CU-BSC.TTM-SEM-IV-B2B Marketing

Figure 6.21Popularity with Google Trends Its popularity increased slowly for 4 years (from 2007 to 2011) and faded away the following 4 years (Interest < 20). As we saw before, New Concepts are difficult to popularize 6. Old Product New Concept – Not east to copy What can we say about Netflix that you don’t know yet? Netflix was a similar product to Kindle: they didn’t offer new content (at the beginning). Figure 6.22NETFLIX What Netflix initially offered was an Old Product (movies that already existed), with a New Concept, but it was Not Easy to Copy (you need powerful servers, contracts with films producers…). Let’s analyze its Product Life Cycle with Google Trends 101 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 6.23Product Life cycle with Google Trends As you can appreciate, its Popularity has grown little by little for 10 years, since it is a New Concept. In this example, the next years will be interesting:  Disney has just launched its Disney plus. Moreover, Netflix is now investing in new self-produced content.  Maybe because now it is not that difficult to Copy their Concept (by big companies such as Disney) and, in that case, if that Concept is not New anymore, they will need New Products. 6.4 SUMMARY ● The product life cycle is the journey of a product from when the product is in development to after it has been removed from the market. ● A product is created with an idea, and within the needs of modern business, it cannot go further until it undergoes research and development (R&D) and is found to be feasible and potentially profitable. ● Introduction is the first phase of the product life cycle once it is developed. During this stage the organization will be able to sense how consumers react to the product and can have alters in the product accordingly. ● The attention of the product among the consumer gets increased and attains the stage of having good sales volume is in the growth stage. 6.5 KEYWORD ● Life Cycle: A life cycle is a course of events that brings a new product into existence and follows its growth into a mature product and eventual critical mass and decline. 102 CU IDOL SELF LEARNING MATERIAL (SLM)

● Product: a product is an object or system made available for consumer use; it is anything that can be offered to a market to satisfy the desire or need of a customer. ● Growth: The process of growing and developing. ● Maturity: The maturity stage of the product life cycle shows that sales will eventually peak and then slow down. During this stage, sales growth has started to slow down, and the product has already reached widespread acceptance in the market, in relative terms. Ultimately, during this stage, sales will peak. ● Decline: The decline stage of the product life cycle is the terminal stage where sales drop and production is ultimately halted. Profitability will fall, eventually to the point where it is no longer profitable to produce, and production will stop. ● Saturation: this is where customers have other preferences that are cheaper and better. When saturation occurs, a product starts to decline. It is the stage where a company designs a particular product to meet specific demands of the market. 6.6 LEARNING ACTIVITY 1. Describe the life cycle of a tourism product of your district with the help of a chart. ___________________________________________________________________________ ___________________________________________________________________________ 2. Identify few tourism places and write down them on few slips of paper. Each one takes a slip and identifies the product stage in which it is situated ___________________________________________________________________________ ___________________________________________________________________________ 3. Discuss about financial investments and revenue generated in each stage of Product Life Cycle ___________________________________________________________________________ ___________________________________________________________________________ 4. Have a Brain Storming session about the importance of knowing in what stage the product is in ___________________________________________________________________________ ___________________________________________________________________________ 103 CU IDOL SELF LEARNING MATERIAL (SLM)

5. Discuss another example of 3 parameter of Product Life Cycle proposed by Consuunt ___________________________________________________________________________ ___________________________________________________________________________ 6.7 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. What is the Product Life Cycle? 2. What is growth in PLC? 3. Explain the Maturity stage with an example. 4. Why is it important to understand the product life cycle? 5. Which stage of Product Life Cycle should be long enough to get more profits and why? LongQuestions 1. Explain the stages of the Product Life cycle. 2. How will the stage of a product be identified? 3. How does identifying a Product Stage will help in cutting costs and leveraging Marketing Techniques for the company? 4. Give some easy and so easy examples of New Product Old Concept 5. List out in detail about the advantages of Product Life Cycle B. Multiple Choice Questions 1. The _______ is the journey of a product from when the product is in development to after it has been removed from the market. a. Product Life Cycle b. Product Strategy c. Product Marketing d. Product Development 104 CU IDOL SELF LEARNING MATERIAL (SLM)

2. Which of the following brings the attention of the product among the consumer and attains the stage of having good sales volume? a. Introduction b. Growth c. Maturity d. Decline 3. Which of the following stage of Product Life Cycle deals with products reaching the saturation point? a. Introduction b. Growth c. Maturity d. Decline 4. Why does a company need to know the life-cycle stages of its products? a. To prevent imitators from entering the market b. To find new uses for the product c. To predict the length of the life cycle d. To adapt its marketing strategies 5. In Product Life Cycle stages, the stage in which sales and profits decrease is called a. Introduction b. Growth c. Maturity d. Decline Answers 1-a, 2- b,3- c,4- d,5-d 105 CU IDOL SELF LEARNING MATERIAL (SLM)

6.8 REFERENCES Reference Books ● Saxena R, Marketing Management, Tata McGraw Hill ● Transforming B2B Marketing to Meet the Needs of the Modern Buyer, by Carlos Hidalgo ● Matthyssens, Paul &Kirca, Ahmet & Pace, Stefano. (2008). Business-to-business marketing and globalization: Two of a kind. International Marketing Review. 25. 481- 486. 10.1108/02651330810904044. Websites ● https://www.businessnewsdaily.com/5000-what-is-b2b.html ● https://www.investopedia.com/terms/b/btob.asp ● https://blog.hubspot.com/marketing/b2b-marketing 106 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT-7 CHANNELS OF DISTRIBUTION -I STRUCTURE 7.0 Learning Objectives 7.1 Introduction 7.2 Marketing Channels Participants 7.3 Physical Distribution 7.3.1 Importance of Physical Distribution 7.3.2 Steps involved in Processing Physical Distribution 7.3.3 Components of Physical Distribution 7.4 Customer Service 7.4.1 Importance of customer Service in B2B 7.5 Summary 7.6 Keywords 7.7 Learning Activity 7.8 Unit End Questions 7.9 References 7.0 LEARNING OBJECTIVES: After studying this unit, you should be able to  Explain the characteristics of marketing channels  Apply the skill set required for customer service  Identify the organization’s nature on customer retention 7.1 INTRODUCTION In order to communicate something to a person or a group or people who are at a distance we always rely on some medium. Those mediums can be phone, TV channels, Newspaper, Internet, social media, etc. The clarity of the communication depends on the channel we choose, as the recipient should be very much aware about the topic we chose to communicate. We prefer call over text message, Video call over phone call depending upon the message we wanted to communicate. 107 CU IDOL SELF LEARNING MATERIAL (SLM)

7.2 MARKETING CHANNELS PARTICIPANTS Marketing channel participants are one of the “4 Ps” that helps to expand the market. ● Product, ● Promotion, ● Price, ● Placement. It is a distribution method of products, where the company can ship their goods or services from one person to another through different mediums. In Simple it is to “build a connection between companies to customers”. It is one of the useful methods for developing a productive and strategic marketing strategy. The marketing channel is one of the key drivers for strategies around the marketing mix, i.e. product, price, place and promotion. Channel Flow and Structure The channel flow is a flow which relates different agencies involved in the distribution of goods and products. The channel structure is referred to as the combination of different channel members in achieving organization’s marketing mix strategy. Channel Participants The marketing channel consists of various players like manufacturers, producers, wholesalers and retailers. Manufacturers and producers develop their own marketing channel to reach the end user. However, not all manufacturers have the expertise in managing channel participants. Therefore, they need wholesalers and retailers for distribution of goods. There are three types of wholesalers: merchant wholesalers, agents and producer’s branch offices. Merchant wholesalers usually have good capacity of storing and managing goods. In contrast, agent works as middlemen for producers and end users. Retailers are responsible for selling goods and products to end users. Importance of Channel Participants The major role of channel participants is to make the distribution and selling of goods and products efficient. Intermediaries provide manufactures opportunities which for them financially would not be feasible. Intermediaries provide greater market exposure, market intelligence, economies of scale and operational knowledge. 108 CU IDOL SELF LEARNING MATERIAL (SLM)

Managing Channel Conflict Conflict among channel partners adversely affects the distribution of goods and products. It is important for the channel managers to understand the nature of conflict and come with solution, which strengthens the distribution network. However, all issues in the channel cannot be considered as a conflict. The channel manager needs to assess the frequency of disagreement, level of disagreement and importance of issue. The top three reasons for an emergence of conflict among channel partners are as follows. The first reason is the different business objectives of channel partners (producers, wholesalers and retailers). The other reason is a narrow vision of each channel partner, i.e. they do not view channel on whole but only at their level. Conflict between the channel partners can be resolved by improving communication among themselves and also with producer. Another way of solving conflict is by directing all channels to a single objective of creating customer delight. Multi-Channel Marketing System Multi-channel marketing system has become a prominent way through which goods and products are delivered to end users. The multi-channel system enables the companies to deliver goods and products to end users as per their preference. The delivery of goods can be through store, website, mail order, etc. Franchise Another innovation in the marketing channel system is the franchise. Franchise enables brand recognition, standardization of operation structure, access to learning curve and less financial investment. 7.3 PHYSICAL DISTRIBUTION In every business, there needs to be some planning for distributing finished goods from the operation to the consumer. The process of physical distribution takes place among the wholesaling and retailing distribution channels such as ● Customer Service ● Material Handling ● Inventory Control ● Order Processing ● Warehousing Transportation Physical distribution is a part of the “Distribution Process”. It has the best role in marketing as the process of physical distribution attracts the organization management as the process itself is considered as one of the decision-making criteria. 109 CU IDOL SELF LEARNING MATERIAL (SLM)

It is a process of coordinating the workflow of goods, services and also information among the members of the organization or the supply chain. Among all the processes in logistics, physical distribution is considered a major task involved in planning, implementation and controlling the physical flow of the materials, identifying the goods and collecting related information from the points of origin to the point of consumption to meet the customer requirements at a profit. A well organised Physical distribution helps to improve customer satisfaction as it ensures reliability, efficiency and less hassle. Physical distribution manages the time and place, utilising it to the maximum to improve the value of the products by delivering the product or services to the right customer at the right time and right place. It generally has two dimensions they are: ● The flow of information from the individual customer or organizer to producer ● The flow of materials from the producer to the consumer or the user. The process is taken forward by a channel, which is a passageway that allows the products or services to get transferred. It is understood to be a process of exchanging, and the market channel creates relationships, and also creates customer value in acquiring, consuming and disposing of the products and services. The distribution channel is the movement of goods and services between the point of production and the point of consumption through organization that performs a variety of marketing activities. The major participants in the distribution channel are; producers, intermediaries and consumers. 7.3.1 Importance of Physical Distribution The process of physical distribution varies from organization to organization, that is associated with the nature of the products and the necessity of customer satisfaction. As discussed earlier it should be strategically planned according to the products in locations to support the order shipments and coming up with a consistent and rapid manner to move the product enables companies to be successful in dynamic markets. The Process is managed with a system approach and considers key interrelated functions to have efficient movement of the products. The processes are interrelated because any time a decision is made in one area it gets reflected in the process of the other side. The importance of physical distribution becomes significant when the manufacturers and market are far from each other. The following points highlight the importance of physical distribution ● Execute physical flow of product from the manufacturer to the customers. ● Grant time and place for the product ● Build customer for the product ● Cost reduction 110 CU IDOL SELF LEARNING MATERIAL (SLM)

● Fulfill the demand of the product in the market so that business takes place 7.3.2 Steps involved in Processing Physical Distribution: To design a physical distribution system for a product, following steps need to be followed − ● Step 1 − Defining distribution objective and services required for product distribution ● Step 2 − Articulating customer requirement ● Step 3 − Comparing the strategy with market competitors ● Step 4 − Managing the cost of distribution to decrease cost without compromising on the quality of service ● Step 5 − Building physical distribution system that is flexible for implementation of changes, if required Designing of a physical distribution system involves these steps. It is necessary to consider all steps involved for smooth distribution of goods and services. 7.3.3 Components of Physical Distribution System Physical distribution can be controlled and monitored by its different components. Each component should be evaluated and managed in order to accomplish physical distribution without any problems. The following are the different components of the physical distribution system − ● Planning of physical distribution system ● Storage planning in plant ● Logistics ● Warehousing on field ● Receiving ● Handling ● Sub distribution of product ● Management of inventory at various levels ● Execution of order ● Accounting transactions ● Communication at different levels 111 CU IDOL SELF LEARNING MATERIAL (SLM)

7.4 CUSTOMER SERVICE Customer service has become one of the major factors to elevate the image of any organization among the market, the consumers need some reliability and want to feel like a friend rather than just a customer, so with good customer service the organization always stands as the best. It is the act of providing timely responses in an empathetic way to the customers when they are in need. B2B customers often rely on a company’s product for their business’s health. Customer service is very important in B2B as the product and service in B2B is comparatively complex and of higher value. Figure 7.1 Customer Service In B2b 7.4.1 Importance of Customer Service in B2B 1) B2B products and services tend to be more complex B2B solutions are intended to handle business processes and bottlenecks, so they are often quite complex and more complicated than products designed for consumers. This also means that issues encountered in business are often more difficult and take longer to resolve. 112 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 7.2 Handling Business Process 2) Developing long-term relationships is critical While consumer purchases are often short-term sales and tend to be motivated by personal wishes (think a new pair of shoes or candy bar), business purchases impact the business itself. Some examples include accounting software or consulting services. As a result, the relationship a vendor and business customer build is essential to customer satisfaction and retention. Figure 7.3 Long Term Customer Relations 3) B2B purchases usually carry a high price tag In the business-to-business world it's not just the initial purchase price, it's the cost for maintenance or renewal, and the indirect costs of the product or service on the business output. It goes without saying that when you pay more, you expect more. 113 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 7.4B2B Purchases 4) B2B interactions carry a higher level of commitment Because there is a higher level of complexity and a longer selling cycle in B2B, when businesses make a purchase, it's typically a major commitment. This can include a contract, a long training/implementation period, or a change in how they do business. When a company makes a purchase decision they usually don't expect to repeat the process any time soon. Figure 7.5 B2B Contract Case Study Role of Distribution Channels in Tourism Promotions Distribution channels play a very important role in the marketing of the products and the services offered by the tour operators to their customers. It is mostly associated with the selection of the appropriate channels as well as their operations in order to communicate effectively and efficiently with the target markets and also with the suppliers both of which play a significant role in the development of the tourism business (Aldebert, Dang and Longhi, 2011). 114 CU IDOL SELF LEARNING MATERIAL (SLM)

Distribution systems can involve a third party to conduct the interactions of the business contract or may even involve direct interactions which may include online communication mediums. As it is very crucial for the tour operators to make appropriate choice of distribution so as to achieve its objectives successfully, it is hence important for the tour operators to consider the following factors while making a decision regarding the tour operators Direct Distribution Channels – They involve direct interaction and the sales also takes place by the means of direct contact with the potential customers. Some of the advantages associated with the same are-  As direct communication takes place hence it is less time consuming  It is flexible in nature and hence changes can be included as and when required  As there is no middle men or third party involved hence no commission is required to be paid for the same and hence it results in increased profits hence they are comfortable and secured regarding the transactions  As the tour operators can exert greater control But the disadvantages can be the fixed cost associated with the direct distribution which have to bear the organization for the distribution. The tour operators have to give fixed margin to the distributors at the end of the month which is the return of investment for the distributors. Indirect Distribution Channels – It involves one or more intermediaries in order to conduct the transactions. It provides the following benefits to the customers – less costly, provides more variety, professional consultation and also involve a system of single payment. But certain disadvantages can be the less responsibilities for the distributors. As they know they will not get any fixed return apart from the commission so they will do their duties will a less effort. The most recommended system will be the direct channel which involves the permanent distributors for the tour operators. They will give their best performances to maximize the reach and availability due to the sound return on investment at the end of the specific period. They are very much aware of the business process that the tour operator will only renew their deals if they can give more business turnover to the tour operators. As a result the business of the tour operator will increase. Questions: 1. Evaluate the suitability of different methods of distribution used to sell a holiday for different types of tour operator and recommend the most appropriate for your tour package. 115 CU IDOL SELF LEARNING MATERIAL (SLM)

7.5 SUMMARY ● In every business, there needs to be some planning for distributing finished goods from the operation to the consumer. ● The marketing channel is one of the key drivers for strategies around the marketing mix, i.e., product, price, place and promotion. ● The major role of channel participants is to make the distribution and selling of goods and products efficient. ● Multi-channel marketing has become a prominent way through which goods and products are delivered to end users. ● Customer service has become one of the major factors to elevate the image of any organization among the market, ● The process of physical distribution varies from organization to organization, that is associated with the nature of the products and the necessity of customer satisfaction. 7.6 KEYWORD ● Distribution Channel: A distribution channel is a chain of businesses or intermediaries through which a good or service passes until it reaches the final buyer or the end consumer. Distribution channels can include wholesalers, retailers, distributors, and even the Internet. ● Customer service: Customer service is the provision of service to customers before, during, and after a purchase. The perception of success of such interactions is dependent on employees \"who can adjust themselves to the personality of the guest\". ● Supply Network: A supply network is a pattern of temporal and spatial processes carried out at facility nodes and over distribution links, which adds value for customers through the manufacturing and delivery of products. 7.7 LEARNING ACTIVITY 1. Form into four groups of Product, Promotion, Price and Placement. Discuss about the importance of each ___________________________________________________________________________ ___________________________________________________________________________ 2. Enact a play on physical distribution of a product 116 CU IDOL SELF LEARNING MATERIAL (SLM)

___________________________________________________________________________ ___________________________________________________________________________ 3. Describe about the process of Physical distribution with the help of a chart ___________________________________________________________________________ ___________________________________________________________________________ 4. Give some Customer Service Problems to a group of 3 people and ask how will they solve them ___________________________________________________________________________ ___________________________________________________________________________ 5. Have a brain storming session on Channel Participants with importance and management of Channel conflicts ___________________________________________________________________________ ___________________________________________________________________________ 7.8 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. What is a channel flow? 2. What is the importance of Channel flow? 3. What is a Multi-Channel Marketing System? 4. What are the different levels in Physical Distribution System? 5. State the importance of Physical Distribution System? LongQuestions 1. Explain marketing channels. 2. Explain Physical distribution. 3. What are the components of physical distribution system and explain each of them in detail? 4. Explain about the importance of Customer Service in B2B? 117 CU IDOL SELF LEARNING MATERIAL (SLM)

5. Who are Channel Participants explain in detail? B. Multiple Choice questions 1. The ________ is one of the key drivers for strategies around the marketing mix, i.e. product, price, place and promotion. a. marketing channel b. Sales c. Service providers d. Consumers 2. The major role of _______ is to make the distribution and selling of goods and products efficient. a. Customer service b. channel participants c. B2B d. Marketing 3. _________ has become a prominent way through which goods and products are delivered to end users. a. Customer service b. Multi-channel marketing c. channel participants d. B2B 4. __________ has become one of the major factors to elevate the image of any organization among the market. a. Customer service b. Multi-channel marketing c. channel participants d. B2B 5. The process of ______ varies from organization to organization, that is associated with the nature of the products and the necessity of customer satisfaction. a. Customer service b. Multi-channel marketing c. physical distribution d. B2B Answers 118 CU IDOL SELF LEARNING MATERIAL (SLM)

1-a, 2-b, 3-b, 4-a, 5-c 7.9 REFERENCES Reference Books ● Saxena R, Marketing Management, Tata McGraw Hill ● Transforming B2B Marketing to Meet the Needs of the Modern Buyer, by Carlos Hidalgo ● Matthyssens, Paul &Kirca, Ahmet & Pace, Stefano. (2008). Business-to-business marketing and globalization: Two of a kind. International Marketing Review. 25. 481- 486. 10.1108/02651330810904044. Websites ● https://www.businessnewsdaily.com/5000-what-is-b2b.html ● https://www.investopedia.com/terms/b/btob.asp ● https://blog.hubspot.com/marketing/b2b-marketing 119 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT-8 CHANNELS OF DISTRIBUTION -II STRUCTURE 8.0 Learning Objectives 8.1 Planning 8.1.1 Characteristics of Planning 8.1.2 Importance of Planning 8.1.3 Market Planning 8.2 Organizing 8.2.1 Characteristics of Organizing 8.2.2 Process of Organizing 8.2.3 Importance of Organizing 8.3 Controlling Selling Function 8.4 Summary 8.5 Keywords 8.6 Learning Activity 8.7 Unit End Questions 8.8 References 8.0 LEARNING OBJECTIVES After studying this unit, you should be able to ● Explain the purpose of planning ● Describe organizing for any business ● State the purpose of Selling function 8.1 PLANNING One of the fundamental functions of the management that is involved to decide beforehand is planning. It deals with the process of how to start, how to proceed and where to change and what to do if something happens. It is an intellectual process that lays down on an organization’s objectives. It sketches down the process to attain the goal. 120 CU IDOL SELF LEARNING MATERIAL (SLM)

Planning is always the first and foremost thing to do before any action takes place. It helps to understand the future and decide in advance regarding how to deal with the situation that we might come across. Planning involves both logical and rational thinking. 8.1.1 Characteristics of Planning Figure 8.1 Planning B2B 1. Managerial function: Planning is a first and foremost managerial function that provides the base for other functions of the management, i.e.organising, staffing, directing and controlling, as they are performed within the periphery of the plans made. 2. Goal oriented: It focuses on defining the goals of the organisation, identifying alternative courses of action and deciding the appropriate action plan, which is to be undertaken for reaching the goals. 3. Pervasive: It is pervasive in the sense that it is present in all the segments and is required at all the levels of the organisation. Although the scope of planning varies at different levels and departments. 4. Continuous Process: Plans are made for a specific term, say for a month, quarter, year and so on. Once that period is over, new plans are drawn, considering the organisation’s 121 CU IDOL SELF LEARNING MATERIAL (SLM)

present and future requirements and conditions. Therefore, it is an ongoing process, as the plans are framed, executed and followed by another plan. 5. Intellectual Process: It is a mental exercise at it involves the application of mind, to think, forecast, imagine intelligently and innovate etc. 6. Futuristic: In the process of planning we take a sneak peek of the future. It encompasses looking into the future, to analyse and predict it so that the organisation can face future challenges effectively. 7. Decision making: Decisions are made regarding the choice of alternative courses of action that can be undertaken to reach the goal. The alternative chosen should be best among all, with the least number of the negative and highest number of positive outcomes. Planning is concerned with setting objectives, targets, and formulating plan to accomplish them. The activity helps managers analyse the present condition to identify the ways of attaining the desired position in future. It is both the need of the organisation and the responsibility of managers. 8.1.2 Importance of Planning ● It helps managers to improve future performance, by establishing objectives and selecting a course of action, for the benefit of the organisation. ● It minimises risk and uncertainty, by looking ahead into the future. ● It facilitates the coordination of activities. Thus, reduces overlapping among activities and eliminates unproductive work. ● It states in advance, what should be done in future, so it provides direction for action. ● It uncovers and identifies future opportunities and threats. ● It sets out standards for controlling. It compares actual performance with the standard performance and efforts are made to correct the same. Planning is present in all types of organisations, households, sectors, economies, etc. We need to plan because the future is highly uncertain and no one can predict the future with 100% accuracy, as the conditions can change anytime. Hence, planning is the basic requirement of any organization for the survival, growth and success. 8.1.3 Market Planning Market planning is the process of organizing and defining the marketing aims of a company and gathering strategies and tactics to achieve them. A solid marketing plan should consist of the company’s value proposition, information regarding its target market or customers, a comparative positioning of its competitors in the market, promotion strategies, distribution channels, and budget allocated for the plan. All relevant teams in the organization should refer to the marketing plan. 122 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 8.2 Marketing Plan 8.2 ORGANIZING Organizing is the second key management function, after planning, which coordinates human efforts, arranges resources and incorporates the two in such a way which helps in the achievement of objectives. It involves deciding the ways and means with which the plans can be implemented. It entails defining jobs and working relationships, assigning different tasks associated with the plans, arranging and allocating resources, design a structure which distinguishes duties, responsibilities and authorities, scheduling activities, in order to maintain smoothness and effectiveness in operations. Once a plan has been created, a manager can begin to organize. Organizing involves assigning tasks, grouping tasks into departments, delegating authority, and allocating resources across the organization. During the organizing process, managers coordinate employees, resources, policies, and procedures to facilitate the goals identified in the plan. Organizing is highly complex and often involves a systematic review of human resources, finances, and priorities. Before a plan can be implemented, managers must organize the assets of the business to execute the plan efficiently and effectively. Understanding specialization and the division of work is key to this effort, since many of the “assets” are employees. 123 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 8.3 Organising channels 8.2.1 Characteristics of Organizing Figure 8.4 Organising channels ● Division of Labour: Work is assigned to the employee who is specialised in that work. ● Coordination: Different members of the organization are given different tasks to perform when all the tasks are put together logically and sequentially, it results in the objectives, so coordination is required. ● Objectives: Objectives need to be specifically defined. 124 CU IDOL SELF LEARNING MATERIAL (SLM)

● Authority-Responsibility Structure: For an effective authority responsibility structure, the position of each manager and executive is specified, as per the degree of the authority and responsibility assigned to them, while performing the duties. ● Communication: The techniques, flow and importance of communication must be known to all the members. 8.2.2 Process of Organizing Organizing is the core function which binds all the activities and resources together in a systematic and logical sequence. It encompasses a number of steps which are pursued to achieve organizational goals. Now, we will discuss those steps in detail: Figure 8.5 Organising channels Process 1. Identification and division of work: Organizing process begins with identifying the work and dividing them as per the plans. Basically, the work is classified into different manageable activities, to avoid redundancy, and sharing of work is encouraged. 2. Departmentalization: After classifying the work into different activities, the activities having a similar nature are grouped together. This process is called as departmentalization which facilitates specialization and forms the basis for creating departments. 125 CU IDOL SELF LEARNING MATERIAL (SLM)

3. Assignment of the task: After the formation of departments, employees are placed in different departments under a manager, called as a departmental manager. Thereafter, employees are assigned the jobs as per their skills, qualifications and competencies. For the effectiveness of the performance, the manager must ensure that there is a proper match between the job and the incumbent, i.e. the right person has to be placed at the right job. 4. Establishment of organizational hierarchy: Deployment of work is not all, the employees must be aware of whom they have to report and who can give them orders. Hence, work relationships need to be established clearly, which helps in the creation of a hierarchical structure of the organization. 5. Provision of resources to the members: Arrangement and deployment of resources such as money, materials, supplies, and machine, etc. which are important to carry out day to day operations of the organization. 6. Coordination of efforts and scheduling of activities: The final step to this process is the coordination of efforts and scheduling the activities in a logical and systematic manner so that the common objectives can be achieved effectively. 8.2.3 Importance of Organizing Organizing is integral to management as it facilitates the smooth functioning of the enterprise. The importance of organizing is as under: Figure 8.6 Importance of Organising ● Advantage of Specialization: Organizing helps in the classification of jobs systematically amongst the workforce, which helps in the reduction of workload, as 126 CU IDOL SELF LEARNING MATERIAL (SLM)

well as improved productivity. This is because the organization will get the benefit of specialization wherein workers will perform specific work on a regular basis, according to their competency. ● Describes work relationships: The definition of work relationships describes the flow of communication and determine the superior-subordinate relationship. This removes confusion and chaos, in getting orders and instructions. ● Effective utilization of resources: Organizing function ensures the best possible utilization of resources whether it is human, material, financial or technical. This is because jobs are assigned to the employees which avoid overlapping and duplication of work. ● Adaptation to change: Organizing process helps the organization to survive and adapt the changes, by making substantial changes in the strategies, hierarchy, relationships, etc. ● Development of personnel: Organising encourages creativity in executives. Delegation of authority reduce their workload and they get time to identify new methods to perform the work. It also enables them to explore new areas for their growth and development. In a nutshell, with organizing the manager brings order out of disorder, removes confusion with respect to work and responsibility, and frames an ideal environment where all the members of the organization can work in tandem. 8.3 CONTROLLING SELLING FUNCTION Sales Management – Meaning and Definitions According to American Marketing Association, sales management is “the planning, direction and control of professional selling including recruiting, selecting, equipping, assigning, routing, supervising, paying and motivating to the personal sales force.” It is also often referred to as management of the personal selling part of a company’s marketing function. Sales is the only function in an organization that generates revenue or income for a company and hence it needs to be managed properly. The financial results of a company depend upon the performance of the sales department. There are couple of aspects observed that should be motivating for the potential sales people. The first is that sales people are ‘often the best paid people in the business and sales is often considered the fastest and surest route to top management. It is important for organizations to develop and maintain an effective sales force. This is because a sales manager is not only entrusted with managing the sales force to derive target- based sales outcomes but also perform managerial functions comprising planning the sales 127 CU IDOL SELF LEARNING MATERIAL (SLM)

efforts and organiz-ing, directing, motivating, coordinating, and controlling the sales force to achieve sales goals. Sales management operates within the periphery of marketing management. In a broad sense, marketing management decides the role of various promotional activities including personal selling. Sales management is assigned the task of managing the personal selling activities, the results of which ultimately affect the marketing department. Sales management spe-cifically contributes to achieve the marketing objectives of a firm. In fact, sales managers set their personal selling objectives and formulate the personal selling policies and strategies. They prepare the sales budget as components of marketing plans, taking in confidence the broad objectives of the marketing department. Sales management covers planning and organizing person-al selling activities. It further performs sales force recruiting, selecting, training, assigning, routing, directing, motivating, remunerating, evaluating, and controlling functions of per-sonal selling. Sales management implements the marketing plan to generate sales performance. There are four major branches (all interrelated) in successful sales management: (1) Top Level Policy Planning, which establishes a framework of policy within which the sales objectives of a com-pany or institution may be achieved, depending on an individual company’s particular situation, (2) Line and Staff Operational Plan-ning, through which procedures are established in advance, against which the quality and quantity of work may be controlled, (3) Organization, the setting up of a structure of responsibilities and normal interrelations— charting the organization, assigning responsibility, delegating authority, tracing accountability, and clarifying the character of collaboration, and (4) Administration, by which management meets planned objectives through guidance and evaluation of activity, including Sales Training, Motivation, Coordination, and Execution. Sales management methods are conditioned by the nature of individual products or product lines, and by the channels through which selling moves. Quite dissimilar problems develop in the sale of industrial and consumer goods, for instance, and within each field there are many variations depending upon whether sales are made to consumers or middlemen. There is also a wide variety in personal preference among sales managers with regard to methods and techniques of organization, motivation and plan-ning. 8.4 SUMMARY ● One of the fundamental functions of the management that is involved to decide beforehand is planning. 128 CU IDOL SELF LEARNING MATERIAL (SLM)

● Organizing is the second key management function, after planning, which coordinates human efforts, arranges resources and incorporates the two in such a way which helps in the achievement of objectives. ● Organizing is the core function which binds all the activities and resources together in a systematic and logical sequence. ● Planning is concerned with setting objectives, targets, and formulating plan to accomplish them. ● Organizing involves assigning tasks, grouping tasks into departments, delegating authority, and allocating resources across the organization. 8.5 KEYWORD ● Planning: Planning is the process of thinking about the activities required to achieve a desired goal. It is the first and foremost activity to achieve desired results. ● Decision Making: In psychology, decision-making is regarded as the cognitive process resulting in the selection of a belief or a course of action among several possible alternative options; it could be either rational or irrational. ● Organizing: Organising is the establishment of effective authority relationships among selected work, persons and work places in order for the group to work together efficiently. ● Evaluating:Evaluation is a systematic determination of a subject's merit, worth and significance, using criteria governed by a set of standards. ● Controlling:Control is a function of management which helps to check errors in order to take corrective actions. This is done to minimize deviation from standards and ensure that the stated goals of the organization are achieved in a desired manner. ● Motivating:Motivation is what explains why people or animals initiate, continue or terminate certainbehaviour at a particular time. Motivational states are commonly understood as forces acting within the agent that create a disposition to engage in goal-directed behaviour. 8.6 LEARNING ACTIVITY 1. Discuss the importance of planning during your college tour. What problems could you be possibly facing if you don’t plan accordingly ____________________________________________________________________________ ______________________________________________________________ 129 CU IDOL SELF LEARNING MATERIAL (SLM)

2. Formulate the differences between Planning and Organising in terms of Definition, Importance, Characteristics and Planningon a chart. ____________________________________________________________________________ ______________________________________________________________ 3. Using the characteristics of Planning, prepare a plan for your college tour formally ____________________________________________________________________________ ______________________________________________________________ 4. Learn about organising and Productivity tools like Trello, Microsoft Teams, Click up, Twist, Flock and prepare one for students of your class. ____________________________________________________________________________ ______________________________________________________________ 5. Have a Group Discussion about the importance of Organising. ____________________________________________________________________________ ______________________________________________________________ 8.7 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Define planning 2. State the importance of planning 3. Define organizing 4. What are the four branches of successful sales management? 5. Explain the importance of organising? LongQuestions 1. Explain the characteristics of Planning 2. What are the characteristics of organizing? 3. Describe the process of organizing 4. Explain about controlling Selling function 5. What are the characteristics of Planning? B. Multiple choice question 130 CU IDOL SELF LEARNING MATERIAL (SLM)

1. ________ focuses on defining the goals of the organization, identifying alternative courses of action and deciding the appropriate action plan, which is to be undertaken for reaching the goals. a. Planning b. Organizing c. Developing d. Customer Service 2. ______ is the second key management function, after planning, which coordinates human efforts, arranges resources and incorporates the two in such a way which helps in the achievement of objectives. a. Planning b. Organizing c. Developing d. Customer Service 3. _________ is the process of organizing and defining the marketing aims of a company and gathering strategies and tactics to achieve them. a. Planning b. Organizing c. Developing d. Market Planning 4. ________ is the only function in an organization that generates revenue or income for a company a. Planning b. Organizing c. Sales d. Marketing 5. ___________ methods are conditioned by the nature of individual products or product lines, and by the channels through which selling moves. a. Developing b. Market Planning c. Sales management d. Customer Service Answers 131 CU IDOL SELF LEARNING MATERIAL (SLM)

1-a, 2-b, 3-d, 4-c, 5-c 8.8 REFERENCES Reference Books ● Saxena R, Marketing Management, Tata McGraw Hill ● Transforming B2B Marketing to Meet the Needs of the Modern Buyer, by Carlos Hidalgo ● Matthyssens, Paul &Kirca, Ahmet & Pace, Stefano. (2008). Business-to-business marketing and globalization: Two of a kind. International Marketing Review. 25. 481- 486. 10.1108/02651330810904044. Websites ● https://www.businessnewsdaily.com/5000-what-is-b2b.html ● https://www.investopedia.com/terms/b/btob.asp ● https://blog.hubspot.com/marketing/b2b-marketing 132 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT-9 PROMOTIONAL MIX STRUCTURE 9.0 Learning Objectives 9.1 Introduction - Promotional Mix 9.2 Importance of Promotional Mix 9.3 Sales Promotion and Publicity Strategy 9.4 Summary 9.5 Keywords 9.6 Learning Activity 9.7 Unit End Questions 9.8 References 9.0 LEARNING OBJECTIVES After studying this unit, you should be able to ● Explain the basics of promotional mix ● Identify the advertising strategy ● Differentiate sales promotion and publicity strategy 9.1 INTRODUCTION - PROMOTIONAL MIX Promotion mix is a list of channels a company chooses to help them achieve a certain goal in the market. The communication in these channels must be compelling to attain reasonable market effectiveness. So, the selected promotional mix must be: ● Captivating ● Educating ● Persuasive The promotion mixes elements you choose must be the most appropriate while developing your promotion mix strategy. 133 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 9.1 Promotion mix elements Elements of Promotional Mix The promotion mix elements enable a company to promote their products effectively to its target market segment. Based on a company’s objectives and budget it allocates resources to the right elements. These elements are Advertisement, public relations, sales promotion, direct marketing, personal selling. Let’s get to the details of each. Advertisement: It is a way companies communicate their product and services through paid commercials. Most times, a third party serves as the facilitator. So, a company gets its promotion to the third party’s platform, and the third party gets it to their viewers. However, companies shouldn’t do this randomly, they should select the platform that has their target market segment. Examples of advertisement media are television, billboard, radio, posters, mobile apps, emails, web pages. Public relations: This way companies try to promote a positive public image. This could be achieved by having promotion shows with third parties, inserting their news stories in the media, and press releases about their activities. Sales promotion: 134 CU IDOL SELF LEARNING MATERIAL (SLM)

In this element of the promotion mix marketers try to boost sales through an afore determined limited market offering. For example, flash sales, coupons, recurring sales. Clearly, there are advantages to this. While new firms can use it to draw customers to themselves. Old ones, that have achieved good market penetration, can sustain the interest of their customers via it. Direct marketing: With methods like interactive consumer websites, emails, messaging firms can persuade customers into a call to action that prompts the customer to act. These channels of direct marketing produce results that are immediately measurable cos firms instantly get updated on customers’ interest. Personal selling: Some firms feel that a direct face-to-face or over the phone interaction with their potential customers through agents like sales personnel is closer to the customer. This promotion mix element is called personal selling. It is the most traditional form of promotion. Clearly, for the face-to-face interaction, there is a significant amount of investment in time from the customer and sales representative also. So, this might be less efficient than other elements. Definition: A promotion mix is a set of different marketing approaches those marketers develop to optimize promotional efforts and reach a broader audience. The marketer’s task is to find the right promotion mix for a particular brand. Developing a promotion mix requires skills and experience in marketing. Marketers should complete various studies and gather lots of data about a particular company to come up with an effective promotion mix A promotion mix is a more expanded approach towards one of five elements of the marketing mix — Promotion. Other factors are people, product, place, and price. 9.2 IMPORTANCE OF PROMOTIONAL MIX Promotional Mix improves the effectiveness of promotional campaigns. Promotion is a crucial part of any business, so companies develop a promotion mix, putting all efforts to make promotions at the right place, at the right time, and to the right audience. It helps one get the most out of their marketing resources by optimizing their budget and saving time. It helps to segment the audience. To develop a compelling promotion mix, a company needs to identify its target audience. Potential subscribers may include various groups of people who have something in common, for example, age, gender, preferences, etc., and they all require an individual approach. A promotion mix is a key method for delivering a relevant promotion message via the most suitable channel for each segment. It improves communication with clients. Companies develop a promotion mix trying to speak their consumers’ language. If prepared correctly, it helps build trust between the brand and its 135 CU IDOL SELF LEARNING MATERIAL (SLM)

customers. This is a crucial factor in lead nurturing and customer retention. For example, automated email campaigns help achieve these goals by responding to people’s actions instantly. It gives necessary updates to customers. Some promotions, on Pinterest for example, aim to show the product from the best angle, and others, like SMS, emphasize the advantages of local services. When using a promotion mix, companies define the best ways to educate people about the products and services they provide. It makes the product stand out from the crowd. People are bombarded with all sorts of advertising at every turn. Successful companies make quality prevail over quantity, promoting their product or service at the right place and right time. Components of a Promotion Mix:  Advertising  Direct selling  Sales promotion  Public relations Advertising. This is a non-personal promotion of products and services. Marketers use advertising as a vital tool for increasing brand awareness. Advertisers show promotions to masses of people using email, webpages, banner ads, television, radio, etc. Direct selling. This is a one-to-one communication between a sales representative and a potential customer. Direct selling influences people to decide to buy certain products or services. It is one of the most effective ways of promoting your brand because the sales rep can tailor the promotion precisely to those who are most likely to make a purchase. On the other hand, this is the most expensive form of sales because companies need to pay for one person’s time. Sales promotion. This is a set of short-term activities that are designed to encourage immediate purchase. Sales promotions are a campaign that uses time-sensitive offers — sales, discounts, coupons, etc., to engage existing consumers and bring in a larger audience. Many companies make this a core component of their marketing efforts, though sometimes it’s the most annoying type of communication for people. Public relations. This type of promotional method determines the way people treat the brand. Companies using PR try to build a firm and attractive brand image by planting interesting news stories about their activities in the media. Public relations are not fully controlled by the company, though, as some reviews and webpages may negatively highlight the brand. If a company adequately solves these issues, people will reward them with positive word-of- mouth consideration. 136 CU IDOL SELF LEARNING MATERIAL (SLM)

9.3 SALES PROMOTION AND PUBLICITY STRATEGY Sales promotion is one of the elements of the promotional mix. It uses both media and non- media marketing communications for a pre-determined, limited time to increase consumer demand, stimulate market demand or improve product availability. Examples include contests, coupons, freebies, loss leaders, the point of purchase displays, premiums, prizes, product samples, and rebates It may be directed at the customer, sales staff, or distribution channel members. Sales promotions targeted at the consumer are called consumer sales promotions. Sales promotions targeted at retailers and wholesale are called trade sales promotions. Publicity is gaining public visibility or awareness for a product, service or your company via the media. It is the publicist that carries out publicity, while PR is the strategic management function that helps an organization communicate, establishing and maintaining communication with the public. This can be done internally, without the use of media. Definition: Sales promotion is a set of marketing technologies aimed to stimulate the demand in particular products and increase brand awareness. Limited in time, it creates a feeling of time-sensitiveness, generates new leads, and keeps existing customers engaged. Benefits of Sales Promotion  It helps to generate new leads. Sales promotion can boost your product image since it encourages sharing information about it within social groups related to your business. If you sell training football shoes, people keen on playing football will share the message.  Allows re-engaging with your existing audience. Once a person subscribed to a brand’s email newsletters, they will receive regular sales promotions. It is a way to keep the audience engaged and maintain a close connection with the company, which is crucial for building loyalty.  Skyrockets revenue. Sales promotions help companies to increase the number of sold goods, even though they need to lower the price to achieve that goal. Of course, merely reducing the price is not enough, people should need your product, while the discount is only another reason to make a purchase.  Increases brand awareness. Sales promotion is a way to make a name for your brand because people are more likely to talk about a company that proposes benefits and saves their money. That’s what sales promotion does. Objectives of Sales Promotion Although the main goal of sales promotion is to increase demand in a particular product, you can reach several important goals. Understanding them will help you create an effective promotion strategy. 137 CU IDOL SELF LEARNING MATERIAL (SLM)

1. Launch a new product. If you're going to expand and turn your small coffee shop into a bakery, you need to reach new market segments. You can attract new customers by offering a free cookie with each cup of coffee or suggest visitors set their own price once in a while. 2. Attract new clients. This objective should be your long-term goal since it allows your business to grow. Your potential clients are likely your competitors' customers, so analyzing their product and benefits, you can offer something more valuable. 3. Stay competitive. Researching and analyzing your competitors will not only help you attract new clients but constantly improve your product and customer service. 4. Make existing customers buy more. It's always easier to make an existing customer buy more than attract new clients. Provide each client with a personalized approach — it will help you build customer loyalty. As a result, clients will promote your brand organically. 5. Sell during the off-season. Goods like swimwear, boats, tents, air conditioners, refrigerators are definitely more popular in summer but you should consider special strategies to sell them throughout the year. Offer time-limited discounts, \"1+1=3\" campaigns, and other marketing tricks. 6. Run clearance campaigns. They're especially popular before summer and winter. As dealers need to make room for a new collection, they often run total clearance campaigns when users can buy goods from old collections at extremely reduced prices. Types of Sales Promotions There is a variety of ways to run a successful sales promotion, but let’s focus on some most frequently used ones, using a cup of coffee as an example.  Price deal. It is a temporary cost reduction, for instance, 20% off for a coffee for a week.  Loyalty reward program. This means that customers collect points or credits when they buy coffee. If they get 10 points, for example, they will have one coffee for free.  Bonus-pack deal. It means that a customer can get more products paying the original price. For instance, they pay a dollar for one cup of coffee and get free candy, which gives some positive emotions and makes them come back in the future.  Giveaways. These tactics aim to increase brand awareness. It means giving some items for free in exchange for personal information to use in further marketing. For example, offer a free cup of coffee in exchange for a phone number, which you can use for many purposes: promoting new sales, sharing updates and news with short text messages, etc.  Coupons. You can sell coffee for the Marked Price and give a coupon, which will make the next purchase 5% cheaper. 138 CU IDOL SELF LEARNING MATERIAL (SLM)

 Mobile couponing. It stands for coupons received on mobile phones via SMS. To get a discount, a customer needs to show the coupon on their smartphone.  Sampling. Choosing this promotion type, companies give a sample of the product; for instance, the first cup of coffee to promote a new taste. Definition of Publicity Strategy or Marketing Strategy A Marketing Strategy is the long-term planning of business objectives that the company wants to achieve. For these to be achieved it is important to choose well the specific actions to consolidate the reputation of products and services or increase sales in the market. Utilizing opportunities is vital to find the target market and to be able to make customers loyal to the organization so that the positioning of the company gets stronger Advantages of implementing Marketing Strategies  Increased sales  Creating sustainable growth for the company  Understanding what your customers want  You will meet the needs and exceed the expectations of the customers  You will strengthen the relationship with the target market  You will build the brand in the consumer’s mind 9.4SUMMARY  A promotion mix is a set of different marketing approaches those marketers develop to optimize promotional efforts and reach a broader audience. The marketer’s task is to find the right promotion mix for a particular brand  Developing a promotion mix requires skills and experience in marketing. Marketers should complete various studies and gather lots of data about a particular company to come up with an effective promotion mix  The promotion mix elements enable a company to promote their products effectively to its target market segment.  With public relations companies try to promote a positive public image. This could be achieved by having promotion shows with third parties, inserting their news stories in the media, and press releases about their activities  Some firms feel that a direct face-to-face or over the phone interaction with their potential customers through agents like sales personnel is closer to the customer. This promotion mix element is called personal selling.  A promotion mix is a more expanded approach towards one of five elements of the marketing mix — Promotion. Other factors are people, product, place, and price.  Direct selling influences people to decide to buy certain products or services. It is one of the most effective ways of promoting your brand because the sales rep can tailor the promotion precisely to those who are most likely to make a purchase. 139 CU IDOL SELF LEARNING MATERIAL (SLM)

 Sales promotions are a campaign that uses time-sensitive offers — sales, discounts, coupons, etc., to engage existing consumers and bring in a larger audience. Many companies make this a core component of their marketing efforts, though sometimes it’s the most annoying type of communication for people.  Public relations are not fully controlled by the company, though, as some reviews and webpages may negatively highlight the brand. If a company adequately solves these issues, people will reward them with positive word-of-mouth consideration.  Publicity is gaining public visibility or awareness for a product, service or your company via the media. It is the publicist that carries out publicity, while PR is the strategic management function that helps an organization communicate, establishing and maintaining communication with the public.  Sales promotion is a set of marketing technologies aimed to stimulate the demand in particular products and increase brand awareness. Limited in time, it creates a feeling of time-sensitiveness, generates new leads, and keeps existing customers engaged  Sales promotion is a way to make a name for your brand because people are more likely to talk about a company that proposes benefits and saves their money. 9.5KEYWORD  Promotion Mix: A promotion mix is a set of different marketing approaches those marketers develop to optimize promotional efforts and reach a broader audience. The marketer’s task is to find the right promotion mix for a particular brand.  Advertising: This is a non-personal promotion of products and services. Marketers use advertising as a vital tool for increasing brand awareness. Advertisers show promotions to masses of people using email, webpages, banner ads, television, radio, etc.  Sales Promotion: Sales promotion is a set of marketing technologies aimed to stimulate the demand in particular products and increase brand awareness. Limited in time, it creates a feeling of time-sensitiveness, generates new leads, and keeps existing customers engaged  Marketing Strategy A Marketing Strategy is the long-term planning of business objectives that the company wants to achieve. For these to be achieved it is important to choose well the specific actions to consolidate the reputation of products and services or increase sales in the market.  Direct Marketing Direct marketing is a type of marketing campaign whose goal is to initiate a personal relationship between the customer and the marketing organization. In a direct marketing campaign, the marketing organization communicates directly with a pre-selected customer or segment of customers via one or more marketing channels 140 CU IDOL SELF LEARNING MATERIAL (SLM)

 Brand Awareness Brand awareness is the extent to which a brand is recognised by the target group and is associated with a product or product category.  Publicity: Publicity is media attention for your product, service, or business. It can include traditional news sources, like news shows and newspapers, and new media, like podcasts, blogs, and websites. 9.6 LEARNING ACTIVITY 1. Explain about the elements of Promotion Mix with the help of a chart? ___________________________________________________________________________ ___________________________________________________________________________ 2. Show some examples of personal selling to your friends and observe how it impacts the customer purchasing behaviour. ___________________________________________________________________________ ___________________________________________________________________________ 3. Make a short play/drama showcasing the components of Promotion Mix. ___________________________________________________________________________ ___________________________________________________________________________ 4. Have a Brain Storming session on Sales Promotions along with Benefits, objectives and sales. ___________________________________________________________________________ ___________________________________________________________________________ 5. Make short videos on Marketing strategy techniques. ___________________________________________________________________________ ___________________________________________________________________________ 9.7UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Define and Explain Promotion Mix? 2. Explain the elements of Promotion Mix with the help of a diagram? 141 CU IDOL SELF LEARNING MATERIAL (SLM)

3. What are the components of Promotion Mix? 4. What is Sales Promotion? 5. What is Marketing Strategy or Publicity Strategy? Long Questions 1. Describe the importance of Promotion Mix? 2. What are the objectives and types of Sales Promotions? 3. Outline the advantages of implementing Publicity Strategy? 4. What are the benefits of Sales Promotion? 5. Explain the components, elements and importance of Promotion Mix? B. Multiple Choice Questions 1. Which is the most personal promotional tool a.Personal Selling b.Public Relations c.Advertising d.Sales Promotion 2. An exhibition is... a.A written piece of 150-200 words explaining who, what, when, where, and why b.Similar enterprises exhibiting the products c.Enterprises paying to have their name and brand displayed at major events. d.One off event to catch the attention of media and the public 3. Sponsorship is... a.A written piece of 150-200 words explaining who, what, when, where, and why b.Similar enterprises exhibiting the products c.Enterprises paying to have their name and brand displayed at major events. d.One off event to catch the attention of media and the public 4. Which of the following is not an advantage of public relations? a.Easy to Scale b.Free positive publicity c.Reaches wide audiences d.Improves brand image 142 CU IDOL SELF LEARNING MATERIAL (SLM)

5. Which methods below falls into personal selling a.Telephone b.Face to Face c.Email d.Sponsorship Answers 1-a, 2-b, 3-c, 4-a, 5-b 9.8 REFERENCES Reference Books ● Saxena R, Marketing Management, Tata McGraw Hill ● Transforming B2B Marketing to Meet the Needs of the Modern Buyer, by Carlos Hidalgo ● Matthyssens, Paul &Kirca, Ahmet & Pace, Stefano. (2008). Business-to-business marketing and globalization: Two of a kind. International Marketing Review. 25. 481-486. 10.1108/02651330810904044. Websites ● https://www.businessnewsdaily.com/5000-what-is-b2b.html ● https://www.investopedia.com/terms/b/btob.asp ● https://blog.hubspot.com/marketing/b2b-marketing 143 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT-10 PRICING DECISION ANALYSIS STRUCTURE 10.0 Learning Objectives 10.1 Introduction 10.2 Pricing decision analysis 10.3 B2B pricing models 10.4 Summary 10.5 Keywords 10.6 Learning Activity 10.7 Unit End Questions 10.8 References 10.0 LEARNING OBJECTIVES: After studying this unit, you should be able to  State the Pricing Decision Analysis  Different B2B pricing models  Factors that determine the fixation of price  Explain types of pricing products 10.1 INTRODUCTION Pricing is one of the main and foremost factors to attract the market. In the list of factors that involve the decision making for purchasing a product or a service the pricing gets more or equal attention with the quality. Every time we compare two products of same features and same quality, we tend to consider the pricing of those products. It makes the consumer happy when they purchase something of good quality on better pricing, where better is always meant for less in the terms of pricing. Without understanding the techniques involved in pricing the marketers could not justify the reason for costing or even for making the purchase as a consumer it is necessary to understand the pricing analysis to know if the product is worth the cost. Pricing is the process whereby a business sets the price at which it will sell its products and services, and may be part of the business's marketing plan. In setting prices, the business will take into account the price at which it could acquire the goods, the manufacturing cost, the marketplace, competition, market condition, brand, and quality of product. 144 CU IDOL SELF LEARNING MATERIAL (SLM)

Pricing is a fundamental aspect of financial modelling and is one of the four Ps of the marketing mix, the other three aspects being product, promotion, and place. Price is the only revenue generating element amongst the four Ps, the rest being cost centers. However, the other Ps of marketing will contribute to decreasing price elasticity and so enable price increases to drive greater revenue and profits. 10.2 PRICING DECISION ANALYSIS 10.2.1 Pricing Pricing is an act to determine the exchange value among the power of purchasing the utility or the satisfaction consumed by the individual or an organisation or a group through purchasing the goods or services, ideas, rights etc. Pricing has always been the main factor for decision making. And it is one of the 4P’s of marketing mix with which the marketing strategy will be incomplete. And pricing cannot be moved too frequently as it is also associated with the quality of the products or services. This element of the marketing mix cannot be moved too frequently as it is closely associated with quality of product and services. It involves many activities performed within an organization to determine the exchange value, such as setting the base price, determining discounts and commissions, and formulating pricing objectives, policies and strategies. It is the most secretly performed activity in a business organization. Method adopted by a firm to set its selling price. It usually depends on the firm's average costs, and on the customer's perceived value of the product in comparison to his or her perceived value of the competing products. Different pricing methods place varying degree of emphasis on selection estimation, and evaluation of costs, comparative analysis, and market situation. Is the process of determining what a company will receive in exchange for its product or service. 10.2.2 Factors that Determine the Fixation of Price (i) Cost of Production: Cost of production is the main component of price. No company can sell its product or services at less than the cost of production. Thus, before price fixation, it is necessary to compile data relating to the cost of production and keep that in mind. Let us also learn about the three types of costs of a company ● Fixed Cost: These costs are fixed. They have no relation to the level of activity or production of the company. Even if there is no production of goods these costs will occur. For example, the rent of the factory is a fixed cost. 145 CU IDOL SELF LEARNING MATERIAL (SLM)

● Variable Cost: These are the costs that vary in direct proportion to the production levels of an entity. Higher the production, higher the cost and vice versa. The raw material is a classic example of a variable cost ● Semi-Variable Costs: These costs also vary with the production levels. But they are not directly proportional. Say for example the salary of a manager is 10,000/- a month fixed and then 10% of his sales. This is a semi-variable cost. (ii) Demand for Product: Intensive study of demand for product and services in the market be undertaken before price fixation. If demand is relatively more than supply, higher price can be fixed (iii) Price of Competing Firms: It is necessary to take into consideration prices of the products of the competing firms prior to fixing the price. In case of cut-throat competition it is desirable to keep prices low. (iv) Purchasing Power of Customers: What are the purchasing power of the customers and at what price and how much they can purchase? It should also be taken into consideration. (v) Government Regulation: If the price of the commodity and services is to be fixed as per the regulation of the government, it should also be borne in mind. (vi) Objective: Usually, at the time of price fixation a certain amount of profit is added to the cost of production. If company’s objective is to earn higher profit it may add higher amount of it. (vii) Marketing Method Used: Price is also influenced by the marketing method used by the company, e.g., commission which is to be paid to the middlemen for sale of the goods is also added to the price. Similarly, if the customers are to be provided “after sale service” facility, then those expenses are also added to the price. Pricing is important due to the following factors: Factor # 1. Flexible Element of Marketing Mix: Price is the most adjustable aspect of the marketing mix. Prices can be changed rapidly, as compared to other elements like product, place or promotion. Changes in product design or distribution system would take a long time to be implemented. Bringing about changes in advertisements or promotional activities is also a time-consuming task. But price is very flexible and can be changed according to the needs of the situation. Therefore, it is a very important component of marketing mix. 146 CU IDOL SELF LEARNING MATERIAL (SLM)

Factor # 2. Right Level Pricing: The wrong price decision can bring about the downfall of a company. It is extremely significant to fix prices at the right level after sufficient market research and evaluation of factors like competitors’ strategies, market conditions, cost of production, etc. Low prices may attract customers in the initial stages, but it would be very hard for the company to raise prices on a future date. Similarly, a very high price will ensure more profit margins, but lesser sales. So in order to maintain balance between profitability and volume of sales, it is important to fix the right price. Factor # 3. Price Creates First Impression: Often price is the first factor a customer notices about a product. While the customer may base his final buying decision on the overall benefits offered by the product, he is likely to compare the price with the perceived value of the product to evaluate it. After learning about the price, the customers try to learn more about the product qualities. If a product is priced too high, then the customer may lose interest in knowing more. But if he thinks that a product is affordable, then he would try to get more information about it. Therefore price is a critical factor that influences a buyer’s decision. Factor # 4. Vital Element of Sales Promotion: Being the most flexible component of marketing mix, price is the most important part of the sales promotion. In order to encourage more sales, the marketing manager may reduce the price. In case of goods whose demand is price sensitive, even a small reduction in price will lead to higher sales volume. However, prices should not be fluctuated too frequently to stimulate sales. 10.2.3 Pricing Decision Analysis The setting of a price for a product is one of the most important decisions and certainly one of the more complex. A change in price not only directly affects revenue but has major consequences on other decisions. If price is lowered, for example, then sales is most likely to increase. Therefore, additional production is needed with all its attendant requirements concerning material, labor and overhead. Any student who has completed a course in principles of economics understands that the theory of price is at the center of economic thought. In management accounting, the analysis of price is not as nearly complex or mathematically sophisticated as in economic theory. The assumptions in management accounting are much simpler and more practical oriented. The following are taken into account by the company 1. Review of some basic economic fundamentals 2. Pricing using cost-volume-profit analysis 3. The special offer decision 147 CU IDOL SELF LEARNING MATERIAL (SLM)

Pricing decisions are the choices businesses make when setting prices for their products or services. Pricing is considered part of a company’s marketing strategy because it influences its relationship with customers: When prices are fair and competitive, customers come back, increasing the profitability of the business. Pricing decisions can be simple or complex. Simple pricing involves charging what competitors charge for similar goods and services. This strategy is often used by retailers and wholesalers selling commodities. Companies that make simple pricing decisions often try to increase sales by making small, competitive adjustments such as purchase discounts, volume discounts and purchase allowances. Complex pricing is based on the originality of a product or service and what customers are willing to pay for it. This type of pricing is determined through negotiation with the customer and is common for custom furniture, artworks and consulting services. If only pricing was as simple as its definition — there’s a lot that goes into the process. Pricing strategies account for many of your business factors, like revenue goals, marketing objectives, target audience, brand positioning, and product attributes. They’re also influenced by external factors like consumer demand, competitor pricing, and overall market and economic trends. It’s not uncommon for entrepreneurs and business owners to skim over pricing. They often look at the cost of their products (COGS), consider their competitor’s rates, and tweak their own selling price by a few dollars. While your COGS and competitors are important, they shouldn’t be at the centre of your pricing strategy. The best pricing strategy maximizes your profit and revenue. Before we talk about pricing strategies, let’s review an important pricing concept that will apply regardless of what strategies you use. 10.2.3 B2B PRICING MODELS When picking a pricing model, you need to consider a few different questions. The first question – are we going to offer one price point or many? A single price point is easy for customers to understand but leads to lower revenue. The price might be set too high for price-sensitive customers. Or it might be too low for customers who are willing to pay more for a premium service. Offering multiple price points can often be the best approach, especially if a company has complex solutions. 148 CU IDOL SELF LEARNING MATERIAL (SLM)

But too many price points can be a problem. Psychologists such as Barry Schwartz have demonstrated that when buyers are faced with too much choice, they may be paralyzed into inaction. The purchase may be deferred to a later date if it happens at all. Most companies try to find a balance by either: Offering a small number of pricing tiers Using a pricing model that’s linked to product usage or the number of users. This approach means that each buyer only sees a small number of pricing options, but because each buyer’s usage levels vary, there are many different possible pricing options in the market The second question – which value metric are we going to use? In other words, what and how are we going to charge for our solution? There are several different value metrics to consider: ● Users – customers pay more as the number of individuals who can access the product increases ● Active users – customers pay more as the number of people using the product increases ● Feature usage – customers pay more as the number of features they use increases, regardless of the number of users ● Activity – customers pay for each activity conducted. For example, email marketing platform users could pay per email sent When choosing a value metric, you should consider the benefits that customers are receiving from the product. For example, Slack uses the ‘active user’ value metric. An increase in active Slack users should lead to greater company productivity, which justifies charging per active user. Once you know the answers to these two questions, it becomes easier to pick the correct pricing model. Flat-rate pricing Flat-rate pricing means offering one product, with the same set of features, for one price. This model is easy to sell and communicate. Sales and marketing can focus on a single offer that is clearly defined. But, as mentioned above, flat-rate pricing prevents you from maximizing revenue. Flat-rate pricing is typically only suited to companies that have one product and limited revenue. Research has found that ‘the fastest-growing companies have less than one product per million dollars of revenue.’ Therefore, flat-rate pricing is best suited to companies who have just launched and may not hit that threshold. 149 CU IDOL SELF LEARNING MATERIAL (SLM)

Tiered pricing Most companies with tiered pricing models offer 3-6 tiers or packages. The most common tiered pricing model is linear. The lowest-priced tier has the fewest features, and each subsequent level adds new features for a higher price. The advantages of a linear model are: You push buyers to upgrade by offering more functionality Some features require more resources to develop/deliver. You can put these features in higher-priced tiers to ensure that you don’t under-sell them The market is likely to be made up of some very price-sensitive individuals and some less price-sensitive ones. Having linear pricing tiers allows you to offer a product for each level of price sensitivity You can include a free tier to get a ‘foot in the door’ with prospects – the so-called ‘freemium’ model However, it is challenging to optimize this model. It’s not clear which features users want at each tier or how many tiers they require. As a result, it’s easy for critical features to be in highly-priced tiers or for the only relevant features to be at the cheapest level, leaving money on the table. A less common tiered pricing model is to build packages/tiers around different customer needs. For example, an email marketing platform could design one tier for experts who want to send emails in volume and another tier for beginners who need hand-holding but not volume. Needs-based tiers can be very powerful as they can be tailored to specific customer personas. And up-selling is still possible – as customers’ needs change, the package they need may change too. The downside of needs-based tiers is that every customer has unique needs, and it becomes tempting to create many packages to cover every possible need. You can quickly end up with too many choices and overwhelm buyers. Usage-based pricing (i.e., Pay As You Go) The more you use a service, the more you pay. For example, Amazon’s Simple Email Service doesn’t have a monthly subscription for access. Users are only charged per email sent or received. The advantages of this model are: Price is linked to usage. Customers pay more in months of more significant activity, which may be months of greater revenue, making it easier to justify a larger invoice 150 CU IDOL SELF LEARNING MATERIAL (SLM)