Revision Notes- Enterprise Marketing | Entrepreneurship Class 12 - Commerce PDF Download

Marketing and Sales Strategy

• Marketing Mix is a combination of four elements viz, product, distribution, price and promotion.
• Marketing Mix refers to the ingredients or the tools or the variables which the marketer mixes in order to interact with a particular market.
• Various elements of Marketing Mix are interdependent.
• Product is any good or service offered for sale by an enterprise.
• Components of Product Mix are Branding, Labelling and Packaging.
• Choice of Product Mix is affected by the factors like profit, efficiency of the enterprise, better customer service, potential to utilize the available know-how, cost reduction, etc.
• Packaging is the process of designing and producing a container for the product. It prevents the degradation of the product due to weather, climate, environment pollution, insects, damage from handling and loss due to accidents.
• Branding is a process of giving a name, sign or a symbol referring to the product to distinguish it from products of similar nature.
• Branding is yet another important component of the Marketing Mix. Branding provides an image and status for the product.
• Pricing is a crucial function of the entrepreneur. Pricing is a process of fixing a monetary value to the product or service against the utility or the experience of the product or the service.
• The price of a product is the amount of money paid by the buyer to own the product or service.
• Price mix refers to the important decisions related to fixing of price of a commodity.
• Pricing decisions are influenced both by economic and non-economic consideration. Some factors that influence pricing are:
  1. Cost of the production
  2. Demand for the product
  3. Competition in the market
  4. Government regulation related to pricing
  5. Consumer behaviour
  6. Objectives of the enterprise
• Skimming Price Method is a method of setting an extremely high initial price to recover the investment cost at the shortest possible time.
• Penetrating Pricing Method is just opposite to the Skimming Pricing Model. In this model, the price is fixed consciously at a low level with minimal margin of profit. This is aimed at covering a large area of the market so that the product can penetrate into the mass market.
• A channel of distribution or trade channel is defined as the path or route along which goods move from producers or manufacturers to ultimate consumers or industrial users. In other words, it is a distribution network through which the producer puts his products in the market and passes it to the actual users.
• A channel of distribution consists of three types of flows:
  1. Downward flow of goods from producers to consumers
  2. Upward flow of cash payments for goods from consumers to producers
  3. Flow of marketing information in both downward and upward direction
• Types of channel of distribution:
  1. Producer-customer (Direct channel-Zero level): This is the simplest and shortest channel in which no middlemen is involved and producers directly sell their products to the consumers. It is fast and economical channel of distribution.
  2. Producer-Retailer-Customer (Indirect-One level): This channel of distribution involves only one middlemen called ‘retailer’. Under it, the producer sells his/her product to big retailers (or retailers who buy goods in large quantities) who in turn sell to the ultimate consumers.
  3. Producer-Wholesaler-Retailer-Customer (Two levels): This is the most common and traditional channel of distribution. Under it, two middlemen i.e. wholesalers and retailers are involved. Here, the producer sells his product to wholesalers, who in turn sell it to retailers.
  4. Producer-Agent-Wholesaler-Retailer-Customer (Three levels): This is the longest channel of distribution in which three middlemen are involved. This is used when the producer wants to be fully relieved of the problem of distribution and thus hands over his/her entire output to the selling agents.
• A sales strategy consists of a plan that positions a company’s brand or product to gain a competitive advantage.
• An effective sales strategy requires looking at long-term sales goals and analyzing the business sales cycle, as well as meeting with sales people about their personal career goals.
• Two basic types of sales strategy: 
  1. Direct sales strategy,
  2. Indirect sales strategy.
• Components: 
  1. Product placement, 
  2. Promotion,
  3. Testimonials, 
  4. Core-selling strategies.
• Promotion includes advertisement, creating awareness about the product among the consumers, educating customers about the use of the product, etc.

Promotion Strategy

• Promotion is the method to spread the word about the product or service to customers, stakeholders and the broader public.
• There are various approaches a company can use to promote its products viz.,
  1. Above-the-line
  2. Below-the-line 
  3. Through-the-line
• Above-the-line promotions use mass media methods. This type of promotion focuses on advertising to a large audience. It includes conventional media like print, online, television and cinema advertising.
• Below-the-line methods are very specific, memorable activities focused on targeted groups of consumers. They are under the control of the organisation.
• Through-the-line refers to an advertising strategy involving both above and below-the line communications in which one form of advertising points the target to another form of advertising thereby crossing the “line”.
• Promotion Mix is a combination of communication tools to achieve desired communication effects aiming to inform and persuade customers about the merits of a product with intention.
• The elements involved in the Promotional Mix are:
  1. Advertising 
  2. Sales Promotion
  3. Personal Selling 
  4. Public Relations
• Advertising refers to a paid form of non-personal communication, presentation or promotion of ideas about goods or services. It is aimed at providing information, developing attitudes and inducing action beneficial to sponsors.
• The primary goal of advertising is to improve the likelihood of the customers to buy the advertised product, it can be through Television, Web advertising, Newspapers, Magazines, Radio, etc.
• Advertising aims to:
  1. Make business and product name familiar to the public.
  2. Create goodwill and build a favourable image.
  3. Educate and inform the public.
  4. Offer specific products or services.
  5. Attract customers to find out more about your product or service.
• The rules:
  1. Aim
  2. Target
  3. Media 
  4. Competitors
• Commonly used media:
  1. Stationary: Stationary, which includes letterheads, envelopes and business cards, is a means by which the business image or name identification is projected.
  2. Window display or office front: The external presentation of the business office or shop is one of the principal ways of establishing the business image.
  3. Press advertising: This is a commonly used form of general advertising and includes advertising in all press such as newspapers, magazines and journals.
  4. Radio: Radio is considered by many advertisers as an ideal medium due to its ability to reach specific target groups for example teenagers, racing followers or grocery buyers.
  5. Television: Television is a powerful advertising medium because it creates impact through sight, sound and movement.
  6. Direct mail: This is a broad category covering direct communication with the consumer through email, post or fax. It can include newsletters, catalogues and letters.
  7. Outdoor: This is any type of advertising which is done outdoors, including static advertising such as billboards, backs of street benches and bus shelters or mobile advertising displayed on buses, trains, taxis or towed signage.
  8. Ambient: Refers to any form of advertising that occurs in a non-standard medium outside the home, and usually where your consumers are likely to be.
  9. Cinema: We can purchase cinema advertising by individual cinemas or screens for a Set amount of screenings or “runs”.
  10. Point of sale: Advertising at the point where the consumer makes a purchase decision, e.g., floor stickers, instore digital advertising, shopping trolley signage, shelf or counter posters or playing documentaries about your product in store.
  11. Online: The options for online advertising continue to grow rapidly. They include advertising on your website, advertising on other websites, creating links to your website from other websites, publishing blogs, offering online product games, social networks and forums.
  12. Directory listings: Many consumers use business directories to find a supplier. Directories include the yellow or white pages, union directories, trade directories or local business directories.
• Sales promotion relates to short-term incentives or activities that encourage the purchase or sale of a product or service.
• The objectives of the Sales Promotion are :
  1. To introduce a new product into the market.
  2. To build a bridge between the Entrepreneur and the Customer.
• The major sales promotion activities:
  1. Consumer promotions
     (i) Point of purchase display material
     (ii) In-store demonstrations, samplings and celebrity appearances
     (iii) Competitions, coupons, sweepstakes and games
     (iv) On-pack offers, multi-packs and bonuses
     (v) Loyalty reward programmes
  2. Business promotions
     (i) Seminars and workshops
     (ii) Conference presentations
     (iii) Trade show displays
     (iv) Telemarketing and direct mail campaigns
     (v) Newsletters
     (vi) Event sponsorship
     (vii) Capability documents
  3. Trade promotions
     (i) Reward incentives linked to purchases or sales
     (ii) Reseller staff incentives
     (iii) Competitions
     (iv) Corporate entertainment
     (v) Bonus stock
  4. Sales force promotions
     (i) Commissions
     (ii) Sales competitions with prizes or awards
• Personal Selling is also known as Salesmanship. The American Marketing Association defines the term, ‘Salesmanship’ as the ‘Personal or Impersonal’ process of assisting and/or persuading a prospective customer to buy a commodity or service and to act favourable upon an idea that has a commercial significance to the seller.
• The features of Personal Selling or Salesmanship are as follows:
  1. It involves personal and individual communication.
  2. It relies mostly on verbal messages.
  3. It makes an honest effort to induce the customers to buy the products.
  4. It is flexible.
• Public relations is the deliberate, planned and sustained effort to establish and maintain mutual understanding between an organization (or individual) and its (or their) public.
• The main public relations tools:
  1. News creation and distribution (media releases)
  2. Special events such as news conferences, grand openings and product launches
  3. Speeches and presentations
  4. Educational programs
  5. Annual reports, brochures, newsletters, magazines and Audio–visual presentations
  6. Community activities and sponsorships

Negotiations, Customer Relationship Management, Vendor Management

• Negotiation is a process where two or more parties with different needs and goals discuss an issue to find a mutually acceptable solution.
• In integrative negotiation, each party is working towards a solution where everyone wins something. It is referred as “win-win.”
• In distributive negotiation, one party gets what they want, and the other party has to give up something. It is referred as “win-lose”.
• Inductive method involves starting on small details and working upward until a settlement is reached.
• Deductive negotiations start with an agreed upon strategy.
• Mixed negotiations are a blend of inductive and deductive method.
• Customer Relationship Management (CRM) entails all aspects of interaction that a company has with its customer, whether it is sales or service related.
• Vendor management is a process of finding, qualifying and doing business with vendors.