MARKETING MIX

MARKETING MIX

Marketing mix is defined as the set of controllable, tactical marketing tools that the firm blends together to produce the response it wants in the target market. In other words, the marketing mix consists of everything the firm can do to influence the demand for its product. It is also described as the combination of the four inputs that constitute the core of a company’s marketing system: the product, the price, place and the promotion.

5.1       The Product

A product is the key marketing mix variable on which all the other marketing mix variables revolve. It cannot be divested from other marketing mix variables because all of them contribute to form the images of the product from the point of view of the buyers. These images determine the values and satisfaction expected from a given product and how much the buyers will offer for it. It is therefore important for the manufacturers and marketers to understand what a product means to consumers and their expectations from that product. Hence, a product can be described as goods, services, ideas, people, places, and even organisations that are offered for exchange. Or, a product is the bundle of benefits or satisfaction offered to a customer. Also, a product is defined as anything offered or sold for the purpose of satisfying a need or want on both sides of the exchange process. It includes a tangible object that marketers refers to as a good, as well as an intangible service (such as ideas, a place, an event, an organisation), or any combination of tangible objects and intangible services.

Activities related to a product, service or idea include the following: quality, features, style, brand name, packaging, sizes, services, warranties, returns, etc.

5.1.1    Product Levels                                                    

(a) The Core Benefits: i.e. the fundamental service or benefit that the customer is really buying. For instance, the core benefit enjoyed by a guest in a hotel is rest and sleep.

(b) The Basic Product: Here, marketers have to turn the core benefit into a basic product. For example, in the case of the hotel, such things as a bed, table, chair, bathroom, and dresser are the basic products enjoyed by a guest in the hotel.

(c) The Expected Product: Here, marketers prepare an expected product, i.e. a set of attributes and conditions buyers normally expect when they purchase a product. For example, in a hotel, guests expect a clean bed, fresh towels, constant power supply, and a relatively quiet environment. Expected 2 Basic Product Core Product 1

(d) Augment Product: Marketers are concerned with preparing augmented products
that exceed customers’ expectations. For example, a hotel may have a remote controlled TV set, remote controlled air conditioner, fresh flowers, etc.

(e) Potential Product: This consists of all the possible augmentations and transformations the product might undergo in the future, just as we have new products in our markets daily due to modifications and diversifications undertaken by manufacturers.

5.1.2    Product Line

A product line is a group of related products all marketed under a single brand name that is sold by the same company. Companies sell multiple product lines under their various brand names, seeking to distinguish them from each other for better usability for consumers.

Companies often expand their offerings by adding to existing product lines because consumers are more likely to purchase products from brands with which they are already familiar. A company's blend of product lines is known as its product mix or product portfolio.

Product lines are created by companies as a marketing strategy to capture the sales of consumers who are already buying the brand. The operating principle is that consumers are more likely to respond positively to brands they know and love and will be willing to buy the new products based on their positive experiences with the brand in the past.

For example, a cosmetic company that's already selling a high-priced product line of makeup (that might include foundation, eyeliner, mascara, and lipstick) under one of its well-known brands might launch a product line under the same brand name but at a lower price point. Product lines can vary in quality, price, and target market. Companies use product lines to gauge trends, which helps them to determine which markets to target.

5.1.3    Product Mix

Product mix, also known as product assortment, refers to the total number of product lines that a company offers to its customers. The product lines may range from one to many and the company may have many products under the same product line as well. All of these product lines when grouped together form the product mix of the company.

The product mix is a subset of the marketing mix and is an important part of the business model of a company. The product mix has the following dimensions or components:

Width: The width of the mix refers to the number of product lines the company has to offer.

For example – if a company produces only soft drinks and juices, this means its mix is two products wide. Coca-Cola deals in juices, soft drinks, and mineral water, and hence the product mix of Coca-Cola is three products wide.

Length: The length of the product mix refers to the total number of products in the mix. That is if a company has 5 product lines and 10 products each under those product lines, the length of the mix will be 50 [5 x 10].

Depth: The depth of the product mix refers to the total number of products within a product line. There can be variations in the products of the same product line. For example – Colgate has different variants under the same product line like Colgate advanced, Colgate active salt, etc.

Consistency: Product mix consistency refers to how closely products are linked to each other. Less the variation among products, more the consistency. For example, a company dealing in just dairy products has more consistency than a company dealing in all types of electronics.

5.1.4    Classification of Products

Generally, products are classified into two types namely: consumer products and industrial products.

A.    Consumer Products

Consumer goods are those which are used by ultimate consumers or households and in such form that they can be used without further commercial processing. Consumer goods can further be classified according to the amount of efforts consumers are willing to expend for purchases and the extent of their preferences for such products and services. Thus, consumer goods can be divided into:

-        Convenience goods

-        Shopping goods

-        Specialty goods

-        Unsought goods.

The functions of marketing can be classified into three, namely merchandising function, physical distribution, and auxiliary function as discussed in unit one.

Convenience Products/Goods: These are standardized products and services usually of low unit values that consumers wish to buy immediately as needs arise and with little buying efforts. That is, goods which consumers generally purchase frequently with little effort. The purchase is almost spontaneous and the person has already, a predetermined brand in mind. These convenience goods include soaps, newspapers, toothpastes, cigarettes, etc. Often, convenience goods are bought impulsively or spontaneously. For example, when a person goes for shopping and sees a product which attracts his eyes, he buys it on impulse. Such goods are not purchased on a regular basis.

Shopping Goods: These are goods which are purchased after going around shops and comparing the different alternatives offered by different manufacturers and retailers. In other words, these are durable items with differentiated product attributes that consumers wish to compare in order to be able to find the most suitable for their needs before buying. In this case, the emphasis is on quality, price, fashion, style, etc. They therefore have to be marketed differently. Examples of such goods are clothing, household appliances, and furniture.

Specialty Goods: These are products that consumers insist on having. The buyers are willing to wait until the right products are available before they buy them. Consumers have either developed special taste or liking for such goods. Specialty products are usually specific branded items rather than product categories. They are specific products which have passed the brand preference stage and reached the brand insistence stage. Examples of these are cars, jewelry, fashion clothing, photocopy machines, and cameras. They are usually very costly items and include luxury items.

Unsought Goods: These are goods that people do not seek, either because they did not plan ahead to buy them or they did not know about their existence before they saw them on displays at the point of purchase. Most new and recently introduced products will fall into this class. Therefore, aggressive and continuous promotion is necessary for them. Examples of unsought products include life insurance, encyclopedia, and blood donation to the Red Cross Society.

B.     Industrial Products

These are products that are used by producers who convert them into consumables or consume them in their processes of conversion or production of their goods. Industrial products are those purchased for further processing or for use in conducting a business. The distinction between consumer and industrial goods is based on the purpose for which the particular product was bought. The classification of industrial goods is based on how they are used by industries. Akanbi (2002) classifies industrial products into five namely:

-        Installation

-        Equipment, Tools and Accessories

-        Raw Materials

-        Semi-Processed Components and Parts

-        Consumables and Operating Supplies

Installation: These are major capital items that form the main assets of production firms. They are very costly items that need major decisions before they are purchased. They include product items as buildings, heavy manufacturing machines, computers, etc. These are usually custom made items that will require direct negotiations between the buyers and the sellers.

Equipment, Tools and Accessories: These are usually standardized items that are used by a wide range of industrial users. They are products like typewriters, hand tools, filing cabinets, and air conditioners. They are production operating items.

Raw Materials: They form the major parts of the finished items. They are the materials that go through the production line to make up the finished items. They include the raw materials of agricultural products, mining products, forestry products, and sea and water products. They are usually standardised items that are sold on the basis of quality and their reliability of supply.
Semi-Processed Components and Parts: These types of industrial goods also form part of the finished items, although some of them are finished items already like buttons for shirts, radio and batteries for cars. Parts can be used by themselves or can be used to form components of the final items.

Consumables and Operating Supplies: These are the convenience items of industrial products. They are used to aid the running and maintenance of the organisation’s equipment and for keeping the organisations and their machines in proper shape. They are usually standardised items and of low prices. Examples are stationery, fuel, water, grease, etc.

5.1.5    Branding

A crucial step in the branding strategy is deciding on a specific brand name for the product that is being introduced.

A Brand

A brand is a word, mark, symbol, device or a combination thereof, used to identify some product or service. The definition clearly focuses on the function of a brand, that is, to identify, irrespective of the specific means employed for the identification.

Akanbi (2002) reports that ‘brand is the name, term, symbol, or design or a combination of these which is employed to identify the goods or services of one seller or group of sellers, and to differentiate them from those of competitors’.

The American Marketing Association defines a brand as ‘a name, term, sign, symbol or design or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors’.

Brand Name

As we have just seen, the American Marketing Association defines it thus:
‘Brand name is a part of a brand consisting of a word, letter, group of words or letters comprising a name which is intended to identify the goods or services of a seller or a group of sellers and to differentiate them from those of competitors’.

A brand name is only one of the means that the brand can use for identification. Examples of brand names are: Toyota, Honda, Mercedes, Mobil, Shell, Lux and Omo.

A Brand Mark

A brand mark is the part of the brand that is in the form of a symbol, design or distinctive colouring or lettering. Examples include: ‘the Lion’ for Peugeot cars, the ‘Star’ for Mercedes Benz cars and a ‘Stallion’ for Union Bank of Nigeria Plc.

A Trademark

This is a brand that is given legal protection as an exclusive use of a particular company. Trademarks are brands, but not all brands are legally protected. Hence, any mark that is not legally protected cannot be referred to as a trademark. The American Marketing Association defines a trademark as ‘a brand that is given legal protection, because under the law, it has been appropriated by one seller’. Thus, trademark is essentially a legal term. All trademarks are brands and thus include the words, letters or numbers that can be pronounced. They also include a pictorial design (brand mark). Some people erroneously believe that the trademark is only the pictorial part of the brand.

Importance of Branding

The importance of branding is as follows: (1) Brands make it easy for consumers to identify products or services. (2) Brands also assure purchasers that they are getting comparable quality when they reorder. (3) For sellers, brands are something that can be advertised and that will be recognized when displayed on shelves in a store. (4) Brands also help sellers to control their share of the market, because buyers will not confuse one product with another. (5) Branding reduces price comparisons, because it is hard to compare prices on two items with different brands. (6) For sellers, branding can add a measure of prestige to otherwise ordinary commodities, such as Coca-Cola, Mercedes’ products, Sony’s products, etc.

5.1.6    Packaging

Packaging has been variously defined in both technical and marketing literature. One of the most quoted definitions is; packaging is the art, science and technology of preparing goods for transport and sale.

Kotler (1997:458) defines packaging as including the activities of designing and producing the container or wrapper for a product.

Stanton (1981) also agrees with this definition when he defines it as “the general group of activities in product planning that involves designing and producing the container or wrapper for a product.”

Reasons for Packaging

There are various reasons for packaging, among these are:

(1) Packaging is used to protect the contents of the product from spoilage or wastage. Packages ensure that consumers receive the products in good condition and then derive the best benefit from them. This protective package is referred to as the primary package.

(2) Packages can also be used as a form of promotion. The primary package can be so designed as to attract customers to the product. Some of the packages can be used after the main content has been used up. Designs, sites and colours of packages can also be employed as means of promoting the product at their points of sale.

(3) Packaging may implement a company’s marketing programme. Packaging helps to identify a product and thus may prevent substitution of competitive goods. A package may be the only significant way in which a firm can differentiate its product. In the case of convenience goods or industrial operating supplies, for example, most buyers feel that one well-known brand is about as good as another. Retailers recognise that effective protection and promotion features in a package can cut their costs and increase sales.

(4) Management may package its product in such a way as to increase profit possibilities. A package may be so attractive that customers will pay more attention to get the special package even though the increase in price exceeds the additional cost of the package.

5.1.7    The Product Life Cycle Concept

A company which introduces a new product naturally hopes that the product will contribute to the profits and provide consumer satisfaction for a long period of time. This however, does not always happen in practice. So, progressive organisations try to remain aware of what is happening throughout the life of the product in terms of the sales and the resultant profits.

a)      The introductory stage

Let us start thinking from the very beginning about what happens when a new product is introduced in the market. If the product is well-designed, the sales would not increase slowly but would shoot up after some time; this stage is called the ‘introduction’ or ‘innovation’ stage in the life cycle of a product.

b)      The growth stage

In case the product launched is successful, the sales must start picking up or rise more rapidly. The next stage is then reached which is known as the ‘growth stage’. Here, the sales would climb up fast and profit picture will also improve considerably. This is because the cost of distribution and promotion is now spread over a larger volume of sales.

c)      The maturity stage

It is too optimistic to think that sales will keep shooting up. At this stage, it is more likely that the competitors become more active. In case your product is a novel one, by now competitors will come out with a similar product in the market to compete with yours. Therefore, the sales are likely to be pushed downwards by the competitors while your promotional efforts would have to be increased to try and sustain the sales.

Thus, the sales reach a plateau. This is called the ‘maturity stage’ or ‘saturation’. At this point, it is difficult to push sales up. With regard to the ‘profit’ picture, the profits are likely to stabilize or start declining as more promotional effort has to be made now in order to meet competition. Unless, of course, you have the largest market share with your product and it needs no extra push in the market.

d)     The decline or obsolescence stage

:

i.                    improve product quality

ii.                  add new product features resulting in extra benefits

iii.                penetrate new market segments

iv.                give incentives to distribution channels

v.                  expand the number of your distribution channels; and

Improve advertising and sales effort.

5.2       The Price

Price is defined as the amount of money that consumers must pay in exchange for the product, service or idea. Generally, marketers consider the following factors in setting prices:
(a) Target customers: How much they will buy at various prices, in other words, price elasticity of demand.

(b) Cost: How much it costs to produce and market the product i.e. both production and distribution costs.

(c) Competition: Severe competition may indicate a lower price than when there is monopoly or little competition.

(d) The Law: Government authorities place numerous restrictions on pricing activities.

(e) Social Responsibility: Pricing affects many parties, including employees, shareholders and the public at large. These should be considered while pricing. There are other factors as well, besides the ones listed above which a marketer has to consider.

5.2.1    Pricing

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.

5.2.2    Pricing Strategies

Pricing strategies are the different approaches that businesses take to figure out what the cost of their goods and services should be. To choose the appropriate pricing strategy, companies consider factors like current product demand, cost of goods sold, consumer behavior, and market conditions.

There are different types of pricing strategies depending on the company’s goals. Some want to maximize profit margins while others want to gain market share and find new customers in their area. And then there are other businesses that simply want to get rid of old inventory

Different types of pricing strategies can help grow your business, earn more sales, and maximize profits. Here are some common pricing strategies to consider:

1. Penetration pricing

The penetration pricing strategy consists of setting a much lower price than competitors to earn initial sales. These low prices can draw in new customers and divert revenue from competitors.

2. Skimming pricing

In this type of pricing strategy, prices drop as products end their life cycle and become less relevant. Businesses that sell high-tech or novelty products typically use price skimming.

3. Premium pricing

Premium pricing occurs when prices are set higher than the rest of the market to create perceived value, quality, or luxury. If your company has a positive brand perception and a loyal customer base, you can often charge a premium price for your high-quality, branded products. 

4. Psychological pricing

Psychological pricing strategies play on the psychology of consumers by slightly altering price, product placement, or product packaging. Some psychological pricing techniques include offering a “buy two, get one half off” deal or setting the price to ₦9.99 rather than ₦10 (“well, it is cheaper than ₦10, right?”). Some businesses also use artificial time constraints to speed customers into stores, such as one-day or limited-time sales.

5. Freemium pricing

Freemium pricing offers a basic product or service for free, then encourages customers to upgrade to the paid, premium version to access more features or choices. Potential customers get a taste of what the product or service can do for them and gain insight into your company. This is a popular strategy for software businesses and membership-based organizations.

5.3       Place or Distribution

Basically, place or distribution activities are used to transfer ownership to consumers and to place products, services or ideas at the right time and place. Distribution is made up of two components: (1) physical distribution, and (2) channels of distribution.

5.3.1    Physical Distribution

Physical distribution consists of the activities involved in moving products or services from producer to consumer. Examples include:

(1) Transportation

(2) Warehousing and storage

(3) Order processing

(4) Inventory control

(5) Location.

Often, the objective of physical distribution is to move goods to consumers at minimum cost.

5.3.2    Channels of Distribution

The term channel of distribution is used to refer to the various intermediaries who help in moving products from the producer to consumers. There are a variety of middlemen and merchants who act as intermediaries between the producers and consumers. Stanton (1981:283) defines a channel of distribution for a product as ‘the route taken by the title to the ultimate consumer or industrial users’. A channel always includes both the producer and the final customer for the product, as well as all middlemen involved in the title transfer. Even though agent middlemen do not take actual title to the goods, they are included as part of a distribution channel. This is because they play such an active role in the transfer of ownership.

A channel of distribution is also defined as ‘a system designed to move goods and services from producers to customers, which consists of people and organizations supported by various facilities, equipment, and information resources’.

Types of Marketing Channels

Marketing channels can be described by the number of channel levels involved. Each layer of middlemen that perform some work in bringing the product and its ownership closer to the final buyer is a channel level. Because the producer and the final consumer both perform some work, they are part of every channel. We have two types of marketing channels – channels for consumer goods and channels for industrial goods; in this section we shall only take a look at the consumer goods channel only.

(1) Producer to the Consumers: When there are no intermediaries between the producer and the consumer, the channel is direct. This type of channel is most commonly used with organizational products, especially where the product is new. This is aimed at creating awareness and to gain access to target consumers.

(2)        Producer to Retailer to the Consumer: The channel from producer to retailer to the consumer is common when the retail establishments involved are relatively large.
(3)        Producer –Wholesaler – Consumer: In this channel, producer dispenses the services of the agent and retailer. According to Odedukun, Udokogu and Oguji (2011) the following are some of the advantages of using the channel:

a.       The retailing profit now largely accrues to either the wholesaler or the consumer in forms of reduced prices or to both of them.

b.      There is reduction in time taken for the goods to reach the consumers. It is specifically desirable when it involves perishable goods, and the fashion goods, which are very much vulnerable to obsolescence within a short time.

(4)        Producer - Agent – Consumer: This is a channel which involves the producer – agent and consumer. It is usually found in industrial goods which are used by companies e.g. Construction Company when buying a caterpillar for their own use.

(5)        Producer to Wholesaler to Retailer to the Consumer: The most common channel for consumer goods. It employs a wholesaler to take care of the shipping and transportation needs. Wholesalers offer the accumulating and allocating functions that allow small producers to interact with large retailers, and vice versa.

(6) Producer to Wholesaler to Jobber to Retailer to the Consumer: the producer chooses to use agents (Jobbers) to assist the wholesalers in marketing goods. The use of Jobbers could be attributed to their specialised experiences.

The Importance of Channels of Distribution

The importance of channels of distribution is summarised below:

(1) Channels of distribution are the most powerful element among marketing mix elements. Many products which were intrinsically sound died in their infancy because they never found the right road to the markets.

(2) Channels take care of the transaction aspects of marketing, including the selling, the financing and the risk taking associated with strong products in anticipation of future sales.

(3) They perform the logical function of moving products from the point of production to the point of purchase.

(4) They help producers promote goods and services.

5.3.3    The Middlemen

a.      Wholesaler

A wholesaler is a company or individual that purchases great quantities of products from manufacturers, farmers, other producers, and vendors. Wholesalers store them in warehouses and sell them on to retailers (shops and stores) and businesses.

Wholesalers are the merchant middlemen who sell mainly to retailers, other merchants, commercial, industrial, or institutional users. They buy principally for resale or business use.

Classes of Wholesalers

1) Merchants Wholesalers: Independently owned businesses that take title to the merchandise they handled. In different trades, they are called different names, such as Jobbers, distributors or mill supply houses. They fall into two categories: Full-service Wholesalers and Limited-service Wholesalers.
2) Full-Service Wholesalers; Provide a full line of services: carrying stocks, maintaining a sales force, offering credit, making deliveries, and providing management assistance. There are two types of full-service wholesalers: wholesale merchants and industrial distributors.
3) Limited-Service Wholesalers: Offer fewer services to their suppliers and customers than full-service wholesalers. Limited-service wholesalers are of several types: cash and carry wholesalers, truck wholesalers, drop shippers, rack jobbers, producers’ cooperatives, and mail-order wholesalers.

b.      Retailers

Retailing includes all the marketing activities carried out by the retailers, aimed to
satisfy the consumers’ demands while making profits. This involves selling of goods or services directly to final consumers for their personal and business uses.

A retailer is defined as a middleman who sells mainly to the ultimate consumer. He may sell to institutions but most of his sales are made to industrial or household consumers. He usually sells in small lots. The retailer is the last link and the most important intermediary in the chain of distribution.

Functions of Retailers

The following are some of the functions of retailers:

        i.            Estimation of the probable demands of the consumers for various types of goods dealt with.
Assembling of various types of goods from different wholesalers.

      ii.            Sale of various kinds of products to the consumers as and when needed by target consumers.
Physical movement of goods from the wholesaler’s warehouses to their own stores.

    iii.            Storage of goods to maintain uninterrupted supply of goods to the consumers.

    iv.            Assumption of risk of loss of goods by fire, theft, deterioration, etc. as long as they are not disposed of to the consumers.

      v.            Extension of credit to some selected regular customers.

    vi.            Providing information about consumer tastes and preferences to wholesalers/manufacturers.

Types of Retailers

There is a wide variety of retail trading establishments. They vary from hawkers and peddlers to big departmental stores. Hawkers and peddlers move from door-to-door or to residential houses to sell their goods. Pavement shops usually arrange their wares at busy street corners or busy streets as found in all the streets in Lagos, Kano, Kaduna, Aba, etc. Some traders sell their wares at weekly markets as applies to the rural markets in our communities in Nigeria. Our discussion will be limited to some selected retail stores, namely:

(i) Specialty Stores: Carry a narrow product line with a deep assortment with limited line: apparel stores, sporting-goods stores, furniture stores, florists and bookstores. Specialty stores can be sub-classified by the degree of narrowness in their product line. A clothing store would be a single-line store; a men’s clothing store would be a limited-line store; and a men’s custom-shirt would be a super specialty store, etc.

(ii) Department Stores: Carry several product lines – typically clothing, home furnishing, and household goods with each line operated as a separate department managed by specialist sellers or merchandisers.

(iii) Supermarkets: Relatively large, low-cost, low-margin, high-volume, self service operations designed to serve the consumer’s total needs for food, laundry, and household maintenance products. Supermarkets earn an operating profit of only about 1% on their sales and 10% on their net worth.

(iv) Convenience Stores: Relatively small stores that are located near residential areas, open long hours, seven days a week, and carry a limited line of high turnover convenience products. Their long hours and their accessibility by consumers mainly for fill-in purchases make them relatively high-price operators.

(v) Catalogue-Showrooms: Sell a broad selection of high-mark-up, fast-moving, brand-name goods at discount prices. These include jewellery, power-tools, cameras, suitcases, small appliances, toys, and sporting goods. Customers order the goods through a catalogue or visit the showrooms, pick these goods as and when visiting such stores.

(vi) Cooperative Stores: Consumers sometimes come together to form cooperative societies to sell goods on retail basis. The basic purpose is to eliminate middlemen and obtain their requirements at lower prices. The capital is subscribed by the members through the purchase of shares of small denominations. Cooperative stores purchase their requirements in bulk from manufacturers or wholesalers, thus enabling the cooperative stores to sell their products at lower prices than the ordinary retailers.

It should be noted that there are other types of retail outlets as well.

c.       Brokers

A broker brings buyers and sellers together and assists in negotiation. Brokers are paid by the parties hiring them. They do not carry inventory, yet involved in financing or assume risk. The most familiar examples are food brokers, real estate brokers, insurance brokers and security brokers. It should be noted that brokers’ main function is to aid in buying and selling, and for these services they earn a commission on the selling price. A broker is an intermediary whose function is only to establish a link between the manufacturer and customer.

d.      Agents

Agents represent buyers or sellers on a more permanent basis. There are several types, for example, manufacturers’ agents which are the most common type of agent wholesaler. They represent two or more manufacturers of related lines. They usually have a formal agreement with manufacturers: covering prices, territories, order handling procedures, delivery and warranties and commission rates. They know each manufacturer’s product line and use their wide contacts to sell the products. Most manufacturers’ agents are small entities, with only a few employees who are skilled salespeople. They are hired by small producers who want to open new territories or sell in areas that cannot support full-time salespersons. Apart from the manufacturer’s agent, there are other types namely: Selling agents, purchasing agents, commission merchants, etc.

5.4       The Promotion

Promotional activities consist of various means of communicating persuasively with the target audience. The important promotional methods are:

(a) Advertising – where an identified sponsor pays media (NTA, for instance) to transmit messages to target consumers.

(b) Personal selling – where sales representatives employed by the firm engage in interpersonal communications with individual consumers and prospective customers.

(c) Sales promotion – where the marketer utilises displays demonstrations, premiums, contests, or similar devices to supplement advertising and personal selling.

(d) Publicity and public relations – where both publicity and public relations are used to stimulate supportive news items about the firm and its products that have greater credibility with the public than advertising.

In the context of this study, our major concern is on advertising aspect of promotion.

5.4.1    Advertising

In the pursuit of its purpose, the economic and social effects of advertising have become the subject of continuing debate. A quick flavour of the arguments put forward on both sides can be had from two viewpoints, one considering advertising as an information disseminating utility function and the other viewing advertising as a source of market power. On balance, advertising has carved out an indispensable place for itself in the marketing mix of a firm.

Phillip Kotler very aptly refers to the following situations where advertising is likely to make greater contribution. The situations are:

1.      When buyer awareness is minimal

2.      When industry sales are rising rather than remaining stable or declining

3.      When the product has features normally not observable to the buyer

4.      When opportunities for product differentiation are strong

5.      When primary instead of secondary motives can be tapped.

Are there some limitations to the role of advertising? The answer is obviously is in the affirmative. Advertising, in the words of Richard H. Stansfield, cannot do the following:

        i.            Sell a bad product twice.

      ii.            Sell an overpriced or otherwise non-competitive product.

    iii.            Sell a poorly distributed product.

    iv.            Sell a seasonal product out of season (significantly).

      v.            Sell products to persons having no use for them.

    vi.            Work overnight.

  vii.            Do the selling job alone.

The usefulness of advertising, which has for long been accused of being a capitalist tool and a bane of the market economy, is now being realised by the planned and communist economies too. While Yugoslavia, USSR, Poland and Hungary shed their hostility to advertising quite a few years ago, China is welcoming advertisements propelled marketing now.