1.

marketing of services vs marketing of products

MARKETING includes identifying unmet needs; producing products and services to meet those needs: and pricing, distributing, and promoting those products and services to produce a profit. Marketing is an integrated communications-based process through which individuals and communities discover that existing and newly-identified needs and wants may be satisfied by the products and services of others. Marketing is defined by the American Marketing Association as the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. [1] The term developed from the original meaning which referred literally to going to market, as in shopping, or going to a market to buy or sell goods or services. The Chartered Institute of Marketing defines marketing as "The management process responsible for identifying, anticipating and satisfying customer requirements profitably."[2] Marketing practice tended to be seen as a creative industry in the past, which included advertising, distribution and selling. Four Factors That Distinguish Services Marketing It's been called "selling the invisible"-delivering intangible services as a core "product" offering. But invisibility, or intangibility, is just one factor that distinguishes services marketing from product marketing. Along with inseparability, variability, and perishability, these four characteristics affect the way clients behave during the buying process and the way organizations must interact with them. Differences between service marketing and product marketing 1. When you are marketing a service, you are really marketing relationship and value. This relationship and value needs to be marketed differently than if you are marketing actual products. 2. Another major difference between marketing services and marketing products is that when a buyer purchases a service, the buyer is purchasing something that is intangible, instead of a tangible product, like a computer or a sprinkler system or a web page. 3. Consumers' concept of a service is often times based on just the reputation of only one single person. Instead of building a reputation based on the quality of a number of different products, a

service is built on how well a particular person delivers on a service, such as how well a stock advisor does with your stock portfolio. 4. It is pretty easy to compare the quality of different products. It's easy for you to see if one computer works more quickly than another computer, or if one TV has a better picture than another picture, or if your child can break a toy more easily than another toy. However, it is much more difficult to compare the quality of similar services that are provided. 5. Products are returnable. However, services are not returnable. How to market services Generally speaking, marketing a product requires what are known as the "4 P's": Product, Price, Place, and Promotion. Marketing a service adds three more "P's" to the traditional "4 P's": People, Physical evidence, and Process. Service marketing also includes marketing what is known as the servicescape, which is the aesthetics of your business place: the outside of your business building, the inside of your business building, and the way that the employees look. OR

Services marketing
Services marketing is marketing based on relationship and value. It may be used to market a service or a product. Marketing a service-base business is different from marketing a goods-base business. There are several major differences, including: 1. 2. 3. 4. The buyer purchases are intangible The service may be based on the reputation of a single person It's more difficult to compare the quality of similar services The buyer cannot return the service

The major difference in the education of services marketing versus regular marketing is that instead of the traditional "4 P's," Product, Price, Place, Promotion, there are three additional "P's" consisting of People, Physical evidence, and Process.[1] Service marketing also includes the servicewomen referring to but not limited to the aesthetic appearance of the business from the outside, the inside, and the general appearance of the employees themselves. Service Marketing has been relatively gaining ground in the overall spectrum of educational marketing as developed economies move farther away from industrial importance to service oriented economies. What is marketing? Marketing is the flow of goods and services from the producer to consumer. It is

based on relationship and value. In common parlance it is the distribution and sale of goods and services. Marketing can be differentiated as:

Marketing of products Marketing of services.

Marketing includes the services of all those indulged may it be then the wholesaler retailer, Warehouse keeper, transport etc. In this modern age of competition marketing of a product or service plays a key role. It is estimated that almost 50% of the price paid for a commodity goes to the marketing of the product in US. Marketing is now said to be a term which has no particular definition as the definitions change everyday.

Product marketing
Product marketing deals with the first of the "4P"'s of marketing, which are Product, Pricing, Place, and Promotion. Product marketing, as opposed to product management, deals with more outbound marketing tasks. For example, product management deals with the nuts and bolts of product development within a firm, whereas product marketing deals with marketing the product to prospects, customers, and others. Product marketing, as a job function within a firm, also differs from other marketing jobs such as Marcom or marketing communications, online marketing, advertising, marketing strategy, etc. A Product Market is something that is referred to when pitching a new product to the general public. The people you are trying to make your product appeal to is your consumer market. For example: If you were pitching a new video game console game to the public, your consumer market would probably be the adult male Video Game market (depending on the type of game). Thus you would carry out market research to find out how best to release the game. Likewise, a massage chair would probably not appeal to younger children, so you would market your product to an older generation

2.Selling v/s marketing

SELLING 1 Emphasis is on the product 2 Company Manufactures the product first 3 Management is sales volume oriented 4 Planning is short-run-oriented in terms of todays products and markets 5 Stresses needs of seller 6 Views business as a good producing process 7 Emphasis on staying with existing technology and reducing costs

8 Different departments work as in a highly separate water tight compartments 9 Cost determines Price 10 Selling views customer as a last link in business MARKETING 1 Emphasis on consumer needs wants 2 Company first determines customers needs and wants and then decides out how to deliver a product to satisfy these wants 3 Management is profit oriented 4 Planning is long-run-oriented in todays products and terms of new products, tomorrows markets and future growth 5 Stresses needs and wants of buyers 6 Views business as consumer producing process satisfying process 7 Emphasis on innovation on every existing technology and reducing every sphere, on providing better costs value to the customer by adopting a superior technology 8 All departments of the business integrated manner, the sole purpose being generation of consumer satisfaction 9. Consumer determine price, price determines cost 10. Marketing views the customer last link in business as the very purpose of the business

3.Marketing Strategy Vs. Marketing Plan

A marketing plan is a road map.

A marketing strategy is an overall approach to designing products to meet customer needs, letting customers know that these offerings are available, and giving them reason to purchase them. A marketing plan provides concrete details for implementing a marketing strategy, with specifics about budgeting and time frame, as well as indicators for gauging the success of different marketing efforts.

1. Role of a Marketing Strategy

o

A marketing strategy provides vision, tying a company's product development and marketing activities to its larger vision. For example, a company whose marketing strategy is to build relationships with loyal customers over time will likely have a long term business strategy of functioning with integrity. This marketing strategy can act as a bridge linking the company's overall mission with the specifics of its marketing plan, making sure that its details also perpetuate broader company ideals.

Role of a Marketing Plan

o

A marketing plan explains in text and numbers how a company will achieve a specific marketing objective, such as increasing sales or introducing a new

product. A marketing plan should include a general introduction clarifying its scope. It should also provide a marketing budget, detailing how much money the company will spend to achieve this objective as well as how it will use these funds. In addition, a marketing plan should specify which data the company will use to assess how well these investments are working.

Relationship
o

A marketing strategy is generally not tied to a particular time frame but rather informs company decisions and company plans. A marketing plan is the manifestation of the marketing strategy with reference to a particular innovation or time frame. For example, a company's marketing strategy might be to build a customer base over time by providing quality products and excellent service. Its marketing department might prepare a marketing plan for the process of introducing a new product, applying the general principle of maintaining quality to the specifics of building and servicing this particular product in the most effective possible way.

Differences
o

A marketing strategy can provide direction and vision, but it is not sufficient in itself to direct a marketing department's actions. Too much specificity in a company's marketing strategy has the potential to limit possibilities, while too much generality in a company's marketing plan has the potential to provide an insufficient framework for attracting and keeping customers. A marketing plan should be revised over time as a company tinkers with its details and cuts out elements that do not work. A marketing strategy can remain static, providing consistency as the marketing plan evolves.

2.Differences Between Marketing Strategy and Marketing Plan

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5. 6.

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To successfully develop a marketing campaign, you would need both a Marketing Strategy and a Marketing Plan. These two terms may sound alike, and have often been confused for one another, but they actually have different meanings. Developing a Marketing Strategy involves addressing business goals with a comprehensive review and firm understanding of the interrnal and external environmental factors including the business and its objectives, the marketplace and its opportunities, the competition, the target audience. This process is also known as Strategic Marketing Planning. The strategy is long term, and will define your priorities, your area of focus, your positioning and your key target audience, the relevant messages. The Marketing Plan is the writen documentation of the execution of your marketing strategy and involves taking the information gathered through strategic marketing planning and to implement a campaign and evaluate its results. This is also known as Tactical Marketing. Common marketing tactics or activities include advertising, search engine optimisation, direct mail, trade show, public relations, viral marketing campaigns and email marketing. A successful marketing campaign encompasses both strategic and tactical elements. Many people think of marketing as advertising and brochures, but is it much much more. Differences between a Marketing Strategy and a Marketing Plan Marketing Plan Tactical How of the business Short term Doing Journey

Marketing Strategy Strategic What of the business Long Term Thinking Destination

4.niche marketing v/s mass marketing

Niche marketing can be defined as: Where a business targets a smaller segment of a larger market, where customers have specific needs and wants Targeting a product or service at a niche segment has several advantages for a business (particularly a small business): Less competition the firm is a big fish in a small pond Clear focus - target particular customers (often easier to find and reach too) Builds up specialist skill and knowledge = market expertise Can often charge a higher price customers are prepared to pay for expertise Profit margins often higher Customers tend to be more loyal The main disadvantages of marketing to a niche include: Lack of economies of scale (these are lower unit costs that arise from operating at high production volumes) Risk of over dependence on a single product or market Likely to attract competition if successful Vulnerable to market changes all eggs in one basket By contrast, mass marketing can be defined as: Where a business sells into the largest part of the market, where there are many similar products on offer The key features of a mass market are as follows: Customers form the majority in the market Customer needs and wants are more general & less specific Associated with higher production output and capacity (economies of scale) Success usually associated with low-cost operation, heavy promotion, widespread distribution or market leading brands Differences between mass marketing and niche marketing Niche marketing and mass marketing have many differences. These are:

1. Mass marketing has to do with selling ordinary things to very large numbers of people at quite cheap prices. Businesses can get high volume sales but at a fairly low profit margin meaning that there is little difference between what it costs to make the product and what the business can sell for it. But in Niche marketing the marketers serve specialist consumers and this can give high profit margins. Small businesses are especially suited to niche marketing. 2. Niche marketing targets a smaller market in which there is a particular focus on which group the firm wishes to concentrate on. In most cases, niche marketing focuses on markets that are not reached by mainstream providers. On the other hand, mass marketing deals with big numbers and an even bigger community. If a mass marketer targets parents, a niche marketer will go smaller, targeting the more specific group of single parents. 3. In mass marketing, the focus is normally on attracting as many customers as possible. While in niche marketing it is all about getting that particular group of society to like your product. 4. Mass marketing uses expensive forms of media to reach out to the people. Mass marketing firms spend a lot of money on advertising on radio and television. As for niche marketing their budget is not wide enough to support mainstream media advertising. The most common way of advertising for them is through the internet. Examples would be through e-mails. They could also use magazine advertising but this would be on a very small scale such as trade journals. 5. Mass marketers focus on high sales at low prices while niche marketers focus on high sales at high prices. But most times the result is low sales at very high prices. In Niche marketing the product is tailor-made for customers while in Mass marketing the product is for the general public.

5.B2B marketing V/S B2c Marketing

B2B and B2C are terms coined and popularized by the worldwide web for commerce and eBusiness sales. Although the marketing programs are the same for each type of business (Internet/direct marketing, advertising, public relations, word of mouth and alliances), the purchase motivation is different and they have different needs when it comes to the information that they need in order to make the decision to purchase. B2B is contemporary shorthand for a longtime sales practice called business-to-business while B2C represents business-to-consumer. In essence, B2B deals primarily with other businesses, not the general public, and B2C provides products and services directly to the end user. The initial step in establishing marketing strategies for both B2B and B2C is somewhat similar. You have to identify first who your target customer is then figure out why this particular customer needs to hear your message. From there, the marketing activities diverge.

Below is the summary of the key differences between B2B marketing and B2C marketing. Your marketing plan has to take account and consider these differences to ensure you are developing the right types of activities intended for your particular market.

B2C Businesses that Sell to Consumers

Product driven Maximize the value of the transaction Large target market Single step buying process, shorter sales cycle Brand identity created through repetition and imagery Merchandising and point of purchase activities Emotional buying decision based on status, desire, or price

The B2C category has expanded greatly in the late 1990s with the growth of public access to the Internet. It largely equates to electronic retailing and its main objective is to aggressively convince prospective buyers to shop. B2C companies employ different marketing campaigns for publicizing their goods and services. This would include coupons, vouchers, email blasts, banner ads, limited edition offers and the likes to entice their target market to buy. These campaigns are much shorter in duration thus the urgent need to secure the customers interest very quickly. The path to purchase must be short and simple just a few clicks from email receipt to order confirmation. Any more than a couple of clicks and the customer is likely to abandon the shopping cart. The call to action must be obvious and the offer enticing. As such, email campaigns often highlight special deals and discount that can be used both online and in store. They can also be informative especially if the aim is to build the brand and enhance customer loyalty. Loyalty is an important aspect in B2C marketing. This proved very true for companies like Amazon, Best Buy, and Staples. They combine good customer service and education on their product and services thus their customers keep coming back.

B2B Businesses that Sell to Businesses

Relationship driven Maximize the value of the relationship Small, focused target market Multi-step buying process, longer sales cycle Brand identity created on personal relationship Educational and awareness building activities Rational buying decision based on business value

The sales cycle in the B2B world is often much longer and more complex. It mainly maximizes on the value of relationships. A B2B company needs to focus on maintaining communication and building relationships. Marketing activities involving lead generation that can be nurtured during the sales cycle can be used to attain this goal. B2B features a multi-step buying process that needs more than one person to decide on the purchase thus B2B companies employ marketing to educate its target audience. Take for example in an email campaign, your objective is to drive prospects to your site to learn about your products and services. B2B newsletters therefore must

be direct and professional and should encourage the audience to bite into your call to action. The content must be straight to the point, should have contact information for offline communications and the landing pages are easy to navigate and utilize. It must contain information on features, benefits, and possibly pricing. In the B2B sales cycle, email campaign is usually the first step towards a series of integrated touch campaign that may include telemarketing, direct mail, and personal follow-up by sales representatives who will thoroughly discuss business details and move the prospect on the next step of the sales cycle. In B2B, content is king for marketing paraphernalia. Media coverage of your products and services also helps in delivering your message across your target audience.

Difference Between B2B and B2C

In the sales industry, your main goal is to sell your product and maximize your profit. In doing this, you have one major choice to make. Do you want to sell to end-users or consumers or would you prefer to sell to other businesses that need your products? Which of these groups of customers you choose to sell to will determine your entire marketing strategy. Ads by Google SWOT Analysis Tool Get a free 30 day trial of Mindjet the leading Mindmapping Tool! www.Mindjet.com The terms B2B and B2C were developed to signify or denote your target market. The terms first grew around the online community but then broadened to include offline sales as well. B2B refers to your potential market being a business and if you are a B2B business, your primary activity is business-to-business sales. The term B2C refers to a business-to-consumer sales situation.

Differences in B2B and B2C

The organization and execution of your marketing program depends on which of these two markets you have chosen to enter. The B2B market relies on very different sales strategies to be successful than the B2C market. The B2B sales market heavily relies on relationship selling. The sales are obtained in a longer sales cycle than B2C sales. The differences in the characteristics between B2B sales and B2C sales and their associated marketing schemes are plentiful.

Sales
B2C sales are driven by highlighting the advantages of the product and its usefulness. Depending on how the product is presented to the end user, it may appeal to them based on novelty, ease of use, appearance or price. Any one of these characteristics can influence the sale to a consumer. B2B sales are made based on your relationship with the purchaser. One of the most important jobs for a B2B salesperson is to build a relationship with the decision maker in your customer's business. The emotional part of the sale is based on the interpersonal relationship in a B2B sales environment whereas the emotional part of the sale in a B2C sale is between the customer and the product. The method used to maximize your sales volume involves relying on the relationship in a B2B sale. It is important to remember that the sales cycle will be longer with a relationship based sale to a business. For example, a business may buy a few of the products to evaluate and then a larger order will follow the evaluation of the first few. In B2C sales, the sales volume is based on getting the customer to by more than one product. Entice them to get one for a friend or relative.

Market
The market you target when selling your product is also very different among B2B and B2C businesses. B2B sales are focused on a very narrow segment that has a use for your product. Those businesses that can make use of your product to save them money or make part of their business more productive or easier will be the market on which you spend your time and marketing efforts. In B2C sales, your market is the entire sales market of consumers. There is very little discrimination or qualification of potential customers. If the product appeals to them, then they are a customer to which you may sell your product. Ads by Google Study In Germany Pursue Higher Education in Germany Get Expert Guidance and Free Advice www.egeglobal.com Free Kitchen Catalog 2013 By SLEEK - The Kitchen Specialist. Get Product Catalog Delivered Now! SleekWorld.com/KitchenDesignCatalog

Sales Cycle
The sales cycles and length of time to achieve a sale is very different between B2B and B2C sales. Selling to a business involves passing through internal "red tape" in order to get the approval for a company to buy your product. Once the approval is received, the order is placed and the product is delivered. The bill is then usually paid on a net 30-day schedule so the profit to be achieved is at least a month out on most sales. With B2C sales, the sale is almost instantaneous. The customer decides to buy and pays right then. The product is paid for and you move on to the next customer. B2B sales are almost entirely based on a rational decision of business value to your customer. The product will simplify a task, provide less waste, increase productivity or cut down labor costs. These are only a few of the reasons the product is attractive to your business customer. In B2C sales, the sale is emotional due to the status of owning it, value that it provides the customer, or simply the price.

6.DISTRIBUTION V/S DIRECT

Distribution Vs Direct What should you consider?

We had been working with the new client for a couple of months. I was looking forward to this opportunity to tag along with their lead salesman on a visit to one of their best customers. The salesman had a reputation for identifying the buyers needs and presenting the product features that met those needs. When we got out of the truck I was surprised to see we were at one of his dealer locations. As we went inside he introduced me to the owner of the dealership and we then proceeded to solve a problem the dealers technicians were having with installation of one of the units they had sold. I met the dealer, but I never saw the end user. Neither did the salesman. As we drove away I tried to understand what had happened. This guy was a really good salesman. The service he had provided to the dealer was certainly valuable. The installation problem was solved, so the dealer was happy now. Although everyone seemed satisfied, nothing seemed right.

The problem was, that salesman was only an adequate technician, so while he had gotten the unit installed that afternoon, he was not the best person for that task. Unfortunately, such tasks made

up the majority of his daily duties. It turned out that he spent almost no time actually selling to end users, where his unique skills could be put to best use. I began to see what was wrongthe company had forgotten the difference between dealers and customers.

Dealers can be a vital component of your sales, marketing, and distribution programs, but what your dealers need from you is different from what customers (end users) need, and companies that confuse the two are not going to do what is best for their customers or their dealers.

Dealer, Customer, Whats the Big Difference? Dealers carry your product for resale. Customers purchase your product to consume it, to use it up. Dealers don't "want" your product, they want a sale!

To be effective through a dealer network you need someone on your team who will recruit the dealers who will do the best job for your company, selling them on the idea of carrying and promoting your product. It may require a different person on your team to train those dealers to sell your product. Remember, those dealers dont need to be sold your product, they need to know how to sell it to end users. Those dealers will also need someone who will provide them with support when they need a problem solved. Finally, you need someone to be your cheerleader, to keep the dealers pumped about your product.

The most important thing you need to appreciate is that your dealers are not actually buying your product, they are reselling your product. They are only interested in your product to the extent that their customers are interested in buying it from them. Your sales efforts are not properly directed at encouraging dealers to buy from youthose efforts should be spent showing them how to sell for you. Because of this not so subtle distinction, too many manufacturers have sales forces trying to accomplish the impossible task - selling product to the dealers.

The only person actually purchasing your product for consumption is the customer. Features and benefits make a difference to your customers because they make your product more useful, better able to accomplish whatever they purchase it for. Your dealers are also interested in your product features, but only because those features help them sell to the end user, your mutual customer.

Your Product If you want a pound of nails, you go to a hardware store and buy them. If you expect to use 10,000 pounds of nails, you may wonder whether you need to go through your local hardware store to acquire them. A dealer is the only logical source of some products and some quantities of products. On the other hand, as the products become larger in quantity or more custom in nature, the dealers role may become less important. In fact, the dealer is sometimes viewed as an inconvenient buffer between the producer and the user. What determines whether a dealer is valuable or unnecessary? Value added.

We all need to be reminded that the product is more than the contents of the box we ship out. The product (from the consumers perspective) is also the technical support the customer can reasonably expect, the warranty, the credit terms, and the host of other intangible and often unspecified (on the order) features the customer expects to receive. Dealers offering service and local parts availability may be adding value to that product, and a company able to offer those features may have a competitive advantage over a company that cannot. On the other hand, if a customer needing a part has to go to a dealer, have the dealer call your plant to order the replacement part, then later come back to the dealer, pick up the part, and self install it, what did the dealer contribute other than a layer of inconvenience that could have been avoided by calling you directly? It is critical that you understand what your real customer (the end user) actually wants, and then strive to offer that product. If your dealer network is offering something that a significant portion of your market does not need, you may have to reevaluate your dealers role. You also need to be sure that your dealers are not preventing you from offering your market what it really needs.

Why Have a Dealer Network? Dealers and distributors can benefit your company and your customers in several different ways. 1) Dealers are a fast and relatively inexpensive means to achieve wide distribution for your product. 2) Dealers permit you to focus more on production and concentrate less on developing and maintaining a sales organization. 3) Dealers may know their local market better than you do. 4) Dealers stock necessary parts and provide service for your product 5) Dealers can demo your product.

6) There are some products that customers want to purchase in a shopping environment. They want to walk around and look at the selection, not call an 800 number and place an order. In short, dealers can add value to your product.

What About Going Direct? A paradigm shift is occurring with automobiles. Advertisements promote automobiles that go 100,000 miles without any required dealer maintenance. If that claim proves true, the customers need for the dealer begins to shift. More reliable and service free automobiles lessen our dependency on the dealers. This could open up many new options to the traditional dealer network for automobile manufacturers. While some people will want to continue purchasing from a traditional showroom, some of us may prefer to buy directly from the manufacturer over the Internet, especially if buying direct saves us some money. Why might a manufacturer consider a direct channel? Lets consider some of the potential benefits: 1) Increased margins - Lets stop talking about cars and consider a lower priced product. You make a product and sell it through your dealer network. So does your competition. The product has a retail price of $500. Your dealers purchase your product at a 50% discount from retail ($250), and sell it for 10% off retail ($450). Your production, marketing, and distribution costs are virtually identical to those of your competition. Your bottom line shows you making a net profit of 10% ($25.00) per unit. If you were to sell your product direct at 75% of list price, not only would you be the lowest priced competitor in the market, you would earn $250.00 profit per sale instead of $25.00 (a 1000% increase) - a difference worth considering. Sure, your unit sales might drop a bit, but you can afford fewer units with margins like that. Remember, you arent in business to make units, youre in business to make money. If you chose to lead the prices down, you could starve out your competition and their dealers while still making more profit than ever before. If nobodys dealers are adding much value to the sale, your direct approach could make you the only survivor in the market. With luck, your competition would not be able to set up direct sales and distribution quickly enough, and your lower retail prices would not leave enough room for manufacturers and dealers to make adequate profits to justify staying in the game together. You win. 2) A chance to actually sell your product - Your product has a lot of characteristics, and some of those characteristics, properly presented by a good salesperson (or advertisement), are valid reasons for a customer to choose your product, even if it costs a little more. Ask yourself the question, are your dealers actually selling your product or are they simply accepting orders for products your marketing efforts have pre-sold? What extra value has the dealer added to this transaction? Did you make the product, and then sell the product with your marketing efforts, only to then let a dealer take the lions share of the profits? Too many manufacturers are discovering

that their dealers are simply taking orders for products their customers already wanted. You may not need to lower your price or add features in order to dominate your market.in too many cases all you need is to start selling the features your product already has! 3) Better compete with small competitors - Your dealer margins may be providing an opportunity for small competitors to flourish. Lets say a national producer establishes fair market value for a product, and sells through a dealer network. Local (less efficient) producers sell direct to the end users at a discount. In spite of their lower efficiency, the small producers maintain the same (or greater) margins as the larger organization. How? No dealer. Plus, the local manufacturer has plenty of opportunity to actually sell his products features, and in the process, obtain valuable customer feedback, helping him improve his product. 4) Better customer feedback - Your dealers tell you what you need to know about the market, right? Maybe. Some dealers will be totally honest with you, but they cant tell you what they dont know, and the end user isnt always honest with them. For example, an end user who is negotiating to get a better price on your product may make a big issue of certain product weaknesses that are actually unimportant. Feedback from that dealer could cause you to fix something that isnt actually broken. On the other hand, some dealers will send you off chasing your own tail as they blame their weak sales performance on imaginary product deficiencies when the real problem can be tracked down to their lack of skill (or willingness to work) in promoting and selling your product. 5) Control of the customer - The end user has the power because the end user is the only one putting money into the system. Whoever controls the end user controls the game. If your marketing produces leads that result in dealer sales, you control the game until you turn those leads over to the dealer. You can stay in partial control if you follow up with the end user to make sure they were serviced properly. If the dealers generate their own sales leads, you are simply a product manufacturer, they are in control, and those dealers can make you or any other manufacturer meet their product feature or pricing demands. Why? Because they control the customer. Do you choose them to be your dealer, or do dealers choose you to be their manufacturer? Whoever controls the end user is in charge.

Free enterprise is the economic version of survival of the fittest. If your dealers are adding more to the value of your product than they cost, they are worth keeping. If not, you may have to consider other options.

Having it both ways

In too many cases manufacturers believe they have only two choices, to go direct or sell through a dealer network. In fact, many have succeeded in having both distribution channels. Needless to say, dealers are usually not too excited about competing with their supplier. This means that you can either compete indirectly or present your intentions openly and take the heat.

Going Direct, Indirectly You have several ways to reach customers that may not unduly upset your dealer network. 1) You can direct market a rebranded version of your product line. This keeps you from competing directly with your dealers, but it also prevents you from taking advantage of your name recognition and product reputation. 2) You can sell direct to a market segment not being addressed by your dealer network. This is one reason some companies choose to enter new markets, finding that the cost of entering those markets is more than offset by the increased margins produced by the direct sales. 3) You can define a portion of your existing market as direct sales. This may be specific large accounts or OEMs. Although this might upset the few dealers actually affected, most will be unaffected, and they will generally continue with business as usual. After all, selling your product is still making them money.

Going Direct, Directly Sometimes you cannot accomplish your goal of direct sales without actually competing with at least some of your dealers. 1) You may open company stores in areas representing the greatest sales opportunity. 2) You may sell direct (perhaps using the internet, direct mail and the telephone) to consumers that do not need a dealers value added services, and refer all sales that need those services to your dealers. If this move is made as you increase your marketing efforts, dealers may experience no decrease in business. 3) If necessary, you may establish parts and service centers that do not sell your product at all, making all of your sales direct to the end user, eliminating the traditional dealer. 4) You may improve your product to reduce the need for dealer parts and service, selling this new consumer friendly product directly against your competitions maintenance intensive unit. If your competition is working through dealers and you are selling

direct, you may be able to offer this superior product for less money, achieving market dominance by offering the end user more for less. Combine this new product with overnight parts delivery and you are a force to be reckoned with.

How to Decide, Dealer or Direct? The decision is actually easy, its the implementation that may be somewhat challenging. As previously mentioned, free enterprise is the economic version of survival of the fittest. The question you have to answer is Do my dealers make my product more or less fit in the marketplace? You will have to know your customers, your product, and your competition intimately. Would your customers rather save some money and forego the services offered by the dealer? Is it possible that some of your dealers are only carrying your product in order to get your leads and establish a price point so that they can more easily sell a (higher margin) generic competitor?

The basic mission of any company that wants to win in a competitive environment is to sell the end users the products they want to buy, the way they want to buy them. If your customers want to purchase from a dealer, by all means, establish and maintain a strong dealer network. If your customers would prefer to deal with the manufacturer directly, they will, because some manufacturer will eventually catch on and offer them what they want.

Can I Start Selling Direct? What you want to avoid is a big drop in sales as you switch (totally or partially) from dealers to direct sales. The first question you must ask is, how necessary is your product to your dealers? Even though they are not pleased to see their manufacturers start selling direct, many dealers will continue to sell the product for one simple reason - they are in business to make a profit, and the product serves that purpose. True, they are generally displeased with your lack of loyalty to your dealer network, but manufacturers forget that most dealers are only loyal to product lines that are selling well! How your dealers will respond to your new way of doing business will be determined by their other options and your market presence.

Disrupting your dealer network is a big step, one that should be based on a thorough analysis of the market. Moving from a dealer network to direct selling can take months (sometimes years) of preparation, sometimes making it impossible for sleepy competitors to respond before it is too late. While it may be scary to contemplate such a bold move, it should be even scarier to contemplate the risk of letting your competition be the first to go direct while you play the role of the sleepy competitor!

7.RURAL MARKET V/S URBAN MARKET

The market is a place where buyers and Sellers Exchange Things . In lay man terms "It is a place where buyers and sellers exchange goods/Service for some value in return such as Money" . So the Market is same everywhere . But , The difference is in the consumer behaviour . There will be different buyers in each market. This is because of different factors which Influence them. So the same way there is a difference between Rural and Urban Market. The factors are so many to define. There is a difference in all the marketing Variables. That is where most of the companies approach with different Marketing Mix and Strategies to Rural Market. The strategies differs from the urban to rural market. The companies which have understood the phenomena of rural market have succeeded in the market, For Ex: HUL, ITC, Colgate, Rajdoot Motorcycle. These companies have done a perfect home work and Implemented in terms of effort and Operations. These companies approach shows that there is a difference between Rural and Urban Market. The Differences can be Infrastructure, Economy, Lifestyle, Socio- Cultural Background, Availability or reach,Habits, Competition, Consumer Behaviour. Infrastructure: The facilities like Electricity, Internet, Roads and Buildings, Educational Institutions, Financial Institutions, Communication and Organised Market , Other Facilities differs in urban and Rural market. In urban everything gets implemented soon and Availability is also there. Where as in rural market everything takes a good amount of time. Economy: Here the Economy means, The earning Capacity in a rural Market. The cost of Living always depends upon their way of earning. So, the Income levels are unreliable, as Most of them are depended upon the seasons and Agriculture. So the Income levels cannot be a fixed one. Lifestyle: The Lifestyle , that is living pattern of both the markets differ a lot. This can be important factor which influences the companies to think of when they approach rural market. Socio- Cultural Background: Due to the illiteracy level, and Culture adaptability from long time the rural market always gets differ than the urban market. The superstition and other belief as well as the way of thinking towards products and goods differ in these two markets. Availability or Reach: Due to the areas which are diverted Geographically and Heterogeneous market the reach is very difficult. The logistics for rural market is a tough task than to reach the Urban Market. Habits: The daily routine of the people makes them to cultivate different habits. Apart from due to the awareness is low in Media terms there will be a difference in the habits.

Competition: The competition in the market for brands and Companies always differ . As in rural markets it is always the channel Partner and Retailer plays a vital role. But where as in Urban Market Brand Plays a great role. Consumer Behaviour: Last but not least, The consumer behaviour is the task for the task for the companies . The mindset of the rural consumer is completely different from Urban Consumer. The Mindset of the consumer is different . For Ex: In urban market , to buy Electronic Item the customer thinks of Brand and Its updated feature. where as in rural market he thinks of in so many ways , such as money, Durability, Buying Capacity and so on. So these mindset makes a difference in both markets. So these are the differences in the rural market and urban market. Those companies which have understood have done well .

8.MARKETING OF FMCG V/S MARKETING OF CONSUMER DURABLES