Showing posts with label marketing mix. Show all posts
Showing posts with label marketing mix. Show all posts

Meaning of Promotion and Its Objectives in Marketing

Meaning of Promotion

Promotion provides sufficient information to the consumers of target market about the features, quality, price and place of availability of goods. Promotion is taken as an important element of marketing mix. Marketing experts may give valuable suggestion to producers to produce goods, according to the interest, wants and needs of the customers by studying and researching markets.
After producing such goods prices, also should be determined. Doing only these activities, the goods should not be distributed; the target customers also should be given necessary information about such goods. Giving information to the target customers about the products is called promotion. Promotional activities create demand for goods. This promotion includes the activities such as personal sale, advertisement, sales promotion and propagation.

Promotional activities make a flow of information about products and persuade the customers to buy the products. Such type of function is also known as the marketing communication. This makes the potential customers know about the products or services. Effective communication persuades the customers to buy the products. These types of promotional activities also create demands as it explains necessity to the customers. So, this can also be defined as the art of creating demand. Different writers and experts have defined promotion; important definitions are given as follows to make its meaning clearer:

Prof. Philip Kotler has defined promotion as, "Promotion includes all the activities the company undertakes the communication and promote its products to the target market."

 

Prof. William J. Stanton has defined it as, "Promotion in the element in an organization marketing mix that serves to inform, persuade and remind the market of the organization and or its products."

 

E. J. McCarthy has defined promotion as, "Promotion is any method of informing, persuading or reminding consumers, wholesalers, retailers, users or final consumers about the marketing mix of product, place and price which has been assembled by the marketing manager."

The above mentioned definitions make it clear that promotion is one of the important tools of marketing. It creates demand in target markets and gives information to the customers about products. Promotional activities should be conducted to give information, make believe, motivate or persuade, influence, and remind the customers about products. Such activities greatly as well as positively affect sales and distribution of the products. So, nowadays, almost all the business companies or firms conduct promotional activities attractively. So, the modern age is also called the age of promotion.

Objectives of Promotion


Promotional activities give information, make believe, remind the customers of target markets about the products. Some important objectives are formed to conduct such activities effectively. The important objectives are:

1. Informing


At first the promotion aims to make flow of information to consumers about products. It provides information about features, benefits, price, utility, etc. of the products to the customers, wholesalers, retailers, consumers etc. Such information creates positive attitude in all customers towards the products. This also makes aware the potential customers and intermediaries. Promotion also provides buying alternatives to the ultimate users. So, the objective of providing information is given first priority.

2. Persuading


Producers should make customers believe in their products for expanding their markets. The second important objective is to make the customers believe in the products. Customers do not get motivated only by giving simple information about the products. It is compulsory to make the customers believe in products. For this, they should be made known about the quality, feature, price, utility etc. of the products. Trust can bring changes in behavior, feeling, thought, attitude and trend of the customers. Only then the customers are motivated to buy products of the newly promoted brand. The customers are not affected by any substitution goods due to the flow of impressive information of the promotion of the new brand goods.

3. Reminding


Different business firms product different types of products. Various kinds of goods appear in markets. In such situation, the customers should be reminded of the information once given. They may be confused in reminding because of different goods in the markets. All the customers may not have such memory power to remember brand of the goods. On the one hand, such situation exists, and on the other hand, many competitors try to divert customers' attention to other side. So, the customers should also be given regular information, information about the organization/firm and goods together. While providing such information about price, quality, utility features, and benefits etc. of the products also should be given to the customers.

4. Reassuring / assuring


The fourth objective of promotion is to give assurance to the customers. They express concern whether their decision has become right or wrong. Their problems should be solved through very simple way. In such situation, assurance should be given by making clear about the benefit of the product. Such assurance gives positive strength towards buying decision. It removes or minimizes their dissatisfaction or confusion. This develops a feeling in the customers that their buying decision is rational and the product is the best. It also plays an important role to maintain image and prestige of the company.
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Factors Affecting Price Determination || Internal Factors and External Factors ||

Determining price is very challenging task. Analysis of various factors should be done to determine price. In other word, various factors affect price determination. So, they should be specially considered. Two types of factors should be studied before determining price. They are internal and external factors.

I. Internal Factors


The factors which can be kept under control of business organization are called internal factors. Such factors affect price determination of the products. Internal factors include,

1. Business efficiency

Internal factors are of different types. Among them business efficiency is one of them. It directly affects price of products. If the business firm is capable, cost becomes less and purchases of raw materials and other activities are effectively conducted. As a result, price of product can be determined low. Just opposite to it, if organization is incapable, production cost becomes high. As a result, the price needs to be determined high. As business competency can be increased, firm can keep it under its control.

2. Organizational factors

Different organizations have their own organizational factors. Under such factors, production policy, pricing policy and prestige of the company are included. These important factors affect pricing directly. Such policies are formed by the top level management of the company. So, these types of organizational factors can be kept under the control of organization. Price can be determined by improving such organizational factors in opportune time.

3. Cost

Without production cost, no goods can be produced. As price of product needs to be determined including production cost, then price also increases due to increase in production cost. Just the same, if production cost decreases price decreases. Mostly, the following costs are included in producing any goods.
    • Factory expense: This type of expense is also called factory related indirect expense. This includes transport expenses, labor wages, fuel, water, factory rent, electricity, consumer goods, and factory repair and maintenance etc. expenses.
    • Direct expense: This expense includes salary, office, direct wages, and other direct expenses.
    • Administrative expense: This includes salary, office rent, telephone tariff, electricity, postage, telegram, director’s remuneration, office repair and maintenance, office equipment and other expenses.
    • Selling and distribution expenses: This includes sellers’ salary, commission to distributors, external transport and transport expenses, advertisement, warehouse rent, packing fees, and other expenses. Such expenses are called direct expenses on selling and distribution. Production cost can be lowered by increasing administrative ability and efficiency. So, this factor is also a controllable factor.

4. Pricing objective

Before determining price of any product, its objective should be taken. So, this is other important factor to affect pricing. These pricing objectives include achievement of targeted result, maximization of price, increase in sale, increase in market share, maintenance of price stability etc. Besides, objectives for facing competition and survival of the organization should be also clearly made. The objective of firm affects the price of products. If the objective is to maximize profit, price should be fixed high. But, if the objective is to expand / increase market share, price should be fixed low. The objective of price fixation is also controllable factor of firm, which can be changed or improved according to need.

5. Other elements of marketing mix

Different elements / factors of marketing mix affect the pricing objectives. The other elements such as product, place, promotion also give pressure to decrease or increase price. They can be mentioned as follows:
  • Product: If the product is original, pricing becomes easy. But, if it is imitated, comparative price should be fixed. In this way, price of different products can be fixed differently. Little difference in price happens at every stage of life cycle of any product.
  • Place: Distribution channel also affects price. If the distribution channel is long, more cost needs for it. As a result, price increase. Similarly, means of transport also affect the price by increasing cost of any product. In comparison to air transport, cost for road transport becomes less expensive and dependable.
  • Promotion: Promotional style and activities also affect price of products. newspapers, radio, television, etc. become expensive for advertisement and increase the cost of the products. But, if distributors, agents, wholesalers and retailers take the responsibility for advertisement, it becomes less costly. So, different promotional activities also affect price of products.

II. External Factors


Any factors which are beyond the control of a firm are called external factors. Such factors may be very strong and influencing. There are different kinds of external factors. They are as follows:
  1. Competition: Competition is one of the effective factors to affect pricing. Competition plays an important role in price determination. If there is no competition price, it can be fixed freely. But, if there is market competition, competitors’ products should be analyzed and suitable price should be fixed. If the products are similar in quality, price also should be fixed same. So, competitive price should be fixed for the products. Before fixing price of any product, deep study should be done on competition. Competition also may be of various types. They directly affect the price of products. Since competition is the factor not to remain under firm’s control, study and analysis should be done on it. Only then the price of products should be fixed.
  2. Suppliers: The group, or firm or organization which provides necessary equipment, raw materials, machines, operating means, etc. is called supplier. If they provide such industrial goods at easy price, price of products also becomes low. But just the opposite of it, if such industrial goods are costly, the price of products also becomes high. So, suppliers also have an important role in pricing any products. This is the second external factor. It cannot be controlled by any business firm.
  3. Pressure group: In every country, pressure groups may be formed in different ways. Save environment group and consumer group are the examples of pressure group. Such groups try to affect price of products. They give pressure to companies/business firms for their own group interest and welfare. Save the environment group can give pressure to business companies for stopping pollution. Consumer group can give pressure demanding for providing high quality products at lower rate, for more security of products, and for providing more information about products. Such pressure directly affects price. These types of pressure remain beyond the control of the company.
  4. Economic factors: Economic factor/element is one of the strong factors to affect price determination. This also affects price. This element does not remain under company’s control. Situation of inflation, deflation, overvaluation or devaluation may appear in markets. They are called, on the whole, economic elements/factors. In the situation of devaluation demand decreases, whereas in the situation of overvaluation demand increase. So, price should be determined only after studying and analyzing the economic factors/elements. If production cost increases, price should be fixed accordingly, and if production cost is low, price should be fixed low increasing rate of profit. In this way, when cost is decreased or increased, price also should be fixed accordingly. Policy to increase price in the situation of deflation and decrease in the situation of overvaluation should adopted.
  5. Market demand: Demand of target market also should be considered and studied by every business company. The total demand of the market also affects pricing. Demand for products may decrease or increase due to the reasons of total number of customers, their income, purchasing power, priority, competition among substitute products etc. A situation may appear to determine price on the basis of demand. In the situation when the total demand for products has declined, price should be decreased and when demand is increased it should be increased. If such policy cannot be adopted, price of products does not become reasonable.
  6. Government: Government makes arrangement of different policies, rules and regulations giving priority to the interest of the nation and people’s welfare. Such policies, rules and regulations also affect price determination. Government may try to keep business companies under control by interfering in price fixing and making policies and provision to provide facilities to the people. Government may make policy to provided facilities by rebating sales tax, excise duty, costume duty, etc. and just the opposite it may charge all of them to increase revenue. In this way, government policies and rules also directly affect pricing determination. If government makes policies to charge new add taxes or increases in taxes, then the business companies also increase price. If taxes are rebated, price is decreased, and if they are increased or added, price increases. So, government policy also directly affects pricing. So, government policies, rules, regulations, legal provisions etc. also are the uncontrollable external factors to affect price determination strongly.
  7. Political situation: Different political modes or situation may prevail in every country. Political situation also affects price determination. Political situation may be stable or instable according to the time. In both political situations, price of products or services may not remain same. If the political situation is stable, one rate or price is fixed, and if it is unstable, another rate is fixed. Government may or may not interfere in pricing. Method of determining prices differs between the interference and free situation. In some countries, there may be legal provision to fix prices of products by government. So, business competitors should compulsorily face such situation.
  8. Market intermediaries: In every market, different intermediaries remain active. They can be identified/ known as agents, distributors, intermediaries, transporters, finance companies, wholesalers, suppliers etc. If such intermediaries change their prices, prices of products or services also should be changed. In other word, if prices of such intermediaries increase or decrease, price of products or services should also be increased or decreased. No company can control their activities but are compelled to fix prices according to the main-stream of the intermediaries.
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Pricing: Meaning, Objectives and Importance of Pricing

Meaning of Pricing


Generally, the amount to be paid for any goods or service is called price. Price is one of the important factors of marketing mix. This is also the main source of income of any business organization. So, profit or loss of business organization depends on the price of products. Price also expresses the quality of products/goods. Generally, high quality goods have high price and low quality goods have low price. Customers select goods on the basis of the price according to their buying capacity. Without certain price no exchanges of any goods or services can be done. So, price has important role in marketing. Generally, price is measured in currency.

In the developing or underdeveloped countries like ours where economic condition is very weak, goods or services are also measured in other form. Price of any goods taken or given according to the product exchange system is not fixed. In other words, in such system price of goods is not determined in currency.
Price means the rate paid by customers for any goods or service. For example, if a customer buys Batika Shampoo for Rs. 140, the price of shampoo is Rs. 140. Here, the utility of the shampoo and its price should be equal. Otherwise, one side gets loss. So, value/utility and price should remain in balance.

Price is the strong equipment of marketing. It simplifies exchange function of marketing. There are many names of such price. For example, interest paid for the use of currency, rent paid for the use of capital or capital assets, commission paid for use of service, tuition fees paid for the education, salary paid to employees for using their service, tax paid for earning income, premium paid for insurance, etc. 

Different writers and experts have defined ‘price’. Some important ones are as follows:

According to Prof. William J. Stanton, “Price is the amount of money and/or other items with utility needed to acquire a product.

 

According to Prof. Philip Kotler, “Price is the only element in the marketing mix that produces revenue, the other elements produce cost.”

 

According to David J. Schwartz, “Price is the exchanged value of the product or service expressed in terms of money.”

 

The above mentioned definitions make it clear that the amount to be paid for any products / goods is called price. The producer should take rational decision to determine such price. Generally, price is expressed in money / currency. Customers study the goods / products, select it and buy it. So, price has an important role in marketing. Price is expressed in salary, interest, tuition fees, rent, commission, premium, fee, revenue, bill, royalty, etc. This is made clearer by the following table.

A List of Names of Price

S. No. Price Product and Services
1. Salary Service of an executive, manager and staffs.
2. Interest Use of money
3. Tuition Education
4. Wage Service of workers and labor
5. Fair Taxi and airline flight
6. Commission Service of seller and distributors
7. Premium Insurance (Various insurances)
8. Fee Service of the doctor and lawyer
9. Dues Membership in a union or a social club
10. Revenue Tax and custom of government
11. Rent Use of living quarters or piece of
equipment for a period of time
12. Bill Telephone, water and electricity

The task of determining price of any product or service is called price. Determining price of any product is very challenging. So, in determining price of any product, special consideration should be taken to production cost, competitors’ prices, prices of substitute products and market environment. Besides this, internal and external obstructions also should be identified. After the obstructions have been identified, ways for facing such obstructions should be found out. Only then proper method of pricing should be applied. The price determined in such way becomes long lasting and reasonable.


Objectives of Pricing


The task of fixing reasonable value of any product or services is called pricing. To fulfill this task all the costs and profits should be included. Various expenses are included under production cost. They may be direct and indirect expenses. Before determining price of any product or services, all the objectives which are directly influenced by the organizational goal should be made clear. If the organizational goal is clear, it becomes easy to prepare the objectives of pricing. Main objectives of pricing are as follows:

Objectives of Pricing


1. Profit oriented objective


All the business organizations or companies are conducted with the main objective of earning profit. Their profit making objective may be for long term or short term. Under such task, companies or organizations form two types of objectives as follows:
  • To achieve a target result: The certain rate of profit intended by an organization or company to earn during certain period is called target result. Business firms or companies fix prices of their products with the objective to get certain result from sale or investment, for instance, 8% profit from sale, 7% profit from investment, etc. Most of the wholesalers and retailers estimate targeted result with the objective of earning short term profit. The firms or companies who do not need to face strangling competition take decision to fix such price.
  • To maximize profit: There are various types of profit making objectives. Among them profit maximization is the second important objective. Fixing maximum rate of price of any product or service to earn maximum profit in very short term adversely affects the customers. So, a strategy should be adopted to earn maximum profit in long term. Sales volumes should be maximized with the minimization profit margin for earnings maximum profit. As a result, profit amount increases. This becomes beneficial to the company/firm and society in the long run.


2. Sales oriented objective


A company may adopt a policy to increase sales volume by fixing lower rate of price of products or services. In fact, sales oriented objectives aims to increase sales quantity and market share. This objective can be studied by dividing into two classes as follows:
  • To increase sales volume: Increasing sales quantity of any product also may be one of the objectives of pricing. The emphasizes to increase certain percent of sales quantity can be increased getting permission from sales department or adopting other pricing strategies. Such strategy discourages possible competitions. Besides this, profit can increase in the long run due to minimum production cost.
  • To increase market share: Every company or firm wishes to promote sale of its products. The objective of pricing may be to increase sales quantity. This also increases market share. In this age of competitive environment of market, it is also necessary to increase market share. Some companies adopt a policy to expand market share gradually; some others adopt the policy to expand market share immediately and control it. In order to expand market share, price of products or services should be low in comparison of competitors. Japanese auto products have become very high in price in American market due to which Toyota, Nissan, Honda Companies have cut down production cost fixing low margin profit and adopted a policy to increase share in American markets. This makes it clear that market share can be increased fixing low profit margin.


3. Status-quo oriented objective


Status-quo objective is formed to maintain the present situation for long time. In this objective, price of products remains same for long. Firm or company does not take any step to change the price. This status-quo includes the objectives like continuation of same price, facing competition and continuation of existence. They can be mentioned as follows:
  • Stability in price: Price stability is one of the importance objectives. This remains effortful to maintain price at the same rate for time. Price leadership companies, frequent demand changing companies and the companies wishing to maintain reputation try not to let price fluctuate. All such companies make their objective to maintain price same at the same level. Such organizations or companies also wish to maintain revenues, price of their products, profits etc. at the same level. They do not want to take risk. They try to maintain same price by increasing production and supply in prosperity period and decreasing production and supply in depression period.
  • To meet competition: This is the age of market competition. Every business company needs to face competition for survival/existence. Companies/firms have to fix price of their products or services as fixed in the markets. So, price is fixed with a view to facing/meeting competition in market. The price leadership companies should fix/determine price of their products by studying and considering market prices. Otherwise, the prices of their products cannot face/meet competition in market; as a result they are compelled to flee away from the market.
  • Survival: It becomes very difficult to save the company/firm from high competition in market. In such situation, the firm should fix prices of their products in a way that only production cost can be recovered. In such situation, production cost may be equal to revenue. (Production cost = Revenue). This situation is called breakeven point. In this situation, there is neither profit nor loss. In this way, company’s existence is saved and it expects improvement in future. Business companies make such objectives waiting for bright future.


Importance of Pricing


Reasonable pricing plays an important role in achieving business goal. Price remains as crucial matter for business companies. Its importance is linked with various aspects. The importance of pricing is related mainly to economy, organization and customers. They can be mentioned as follows:

1. Importance to the economy


In fact, price is the important element of economy. It directly affects demand and saving. It also controls means of production. To make it clearer, a short description has been made as follows:
  • Determinant of demand and supply: As the price of products directly affects demand, price plays an important role in determining the quantity of demand. So, price has been accepted as basic element. If the price is increased but the quality of the product is unchanged, and then demands of the products decreases, and if the price is decreased, demand for the products increases. In other words, when price decreases, demand increases, and when price increases, demand decreases, hence the law of demand applies. In this way, the quantity of demand and supply depends on price; price can be identified as determinant of demand and supplies.
  • Effect to the factors of production: Price of products is very important to economy and industry. It directly affects wages, rent, interest and profits. Capital, labor, land and venture are the factors/means of venture productions. Wage for labor, rent for land, interest for capital, reasonable profits for venture should be distributed. The factors/means of production (wages, rent, capital and venture) affect demand and supply. Rate of wage attracts labor whereas high interest rate attracts capital. Hence, price strongly affects factors/means of productions.
  • Effect to the saving and investment: Determined/fixed price for target market may affect inflation. This indicates that inflation causes increase in price of products. If the price of products or service increases, the customers get in difficulties. When the price of products or services increases, consumers’ saving decreases, due to which investment is discouraged. But, if price decreases and saving increases, investment also increases. This situation contributes to the development of society and nation.


2. Importance to organization


Price of product or services is an important element/factor of marketing mix. Price management is very difficult task for profit making organizations. So, rational decision should be taken for price management. Success in market competition can be achieved; income and profits can be earned only through price. The following points are discussed to make the importance of price clearer.
  • Revenue and profit: Price plays an important role in determining income and profit of an organization. Total income can be made out/found out by multiplying per unit price by sold quantity. When sale quantity remains same, but price is decreased, income also decreases. If price is increased and sale quantity remains same, income is increased. Profit can be made out/found out also by subtracting total cost from total revenue. So, profit can be increased or decreased by increasing or decreasing price of products. But policy of frequent change in prices and profit/revenue is detrimental to the company.
  • Competition: Business organization should face various competitions appeared in market. It has to face price competition certainly. If market competition increases in the price already fixed, the organization can attract increased number of customers by decreasing the price. This increases sales volume and decreases production cost.
  • Expansion of the product line: Price directly affects organization to expand target markets and add product line. Price also helps in taking decision whether to add new product line or expand new product or not. This can be decided by comparing production cost with the price. If profit seems sure, decision for expansion should be taken. But, just opposite to it, if there is no possibility of profit but only loss, then decision should be taken not to expand the products.


3. Importance to the customers


Determination of price should be based on genuine reasons. If price has been determined rationally, this helps general customers. Following points can be discussed to make clearer the importance for general customers:
  • Importance of the product selection: Most of the customers give priority to price and analyze it. They try to select products considering their prices. Such customers minimize quality and utility. They can take decision to buy the products which contain relatively low prices.
  • Importance of the quality perception: Price plays an important role to meet customers’ necessity/want. Similarly, it is also equally helpful to assure them of the quality of the products. If high price products or services make the customers realize high quality and low price product signifies low quality.
  • Importance of customers’ benefits: Price of products affects customers’ benefits. The customers by low priced products/goods even when the income sources have fallen down. In the situation when income has increased, demand for products does not decrease even if the price is high. The customers who are sensitive to price may take decision to buy products when the price has decreased or discount is provided. Some customers give priority to their social dignity, respect and satisfaction.
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Packaging: Meaning, Objectives, Functions and Levels of Packaging | Essentials of a Good Packaging

Meaning of Packaging


Any product of any company can be exported or imported to any country of the world. The products need to be exported or imported from or to far off countries. So, products are packed to make easy to do so. Generally, packing or parceling products is called packaging. This is an important task of marketing. It plays an important role in this competitive business age.
So, packaging is also called fifth ‘P’ of market mix. Packaging means putting any product safely in a pocket or pot or envelop. This makes the products more attractive, safe and trouble-free. This also works as effective communication.

Packaging also provides information to the consumers about features, quality, using method etc. This also plays a great role in maintaining quality of products. This also forms good impression on customers towards products. There are some products which may lose even their existence if they are not nicely packed. For instance, gas, camphor, alcohol, liquid medicines, kerosene, petrol etc. So, the products should be suitably as well as properly packed according to their nature. Liquid medicines, alcohol, beer, soft drinks like CokaCola, Fanta etc. are packed in glass bottles. Juice, meat, fish, oil, etc. are packed in tin cans. Similarly, fruits are packed in wooded boxes, ghee, water and other similar natural things are packed in plastic cans.

According to the nature of products, biscuits, breads, chocolates, etc. are packed in paper. Pulse, rice, etc. are packed in sacks or clothes. Nowadays products are packed in reusable materials. Packs should also be protective from environmental pollution. Plastic packing has negatively affected and dirtied the cities like Kathmandu. The government also can prohibit such materials used in packing. So, society and environment related matters also should be considered to use packing materials.

Packing can be done using different methods. Mostly there are three levels of packaging. Keeping the products in any port or bottles or bag is primary packaging. For instance, putting oil in a pot or can, cream in tube, etc. are primary packaging. Putting primary pack in any bag is called secondary packing. Generally such bag should be made of thick paper. After secondary packaging, the products are kept in wrappers, in cartons or cans. This is called shipping packaging. In such types of packaging, the products can be put in each packet such as one dozen, two dozens, twenty units, thirty units etc. This makes easy to supply, store, or transport the products.

Different writers and experts have defined packaging in different ways as follows:
According to Prof. Philip Kotler, “Packaging is the activity of designing and producing the container or wrapper for products.”

 

According to David J. Schwartch, “The package that contains protects and identifies the basic products.”

 

According to Prof. William J. Stanton, “The packing may be defined as all the activities involved in designing and producing the container or wrapper for a product.”

 

From the study of the above definitions, we can make out conclusion that packaging is the task which protects the products and gives identity. In other words, it keeps the products safe, makes attractive and easy to handle. It also helps in sales promotional activities.


Objectives of Packaging


Packaging is done to facilitate distribution and use of products. Its importance is growing day by day. The business companies have remained engaged in improving packaging how it can be made attractive. For doing such important task, some objectives are also ascertained. They are as follows:

1. Product protection


Most of the business firms produce quality goods. Packaging is done to protect quality, features, utility etc. This also saves products from different risk or damage. After the products have been produced, they need to be transported to target markets. For this purpose, they are properly packed according to their nature. If packing could not be properly done, they may be damaged, ruined or broken. So, the main objective of packaging is to protect products.

2. Product prestige


Every product needs packaging for carrying to sell or market from production place. Then the customers like to keep them secure until they use it. On the other hand, unpacked products do not look attractive. Packing is necessary for making product attractive, winning the heart of customers and increasing prestige of the products.

3. Easy in handling


Packaged products/ goods become easy to take from one place to another. On the other hand, packed goods can be used at any time when needed. Products are also packed with the objectives that the customers feel easy to handle and use them easily. So, proper packaging methods are devised by the producers.

4. Promotional appeal


Effective packaging gives information about the feature, quality and using methods. The producers give such information so that the customers accept the goods. So, good packaging is also called silent salesman. It effectively advertises the goods in markets. So, the producers include appealing information for the promotion of the products.

5. Reasonable cost


Good packaging should also have reasonable cost. Packaging cost should not be high burdening the customers. So, packaging of the products should involve reasonable cost so that the customers do not feel burden. So, packaging should be done with reasonable cost.


Functions of Packaging


Packaging involves many activities. This function gives protection to products keeping in packs. It also makes easy to transfer from production place to markets. The main functions of packaging can be mentioned as follows:

I. Basic functions


Basic functions of packaging are of different kinds. They are mentioned as follows:

  1. Product containment: At first packaging design should be prepared and produced. After this task is completed, the products are put into covers. The covers, containers or wraps or packs become different according to the nature of the products. In order to keep the produced goods in safe, bottles, containers, bags, tubes or drums or plastics, tin boxes or wooden boxes are used according to the nature of the products.
  2. Product protection: The second important function is to protect the products. This plays an important role to keep the quality and feature of the products fresh. It becomes impossible to supply goods to the customers without proper packaging. Packaging protects products from damage, breaking, leaking, or moistening or ruining. Any product should not get mixed with other products. Packaging protects products from such possibilities.
  3. Product identification: Besides brand, other instructions and information are also written on packs. Producer’s name, production date, usable duration, expiry date, suing methods etc. are written on packs. Composition of the packed products is also given on it. So, important information about the product can be obtained from pack. In this way, every packaging gives introduction of the product with which the customers feel easy to take decision to buy or not to buy.


II. Selling function


Packaging performs different activities related to sale. These activities are mentioned as follows:
  1. Promotion: Good packaging itself advertises the products. Good packaging attracts the customers and makes them confident about the quality of the product. Multiple packaging becomes successful to win the heart of customers in competitive situation. Such attractive packaging can be seen at super market, big shopping centers etc. So, it is said attractive packaging plays a role of silent seller.
  2. Creation of public image: Dependable and attractive packaging creates positive attitude of the public. If positive public image is created towards the products, the customers buy such products regularly. They also tell their relatives, friends, neighbors etc. about the products and suggest them to buy it. This plays an important role in the achievement of the objective of the company.
  3. Communication: Good packaging gives information about quality and features of the products to the customers. Together with this, the customers get every information about products mix, manufactured date, duration of the use of the products, method of use, keeping safe the product etc. from the packaging. Such information or notices motivate the customers to buy product.
  4. Product differences: Nowadays, many products of various companies can be found in markets. In this age of market competition, it is necessary to know which product belongs to which company. This becomes possible only from packaging. From this customers can take buying decision to the best product only by reading the information about quality, feature, price, mix etc.

Functions of Packaging


Levels of Packaging


Packaging should be done on the basis of nature and lastingness of the products. Packaging can be done at different standard and levels. According to the modern method, packaging can be classified as follows:

1. Primary package level


After the goods have been produced they are put in any container, bottle or wrapper. This is called primary packaging. The products are packed in such way that their quality and features do not get declined or damaged. This also creates convenient value for the customers.

2. Multiple package level


If the primary packed products are again packed in any other container, box or packs or anything, this is called multiple packaging. Different decorative and cosmetic goods can be packed in a single box. It makes the customers easy to use different goods taking out from a single box according to necessity. As it becomes easy for the consumers, sale of such products can also increase.

3. Distribution package level


Any product produced by any company needs to supply, send to target markets and even foreign countries. This needs transport and distribution packaging. Such packaging is also called shipping package. To transport them by bus, truck, plane, train etc. only packing in thick paper bags cannot be safe. The products to be transported in such way should be packed in tin or steel can or wooden box. Keeping products in these types of container is called distribution package. Such packaging becomes very safe and dependable.


Essentials of a Good Packaging

Good packaging is an important tool/ equipment for selling products. It gives short information about product and services. Besides, it also gives introduction of product and makes transportation easy. This is also taken as an important means for advertisement of the products. This motivates customers for impulse buying i.e. they buy products without plan. The following things should be studied to understand the necessity of good packaging.

1. Protection


Good packaging keeps safe the quality of the products when kept in warehouse or transported. Keeping safe quality, feature and utility of the products is the basic activity of packaging. So, packaging should be compulsorily done for the safety of the products.

2. Dependable


Producers sincerely mention true information on the package. Products in such package become good in quality. So, the customers confidently decide to use packed products. While buying such packed products, the customers are not confused. So, packed products become dependable and believable.

3. Easy in handling


Produced goods should be supplied to different target markets. They should be taken to or from warehouse. Taking out or in or supplying to far off places, the products should be easy in handling. Packed products become easy to handle or distribute.

4. Convenient


Design, shape, or form of packaging should be good. Good packaging becomes easy for middlemen, retailers, wholesalers and customers to handle, use or distribute. Such products become easy to store in warehouse, showrooms, and sell from sale centers, or to use by the customers.

5. Reasonable cost


Products should be made safe and attractive with effective packaging. But is should not be much costly. Much packaging cost increases price of the product. On the other hand, cheap packaging also should not be used. It causes decline in quality and utility of the products. So, packaging should be done with reasonable and balanced cost.

6. Easy to identify


Good packaging gives clear introduction of the product. One of the important tasks of good packaging is to provide clear introduction of the products. Manufactured/ production date, quality, features, price, utility, using method etc. should be compulsorily mentioned on the cover, can, bottle, or box. Everything should be clear to the customers about the product from the introduction written on the package.

7. Attractiveness


Packaging products should be attractive to the customers in looking. While packaging any product, much attention should be paid to its size, form, design, figure, printing etc. on the cover-pack. They are important tools for product sale. So, attractiveness should be taken as a necessary.
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Meaning of Branding, Characteristics, Objectives, Reasons for and Against Branding

Meaning of Branding


After producing goods, the producer provides sign or mark to justify ownership of the products. The same sign or mark is called brand. In other words, the name, sign, symbol or digit or letter is called branding of products. As various types of products enter in markets, every company or firm tries to give separate identity of the product and firm. So,
this task is called creative process. YamYam noodles, Puja Soap, Pepsodent tooth paste, Premise tooth paste, OK soap, etc. are some examples of branding. In this age of competition, there are various products’ substitute products in markets. Branding of the products plays an important role to identity the goods of any producing company or firm.

Products branding makes easy to a company to have product positioning. Its products and customers also feel easy to demand for the products. Healthy competition makes market management easy and strong. So, branding of the products is an important task. It reflects the features of the product. The brand of Brighter Tooth Paste reflects teeth become bright, if pasted with it. Brand / name of any product should be short, easy to pronounce and attractive so that it can be kept in mind by the customers. This makes both customers and producers feel easy in dealing. The combined activity of mark, trademark, brand etc. is called branding of product. It can be mentioned as follows:

1. Brand


Brand is the combined form of name, mark, word, sign or symbol used to as an identity of the product.

Different experts and writers have defined Brand in different ways. Important definitions have been given as follows:

According to Prof. Philip Kotler, “Brand is the name, term, symbol, or design or a combination or services of one seller or group of sellers and to differentiate them from those of competitors.”


2. Brand name


Brand name is the word, sign, symbol or letter which can be easily pronounced. Washing soap Diyo, bathing soap Liril, Cammay, Lux etc. can be taken as examples of brand name.

According to Prof. Philip Kotler, “Brand name is that part of brand which can be vocalized.”


3. Brand mark


Brand mark is the sign used to popularize product which can be identified easily by the customers but cannot be pronounced.

Prof. Philip Kotler has defined it as, “Brand mark is that part of a brand which can be recognized but is not alterable such as a symbol, design, or distinctive coloring and lettering.” The feature of attractiveness should contain in the product.


4. Trade mark


An established trade mark permitted by law, rules and regulations used to identify any production by a company is called trade mark. This mark becomes legal mark. It is protected and recognized by law. An owner of the company has the full right to use such mark. Trade mark can be legally recognized and protected only after getting the company registered from government office.

According to Prof. Philip Kotler, “Trade mark is a brand or part of brand that is given legal protection because it is capable of exclusive appropriation.”

 

For example, Dettol, Nycil, Break etc.


Characteristics of Branding


Branding of any product becomes very challenging. Different aspects should be considered while branding a product. If suitable brand is not given to any product, the product cannot live long in market. So, while branding a product, quality, features and characteristics or nature of the product should be studied. Branding should reflect the characteristics as follows:

1. Attractive


Branding of any product should be attractive. If brand name is attractive, customers are attracted to such products. As the customers themselves are attracted, much amount should not be spent on promotional activities. If the brand name is enticing, customers remember and call the name of such products. As a result, the name becomes popular among them.

2. Product features


Branding should reflect the features of the products. If brand reflects the feature of the product, various information can be obtained about the products. For example: GoGo Detergent Powder, Brighter tooth paste etc.

3. Short and simple


Brand name of any product should be simple and short. If it becomes short and simple, it can be easily pronounced and remembered. But if it becomes complex and difficult to pronounce the customers cannot remember nor pronounce. As a result, the product does not become popular. Diyo Soap, Puja Soap, Brighter tooth paste, Baba biscuit etc. are some of the examples of short, simple and easy brand names.

4. Easy to pronounce


The brand name of any product should be easy to read or pronounce. The brand name should be easy to pronounce for all levels of customers such as educated, uneducated, children, young, old, men, women etc. Difficult brand name to pronounce makes customers feel difficult. As a result, the product becomes popular.

5. Distinctive


Brand name should be very new and distinctive from competitors’ products. If the brand name becomes similar to competitors’ products, there arise difficulties in marketing mix. Customers also may be confused. So, brand name should be new and distinctive.

6. Suggestive


Brand name ‘Safa Sabun’ suggests that it makes cloth clean, if washed with it. Similarly, A.M. P.M. – Tooth Brush suggests that teeth should be brushed in the morning and evening.

7. Registrable


Brand name of product should be registrable. It should not be similar to those which have been already registered by other companies. Similarly, brand name which has been banned by law of any country should not be kept. If the brand name could not be kept separate and distinct from others, the producing company cannot have right of sole ownership. Besides, repeated brand name or already used brand name should not be used. If done so, promotion of the product cannot be made with the unqualified brand.

8. Avoidance/ lack of obscenity


While branding of any product, social values and norms should be specially considered. It should not be obscene and should avoid obscene word, sign or symbol. Even unknowingly if such obscenity is used the whole society boycotts such products. So, brand name for the product should be selected carefully so that every class, group, and society can accept it.

9. No hurting religious feelings


The brand name of a product should not hurt the religious feeling, tradition, values and norms of society. Brand of product should be kept respecting religious feeling and belief of any group of society. If any such mistake is done in selecting brand, the related religious people feel hurt in their religious belief due to which marketization of the product gets hampered.

10. Memorable


When once the brand name of a product is heard, it should be easily remembered. The brand name should be able to leave impression on the customers even when it is heard once. If such brand name is kept, trust and loyalty of customers to the product becomes long lasting.


Objectives of Branding


One of the many important functions of marketing is product branding. Name, symbol, sign or letters given to the any product by its producer for separate identity are called branding. In this age of business competition, its importance cannot be underestimated. Branding to any product has important objectives. They are as follows:

1. Business organization related objectives


Business organizations give brand name to their products. They give brand name to achieve the following objectives.
  • Safety from competition: Business organizations give brand name to their products so as to make easy to positioning and advertise the product. It helps customers to know about quality and features of the product. In this way, the product can be saved from unhealthy competition.
  • Promotion: Business organization should conduct promotional activities. Brand of the product greatly helps in conducting such activities. Brand also helps to know about price and features of the product. So, production organization aims to promote the product while giving brand to the product.
  • Brand loyalty: The customers can get information about the feature, quality, price, aim and utility of the product. They can easily know about the company and its products. In this way, the objective of a company is to make customers loyal to brand name by maintaining quality.
  • Product mix expansion: Quality product is first given brand name. In this way, product line or products can be expanded in markets. New products can be easily taken to target markets. So, the business firms have their objective to expand products mix.
  • Legal protection: The brand name of the product registered by fulfilling legal requirements cannot be used by any other producers or companies. But such brand name can be given on hire, lease, or can be sold to any company to use it. So, the concerned company forms its objective to have legal protection.
  • Product positioning: In order to positioning any product, it should be given brand. It can be easily distinguished on the basis of brand. Loyal customers can be provided sufficient description by comparing brand of the products. So, every company forms its objective of product positioning.

2. Society related objectives


Every company determines some important society related objectives. They can be mentioned as follows:
  • Consumers’ welfare: While buying branded products, the rights of the consumers remain secure. Consumers can get legal remedies if they have been given wrong or false information, or found any defect in the products. If some wrong products are sold to customers, the company should take responsibility for it. So, the producer company has the objective to give special attention to the interest of the consumers.
  • Environmental protection: The companies which give brand to their products also become equally careful towards environment. They try to protect environment. In fact, the products of the company which do not pay attention toward protection of environment may be boycotted by the society. So, the producers themselves form objective to protection of environment.
  • Social welfare: Popular and reputed companies/firms conduct social welfare activities while branding their products. Such activities contribute to the interest of the society and welfare of the companies themselves. The society accepts the products of such companies with priority.

3. Customer related objectives


The producer company also forms customer related objectives. Such main objectives are mentioned as follows:
  • Product identification: The customers can easily identify and adopt the branded products. They take decision to buy products by comparing with other company’s products on the basis of brand. While taking decision to buy such products, there does not remain possibility to be confused, cheated or misled. Hence, the producers make their objective to give exact introduction or their products.
  • Price stability: The producers always aim to maintain price stability. The price of the branded products is fixed by the producers themselves. So, the price of such product does not change frequently. The producers try to keep price stable for long time.
  • Quality stability: The producers try to maintain stability in quality of the branded products. If quality of the product declines for any reason, the customers’ attitude towards such products becomes negative. Hence, the customers can always get opportunity to get high quality products. So, the producers try to maintain stability in the quality of branded products.
  • To maintain the prestige: All the branded products make customers’ prestige high. When the quality products enter into markets, the customers feel satisfied with the quality products, due to which their image also heightens.


Reasons For and Against Branding

1. Reasons for Branding


Branding of product gives satisfaction to customers besides enhancing image of the company. As only quality products are given brand name, it has more importance. This task also plays an important role for society including customers. There are many reasons for branding products. The main reasons are as follows:
  • Product identification: The customers can easily identify / recognize branded products. They can easily buy branded products whichever they want. They do not become bewildered to buy. There does not remain possibility to be cheated. So, products should be branded for the protection of the customers.
  • Price stability: The price of the products is fixed by the production company itself. The price of branded products does not fluctuate frequently. So, price of such products remains stable. That’s why, the producer gives brand name of the products.
  • Quality stability: The producers give brand name only to the quality products. They make policy not to give brand name to the quality less products. Quality of branded products does not decline. So, firm or company tries to maintain quality so that the customers can always get quality products.
  • Regular supply: Producer, at first, gives brand name to the products. Such branded products are regularly supplied to target markets. The customers can easily get demanded products. Products are given brand name with the intention that products demanded by customers become available in market.
  • Demand creation: Information about quality, feature and price etc. is given in branded products. Brand promotes sale of the products. It creates demands by attracting possible customers. It also encourages customers by appealing them to buy products.
  • Time saving: Branded products do not take long time for selection. Customers can give prompt purchase order by mentioning brand of the products whichever they like. As adequate information can be found in the branded products, selection of product becomes fast, time is saved. So, products are also branded for time saving.
  • Prestige: Branded products heighten the customers’ prestige. Branded products increase customers’ dignity in society. So, producers give brand name to their products to help to increase customers’ prestige and dignity.

2. Reasons against Branding


After the production of goods, it should be branded. Branding of product per unit price can also increase. Some producers supply their products to target markets without giving brand name. Some products become difficult to give brand name to their nature. So, producers may adopt a policy not to give brand name of such products. There are many reasons against branding; the main reasons are mentioned as follows:

  • Increase in price: Branded product may be more expensive than unbranded ones. Brand name should reflect the quality and features of the products. Promotional activities also should be conducted for the branded products, due to which per unit price of such products becomes higher. So, decision can be taken not to give brand name to the products to save for high price.
  • Low quality: Some products are not branded due to being unable to maintain quality. Customers also do not believe in products whose minimum quality cannot be maintained. Once they have bought and used, they do not buy such products again. So, brand name should not be given to some products.
  • Perishable products: While giving brand name to any products, their nature also should be considered. These types of products should be sold promptly. Such products may be perishable. An arrangement should be made to sell such products without giving brand name. Vegetable items, fruits etc. should not be branded. They are perishable goods. So, they should not be given brand name.
  • Homogeneous products: Many companies may produce same type of products. It becomes difficult to identify which product belongs to which company. Raw materials, paddy, wheat, millet, maize or all the food stuffs are the examples of such products. They cannot be distinguished by branding. So, such homogeneous products should be sold without branding.
  • Legal procedure: Legal procedure should be fulfilled for branding. Government prescribed legal procedures and requirement should also be carefully considered. It needs to spend time and money for fulfilling such requirements. So, some production companies decide not to give brand name to their products to avoid legal troubles.

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Marketing activities in Different Stages of Product Life Cycle

Marketing activities in Different Stages of Product Life Cycle      


The products to be used by consumers remain in different stages. So, marketing should pay attention towards the condition/situation of its products and consider what extra facilities should be given to supply to the markets. Different activities should be conducted at different stages of the life cycle of the products. Such activities are called marketing activities.

The main activities can be mentioned as follows:

1. Marketing Activities at Introduction Stage


At this stage, the new products enter into markets for the first time. So, the customers should be impressed that the new product is better than those found in the market. This is one of the many activities to be adopted at this stage. Pricing policy may also be adopted accordingly. Especially, the following activities may be conducted at this stage of the products:
  • Product: When the new products of a firm appear in market, the customers should be convinced that the new products are more useful than the old ones. It is also necessary to justify the utility of the new products is more than the others. Besides, after-sale services and conditions also should be explained to the customers.
  • Price: While fixing price of the new products, two main points should be kept in mind. (a) If it is to adopt a policy to earn full profit from a certain market, price should be fixed high. It is called market skimming strategy. (b) Another alternative method can also be applied. If it is to cover greater segment of market, low price should be fixed from which a success can be achieved at the introduction stage of the products.
  • Promotion: The consumers should be fully informed about the features, quality and utility of the new products. For this task, heavy advertisement, personal selling and other promotional activities should be conducted effectively through which the possible customers can be attracted towards the new product.
  • Place: At first, a proper channel should be selected at the introductory stage of the product. After selecting it, efforts should be made to enter the suitable market. If done so, there does not remain fear of failure.

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2. Marketing Activities at Growth Stage


Growth stage of product life cycle is the second stage of the product. At this stage, the firms or producers should adopt low pricing policy. Besides, the new products can also be properly distributed by entering to new distribution channels. The producers can foster different activities to promote sale of the products. At this stage, the following main activities should be conducted.
  • Product: At first, the marketing expert should change the quality of the product; he should include new features in the new product. It is also compulsory to provide effective after-sale services and warranty.
  • Price: The customers may be sensitive about price of the new products. So, the firm or producer should adopt a policy to fix low price at appropriate time, by which rational customers can be attracted.
  • Promotion: Full knowledge about the product or services should be given to the customers. Information about place and products should be made available in right time and right place. Personal sale, advertisement and other promotional activities should be increased properly.
  • Place: The producer should give more importance to the goal of market extension. Easy environment should be created to enter new markets. Such activities popularize the products and cover more area.

3. Marketing Activities in Maturity Stage


Every firm or production company makes the objective to mobilize its resources and means in profitable areas. For this, weak products should not be supplied to new market segments. In fact, activities towards market modification and marketing mix modification should be conducted at this mature stage. The following activities should be conducted at the maturity stage of product life cycle.
  • Product: At first improvement should be made in quality at this maturity stage of product. Product differentiation is also equally important. Product mix should also be changed. The products which cannot compete in market should be abandoned. The improved product needs to be made reliable, long lasting and give new taste. Product improvement policy should be adopted for the same.
  • Price: At this stage, a healthy and proper competition takes place. So, price should be fixed on the basis of market competition. At this stage, low price should be fixed.
  • Promotion: At this stage, marketing expert should pay special attention to brand loyalty. Efforts should be made to increase such activities by properly using sale promotion equipment. After sales services should be made more effective, dependable warranty should also be provided to meet other terms and conditions after sale.
  • Place: At this stage, the producer or firm should use new distribution/ supply channel. This activity helps to stabilize product distribution. This activity helps to take new place in new market segment.

4. Marketing Activities in Declined Stage


Market competition continues even in the declining situation of the product. When the demand for product becomes weaker, the product should not be produced. While adopting such strategy there remains least chance of losses. At this declined stage of the product life cycle, business can continue with the following activities:
  • Product: Producers or firms produce different types of products. Among them weak or less demanded products should be identified. Decision should be taken to abandon such goods immediately. The market of the weak products should be left uncared without improving the product.
  • Price: Demand for some products may continue. So, price should be increased of such products. On the other hand, there may not be demand for some other products; the price of such products should be decreased.
  • Promotion: No investment should be made on advertisement, personal sale and other promotional activities without carrying out product research and development. However, some specific market segment may be promoted for target customers.
  • Place: Declined stage is the weakest stage in the product life cycle of any product. So, at this stage only especially capable distribution channels should be given permission for product distribution.
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