3. Discounts and promotion
Distribution channels often offer discounts and promotions to stimulate sales and attract customers.
These discounts, such as trade discounts or volume-based discounts, can impact the final price of the
product. For example, a manufacturer might offer a higher trade discount to a wholesaler, allowing
the wholesaler to sell the product at a lower price to retailers, who can then pass on the savings to
customers.
4. Channel length
The number of intermediaries involved in the distribution channel can influence the price. Longer
distribution channels with multiple intermediaries typically result in higher prices due to the
accumulation of markups and costs along the chain. Conversely, shorter distribution channels with
fewer intermediaries may result in lower prices as there are fewer markups and costs to consider.
5. Pricing strategies
Distribution channels can greatly influence pricing strategies. For instance, exclusive or luxury
products may be distributed through selective channels, which often involve higher prices to maintain
exclusivity and perceived value. On the other hand, products with a mass-market appeal may be
distributed through more extensive channels, allowing for lower prices to reach a larger customer
base.
6. Competitive landscape
Distribution channels can impact pricing in response to market competition. Intermediaries may
engage in price competition to attract customers or negotiate pricing terms with manufacturers based
on their market power. This competitive environment within the distribution channel can influence the
final price offered to consumers.
It is important for businesses to consider the impact of distribution channels on pricing decisions to
strike a balance between profitability, market competitiveness, and customer value. Understanding the
pricing dynamics within the distribution channel helps companies determine the optimal pricing
strategies and maintain a competitive edge in the market.
In conclusion, distribution channels play a crucial role in the success of businesses by ensuring
products or services reach the right customers in the most efficient and effective manner. Whether
through direct, indirect, or hybrid channels, companies must carefully evaluate their options based on
factors such as product characteristics, target market preferences, and competitive landscape.

Social Media Marketing (SMM)

Social media marketing (also known as digital marketing and e-marketing) is the use of social
media—the platforms on which users build social networks and share information—to build a
company's brand, increase sales, and drive website traffic. In addition to providing companies
with a way to engage with existing customers and reach new ones, SMM has purpose-built
data analytics that allows marketers to track the success of their efforts and identify even
more ways to engage.

Within 18 years, from 2004 (when MySpace became the first social media site to reach one
million users) to 2022, the dramatic growth of interactive digital channels took social media
to levels that challenge even the reach of television and radio.

At the start of 2023, there were 4.76 billion social media users globally—over 59% of the
world's population.

Social media marketing uses social media and social networks—like Facebook, X (formerly
Twitter), and Instagram—to market products and services, engage with existing customers,
and reach new ones.

The power of social media marketing comes from the unparalleled capacity of social media in
three core marketing areas: connection, interaction, and customer data.

Social media marketing has transformed the way businesses can influence consumer
behavior—from promoting content that drives engagement to extracting personal data that
makes messaging resonate with users.

Because social media today is so ubiquitous, marketing techniques using these platforms are
extremely important for businesses.

Social media marketing is often more cost-effective with great exposure, though it requires
ongoing maintenance and might have unintended negative feedback consequences.
Why Is Social Media Marketing (SMM) So Powerful?

The power of SMM is driven by the unparalleled capacity of social media in three core
marketing areas: connection, interaction, and customer data.

Connection

Not only does social media enable businesses to connect with customers in previously
impossible ways, but there is also an extraordinary range of avenues to connect with target
audiences—from content platforms (like YouTube) and social sites (like Facebook) to
microblogging services (like X).

Interaction

The dynamic nature of the interaction on social media—whether direct communication or

passive liking—enables businesses to leverage free advertising opportunities from eWOM
(electronic word-of-mouth) recommendations between existing and potential customers. Not
only is the positive contagion effect from eWOM a valuable driver of consumer decisions,
but the fact that these interactions happen on the social network makes them measurable. For
example, businesses can measure their social equity—a term for the return on investment
(ROI) from their social media marketing campaigns.

Customer Data

A well-designed social media marketing plan delivers another invaluable resource to boost
marketing outcomes: customer data. Rather than being overwhelmed by the 3Vs of big data
(volume, variety, and velocity), SMM tools have the capacity not only to extract customer
data but also to turn this gold into actionable market analysis—or even to use the data to
crowdsource new strategies.

Consider how different demographics may not have equal access to social media. Relying
only on digital or online marketing may unintendedly exclude certain groups of people
without online access.

How Social Media Marketing (SMM) Works

As platforms like Facebook, X, and Instagram took off, social media transformed how we
connect and how businesses can influence consumer behavior—from promoting content that
drives engagement to extracting geographic, demographic, and personal information that
makes messaging resonate with users.

SMM Action Plan

The more targeted your SMM strategy is, the more effective it will be. Hootsuite, a leading
software provider in the social media management space, recommends the following action
plan to build an SMM campaign that has an execution framework as well as performance
metrics:
  Align SMM goals to clear business objectives
 Learn your target customer (age, location, income, job title, industry, interests)
 Conduct a competitive analysis of your competition (successes and failures)
 Audit your current SMM (successes and failures)
 Create a calendar for SMM content delivery
 Create best-in-class content
 Track performance and adjust SMM strategy as needed

Customer Relationship Management (CRM)

Compared to traditional marketing, social media marketing has several distinct advantages,
including the fact that SMM has two kinds of interaction that enable targeted customer
relationship management (CRM) tools: both customer-to-customer and firm-to-customer. In
other words, while traditional marketing tracks customer value primarily by capturing
purchase activity, SMM can track customer value directly (through purchases) and indirectly
(through product referrals).

Shareable Content

Businesses can also convert the amplified interconnectedness of SMM into the creation of
sticky content, the marketing term for attractive content that engages customers at first
glance. This gets them to purchase products and share the content. This kind of word-of-
mouth advertising not only reaches an otherwise inaccessible audience but also carries the
implicit endorsement of someone the recipient knows and trusts—making the creation of
shareable content one of the most important ways social media marketing drives growth.

Earned Media

SMM is also the most efficient way for a business to reap the benefits of another kind of
earned media (a term for brand exposure from any method other than paid advertising):
customer-created product reviews and recommendations.

Viral Marketing

Another SMM strategy that relies on the audience to generate the message is viral marketing,
a sales technique that attempts to trigger the rapid spread of word-of-mouth product
information. Once a marketing message is being shared with the general public far beyond
the original target audience, it is considered viral—a very simple and inexpensive way to
promote sales.

Customer Segmentation

Because customer segmentation is much more refined on SMM than on traditional marketing
channels, companies can ensure they focus their marketing resources on their exact target
audiences.
Tracking Metrics

According to Sprout Social, the most important SMM metrics to track are focused on the
customer: engagement (likes, comments, shares, clicks); impressions (how many times a post
shows up); reach/virality (how many unique views an SMM post has); share of voice (how
far a brand reaches in the online sphere); referrals (how a user lands on a site); and
conversions (when a user makes a purchase on a site). However, another critical metric is
focused on the business: response rate/time (how often and how fast the business responds to
customer messages).

When a business is trying to determine which metrics to track in the sea of data that social
media generates, the rule is always to align each business goal to a relevant metric. If your
business goal is to grow conversions from an SMM campaign by 15% within three months,
then use a social media analytics tool that measures the effectiveness of your campaign
against that specific target.

Even in the digital age, people appreciate the human touch, so don't rely only on social media
to get the word out.

Advantages and Disadvantages of Social Media Marketing (SMM)

Advantages

 The introduction of social media marketing has introduced a new suite of benefits.
Social media platforms provide a powerful channel for reaching and engaging with a
large audience, which can help increase brand awareness and recognition.
 Engaging with customers through social media channels can help build stronger
relationships and foster customer loyalty. It's often a less expensive option than
traditional advertising methods, making it more appealing for smaller or start-up
businesses.
 The nature of social media marketing also has plenty of benefits. Sharing links to your
website or blog on social media can help drive more traffic to your website and
increase the likelihood of conversions. In addition, social media provides a way to
gather feedback from customers in real time, allowing for instant interaction and
simplicity in communication.
 Social media marketing also has the benefit of being broad but also targeted. Social
media can help businesses reach a wider audience and increase engagement through
shares, likes, comments, and other forms of interaction. This is especially true
considering many customers forward content to friends and family who might be non-
customers. On the other hand, social media platforms offer a range of targeting
options, meaning companies can pinpoint specific demographics, interests, and
behaviors and deliver personalized content to those audiences.

Disadvantages

 Though riddled with benefits, there are some downsides and complications to social
media marketing. Building a strong social media presence takes time and effort, and
business owners must often consistently engage and create content.
  Effective social media marketing requires a deep understanding of the various
platforms and the ability to create engaging content, analyze data, and make data-
driven decisions. Each platform is often specialized and requires its own
understanding. In addition, social media platforms are constantly changing their
algorithms and policies which can make it difficult to predict and maintain success.
 Though social media makes it easy to communicate with customers, it also provides a
platform for customers to voice their complaints and grievances publicly. This may
have the unintended consequence of creating a public forum, which can damage a
company's reputation if not handled properly.
 Last, it may be difficult to clearly quantify the return on social media marketing.
Measuring the effectiveness and ROI of social media marketing can be challenging as
it often involves tracking multiple metrics, analyzing complex data sets, and making
assumptions about why consumers may have acted in various ways.

Pros

 May help companies enhance brand recognition easily

 Offers companies more cost-effective solutions with great exposure
 May be leveraged to increase website traffic and real-time feedback
 May be leveraged for targeted or specific engagements

Cons

 May be time-consuming to set up and maintain

 May be unpredictable, as different platforms may change algorithms.
 May result in negative feedback displayed in a very public fashion
 May be difficult to fully understand the true ROI

Internet Marketing
With rapid advancements in technology and the internet, marketing techniques have undergone
significant changes. A majority of businesses now include online marketing as a vital element of their
primary marketing plans. Knowing how to use online marketing to assist a business in reaching its
target audience might be useful if you work in the marketing sector. It's important to keep your
audience and brand in mind when developing your Internet marketing plan because it helps you to
share your brand's message with your audience.
Internet marketing, often known as online marketing, uses digital platforms and methods to promote
brands by focusing on their target markets. Internet marketing is not the only strategy for generating
interest in and knowledge about a product. The goal of internet marketing is to increase traffic to the
advertiser's website through a number of methods.
Role of Internet Marketing
The internet is a channel via which businesses can advertise, communicate with customers, and make
sales. The perfect Internet strategy can play a big role in the effective marketing and sales of products.
The importance of digital marketing for business success comes from the fact that most businesses
and customers have grown extremely reliant on the internet. Because of this dependency and the value
placed on having an online presence, it is essential for businesses to practice structured internet
marketing.
Internet Marketing to Attract New Customers
Paid social media can bring in new clients for your business or product, but before spending too much
money on one social media platform, you should carry out market research and A/B testing. You also
need to keep up a strong SEO presence if you want to attract new customers. Online marketing
strategies can be used to attract new clients. You should prioritize paid social media marketing, search
engine optimization, and web design in order to achieve this.
Internet Marketing to Cultivate Brand Loyalties
Through word-of-mouth, customers have a long-controlled brand perception. It has always been up to
the consumers, even while businesses can provide good items, advertise those things, and make
attempts to guide branding in a particular direction. Today, word-of-mouth is considerably more
widespread and has moved online. And it's accessible to everyone via various social media sites. Your
consumers and prospective customers rely on reviews and the opinions of their peers to judge the
quality of your brand because marketing and advertising have become less effective.
Content Marketing vs Traditional Advertising
The purpose of content marketing is to offer value to the audience and serve as an example of thought
leadership. In contrast, traditional advertising typically concentrates on the brand as a whole. Both
media try to increase conversions in any way they can. Content marketing is a slower, more deliberate
approach. In contrast, traditional marketing focuses more on audience targeting and swiftly reaching a
larger potential client, even if they haven't directly requested to see your marketing. Content
marketing is a long-term, SEO-driven approach for converting visitors and prospects into repeat
consumers. Traditional marketing, on the other hand, has a significantly shorter life cycle, frequently
consisting of a one-time attempt to advertise products or services to a specific target group.
Types of Internet Marketing
Internet marketing reaches individuals from various online locations by utilizing their online activity
to establish a connection with a business. The kinds of internet marketing a company employs will
vary depending on its business model, items it sells, target market, available resources, and other
factors.
1. Website Content and Design
The method of creating and spreading content in order to bring in and keep customers is known as
content marketing. Instead of focusing on selling, it concentrates on client communication, which is
usually more well-liked.
2. Email Marketing
Email marketing is the process of sending direct marketing communications to consumers via email in
an effort to attract new clients and keep hold of current ones. It's one of the most economical forms of
marketing and may be used to target both a large customer base and a highly specific one. When
customers provide a brand with their email address, the company can contact them for future
marketing initiatives.
3. Social Media
Social media marketing refers to the use of social media websites to promote a business and its goods
and services. It attempts to increase brand recognition, enhance consumer interaction, build loyalty,
and produce leads for sales. Paid advertising and organic marketing are both components of social
media marketing strategy. Organic social media marketing places a strong emphasis on building a
community and establishing relations with customers in order to pique interest and encourage client
loyalty. A paid social media campaign is a collection of advertisements that can work together to help
you use social media to accomplish a goal or purpose.
4. SEO ( Search Engine Optimization )
SEO is the process of upgrading a website and digital content to increase its organic or "natural"
placement in search rankings. A website is more likely to be viewed by a potential consumer if it
ranks higher in search results. Effective SEO efforts need thorough keyword research as well as the
ability to develop high-quality, useful content utilizing the selected keywords. Using relevant
keywords, link-building, making your website mobile-friendly to improve user experience, and voice
search optimization are some best practices for SEO that increase conversion rate.
5. Blogging
By adding posts and blogs based around specific targeted keywords, blogging enables you to improve
the SEO of your website. Customers are more likely to find and visit your website as a result of an
online search if you do this. They keep the website up to date and offer chances for audience
engagement. You can link to reliable websites, which increases client loyalty and increases your
audience. The most important benefit of blogging is that it can strengthen your relationship with your
audience. All of this contributes to the generation of more leads and the expansion of sales.
6. Pay-Per-Click (PPC): Pay-Per-Click can convert passive buyers into potential customers who may
be ready to pay for the products. Pay-per-click is initiated when a person clicks on a certain ad and
that leads to another portal providing them with detailed information about the product or an option to
buy the one. If the consumer seeks interest in the information provided, he/she automatically makes a
buying decision.
7. Email Marketing: Email marketing helps marketers to connect with the audiences by sending
them exclusive discounts, offers and customized content. Email marketing helps in winning the
loyalty of their customers as well as increasing sales. The discounts and offers provided motivate a lot
of subscribers to keep up with the updates.
8. Video Advertisements: Video advertisements are those ads which are released before or during the
streaming of a video. The consumers get a chance to buy the product or attain additional information
about it at the end of the advertisement.
9. Network Marketing: Network marketing is engaged with person-to-person sales. It is that type of
marketing channel where the marketers influence their consumers to promote their products among
their networks or friends with a basic idea of a reward mechanism. The people associated with sales
are known as independent distributors, participants or contractors. Such people earn commissions or
rewards based on their product sales, or through sales done by recruiting new agents into the business.
This process of targeting consumers attracts early users and trendsetters.
10.Contextual Marketing: Contextual marketing helps in both promoting the product as well as
improving brand image. In this strategy, the marketers search and buy platforms which have a larger
user engagement and stand as a higher rank search portal. These platforms help the marketers to
advertise their products online.
11. Affiliate Marketing: Companies use affiliate marketing, a performance-based approach, to work
with affiliates who market their products and services using digital channels such as websites, blogs,
social media and Email marketing. Advertisers offer affiliates certain tracking codes or links and
whenever a customer clicks on the links or buys the product, the affiliate gets paid a commission or a
percentage of sales.
12.Influencer Marketing: In this form of marketing, the marketers tie up with the influencers
(people who have a substantial amount of followers on social media and prominently get higher views
on the content posted by them). These influencers promote the products on behalf of the marketers.
13. Audio Marketing: Audio marketing makes use of podcasts such as Spotify as well as smart home
assistance such as Amazon Alexa. The biggest advantage of audio marketing is people get to hear the
advertisements in the form of audio recordings while they can easily carry on with their other work.
Direct Marketing, Services Marketing, Green Marketing, Relationship Marketing.
Direct marketing communicates information about a product or business to an individual customer
without using a mass distribution channel.
Direct marketing campaigns use email, social media, telemarketing, and in-person meetings to speak
directly to consumers.
Direct marketing is a form of advertising that communicates a marketing message directly to a
potential customer. A direct marketing campaign happens through emails, social media DMs, mail-
order catalogs, promotional flyers and coupons, telemarketing, and door-to-door visits. Direct
marketing differs from other forms of advertising that use mass distribution marketing channels, such
as TV ads.
Even though a direct marketing campaign might reach millions of people, each instance of direct
marketing should feel like a one-on-one conversation between a brand and a potential customer.
To achieve this, direct marketers use personalization techniques, such as mentioning the recipient’s
name or referencing a recent action they’ve taken.
The main aim of personalized outreach is to persuade a prospect to take action. That action could be:

 Viewing a website
 Making a phone call to learn more
 Returning a postcard or form to request a quote
 Giving your name and email address
 Making a purchase
Direct marketing is a targeted form of advertising used on prospects who are determined to be likely
buyers.
Types of Direct Marketing
Here are six common types of direct marketing and examples of how marketers might use channels to
reach a target audience:
1. Email
Email marketing can be used as a direct marketing strategy. Through email, marketers send
promotional messages, announcements, and newsletters to current or potential customers. These
communications can include special offers, promo codes, or other relevant information.
Newsletters
Newsletters are regularly distributed emails that provide updates, information, and entertainment.
They serve as a consistent touchpoint between a brand and a customer, and can be segmented to
increase personalization. For example, followers of a running club on social media might receive an
email newsletter with tips for improving your speed, alongside a coupon for discounts on new
sneakers.
2. Social media
Social media marketing uses platforms like TikTok, Facebook, and Instagram to reach audiences.
Brands can send direct messages or use targeted ads to reach potential customers, leveraging a vast
user base and data-rich environment.
Social media DMs
Direct messages on social media are personalized messages sent to followers or potential customers.
They offer a direct and instantaneous line of communication, allowing brands to address specific
customer queries, concerns, or interests.
Targeted social ads
Targeted ads are tailored based on a user’s age, gender, interests, purchase and browsing history, and
other demographic factors. This allows brands to reach the right audience with the right message. For
instance, followers of Instagram influencers popular with teens might be served Facebook ads for an
acne remedy, based on the assumption that they’re more likely to be interested in the product.
3. Catalogs
Catalogs, printed or digital booklets that showcase a brand’s products, are the historic form of direct
marketing. They are typically sent to customers who have shown previous interest in products,
offering a tactile and branded way to browse.
4. Flyers, postcards, and coupons
These marketing materials can be sent physically through mail or digitally via email. They often
include information about recently launched products and services, or news of an upcoming sale or
special event.
Direct mail
Direct mail involves sending physical marketing materials, like flyers or postcards, to potential
customers.
While sometimes seen as an old-fashioned form of direct marketing, the presence of a physical
(perhaps personalized) piece of branded content in your prospect’s home can be a more persuasive
sales tool than an email sitting in their inbox.
For example, supplement brand Obvi generated a 1,052.8% return on investment with a direct mail
campaign targeting repeat purchasers who hadn’t returned to their online store in 90 days since.
5. In-person (direct selling)
In-person direct selling involves selling products or services to customers face-to-face. This allows for
immediate feedback and personal interaction, enhancing the customer’s connection with the brand.
Pop-ups
Pop-ups are temporary sales spaces that allow customers to experience products or services firsthand.
They offer a unique and engaging shopping experience, often in high-traffic areas, to reach a broad
audience.
Direct selling
Direct selling often involves personal selling tactics, such as door-to-door sales or event sales. This
approach allows for an emotional connection between the salesperson and the customer, often leading
to higher engagement.
6. Telemarketing
Telemarketing involves contacting potential customers over the phone to sell products or services.
This direct approach allows for immediate interaction and response, making it a powerful tool for
sales and customer engagement.
Cold calling
Cold outreach is a specific telemarketing strategy where businesses call large lists of potential
customers, often without prior contact. Despite being unsolicited, it can reach a broad audience
quickly and can generate leads if executed effectively.
SMS
SMS marketing involves sending promotional text messages to customers. With the rise of messaging
apps like WhatsApp and Facebook Messenger, businesses are finding new ways to reach customers
via text. For example, a brand might send a text message with a reminder about items left in a
shopping cart.
Advantages of direct marketing
Direct marketing isn’t a scattergun approach. Instead, it targets your marketing resources at people
likely to be interested in your product or service, based on information you’ve gathered about them.
Direct marketing has several other advantages:
Personal touch: You can tailor a message to make the recipient feel it’s just for them. This
personalization can increase engagement and response rates.
Cost-effective: It’s more economical to market to identified potential buyers. You’re not wasting
resources on those unlikely to be interested.
High ROI: Direct marketing can offer a high return on investment. The odds of making a sale are
higher when your customer list is already inclined toward your product or service.
Measurable: Direct marketing provides ways to track the success of each campaign. This data lets
you tweak and improve your approach with each new campaign cycle.
Disadvantages of direct marketing
While direct marketing has its advantages, it’s not without its downsides. Here are a few potential
challenges to consider:
Cost: Direct marketing can be a cost-effective way to target potential customers, but the initial outlay
for creating and launching a campaign can also be high. This includes costs for market research,
designing the marketing materials, and distribution.
Lack of social proof: Direct marketing often involves one-on-one communication between the brand
and the potential customer. This means there’s less opportunity for social proof, such as reviews or
testimonials, which can influence a buyer’s decision.
Lower reach: Direct marketing is targeted, which means it’s not always the best method for reaching
a broad audience quickly. If your goal is widespread brand awareness, there may be more effective
strategies than direct marketing.
Services Marketing
Service is the action of doing something for someone or something. It is largely intangible (i.e. not
material). A product is tangible (i.e. material) since you can touch it and own it. A service tends to be
an experience that is consumed at the point where it is purchased, and cannot be owned since it
quickly perishes. A person could go to a café one day and have excellent service, and then return the
next day and have a poor experience.
Services marketing is marketing based on relationship and value. It may be used to market a service
or a product.
Marketing a service-base business is different from marketing a product-base business.
There are several major differences, including:
1. The buyer purchases are intangible
2. The service may be based on the reputation of a single person
3. It’s more difficult to compare the quality of similar services
4. The buyer cannot return the service
5. Service Marketing mix adds 3 more p’s, i.e. people, physical environment, process
service and follow-through are keys to a successful venture.

When one markets a service business, one must keep in mind that reputation, value, delivery of
“Managing the evidence” refers to the act of informing customers that the service encounter has been
performed successfully. It is best done in subtle ways like providing examples or descriptions of good
and poor service that can be used as a basis of comparison. The underlying rationale is that a customer
might not appreciate the full worth of the service if they do not have a good benchmark for
comparisons.
The use of Marketing by Service Firms Has been limited to:

➢ Many service firms stress technical expertise, therefore have lagged in their use of marketing.

➢ Many service firms are small, marketing expertise cannot be hired.

➢ Strict licensing/legal restrictions limit competition and need for marketing.

➢ Service associations have prohibited marketing

➢ High esteem of professionals, do not need marketing. A number of professionals

have a dislike for marketing and a lack of understanding.

Characteristics of Services
Intangibility
They cannot be seen, handled, smelled, etc. There is no need for storage. Because services are
difficult to conceptualize, marketing them requires creative visualization to effectively evoke a
concrete image in the customer’s mind. From the customer’s point of view, this attribute makes it
difficult to evaluate or compare services prior to experiencing the service
Prior to purchase, much service promotion must rely on performance attributes which can only be
measured after a purchase experience (tangible goods have search qualities). Also professional
services have credence qualities.
Perishability
Unsold service time is “lost”, that is, it cannot be regained. It is a lost economic opportunity. For
example, a doctor that is booked for only two hours a day cannot later work those hours— she has lost
her economic opportunity. Other service examples are airplane seats (once the plane departs, those
empty seats cannot be sold), and theatre seats (sales end at a certain point).
Inseparability
Leads to direct (short) channels of distribution. In some cases it is possible to use intermediaries,
travel agents, ATMs etc. Close provider-customer relationship—employee interpersonal skills very
important. “relationship managers”, quality of relationships determines the probability of continued
interchange with those parties in the future.
Customers may become loyal to a particular employee as opposed to the company, prevalent in the
advertising industry. Therefore, must make sure that multiple employees are capable of performing
the same tasks.
7 Ps of Services Marketing mix
Product

 Product design
 Product positioning
 Product name and branding
 Packaging and labeling
 Breadth and depth of product line
 Level and type of customer service
 Product warranty
 New product development process
 Product life cycle strategies
Price

 Manufacturer, wholesaler and retailer selling prices

 Terms and conditions
 Bidding tactics
 Discount policies
 New product pricing (Skim Vs. Penetrating pricing)
Promotion (marketing communications)

 Advertising
  Sales force policies
 Direct marketing (mail, catalog)
 Public relations
 Price promotions – for the consumers and the channel
 Trade shows and special events
Place (distribution channels)

 Direct Vs. Indirect channels

 Channel length
 Channel breadth (exclusive, selective or intensive)
 Franchising policies
 Policies to ensure channel coordination and control
People

➢ Employees

 Recruiting
 Training
 Motivation
 Rewards
 Teamwork

➢ Customers

 Education
 Training
Physical evidence

 Facility design
 Service ambience
 Equipment
 Signage
 Employee dress
 Point-of-sale displays
 Other tangibles (e.g. business cards)
Process

 Flow of activities
 Service script (number of steps)
 Customer involvement
Green Marketing
Green marketing is the practice of promoting products or services that are environmentally friendly or
have a positive impact on the planet. It involves incorporating sustainability principles into various
aspects of marketing, such as product design, packaging, messaging, and promotion. Some green
marketing strategies include:

 Creating eco-friendly products

 Using eco-friendly product packaging made from recycled materials
  Reducing greenhouse gas emissions from production processes
 Adopting sustainable business practices
 Marketing efforts communicating a product's environmental benefits
 Investing profits in renewable energy or carbon offset efforts
Green marketing is the marketing of products that are presumed to be environmentally safe. It
incorporates a broad range of activities, including product modification, changes to the production
process, sustainable packaging, as well as modifying advertising. Yet defining green marketing is not
a simple task Other similar terms used are environmental marketing and ecological marketing.
Green, environmental and eco-marketing are part of the new marketing approaches which do not just
refocus, adjust or enhance existing marketing thinking and practice, but seek to challenge those
approaches and provide a substantially different perspective. In more detail green, environmental and
eco-marketing belong to the group of approaches which seek to address the lack of fit between
marketing as it is currently practiced and the ecological and social realities of the wider marketing
environment.
Green marketing is becoming more popular as more people become concerned with environmental
issues. Indeed, in 2020, more than three quarters of consumers (77%) cited a brand's sustainability and
environmental responsibility as very important or moderately important in their choice of brands.
Benefits of Green Marketing
With green marketing, companies have an excellent opportunity to change our planet for the better
and support people who are aware of the situation to help the environment. By creating sustainable
products, companies want to reduce the negative impact of waste products on our nature. Going green
enables, you to win the trust and loyalty of your customers. It helps you:

 stand out in the increasingly competitive environment;

 reduce the negative impact of production on the environment;
 save energy, reduce the use of natural resources and carbon footprint;
 produce recyclable products;
 improve your credibility;
 enter a new audience segment;
 ensure long-term growth;
 implement innovations;
 obtain a higher revenue
8 strategies for green marketing
Here are eight green marketing techniques that an organization can use to develop a sustainable
strategy:
1. Producing sustainable products
One of the most popular green marketing techniques is producing sustainable products for consumers
to use as alternatives to non-sustainable ones. These products range from shampoos with less harmful
ingredients that more easily dissolve in water to reusable straws and water bottles.
Such products may help consumers feel better about their impact on the environment, so companies
can gain traction on the green market by providing alternative products to consumers.
2. Using sustainable materials to make products
Companies can practice green marketing by using sustainable materials to manufacture their products.
This can mean using recycled materials or other eco-friendly materials, like product packaging that is
more easily biodegradable.
For instance, a coffee company that uses compostable bags and a printing press that uses re-
manufactured ink would both be using sustainable materials to their advantage.
3. Responsible waste disposal
Practicing responsible waste disposal is a way to offset a company's impact on the environment.
Manufacturing products can result in the creation of hazardous waste materials, which often harm the
environment if they're improperly disposed of.
Companies can practice green marketing by advertising their responsible waste disposal programs as a
sustainable contribution. This is an especially effective strategy to help companies stand out from
competitors that don't employ responsible waste disposal practices.
4. Opting for electronic marketing
A small way that companies can practice green marketing is by shifting their entire marketing strategy
to digital platforms. Print materials like flyers, brochures, magazines and catalogs are costly to the
environment, especially if consumers don't recycle them properly.
Companies seeking to switch over to a fully digital strategy can use mechanisms like social media
marketing, email marketing campaigns and text marketing to reduce their ecological footprint.
5. Implementing eco-friendly energy practices
When companies switch to using renewable energy sources, like solar, wind, hydropower or
geothermal power, they can drive down manufacturing costs and make a difference environmentally.
In recent years, access to renewable energy sources has increased, and the market for harvesting
renewable energy is expected to expand in the next few decades as more nations invest in it.
Implementing eco-friendly energy practices may cause a decrease in the price of the goods and
services a company offers to consumers. If a company spends less money creating the product, it can
decrease the cost of buying that product for the consumer.
6. Using emission-minded shipping practices
Shipping goods across long distances can leave a large carbon footprint. Trucks and planes, among
other transportation methods, are some of the largest contributors to greenhouse gas emissions.
To reduce their footprint, companies can choose to ship items in bulk rather than individually, or they
can offer a green shipping option when consumers check out. When consumers opt for green shipping
options, they can choose longer shipping times or combine multiple orders into a single package to
help drive down emissions.
7. Promoting a green alliance
Companies that practice environmental solidarity with consumers are also a part of the green
marketing movement. By pledging donations to designated nonprofit or activist organizations geared
toward saving the environment in some way, companies can become part of a green alliance.
Companies looking to improve consumer perception of their brand's environmental practices often
choose this green marketing strategy as a starting point for future sustainability endeavors.
8. Investing in your community
Some companies run green marketing campaigns that show how much they invest in their local
communities. There are various ways to do this, such as sponsoring a local recycling program or
donating sustainable infrastructure, like solar panels or compost bins, to local citizens. Initiatives like
this are largely successful, as the company's image often benefits as much as local citizens do.
Relationship Marketing.
In recent years, market competition has only grown more severe, making it difficult to generate stable
profits and differentiate oneself in the long-term. At the same time, with the spread of social media,
consumers now gather information and make purchase decisions on their own. From this, you can see
a need to put in extra effort on maintaining the relationship between customer and company.
That’s where relationship marketing comes in. This marketing strategy aims to maximize the lifetime
value of each customer by building good relationships with them and encouraging repeat purchases.
Relationship marketing is a marketing strategy with the goal of maximizing profits by building strong
relationships with customers and increasing their satisfaction with products and services.
This strategy depends on customer relationships to lead business growth, as opposed to expanding the
market share of the company's products and services. It aims to build customer loyalty through
repeated transactions and word-of-mouth diffusion.
Putting the customer's needs first, relationship marketing not only provides products and services that
solve their unique problems, but also builds long-lasting relationships by following up with them after
their purchase.
The growing importance of customer relationships
Changes in consumer behavior
With the popularization of the Internet and smartphones, consumers can now easily find information
on products or services on their own. As a result, the number of consumers who wait for information
to be given to them by sellers, which was common in the past, has decreased, and consumers who take
active steps to gather information on their own have become the mainstream. This change is a major
reason why relationship marketing has become so important.
Changes in the way consumers gather information
Changes in consumer behavior have made it possible for consumers to gather as much information as
they need, and this has led to a demand for more transparent information when considering a
purchase. The buying process has also lengthened, as customers take more time to go over each piece
of content and continue searching until they can make a rational decision based on all the facts. This is
why relationship marketing, which emphasizes the building of long-term relationships rather than fast
sales, has received more attention over the years.
Because of these changes, the market is now centered around the consumer. This situation has created
the need for relationship marketing, which considers the customer's perspective first and foremost.
Increased demand for personalization
Now that consumers have easy access to info online, the traditional approach of treating all customers
the same way and providing them all with the same information is considered to be less effective. It
has become necessary to provide personalized information based on data.
You now need to break your list of prospects and existing clients down into segments, and send
content that is tailored to their interests and needs. One of the principle ideas in relationship marketing
is to treat each customer as an individual, and personalized content is just one way of achieving this.
Benefits of relationship marketing
1. Increased life-time value per customer
Life-time value (LTV) refers to the predicted net profit of an ongoing relationship between a customer
and a business. A maximized LTV is considered a huge benefit of relationship marketing. This is
achieved as there will be more repeat purchases from existing clients, and you will have to invest less
costs into new customer acquisition.
2. More repeat purchases + lower CPA
If you can gain the trust of your customers, they will be less likely to waver and switch to a
competitor's products, and will repeatedly purchase from you. If you can develop products and a
customer experience that keeps everyone satisfied, you can avoid customer churn as well.
3. Business growth through word of mouth
These days, when everyone is on social media and look to their peers or influencers to learn what’s
trending, word of mouth advocacy is very powerful. If you can turn your customers into loyal
customers - or better yet, fans - they will act as free advertisement to promote your products and
services in their circles, helping you to attract new customers.
4. Larger average deal size
By cultivating loyal customers through relationship marketing, you can expect to increase the average
deal size and the amount spent per year, thereby maximizing the amount spent per customer.
Relationship marketing strategies
Database marketing
Database marketing aims to increase sales by utilizing customer information such as purchase history,
demographics, and survey data, to provide a more personalized experience. The purpose of database
marketing is not to develop new customers, but rather to build stronger relationships with existing
clients, and it is a very effective method of relationship marketing.
By focusing on the needs of the customer, it is possible to provide detailed support, increase the
likelihood of receiving orders by approaching customers as their needs arise, and reduce work time by
centralizing customer data. Ultimately, database marketing leads to a more efficient marketing~sales
funnel.
Account-based marketing (ABM)
Account-based marketing (ABM) is arguably the most popular B2B marketing strategy. ABM
involves pinpointing the highest-value clients and targeting all your marketing messages, content,
sales efforts, etc. towards them. By seeking quality rather than quantity of customers, you can focus
your resources on companies with high LTV potential, thereby expanding your marketing ROI.
Since your target is narrowed down to a select few groups, you need only focus on their data, making
it easier to keep track of which prospects are active and engaging with your brand online.
One-to-one marketing
One-to-one marketing is a hyper-personalized strategy. Communication is all based on the customer’s
unique values, interests, and situation. The main advantage of this approach is that it can improve the
cost-effectiveness of marketing by sending out targeted information, while also improving the
relationship with customers by providing a better experience.
Since content is not sent out to your entire list at once, you need to spend time planning different
messages for each target, which can be time-consuming, but also highly effective.