Chapter 3- Promotion Mix and Consumerism

What is Promotion?
Promotion has been defined as “Coordinated Self-initiated efforts to
establish channels of information and persuasion to facilitate or
foster the sale of goods or services or the acceptance of ideas or
points of view.”
promotion involves the creation and expansion of demand. After
product development, it is introduced in the market and its demand is
created through promotional activities. Promotion is just like the
spark plug in the marketing mix of a firm. Promotion is a term used
frequently in marketing and is one of the elements of marketing mix.
It refers to raising customer awareness of a product or brand,
generating sales and creating brand loyalty. It involves an entire set of
activities that communicate about the product, brand or service to the
user. The basic idea behind promotion is to make people aware,
attract and induce to buy the product, in preference over other similar
products available in the market. The promotion tool of marketing
mix comprises communication tactics used by the marketers to
educate consumers, increase demand and differentiate brands.
Promotion aims at keeping the product in the minds of the customers
and helps stimulate demand for the product.

Promotion is the process of marketing communication

involving information, persuasion and influence. Promotion
has been defined as “Coordinated Self-initiated efforts to
establish channels of information and persuasion to
facilitate or foster the sale of goods or services or the
acceptance of ideas or points of view.” Thus promotion is
persuasive communication to inform potential customers of
the existence of products, to persuade them that those
products have want satisfying capabilities.

As such, promotion message has two basic purposes:

1. Persuasive communication

2. Tool of competition. Promotion is responsible for awakening and

stimulating consumer demand for the product.

Some Important Definitions of Promotion as a Tool of

Marketing Mix:
Promotion compasses all the tools in the marketing mix whose major
role is persuasive communication. — Philip Kotler

Promotion includes advertising, personal selling, sales promotion and

other selling tools. — Stanton

Promotion is the personal or impersonal process of assisting and of

persuading a prospective customer to buy a product or service or to
act favourably upon the idea that has commercial significance to the
seller.

Objectives of Promotion

i. To create product and brand awareness – Several sales promotion

techniques are highly effective in exposing customers to products and
brands for the first time and can serve as key promotional
components in the early stages of new product and brand
introduction. This awareness is the basis for all other future
promotional activities. Promotional activities motivate the customers
to try new products and brand and the dealers also to push the new
products and brands.

ii. To create interest – Sales promotions are very effective in creating

interest in a product. In fact, creating interest is often considered the
most important use of sales promotion. In the retail industry an
appealing sales promotion can significantly create customer interest.

iii. To provide information – Promotional activities provide

substantial information about the product to the customers. This goes
a long way in converting interest into actual sales.

iv. To stimulate demand – Effective promotional activities can

stimulate demand for the product by convincing the customers to buy
the products.

v. To reinforce the Brand – Promotion can be used to reinforce or

strengthen the brand in the minds of the customers. This will ensure
repeat sales of the product in the long run.

vi. To attract new customers – Sales promotion measures also play an

important role in attracting new customers for an organization.
Usually, new customers are those persons that are loyal to other
brands. Samples, gifts, prizes, etc. are used to encourage consumers to
try a new brand or shift their patronage to new dealers.
vii. To induce existing customers to buy more – Promotion activities
can increase the purchases made by the existing customers by making
them consume more quantity or consume on more occasions.

viii. To help the firm to remain competitive – Companies undertake

sales promotion activities in order to remain competitive in the
market. Therefore, in the modern competitive world no firm can
escape sales promotion activities.

ix. To increase sales in off-seasons – Sales of the products naturally

reduce during the off-season. Therefore promotional activities can be
implemented during the off-season to maintain or even increase the
sales. Techniques such as off-season discounts, off-season offers can
achieve this.

x. To add to the stock of the dealers – Dealers like wholesalers and

retailers usually deal with a variety of goods. Their selling activity
becomes easier when the manufacturer supplements their efforts by
sales promotion measures. When a product or service is well
supported by sales promotion, dealers are automatically induced to
have more of such items.

xi. To Keep Existing Customers – A sales promotion can be geared

toward keeping existing customers, especially if a new competitor is
likely to enter the market.

xii. To clear inventory – Promotional techniques can be effectively

used to clear unsold inventory by giving effective offers.

Nature of Promotion –
1. Creates Awareness:
Promotional activities expose an adequate number of target
consumers to the messages and create awareness about the product.
For this purpose, such promotion media is chosen which will reach
adequate numbers of target consumers. Print, electronic, outside or
online media can be used as per nature of the product and target
audience.

2. Attention Grabbing:
The promotional campaigns draw the potential customer’s attention
towards the product. The customers are not aware about the new
product and it is only through promotional activities that they can be
informed about the product, its features and utility.
3. Creates Interest:
It is not enough to get the attention of the customer. The aim of
promotion is to make the potential customers interested in knowing
more about the product. Customers will be interested only in those
products that they actually need, so the promotional messages should
emphasise on how the featured product can fulfill their needs.

4. Informative:
The target markets needs to know about the functions and
characteristics of the product so that they can relate their needs with
it. Promotion is done to provide the necessary information and details
to the prospective buyers of the product. The information given to the
customers should also enable them to differentiate the product from
those of competitors.

5. Induces Action:
The ultimate goal of all marketing activities is to make a sale. An
effective promotional strategy will grab the attention of the would be
consumers, create interest in their minds, provide enough
information about the product to help them in taking the purchase
decision and finally induce them to take action, i.e. purchase the
product.

Importance of promotion

1. Motivates agencies
2. Participation
3. Measurability
4. Interaction
5. Consistency of message delivery
6. Client relationship
7. Corporate cohesion

5 Major Factors Affecting Promotion Decisions

Factor # 1. Corporate Objectives:
The objectives of the firm affect the promotion decision to a great
extent. A firm may have different objectives in different foreign
markets or different firms may have different strategy in the same
market. Firm’s level of commitment to international operations will
determined its promotion strategy.

The objective of the firm in international marketing may be to create

its image on a long term basis or it may be to maximise its cash
resources or profitability in a short time and then withdraw itself from
the market. A firm may want to sell its product only to a few
customers whereas another firm would like to reach to the masses.

The promotion strategy would be different in each case. A firm’s

promotion strategy wanting to sell only to a few customers will be
quite different from a firm wanting to sell its product to the masses or
to develop its own image in the market. Thus corporate objective shall
determine the promotion strategy of a firm. It is so why different
firms use different strategies in their international operations.

Factor # 2. Nature of the Product or Services Offered:

The nature of the product or the services offered by the firm is
another factor that will determine the promotion strategy of a firm.
Certain products are standardised and their promotional themes are
also standardised. In such cases standardised promotional strategy
can be used throughout the world.

For example soft drinks like coca cola, satisfy the same basic need-
thirst of the consumers in different countries. Hence it is possible for
a firm selling soft drink to use common promotional themes in all the
markets. Besides, there are certain other standardised products which
are used in the same form, with slight modifications.

The promotional themes and programmes may be used in the

standardised form or with slight modifications. As against these
products, there are certain other products which are not standardised
such as – ready-made garments. Such products are differentiated
from market to market.

As these products do not satisfy the same need in all markets of the
world, the standardised promotional strategy cannot be used. To
illustrate, garments in France satisfy the fashion need whereas in
developing countries, they meet the basic clothing need. Here the
standardised promotional strategy cannot be used in the two markets.
A firm dealing in garments should design different promotional
strategies and themes for different markets.

Factor # 3. Media Availability:

A media which is easily available in domestic country need not
necessarily be available in the foreign market. Though one may
generalise that identical media are available in most industrialised
countries, one should keep in mind that they may vary in institution
quality and communications value.
In such circumstances, the promotional message, theme and other
properties of the media may be adjusted. But the task of international
marketer is compounded where a certain type of media is just not
available. For example, in some developing countries, television is not
available for commercial communications.

India has recently introduced the commercial service on TV network.

In such cases, TV cannot be used as a promotion media. Countries
having low rate of literacy, may not have sufficient number of journals
for advertisements.

Hence, the marketer cannot make use of journals and may have to be
shifted to other available media. The information about media may be
available from international advertising agencies, country’s
diplomatic missions and advertising agencies’ associations and the
marketer should collect the information before drawing its promotion
policy.

Factor # 4. Financial Considerations:

Financial resources of the firm may have serious constraint in
deciding the promotion policy. A firm, not having sufficient financial
strength, cannot use a strategy involving a heavy expenditure. As
against this, a firm having a good financial background may use any
method which may prove useful to the firm.

For example, most firms from developing countries like India do not
rely more on advertising because it is expensive. They prefer direct
mailing to customers in foreign countries or to participate in fairs and
exhibitions. These firms, at times resort to consortia advertisements,
in foreign markets.

Such advertisements are often placed by the Commodity Boards or the

Export Promotion Councils. But firms having large financial
resources, on the other hand, prefer to use advertising and other sales
promotion methods to promote their products in world markets.
Thus, financial resources of a firm put a limit on the promotion policy
and promo tools of the firm.

Factor # 5. Environmental Constraints:

Finally, the firm should evaluate the environmental factors like the
level of economic development of a country, the disposable income of
the people, consumer’s preferences and attitudes towards advertising
and sales presentation, competitor’s promotion strategies and the
legal requirements in a given foreign market.
Broadly, a firm should assess the cultural and legal side of
the environment and the competitor’s strategies followed in
that market:

(i) Cultural Environment:

The culture of the people in a given market influences their attitudes

towards the promotion programme of a company. If people believe
that the advertisement is nothing but a bundle of lie, the Promotor
should avoid this tool. People in some country are against foreign
goods because they violate their cultural traditions; the firm would
have to adopt a promotion programme which would remove this bias.

The marketer should make endeavour to educate the people on the

benefits which would accrue to them through the product use over
their traditional products. The better way in such cases may be to
localise the product. The marketer may sell the product to the agents
or distributors in the foreign markets and they may sell it under their
brand names in the manner most suitable to the country’s culture.

Attitude of the people towards their traditions or the image of a

particular product cannot be changed overnight. The people are to be
educated to benefits of the product and it is a long-drawn programme.
This strategy is beneficial only if the marketer develops a market on
long-term basis and has sufficient funds to invest in such long term
programmes.

(ii) Legal Constraints:

The legal requirements as regards promotion techniques must also be

fulfilled by a marketer. Legal system in a target foreign market may be
different from that of the domestic country which may seriously affect
the promotion decision of the firm. The international marketer must
have a clear understanding of such requirements before going for a
particular promotion strategy or drawing up a promotion programme.
Although these legislations vary from country to country, one may
observe that there are certain common restrictions in varying degree
in almost all countries.

These are:

(a) There are specific prohibitions on advertisements on certain

products like wine, cigarettes and tobacco, and certain types of drugs
etc. Most countries require that Cigarette Company must warn their
consumers against the injurious effects of smoking hence it is
statutorily compulsory to print ‘smoking is injurious to health’ on all
packs and advertisements.

(b) Certain words or expressions that may be mis-interpreted by

consumer or may deceive them are prohibited to use.

(c) Some countries, mainly Islamic countries, ban advertisements

which are viewed as obscene.

(d) There are legislations which prohibit the promoter to make tall
claims about their products. In countries where such legislations do
not exists the trade has developed its own code of advertising which
acts as a self-disciplinary system of control.

(e) In certain countries, requirements on packaging such as –

inscribing the name, address, weight and contents of the inside
product, should be strictly observed.

The above legal requirements and there may be certain others which
may be peculiar to the target market, must be observed by an
international marketer before designing a promotion policy for the
market. Any carelessness to such provisions may cause harassment to
the marketer.

(iii) Competitors’ Promotional Strategy:

In designing its promotion policy or strategy for the target market, a

firm should not ignore the promotion strategies, policies, programmes
and promo tools undertaken by the competitors in the market. The
firm should study them and then decide on the promotion policy
which is better or if not better, it should at least the similar to
competitors’ policy. This, however, depends very much on the
company’s resources, culture and attitude of the people, etc.

Thus, the international marketer must consider the above factors into
consideration before jumping to any promotion policy. He must not
base promotion decision on his hunches or intuition. He should not
do what others are doing. He must study and evaluate all the factors
relevant to reach a decision for the promotion of his product in the
target market.
Methods of Product Promotion

1. Advertising

2. Personal selling

3. Sales promotion

4. Publicity

5. Public relations

1. Offer discounts
2. Host a contest
3. Use e-mail promotions
4. Start a blog
5. Request customer feedback
6. Collaborate with an influencer
7. Publish press releases
8. Encourage pre-orders
9. Create a customer loyalty program
10. Offer free samples
11. Have an event- You can highlight the product or business by hosting a
virtual or live event and inviting consumers to take part. Virtual events
can include:

 interviews with product designers, industry professionals, or

company leaders
 question-and-answer sessions regarding the product
  live product demonstrations through social media
 behind-the-scenes tours of product facilities via live video feed

In-person events can include:

 open houses for certain businesses

 live product demonstrations at trade shows or other events
 sponsored festivals
 sidewalk markets and sales

Method # 1. Advertising:
Advertising is a non-personal sales presentation communicated
through media or non-media forms to influence a large number of
consumers. It is a common method for promoting products and
services. Although advertising is generally more expensive than other
methods, it can reach many consumers.

Large firms commonly use advertising agencies to develop their

promotion strategies for them. Many firms such as Anheuser-Busch,
General Motors, and ExxonMobil spend more than $100 million per
year on advertising. Procter & Gamble spends more than $3 billion a
year on advertising.

Although advertising can be expensive, it can increase a product’s

market share. One reason for Frito- Lay’s increase in market share
over time is its heavy use of advertising. Frito-Lay typically spends
more than $50 million a year on advertising.

Reasons for Advertising:

Advertising is normally intended to enhance the image of a specific

brand, institution, or industry. The most common reason is to
enhance the image of a specific brand. Brand advertising is a non-
personal sales presentation about a specific brand. Some brands are
advertised to inform consumers about changes in the product.

GNC (General Nutrition Centers) spends more than $80 million per
year on brand advertising. The Gap and The Coca-Cola Company also
spend heavily on brand advertising. Amazon(dot)com uses extensive
brand advertising on its own website.

Common strategies used to advertise a specific brand are comparative

advertising and reminder advertising. Comparative advertising is
intended to persuade customers to purchase a specific product by
demonstrating a brand’s superiority by comparison with other
competing brands.

Some soft drink makers use taste tests to demonstrate the superiority
of their respective soft drinks. Volvo advertises its superior safety
features, while Saturn advertises that its price is lower than that of its
competitors and that its quality is superior.

Reminder advertising is intended to remind consumers of a product’s

existence. It is commonly used for products that have already proved
successful and are at the maturity stage of their life cycle. This type of
advertising is frequently used for grocery products such as cereal,
peanut butter, and dog food.

A second reason for advertising is to enhance the image of a specific

institution. Institutional advertising is a non-personal sales
presentation about a specific institution. For example, firms such as
IBM and ExxonMobil sometimes advertise to enhance their overall
image, without focusing on a particular product they produce. Utility
companies also advertise to enhance their image.

A third reason for advertising is to enhance the image of a specific

industry. Industry advertising is a non-personal sales presentation
about a specific industry. Industry associations advertise their
respective products (such as orange juice, milk, or beef) to increase
demand for these products.

The important features of advertising are identified as

follows:

a. A service paid for- Advertising, unlike publicity, is a service that is

paid for by the advertiser. It is a paid form of communication. It
ceases to qualify as advertising if its cost is paid for by anyone other
than the organisation whose product or service is being advertised.

b. Impersonal presentation- It is a form of non-personal presentation

directed at a wide audience rather than a particular individual. The
advertiser and the consumer do not come into contact with each
other.

c. Identified sponsor or advertiser- The sponsor or the company who

is being provided the service gets always identifiable due to the impact
of advertising. If it cannot be identified, the activity ceases to qualify
as advertising. In that case, it can be termed as propaganda or
publicity only.

d. Promotes ideas, goods and services- The scope of advertising is

wide in the sense that it promotes not only tangible goods, but also
company services and ideas.

e. Informative and persuasive- An important feature of advertising is

that not only it informs consumers about the products, services as
well as their benefits, utility; it also serves to persuade potential
consumer to buy these products and services. It stimulates human
desires, thereby generating the demand for the product.

Objectives of Advertising:

There can be many objectives of advertising by a company.

Some of the major objectives are given below:

a. To create demand- The basic objective of advertising is to attract

potential customers and motivate them to buy the products.

b. To ensure loyalty of customers- By focusing the company’s

commitment to quality through advertising, the company makes
certain that its existing customers do not shift their preference to
other brands.

c. Introduce new product- Another objective of advertising is to keep

the buyer informed about the new products and services introduced in
the market. It is through advertising that customers are informed
about the utility, quality, features, benefits and price of the new
products.

d. To create and maintain image and goodwill- Constant and regular

advertising builds a good impression, goodwill and positive image of
the producer. When a brand has a good image in the market, it enjoys
a prosperous business. This also creates the right marketing
environment to introduce new products with ease.

e. To educate customers- Advertising seeks to educate customers

regarding the proper usage of the product so as to provide maximum
utility and prevent any loss, physical or otherwise, to the customer.
Method # 2. Personal Selling:
Personal selling is a personal sales presentation used to influence one
or more consumers. It requires a personal effort to influence a
consumer’s demand for a product. Salespeople conduct personal
selling on a retail basis, on an industrial basis, and on an individual
basis.

The sales effort on a retail basis is usually less challenging because it

is addressed mostly to consumers who have already entered the store
with plans to purchase. Many salespeople in retail stores do not earn a
commission and thus may be less motivated to make a sale than other
salespeople.

Selling on an industrial basis involves selling supplies or products to

companies. Salespeople this capacity are normally paid a salary plus
commission. The volume of industrial sales achieved by a salesperson
is highly influenced by that person’s promotional efforts.

Selling on an individual basis involves selling directly to individual

consumers. Some insurance salespeople and financial planners fit this
description. Their task is especially challenging if they do not
represent a well-known firm, because they must prove their
credibility.

Features of Personal Selling:

Personal selling can be better understood by the following

features:

a. It is a promotional method using skills and techniques for

persuasion and building relationships with potential and actual
consumers.

b. Personal selling is through face-to-face meetings and contact with

customers.

c. It uses a personalised approach that is tailored to meet the

individualised needs of the customer.

d. It utilises aggressive sales techniques.

e. It is a multi-stage process starting with prospecting and ending

with selling. This result in consumer satisfaction.
f. The salesperson who successfully performs the job of personal
selling is rewarded with financial incentives.

g. The consumer is rewarded with benefits of consuming the product

purchased.

Objectives of Personal Selling:

Some important objectives of personal selling are as listed

below:

a. Reinforcing the brand- Most personal selling is intended to build

long-term relationships with the customer. A strong relationship can
only be built over time. Meeting with the customer on a regular basis
allows the sales staff to repeatedly hold a discussion on their company
products and brand promotion.

b. Building relationship- Personal selling intends to build up an on

going and long term relationship with the customer. The process does
not end with the sales.

c. Creating interest- Personal selling involves person-to-person

communication. It seeks to create greater interest in the product. It
also encourages the spread of product awareness by sales
professionals.

d. Stimulating demand- The most important objective of personal

selling is to convince the customer to make a purchase.

Salespeople who sell on an industrial or individual basis

generally perform the following steps:

(i) Identify the target market.

(ii) Contact potential customers.

(iii) Make the sales presentation.

(iv) Answer questions.

(v) Close the sale.

(vi) Follow up.

(i) Identify the Target Market:

An efficient salesperson first determines the type of consumers

interested in the product. In this way, less time is wasted on
consumers who will not purchase the product, regardless of the sales
effort. If previous sales have been made, the previous customers may
be an obvious starting point.

Industrial salespeople can identify their target market by using library

references and the Yellow Pages of a phone book. If they sell safety
equipment, they will call almost any manufacturer in their area. If
they sell printing presses, their market will be much more limited.

Individual salespeople have more difficulty identifying their market

because they are unable to obtain information on each household.
Thus, they may send a brochure to the “resident” at each address,
asking the recipient to call if interested. The target market initially
includes all households but is then reduced to those consumers who
call back. Specific subdivisions of households that fit the income
profile of typical consumers may be targeted.

(ii) Contact Potential Customers:

Once potential customers are identified, they should be contacted by

phone, e-mail, direct mail, or in person and provided with a brief
summary of what the firm can offer them. Interested customers will
make an appointment to meet with salespeople. Ideally, the
salespeople should schedule appointments so that their time is used
efficiently.

For example, an industrial salesperson working the state of Florida

should not make appointments in Jacksonville (northeast Florida),
Miami (southeast), and Pensacola (northwest) within the same week.

Half the week would be devoted to travel alone. The most logical
approach is to fill the appointment schedule within a specific area.
Individual salespeople should also attempt to schedule appointments
on a specific day when they are near the same area.

(iii) Make the Sales Presentation:

A sales presentation can range from demonstrating how a printing

press is used to explaining the benefits of an insurance policy.
Industrial salespeople usually bring equipment with them.
They also provide free samples of some products to companies. The
sales presentation generally describes the use of each product, the
price, and the advantages over competing products. The presentation
should focus on how a particular product satisfies customer needs.

(iv) Answer Questions:

Potential customers normally raise questions during the course of the

sales presentation. Salespeople should anticipate common questions
and prepare responses to them.

(v) Close the Sale:

Most salespeople prefer to make (or “close”) a sale right after the sales
presentation, while the product’s advantages are still in the minds of
potential customers. For this reason, they may offer some incentive to
purchase immediately, such as a discounted price.

(vi) Follow Up:

A key to long-term selling success is the attention given to purchasers

after the sale is made. This effort increases the credibility of
salespeople and encourages existing customers to call again when they
need additional products. Salespeople should also follow up on
potential customers who did not purchase the product after a sales
presentation.

These potential customers may experience budget changes and

become more interested in purchasing the product over time. E-mail
facilitates the follow-up communication between the purchasers and
the salespeople.

(vii) Managing Salespeople:

A common goal of many sales representatives is to become a sales

manager and manage a group of sales representatives. For example, a
company with 40 sales representatives around the country may split
the geographic markets into four regions. Each region would have 10
sales representatives who are monitored by a sales manager.

Sales managers require some of the same skills as sales

representatives. They need to have knowledge of the product and the
competition. In addition, they must be able to motivate their
representatives to sell. They must also be able to resolve customer
complaints on the service provided by representatives and reprimand
representatives when necessary.

Some people are better suited to selling than managing salespeople.

There is a distinct difference between motivating consumers to
purchase a product and motivating employees to sell a product.

Since sales managers do not perform the daily tasks of selling the
product, they can concentrate on special projects, such as servicing a
major customer’s massive order of products. They should evaluate the
long-term prospects of the product and consider possible plans for
expanding the geographic market. Information from their sales
representatives may help their assessments.

Method # 3. Sales Promotion:

Sales promotion is the set of activities that is intended to influence
consumers. It can be an effective means of encouraging consumers to
purchase a specific product.

Features of Sales Promotion:

Sales promotion has the following major features which are

listed below:

a. Supports Advertising and Personal Selling – Sales promotion

supports advertising and personal selling. It acts as a connecting link
between the two. Companies follow up advertising campaigns with
sales promotion campaigns. Sales promotion gives strength and
support to personal selling. The price inducements given during sales
promotion help the sales force to generate sales.

b. Stimulates Sales – A unique sales promotion feature is that it

stimulates sales at the point of sale, i.e., where the sale actually takes
place. It appeals to the consumers, through price discounts, or other
inducements, when they are in the process of buying, and induces
them either to buy in larger quantity or in terms of other promoted
products of the same brand. Both ways it brings in more sales revenue
for the producer.

c. Acts as a Marketing Tool – Sales promotion acts as a very effective

marketing tool, highlighting the qualities and unique selling points
that serve as powerful magnets to draw the consumers’ attention to
the product. Packaging, pricing and consumer satisfaction as a result
of usage of the product are highlighted by an effective sales promotion
campaign.

d. Stimulates Dealer Effectiveness – Dealers are positively affected

and are more supportive of brands that are frequently supported by
well-organised sales promotion campaigns. The reason is that sales
promotion helps the dealers in popularising brands and they are able
to attain company sales targets. It assists them in getting larger trade
discounts and other incentives thus increasing their operating profit.

Objectives of Sales Promotion:

The main objectives of sales promotion are identified below:

a. Product Differentiation – Use of sales promotion techniques helps

to differentiate one brand from other competing brands especially
where all products offer essentially the same features and benefits. A
common sales promotion method is to offer products at a slightly
reduced price for a short period of time.

b. Attract Customers and Push up Sales – Sales promotion is used to

attract customers during periods of low sales. This helps in drawing
the customer attention to that product and also helps to support sales.

c. New Product Introduction – Sales promotion is used to introduce a

new product into the market. By offering a new item and promoting
its sale, the marketer persuades the existing customers to give the new
product a try, while it also attracting new and potential customers.

d. Phasing Out a Product – Sales promotion is extensively used to sell

out remaining stock of old products or brands that the company
intends to phase out of its portfolio.

e. Increase Off-Season Sales – Business organisations encourage the

purchase of their products during off-season through sales promotion.
That is why they offer discounts and off-season price reductions of
many products in the market during period of slack sales. Products
like air-coolers, fans, refrigerators, air-conditioners, and room heaters
have seasonal demand. Business organisations focus to maintain a
stable demand of these seasonal products throughout the year.

The following are the most common sales promotion

strategies:
(i) Rebates

(ii) Coupons

(iii) Sampling

(iv) Displays

(v) Premiums

(i) Rebates:

A rebate is a potential refund by the manufacturer to the consumer.

When manufacturers desire to increase product demand, they may
offer rebates rather than lowering the price charged to the retail store.
Lowering the price to the retail store does not guarantee that the store
will pass on the discount.

Thus, this strategy could result in lower profit per unit without
increasing demand. A rebate ensures that consumers receive the
manufacturer’s discount. Automobile manufacturers frequently offer
rebates of $500 or more.

(ii) Coupons:

Coupons are used in newspapers, magazines, and ads to encourage

the purchase of a product. They are also commonly packaged with a
product so that consumers can use the coupon only if they purchase
this same product again. Coupons used in this way can encourage
consumers to repeatedly purchase the same brand. Consequently,
consumers may become loyal to that brand.

Some coupons are not available until consumers make repeated

purchases. For example, airlines offer free flights to frequent fliers,
and some hotels offer a free night’s stay to frequent customers.

Promoting with coupons may be inefficient for some firms. General

Mills had historically used coupons to promote its cereals. However,
after learning from marketing research that 98 percent of all cereal
coupons are not used, it decided to cut back on this promotion
strategy. It reduced annual spending on some promotions by $175
million and focused on improving its product.

(iii) Sampling:
Sampling involves offering free samples to encourage consumers to
try a new brand or product. The intent is to lure customers away from
competing products. For example, Clinique samples are available in
cosmetics departments of retail stores. Food samples are offered in
grocery stores. Manufacturing firms also provide samples so that
consumers can try out equipment. Samples are even sent through
direct mail.

Samples are most commonly used to introduce new products. Firms

recognize that once customers become accustomed to a particular
brand, they tend to stick with that brand. Thus, the free sample is
intended to achieve brand loyalty, or the loyalty of consumers to a
specific brand over time.

Sampling of Services- Sampling is used for services as well as

products. For example, in 1999 America Online (AOL) provided a
limited amount of free online time to potential customers. This
strategy allowed customers to experience the service that AOL
provides and resulted in a large number of subscriptions to AOL’s
online service. Subsequently, AOL merged with media giant Time
Warner.

(iv) Displays:

Many stores create special displays to promote particular products.

The displays are used to attract consumers who are in the store for
other reasons. Products are more likely to get attention if they are
located at a point of purchase, such as by the cash registers where
consumers are waiting in line.

Because there is limited room for displays, companies that want retail
stores to display their products are typically willing to set up the
display themselves. They may even offer a reduced price to retail
stores that allow a display.

(v) Premiums:

A premium is a gift or prize provided free to consumers who purchase

a specific product. For example, Sports Illustrated magazine may offer
a free sports DVD to new subscribers. A boat manufacturer may offer
a free fishing rod to anyone who purchases its boats. Premiums offer
an extra incentive to purchase products.
Method # 4. Publicity:
It is the non-personal stimulation of demand brought about by the
positive coverage received by a product or brand. Issue of press
releases, getting an honorable mention in the media, doing charitable
activities for social good, taking up charitable causes, giving
donations, etc. are all forms of public exercises. These are all designed
with the objective of getting publicity for the organisation and its
products and services.

Features of Publicity:

Some basic features of publicity are defined as under:

a. Third party involvement – Publicity requires third part involvement

for spreading information and messages about goods or services of a
firm. This third party involvement becomes necessary for the
promotion of business firm and its products. It imparts an element of
authenticity.

b. Publicity is free – No fee or charge is needed to be paid to the third

party for the publicity of information about goods or services or the
firm. The business firm does not incur any expense for the publicity
materials communicated to the general public through mass media by
the third party.

c. Wide and quick dissemination of information – Information about

the business firm and its products is communicated to a very large
number of viewers and readers by the flow of news and publicity both
in print and electronic form in a very short span of time.

d. Free advertising – Positive publicity serves as free advertising for

the business firm.

Objectives of Publicity:

Major objectives of publicity are listed below:

a. Building Product Awareness – The first objective of publicity is to

generate consumer attention and awareness through media
placements and special events. This results in increasing hype
specially when a new product or service is being introduced by a
company.
b. Stimulating Demand – A positive news report in a newspaper, a TV
news show or a favourable mention on the internet often results in
significant rise in product sales. The objective of publicity is to ensure
constant positive coverage and thus gain through every increase in
sales.

c. Creating Interest – Creating interest among the masses in the

company’s product or service is another objective of publicity. It is the
first stage towards creating a customer base for the company.

d. Providing Information – Publicity provides customer with detailed

information about products and services. Publicity and information
dissemination is done through newspaper articles, collateral
materials, company newsletters and websites. It helps the customer
gain an in-depth understanding of the product.

e. Reinforcing the Brand – Publicity is a way of building brand

awareness by maintaining positive relationships with key audiences,
thereby aiding in building a strong brand image. A strong image helps
the company build its business which can prove helpful in times of
crisis.

Method # 5. Public Relations:

The term public relations refers to actions taken with the goal of
creating or maintaining a favorable public image. Firms attempt to
develop good public relations by communicating to the general public,
including prospective customers. Public relations can be used to
enhance the image of a product or of the firm itself.

It may also be used to clarify information in response to adverse

publicity. Many firms have a public relations department that
provides information about the firm and its products to the public.
Public relations departments typically use the media to relay their
information to the public.

Firm commonly attempt to be very accessible to the media because

they may receive media coverage at no charge. When employees of a
firm are quoted by the media, the firm’s name is mentioned across
large audience. Some banks assign employees to provide economic
forecasts because the media will mention the bank’s name when
reporting the forecast.

Some public relations are not planned but results from a response to
circumstances. For example, during the tragedy of September 11,
Home Depot offered its support and was recognized by the media for
its efforts.

The following are the most common types of public relations

strategies:

(i) Special events

(ii) News releases

(iii) Press conferences

(i) Special Events:

Some firms sponsor a special event such as a race. Anheuser-Busch

(producer of Budweiser) supports many marathons and festivals
where it promotes its name. 7UP promotes local marathons and has
even printed the marathon logo and running figures on 7UP cans,
which may attract consumers who run or exercise.

(ii) News Releases:

A news release is a brief written announcement about a firm provided

by that firm to the media It enables the firm to update the public
about its products or operations. It may also be used to clarify
information in response to false rumors that could adversely affect the
firm’s reputation. The news release may include the name and phone
number of an employee who can provide more details if desired by the
media.

There is no charge for providing a news release, but the firm incurs an
indirect cost for hiring employees to promote news releases. Also,
there is no guarantee that a news release will be publicized by the
media.

(iii) Press Conferences:

A press conference is an oral announcement about a firm provided by

that firm to the media. Like a news release, a press conference may be
intended to enhance the firm’s image or to eliminate any adverse
effects caused by false rumors.

A press conference is more personal than a news release because an

employee of the firm makes the announcement directly to the media
and may even be willing to answer questions from the media. There is
no charge for organizing a press conference, but there is an indirect
cost of hiring employees to perform the necessary tasks.

What is Promotion – Difference between Push Strategy and Pull Strategy

of Promotion
Push Strategy:

(i) This involves taking the product directly to the customer via
whatever means to ensure that the customer is aware of a brand at the
point of purchase. It actually creates the demand for that particular
product. It is useful when there is low brand loyalty for a general
product category.

(ii) Push strategy emphasizes personal selling. Firms are adopting this
method for their sales promotions.

(iii) Push strategy requires extensive use of sales force and trade
promotion to push product through the channels.

Pull Strategy:

(i) The manufacturer uses advertising promotion and other ways to

persuade customers to demand the product from the intermediaries.
The consumer will ask the retailers, retailers will demand from the
wholesalers and the wholesalers will ultimately approach the
producers.

(ii) Pull strategy is the one in which mass impersonal sales efforts are
given the greatest emphasis. The purpose of the pull strategy is to pre-
sell to the final consumers so that they demand the product at the
retail level of distribution. These efforts will pull the customer
towards the manufacturer.

(iii) Pull strategy requires considerable expenditure on advertising

and sales promotion to build up the consumer demand.

What is Promotion – Promotion Budget: Meaning, Process, Types

A promotional budget is a specified amount of money set aside to
promote the products or beliefs of a business or organization.
Promotional budgets are created to anticipate the essential costs
associated with growing a business or maintaining a brand name. The
budget is often set according to a percentage of sales or profits in
order to maintain an expected growth rate.

The advertising and marketing of a business tough time to predict,

i.e., why a percentage method might be used. A promotional budget
could be increased in anticipation of new product lines are set to be
released in the near future. High promotional budgets can reduce
profits during the period such assets are expended. Companies may
allow for such higher costs based on an assumption that sales or
awareness will increase among customers.

How Promotional Budgets are Spent?

Promotional budgets usually include money put towards advertising

across mediums such as radio, television, Internet and print. A
company’s promotional budget can include expenses for email
campaigns, social media outreach and outdoor signage. The
promotional budget might also go towards hiring outside experts and
consultants, who develop the campaigns and place ads in appropriate
media and locations. This can include contracting marketing
intelligence firms to interpret data that shows how dollars spent on
marketing translate into new or recurring business for the company.

The decision-making process at organizations continues to evolve

when it comes to allocating funds for promotional budgets. Budgeting
strategies change as public attention continues to shift away from
older, traditional mediums such as print to focus more on digital,
online and mobile media.

While the overall size of a company’s promotional budget might not

have changed, the way the money is divided up may have. For
instance, money previously dedicated to advertising through
television might now include campaigns that reach people on the
smartphones.

The shifts that occur with promotional budget trends can have a direct
effect on media industries that rely on those proceeds. A reduction in
advertising dollars for newspapers and other print media, as
companies directed those assets instead to digital media and other
outlets, contributed to a decline in the newspaper and magazine
industries.
Companies regularly measure the return on investment from their
promotional budgets. The results often have a significant impact on
where companies continue to put their funds. For example, a company
will likely change its strategy if a billboard campaign fails to attract
attention at the same time social media marketing messages increase
sales. In many cases, the promotional budget at the company will be
adjusted to favour more investment in social media.

Types of Promotion Budget:

1. Affordable Method:

Many companies employ the affordable method for determining the

promotion budget. The promotion budget is set in a manner which the
company can afford. This method is a subjective assessment, as it
pays little attention to the long-term promotional needs of a service.
This method does not consider the role of promotion in sales volume.
Employment of affordable method very often results in an uncertain
annual budget, making the long-range planning difficult.

2. Percentage of Sales Method:

Under this method, promotion expenditure is determined as a

percentage of sales.

The advantages of percentage of sales method are:

First, expenditure on advertising is closely related to the sales. So, the

company can easily afford to spend a specified percentage of sale on
promotion.

Second, this method facilitates an analysis of the relationship among

promotion cost and selling price per unit. Third, this method ensures
stability when competitors are also spending the same percentage of
sales on promotion.

3. Competitive-Parity Method:

Under this method, advertising expenditure of the firm is equal to the

amount spent by competitors. This method follows the policy of the
competitors in respect of promotion budget. It is based on the
assumption that competitor’s expenditure represents the prudence of
the industry.
Since the promotion budget of one firm is in parity with the
competitor, promotion war is avoided. However, this method has
certain limitations. There is no assurance that competitors’ promotion
budget represents collective wisdom of the industry. Companies vary
in reputation, resources, objectives and opportunities. So, the
promotion budget appropriate to one firm may not be appropriate to
the other.

4. Objective and Task Method:

Under this method, marketers determine promotion budget by

defining specific objectives, determining tasks to be performed to
accomplish the objectives and estimating the cost of performing these
tasks. This method is rational as it sets the promotion budget at a cost
which is required to realize the objective of the company.

What is Promotion – Control Process in Promotion (With Principles)

Human beings have an inherent dislike for ‘control’ is a quote with
which, the meaning of the word control begins, yet there is a need for
control in every sphere of life.

Control cannot be viewed as a post mortem activity as once the event

is over, no correction is possible. Therefore the best course of action is
to combine planning and control together and following the three
important principles of effective control –

i. Pre-control

ii. Current-control

iii. Post-control

For making the control process efficient in promotion it will be

imperative for the marketer to do a complete micro analysis of the
promotion plan by following ‘PERT/CPM’ ,as the case maybe ,and
then carry out the monitoring process simultaneously which will
enable the marketer to take right steps if anything appear to be
moving in the wrong direction.

Most of the success is achieved with the pre-control and current-

control techniques, but once the entire promotion is completed, a
complete review should be done, to enable the company to avoid
repetition of same mistakes.

For this the following three principles of planning are

followed:

i. Principle of limiting factor

ii. Principle of navigational change

iii. Principle of timing

By following above stated principles, a company can achieve full

success in its endeavour. Promotion, planning and control process are
inter linked and effectiveness depends on efficiency of each process,
healthy well-fed girl.

PERT – programme evaluation and review technique

CPM – critical path method

What is Promotion – Role of Communication Process in Promotion

(With Dimensions)
The word communication has been derived from Latin word
communicare, which means in English “to share”.

There are two types of communications, namely non-verbal and

verbal communication.

These have been explained briefly below:

1. Non-Verbal Communication:

Non-verbal communication describes the process of conveying

meaning in the form of non- word messages. Examples of nonverbal
communication gestures, body language, facial expression, eye
contact, and how one dresses. Speech also contains nonverbal
elements known as paralanguage, e.g., rhythm, intonation, tempo,
and stress. Research has shown that up to 55% of human
communication may occur through nonverbal facial expressions, and
a further 38% through paralanguage.

2. Verbal Communication:
Effective verbal or spoken communication is dependent on a number
of factors such as words and, listening skills and clarification. Human
language can be defined as a system of symbols and the grammars by
which the symbols are manipulated. Communication plays a very
significant role in promotion of a product.

It is a fact that nothing can succeed without communication.

Particularly, in case of promotion, it is a message which must reach
the masses for creating awareness; therefore, communication has to
be very effective.

Communication in promotion has five dimensions, namely:

i. Message,

ii. Channels,

iii. Level of recipients,

iv. Objectives, and

v. Measures.

These have been explained briefly below:

i. Message – success of promotion is dependent on the

appropriateness of the message, Chosen for this purpose.

Message here can be of following types:

a. Physical – a physical message is the product itself, for example,

while promoting a new model of a car, facility of test drive is provided
to the customer for the first-hand experience.

b. Verbal – this includes advertisements on the desired medium in the

form of a jingle, a catchy tag-line etc.

c. Audio – these are meant for a mass reach, therefore, medium such
as radio, loud speakers etc. are used for promoting the product.

d. Visual – visual message is a message that can be seen with eyes,

such as the hoardings, billboards etc.
ii. Channels – next significant dimension is the channel which is
selected for the purpose of promotion. Channel are innumerable such
as Voice, Print, Busses, Mail, post, SMS, what’s app etc.

iii. Level of Recipient – it is very important to carry out a research on

the type of target audience the company is aiming to reach. Therefore,
the customer’s interests, educational background, IQ, level of
knowledge & Capability must be kept in mind before deciding on a
promotion strategy

iv. Objective – it is equally important to keep the main objective in

mind while promoting the product. It is necessary that the objective
and the actual promotion must be in sync for best results

v. Measure – measure as a dimension relates to the Feedback

obtained from the customers after the promotion and then evaluating
the Results with the targeted result.

What is Promotion – Benefits and Limitations of Promotion

Product promotion is one of the techniques that are used to promote
services or goods with the short term and long term goals of
increasing the sales. There are many companies which use various
types of techniques to promote their products and services. The main
factor for the growth of any type of business is product promotions.
These days, it is difficult to imagine any business without promotion.
It is very helpful for the entrepreneur to expand the business in
various forms.

The promotion of the product attracts the customer to avail the

benefits of the product as well as services. Therefore, for a small or big
business, product promotion is very important for achieving success.

Following are some of the benefits of promotion:

1. It is helps to increase the customer base as well as increases sales of

the products.

2. Product promotion creates a long-lasting impression on customers

mind.

3. It is simple for the Company to promote business through

corporate gifts.
4. Free samples can be used as a promotional product. These are
greatly helpful in creating demand for the new product in particular.

5. Promotional products are not only useful for customers but also
offer incentives for the employees and boost their morale.

6. Promotion helps in allowing the organization to penetrate the

market.

7. It helps in sustaining the existing market.

8. Promotion keeps the product alive in the memory of the consumer.

9. It also helps in creating and expanding the market.

10. It is Helpful in the wider exposure of new services or products.

i. Positive product attitude – Sales promotion stimulates the positive

attitude about the product in the minds of customers.

ii. Incentive to purchase – Promotion provides incentives to the

customers to buy the product.

iii. Induces immediate action – Effective promotional activities induce

immediate action on the part of the customers.

iv. Flexibility – Promotion itself is a very flexible technique and

therefore can be used at any stage to achieve any sales related
objective.

v. Overcome competition – Promotional activities enable a company

to overcome competition.

Limitations of Promotion:
i. Temporary nature – The effect of promotion is very temporary.
Therefore one has to keep repeating the promotional activities.

ii. Only a supplementary activity – Promotion as a stand-alone

activity is not effective. Therefore it has to be done with other
activities.

iii. Highly perishable – The effect of a particular promotional activity

is very perishable.
iv. Clutter – Too much of promotional activities result in clutter and
cause confusion in the minds of customers.

v. Expensive – All promotion activities require huge amounts of

expenses.

What is Advertising Media?

Advertising media is the medium through which an advertisement is

delivered to the public. It carries messages, stories or points regarding
the product that is being advertised. It is a highly informative way to
reach the masses and ask them to buy the product or avail of the service.

Advertising Media plays a significant role in binding the direct

communication relationship between the seller and the buyer.

With the help of right types of advertising, there is not a single speck of
doubt about the fact that you will be able to make your brand known to
people in the best way.

The advertising media can be used to showcase the content that is

promotional and that is communicated in the best way with the help of
many methods. These methods include speech, text, videos, images, and
so much more.
How to choose the Right Advertising Channel or Media?

One must always keep these points in mind while choosing the medium
of advertising to earn maximum profit:

 Target Audience.
 Nature of the product or service
 Return on investment.
 Exposure
 Accessibility
 Future benefits.
 Competitor’s strategy, etc
Different Types of Advertising Methods in Media

Different types of online ads that you can run in Digital Advertising
Media are-

 Google Search Ads

 PPC Ads
 AdWords Ads
 Facebook Ads
 Bing Ads
 Twitter Ads
 Tumblr Ads
 Google Display Ads
 Banner Ads
 Retargeting Ads
 Flash Ads
 Mobile Ads
 In-Game Ads
 Gmail Ads
 Email Ads
 Video Ads
 YouTube Ads
 Instagram Ads
 Pinterest Ads
What are advertising ethics?

Advertising ethics are the moral principles that govern how a business
communicates with members of its target audience. Advertising has a set
of defined principles that outline the type of communication that can
take place between a potential buyer and a seller of goods or services. An
example of ethical advertising is an ad that presents true statements in a
decent manner, although the definition of decency may vary between
individuals.

The purpose of advertising is to increase sales and generate more brand

awareness. Good advertising can appeal to a wide audience and generate
more demand for a product or service. Companies may claim that what
they sell is better than what competitors sell, but ethics come into play
when a business cannot back up their claims or use unacceptable
methods to generate brand awareness.

Applying ethics in advertising can pose a challenge because the ethical

beliefs that people hold vary, based on their background and moral
beliefs. For example, one consumer might feel tricked by an
advertisement that shows someone snapping their fingers and having a
home full of new furniture appear, while another consumer would
understand that this advertisement is not attempting to show reality.
Certain regulations do apply to advertisers, who must exercise caution
when creating ads to avoid facing legal issues or consumer backlash.

Definition – Advertising ethics is the way in which a company or

a brand conducts itself and communicates with customers or buyers by
following set principles and a governed manner. There are different
ethical concerns which advertisers have to take care of because they are
the ones responsible for communication and messaging, from the
company to the world.

Advertising is a kind of business discourse that is used for promoting

and publicizing a product, service, or brand. While doing this, brands or
agencies must be aware of the items or services they are promoting, so
the things they are advertising are not misguiding or misinforming. They
must know advertising ethics to avoid any future issues and
inconveniences.

We all understand that businesses attempt a wide range of techniques,

strategies, and manoeuvres to stand out enough to get noticed by their
target audiences or masses, so their conversions and sales potentials get
optimized.

– And in the process, once in a while, they might come up with illicit or
unethical strategies (intentionally or unintentionally).

One of the issues here is- such wicked strategies work “excessively well”
since they depend on double-dealing, confusion, and other facades that
might seem alluring, convincing, or easy ways to make profits by the
target audiences (or by the masses as well).

What is Ethics in Advertising?

Ethical advertising is introduced for resolving issues related to the public

perceptions that advertising comes up short on the moral ground, and it
doesn’t adhere to a meaningful boundary in what is correct or incorrect.

Different ethical issues that the advertising industry always face are-

 Puffery & Hype: Making different exaggerated claims

 Good Taste: Promoting different types of stereotyping related
to gender, ethnicity, race, age, handicaps, lifestyle, religion
 Stealth Advertising: Using messages embedded in a
storyline which is not explicitly shown as advertising
 Advertising to Children: Promoting different controversial
products such as alcohol, gambling or tobacco
 Gratuitous Sexual Content: Use of sexual imagery, nudity, and
sex appeal in an explicit and implicit manner
 Negative Content: Making different fear appeals, threats or
guilt appeals

9 Principles of Ethical Advertising

1. Advertising and related kinds of stuff should comprise

a common goal of truth and high moral measures in serving
the people in general.
2. Advertising ethics practitioners should commit to practising
the most important morals in the creation and channelization
of business data and related information to customers and
target masses.
3. Advertisers ought to recognize the difference between
advertising, corporate communication, and PRs from editorial
 pieces, news, and entertainment, both offline and on the web
as well.
4. Followers of advertising ethics ought to reveal every material
condition, for example, payment or receipt of a free item,
influencing endorsements in social and conventional
channels, just as the identity of endorsers, all in light of a
legitimate concern for complete honesty and
straightforwardness to ensure full transparency.
5. Promotional strategies based upon advertising ethics should
treat buyers fairly as per the nature of the target audiences to
whom the advertisements are targeted to. Treatment should
also be based upon the nature of the item or service
advertised.
6. Advertising ethics ought to never bargain the protection and
personal privacy of its consumers while making different
marketing communications. Ethical advertisers’ decisions
concerning how to use their data ought to be transparent.
7. While strategizing promotional campaigns with advertising
ethics, advertisers ought to follow government and local laws
regarding the marketing and advertising campaigns. They
should also abide by self-regulatory programs of the industry
for the goal of advertising rehearses.
8. Ethical advertisers and ad agencies working in online and
offline domains ought to examine secretly about the different
possible moral or ethical concerns. Also, different members of
the ad creation team need to be allowed to communicate
inside their ethical or moral concerns associated with a
particular type of ad campaign.
9. In practices based on advertising ethics, there should be trust
among advertising agencies, PR agencies, media vendors,
clients, and third-party service providers. The whole process
ought to be based upon straightforwardness and complete
honesty of business proprietorship, plans, compensations,
discounts, and media incentives.

Tips for Ethical Marketing

Ethics in ethical advertising recognizes the right and wrong practices in

an advertising campaign that can influence society positively or
negatively.

Moral obligation is only a sort of commitment laid out by the ideas of

ethical advertising.
These obligations must be done as such as to advance a constructive way
of living not just for oneself but for the general public as well.

Some of the key tips related to advertising ethics that advertisers should
pay heed to while planning and channelizing an ad campaign in front of
the masses are-

1. Try not to guarantee that your item or service can do what you
realize it can’t do. It is morally not correct to publicize
something that doesn’t exist, and you should never do this as
it is ethically wrong.
2. Try not to mislead the people with your ads, as many
individuals may get astonished by the specific advert since
they do not comprehend the message that your ad is passing;
instead, they enjoy the image or the visuals you use.
Accordingly, it is unethical if you use wrong, harmful, or
misleading visuals or languages in your advertisement.
3. Try not to advertise specific items or services to those places
where those items or services are considered illegal,
illegitimate, or unacceptable.
4. Attempt to provide the optimum possible disclosure of what
you are offering to your audiences, as it is significant in
maintaining the advertising ethics in your campaign.
5. Try not to put bogus, false, or misleading ads, as it is deceptive
conduct and not considered right as per the advertising ethics.
6. Try not to cheat, misguide, or double-cross the audiences with
your promotions. Do not run those ads that are deceiving
because they go amiss from the actual facts about your
product or service.
7. Moral norms in your campaigns should think about the
community standard. It would be best if you understood that
one thing which is right in one community could be wrong in
another community.
8. Never have hidden charges, as this is the most exploitative
conduct. Having concealed extra charges and deceiving your
audiences to make more money is unethical, and never
suggested as per the standards set by advertising ethics.
9. Always advertise to the right audience group, so if you are
making a product or running a service to adult, then your
campaign should be strictly directed towards them and not to
the kids.
10. Carefully hold fast to Industry and Government Regulations
on advertising.
Here are some key points highlighting the importance of advertising
media:

1. Reach and Exposure: Advertising media allows businesses to reach

a wide and diverse audience. Depending on the chosen media, you
can target local, regional, national, or even international audiences.
2. Brand Visibility: It helps in increasing brand visibility and
awareness. Consistent advertising in the right media can help
establish a brand's presence in the market.
3. Targeted Marketing: Different media channels cater to different
demographics and interests. This allows advertisers to target their
messages to specific groups, increasing the relevance of their ads.
4. Conveying Information: Advertising media provides a platform for
businesses to convey information about their products or services,
promotions, discounts, and other relevant details to potential
customers.
5. Building Trust: Continuous advertising through reputable media
channels can help build trust and credibility with the audience.
Consumers often view businesses that advertise in well-established
media outlets as more reliable.
6. Competition: In a competitive market, advertising media is
essential to keep up with competitors and maintain a competitive
edge.
7. Consumer Decision-Making: Advertising media influences
consumer decision-making by creating awareness and informing
potential customers about their options.
8. Revenue Generation: Advertising generates revenue for the media
outlets themselves. This revenue helps support quality content and
journalism in various media platforms.
9. Adaptability: In the digital age, advertising media has become
highly adaptable. Businesses can use data and analytics to fine-
tune their ad campaigns, making them more effective and cost-
efficient.
10. Measurable Results: Many advertising media channels offer
tools and metrics to measure the effectiveness of ad campaigns.
This allows businesses to assess their return on investment (ROI)
and make data-driven decisions.
Consumer vs customer
 Who is a Customer?
A customer is a person who buys goods and services regularly from the
seller and pays for it to satisfy their needs. Many times when a customer
who buys a product is also the consumer, but sometimes it’s not. For
example, when parents purchase a product for their children, the parent
is the customer, and the children are the consumer. They can also be
known as clients or buyers.

Customers are divided into two categories:

 Trade Customer- These are customers who buy the product, add
value and resell it. Like a reseller, wholesaler, and distributor, etc.
 Final Customer– These are the customers who buy the product
to fulfil their own needs or desires.
Further, according to an analysis of the product satisfaction and
relationship with the customers, the customers are divided into three
kinds-

 Present Customer
 Former Customer
 Potential Customer

Who is a Consumer?
A consumer is someone who purchases the product for his/her own need
and consumes it. A consumer cannot resell the good or service but can
consume it to earn his/her livelihood and self-employment. Any person,
other than the buyer who buys the product or services, consumes the
product by taking his/her permission is categorized as a consumer. In
simple word, the end-user of the goods or services is termed as a
consumer.

All individuals who engage themselves in the economy is a consumer of

the product. For instance, when a person buys goods from a grocery
store for their family, you become a customer, as you are only purchasing
the commodities. But, when they feed the grocery to other members of
the family, they become the consumer.

Types of Customers
In business, customers play a vital role. In fact, customers are the actual
boss and responsible for a company to make a profit. A few different
types of customers are:

 Loyal Customer- They are less in numbers but increase more

profit and sales as they are completely satisfied with the product or
service.
 Discount Customers- They also regular visitors but buy when
they are offered discounts or they purchase only low-cost goods.
  Impulsive Customers- These types of customers are hard to
convince, as they don’t go for a specific product, but buy whatever
they feel is good and fruitful at that particular point of time.
 Need-Based Customers- These customers buy only those
products which they are in need of or habituated with.
 Wandering Customers- These are the least valuable customers
as they themselves don’t know what to purchase.

Types of Consumers
A service or product producing firm has to recognise different types of
consumers when they target them with its product to gain profits. Some
of the different types of consumers are:

 Commercial Consumer- They buy goods in large numbers

whether they need the product or not and sometimes associate
special needs with their purchase orders.
 Discretionary Spending Consumers- They have unique
buying habits and purchase a lot of clothes and electronic gadgets.
 Extroverted Consumer- They prefer brands that are unique and
become a loyal consumer once they gain that trust as a customer.
 Inferior Goods Consumer- Consumer having low-income buy
goods having low price.
What is consumer behavior?

Consumer behavior is how people feel and think when they are deciding
whether to buy a product. In the study of consumer behavior,
researchers might examine what people buy, when and how often they
buy it, where they

Consumer behavior is the actions and decisions that people or

households make when they choose, buy, use, and dispose of a product
or service. Many psychological, sociological, and cultural elements play a
role in how consumers engage with the market.

It is a multi-stage process that involves identifying problems, collecting

data, exploring options, making a decision to buy, and evaluating the
experience afterward. Consumers may be impacted during these stages
by things including personal views and values, social conventions,
marketing campaigns, product features, and environmental conditions.
Understanding consumer behavior is essential for businesses to create
marketing plans that work and to supply goods and services that satisfy
customers’ wants and needs. To see trends and patterns, forecast
demand, and make wise choices regarding product design, price,
promotion, and distribution, marketers must analyze and understand
data on customer behavior.

4 Types of Consumer Behavior for effective marketing

strategies

Marketers must understand several types of consumer behavior to create

effective marketing strategies and meet customer needs. This section will
look at the four types of customer behavior and how they affect
businesses.

1. Complex buying behavior

When customers are actively involved in the purchasing decision

process and are aware of the significant differences between the
various brands, this happens. Before making purchasing
decisions, consumers conduct extensive research, gather
information, and evaluate alternatives.

2. Dissonance-reducing buying behavior

This type of behavior happens when people make expensive or

risky purchases and then feel uncomfortable or confused about
their decision. Consumers may seek reassurance, information, or
feedback from others to reduce confusion.

3. Habitual buying behavior

This happens when customers make purchases with minimal

decision-making and marketing efforts or information search.
Based on prior experiences, they have developed brand and
customer loyalty also buying habits, and they may buy things out
of habit, convenience, or familiarity.

4. Variety-seeking buying behavior

This type of behavior happens when customers are not deeply

involved in the purchase decisions but seek variety or uniqueness
 in their purchases. They may most often change brands or
products to satisfy their curiosity or need for variety.

Home Market Research

Consumer Behavior: Definition, factors and methods

Understanding consumer behavior is a key element of a marketing

strategy. In fact, before implementing a strategy, it is essential to fully
understand the needs and expectations of the consumers you want to
influence. To do this, you need to understand how the consumer will
react and be influenced by your marketing strategies.

To delve deeper into the preferences of your target market, some of the
questions you must answer are:

 How do the consumers perceive the information?

 How do you capture their paying attention?
 What are their needs?
 What factors influence them to make purchasing decisions? Are
they price, quality, commercial offer, or others?

The goal of every entrepreneur is to meet the demands of the public and
market, which will give a boost to the organization’s sales and customer
satisfaction.
To achieve this goal, an entrepreneur conducts a study and gains insights
into the consumer’s behavior, who can be potential
buyers. Surveys and research studies make decision-making easier and
aid in improving relationships with customers.

Content Index

1.What is consumer behavior?

2.Consumer behavior in marketing
3.Why is consumer behavior so important?
4.4 Types of Consumer Behavior for effective marketing
strategies
5. What factors influence consumer buying behavior while
purchasing?
6. How to collect data on consumer behavior?
7. How QuestionPro helps in consumer behavior research?
What is consumer behavior?

Consumer behavior is the actions and decisions that people or

households make when they choose, buy, use, and dispose of a product
or service. Many psychological, sociological, and cultural elements play a
role in how consumers engage with the market.

It is a multi-stage process that involves identifying problems, collecting

data, exploring options, making a decision to buy, and evaluating the
experience afterward. Consumers may be impacted during these stages
by things including personal views and values, social conventions,
marketing campaigns, product features, and environmental conditions.

Understanding consumer behavior is essential for businesses to create

marketing plans that work and to supply goods and services that satisfy
customers’ wants and needs. To see trends and patterns, forecast
demand, and make wise choices regarding product design, price,
promotion, and distribution, marketers must analyze and understand
data on customer behavior.

LEARN ABOUT: Test Market Demand

Consumer behavior in marketing

Consumer behavior is important in marketing because it explains how

consumers make decisions about what products to buy when to buy
them, and from whom to buy them.

Marketers can develop effective marketing strategies that target the

right consumers with the right message at the right time by
understanding consumer behavior.

Here are some examples of how consumer behavior affects marketing:

 Segmentation

Consumer behavior research helps marketers behavioral

segment markets. Marketers can modify their marketing
messages and strategies to better appeal to each demographic by
recognizing these segments.

 Product design

Understanding consumer behavior can also aid in product

development. Marketers can create products that better meet
consumer needs and preferences by analyzing customer
requirements and tastes, leading to increased sales and customer
satisfaction.

 Pricing Strategies

Marketers can use consumer behavior data to determine the

price points at which customers are willing to pay for a product,
as well as the pricing strategies most likely to appeal to each
market segment.

 Branding

Consumer behavior research helps in the development of

branding strategies. Marketers can create brand messages and
strategies that resonate with consumers and build brand loyalty
by understanding consumer attitudes and perceptions of brands.
Why is consumer behavior so important?

Businesses invest a lot of time and resources in their product or service.

Hence, it is absolutely essential that their offerings cater to the needs of
their customers. Or they will incur huge amounts of losses.

So, in order to make sure that the products, as well as the brand, are
well-accepted by the consumers, it is important to first know what
consumers want and are likely to buy.

 Better marketing and communications

As living standards, trends, and technology keep changing,

consumers’ choices also keep varying. Understanding how these
factors affect customers’ buying habits helps organizations
design their messaging accordingly. Thus, having insights into
consumers’ purchase behavior can help marketers in meeting
their objectives.
 Improve customer retention

It is far more beneficial to retain an existing customer than to

gain new customers. It’s easier to sell new products and services
to your existing customers than to find new ones.

Entrepreneurs who are able to retain their customers and create

strong relationships manage to create strong new brand loyalty
for their businesses. Customer loyalty can prove to be a promoter
of your business and spread positive word of mouth. Satisfied
customers share their happy experiences with their friends and
family.

So, retaining as many customers as possible should be the goal of

entrepreneurs interested in growing their companies.

 Increase customer loyalty

Understanding customer behavior helps in finding out ways to

boost customer loyalty, which in turn, will lead to higher sales
and a strong brand. Analyzing trends in sales can aid in offering
discounts as well as suggesting the best products and services to
them.

 Better plan inventory

Researching customer attitudes helps companies plan inventory

and stock raw materials. In the case of a service-based business,
the management team can better plan their human resources. If
businesses see a trend in demand for specific products, they are
likely to send more purchase orders to their suppliers. Consumer
behavior data can help them to balance demand and supply.

 Increase sales

A company always aims to satisfy specific market niches. Even if

the company operates in different sectors, it should target
potential buyers in each segment. If you know your customers
well, you can have better conversations with a high probability of
closing the deal.

Knowing who you are selling to makes it possible to clearly

 define your objectives in the market. Learning more about
consumer behaviors helps to define the main customers that
come directly to the company. Your inventory should be stocked
with products that meet the requirements of your potential
buyers.

Instead of taking random shots and trying to sell to anyone,

having knowledge about your customers’ likes and dislikes helps
in making smarter decisions. Such a strategy has a higher chance
of generating sales.

 Research competition

Studying consumer buying behavior helps in understanding the

competitive market. You can plan on how to position your
products and services to offer competitive advantages. Find out
answers to questions like:

o Is the customer already using a competitor brand?

o What drives a consumer to buy from your competitor?
o Are potential customers happy with the competitor
brands?
o What are the gaps between your products and that of
competitors?

Explore further: Consumer research: Examples, process, and scope

4 Types of Consumer Behavior for effective marketing

strategies

Marketers must understand several types of consumer behavior to create

effective marketing strategies and meet customer needs. This section will
look at the four types of customer behavior and how they affect
businesses.

1. Complex buying behavior

When customers are actively involved in the purchasing decision

process and are aware of the significant differences between the
various brands, this happens. Before making purchasing
decisions, consumers conduct extensive research, gather
information, and evaluate alternatives.
 2. Dissonance-reducing buying behavior

This type of behavior happens when people make expensive or

risky purchases and then feel uncomfortable or confused about
their decision. Consumers may seek reassurance, information, or
feedback from others to reduce confusion.

3. Habitual buying behavior

This happens when customers make purchases with minimal

decision-making and marketing efforts or information search.
Based on prior experiences, they have developed brand and
customer loyalty also buying habits, and they may buy things out
of habit, convenience, or familiarity.

4. Variety-seeking buying behavior

This type of behavior happens when customers are not deeply

involved in the purchase decisions but seek variety or uniqueness
in their purchases. They may most often change brands or
products to satisfy their curiosity or need for variety.

What factors influence consumer behavior while purchasing?

 Situational factors

They are temporary in nature and include physical factors such

as a store’s location, layout, colors, music, lighting, and even
scent. Companies try to make these factors as favorable as
 possible. Other situational factors include holidays, time, and
moods of the consumer.

 Personal factors

These factors include demographic factors such as age, gender,

income, occupation, etc. It also depends on one’s interests and
opinions. To further understand consumers, companies also look
more closely at their lifestyles – their daily routine, leisure
activities, etc.

 Social factors

This factor also includes social class, level of education, religious

and ethnic background, sexual orientation, customer orientation,
and people around you – family, friends, or social network.
Different cultures have varying customs and rituals that
influence how people live their lives and what products they
purchase.

Generally, consumers in the same social class exhibit similar

buying behavior. Most market researchers believe a person’s
family is one of the biggest determinants of buying behavior.

 Psychological factor

A person’s ability to understand information, perception of

needs, and mindset influence consumer behavior. One’s reaction
to a marketing campaign will depend on one’s beliefs and state of
mind.

Types Of Consumer Behaviour

Here are four primary consumer behaviour types:

Complex buying

Customers with complex purchasing patterns are more likely to purchase

costly, expressive and risky assets. Before making a substantial
investment in this kind of transaction, the buyer may extensively
research the product. This consumer behaviour is evident when a
customer buys a car or real estate.
Dissonance-reducing buying

When consumers engage in dissonance-reducing purchasing behaviour,

they actively participate in decision-making but struggle to distinguish
between the various brands' offerings. When a customer worry they
might regret their decision, dissonance can happen. Before making a
purchase, they gather information from multiple sources and compare to
evaluate all the available options.

Habitual buying

This type of consumer behaviour is evident when the product is

inexpensive, and the purchase is rare. Consequently, the consumer's
interest and investment are less in the product type or brand. In this
market, consumers rarely consider complex factors before making a
purchase. Instead, they purchase from their choice of company or any
other readily available. Instead of brand loyalty, habitual buying practice
typically depends on the convention or brand familiarity.

Variety-seeking- When a consumer engages in variety-seeking

behaviour, they do not buy additional products because they are
unhappy with the results of their previous purchase. Rather, they do so
because they simply want more options available. Most of the time, when
a consumer switches products or brands, it is out of boredom, interest or
a desire to try a different one. Companies can better understand how to
classify their consumer type by understanding the types of consumers
they attract.

Both customer loyalty and customer retention are vital parts of a

business strategy. Understanding and measuring both is crucial to
succeeding in any market, particularly when considering increasingly
competitive markets, such as B2B SaaS. Although they’re sometimes
used interchangeably, it's essential to understand how they’re different
and critical to each other and across the customer journey.

WHAT IS CUSTOMER RETENTION?

Customer retention is a measurement of whether an existing client
continues to use your products or services over a given period of time.
Growth-minded businesses cannot depend on customer acquisition
alone. Studies have shown that retaining customers costs between 5 and
25 times less than adding new customers. In the last decade, companies
have significantly prioritized improved customer success functions.
According to Forrester, as many as 72% of companies named it their top
priority.

RETENTION METRICS: HOW TO MEASURE CUSTOMER

RETENTION RATE
There are a variety of ways to measure customer retention. For
subscription models, the simplest way is to follow these steps:

1. Pick a time period. At the end of the time period, take your number
of current customers and subtract the number of new customers
you added since the beginning of the time period.
2. Divide the output from step one by the number of customers you
had at the beginning of the time period.
3. Multiply that output by 100 to get your customer retention rate.

For example, in 2022, you started the year with 300 customers. At the
end of the year, you had 350 customers and sold 72 new deals. The
calculation would be:

 Step 1: 350 - 72= 278

 Step 2: 278 / 300= .9267
 Step 3: .9267 x 100= 92.67% retention rate

RETENTION METRICS: HOW TO CALCULATE CUSTOMER

CHURN RATE
The customer churn rate is the inverse of the customer retention rate.
Churn measures how many customers leave over a given time period. To
get your customer churn rate for a subscription model, follow these
steps:

1. Pick a time period. At the end of the time period, take your number
of current customers and subtract the number of new customers
you added since the beginning of the time period.
 2. Subtract the number of customers you had at the beginning of the
period from the output of step one. This gives you the number of
customers you lost.
3. Divide the number of lost customers by the number of customers
you had at the beginning of the period.
4. Multiply that output by 100 to get your customer churn rate.

For example, in 2022, you started the year with 300 customerss. At the
end of the year, you had 350 customers and sold 72 new deals. The
calculation would be:

 Step 1: 350 - 72 = 278

 Step 2: 300 - 278 = 22
 Step 3: 22 / 300 = .0733
 Step 4: .0733 x 100 = 7.33% churn rate

RETENTION METRICS: OTHER WAYS TO CALCULATE

RETENTION AND CHURN
There are many other ways to calculate retention and churn rates. While
the above formulas give a company a good idea of how they are doing in
these areas, more than this simplistic way of measuring retention and
churn may be needed. In cases where customer size (whether by revenue
or user numbers) varies a lot, you may want to measure revenue
retention rate and revenue churn rate (often referred to as MRR churn)
or user retention rate and user churn rate. The formulas remain the
same, but the input numbers would be revenue or users instead.
HOW DO YOU OPTIMIZE CUSTOMER RETENTION? BUILD
CUSTOMER LOYALTY
Retained customers keep money coming in the door while you grow a
sales team or build out the right channel partners. High customer
retention levels give your business more opportunities to upsell, cross-
sell, and grow. Existing customers are a pool of potential revenue you
can tap into – repeatedly. Higher customer retention means that you’re
increasing your customer lifetime value (LTV or CLV) and increasing
your revenue at the same time.

But how do businesses improve customer retention? Customer retention

is a broad and binary concept. To achieve greater customer retention,
you need to measure, improve, and build customer satisfaction and
customer loyalty.

WHAT IS CUSTOMER LOYALTY?

Customer loyalty, sometimes referred to as brand loyalty, is a
measurement of a customer’s relationship with a business. While there
are many ways to measure customer loyalty, in a basic sense, loyal
customers help your business grow because they spend more money with
your business, improve word-of-mouth, give referrals for new customers,
provide crucial testimonials for case studies, and help you improve your
product.

While it makes sense intuitively that satisfied customers will spend more
with your business, a lot of research backs this up. According to Crazy
Egg, existing loyal customers are 50% more likely to try a new product
offering than a prospect. Customer loyalty is built by setting customer
expectations that are met or exceeded, designing customer engagement
that helps a customer succeed in using the product, and facilitating a
positive customer experience that is reinforced repeatedly. A company’s
success in building customer loyalty can often be measured by evaluating
and analyzing customer behavior. Let’s investigate these components
closer:

CUSTOMER EXPECTATIONS
Customer expectations are behaviors and actions a customer can expect
from a business and a product. For subscription-based SaaS products,
expectations are typically built during sales and onboarding processes.
Meeting and exceeding customer expectations is crucial to building
customer loyalty.

CUSTOMER ENGAGEMENT
Customer engagement is the actions a company takes to build customer
relationships, both through the actual product and the way company
employees interact with these customers. Whether it is the marketing
team or the customer support team, each interaction is part of the
company’s overall engagement with the customer. Companies that
engage customers effectively create more loyal customers.

CUSTOMER EXPERIENCE
Customer experience is how a customer perceives a business driven by
its interactions with the company and product. Customer Experience is
driven by customer engagement choices a business makes. Customers
can feel several different ways about their experience depending on their
expectations and how well these match the customer engagement they
received. Customers with a positive experience are more likely to be loyal
customers.

CUSTOMER BEHAVIOR
Customer behavior is how customers interact with a business and use
their products. Organizations attempt to measure granular behaviors to
tell them how a product or service is performing prior to a renewal
decision. For example, a company employing a SaaS-based subscription
model may measure how many company users are active, how often they
interact with the software, how many support tickets they open, etc.
Understanding and measuring customer data is extremely important to
build customer loyalty. Without this understanding, a company may not
know the customer is unhappy until it is too late, and they churn.

MEASURING CUSTOMER LOYALTY: NET PROMOTER SCORE

(NPS)
To improve customer loyalty, a business needs a way to measure it. By
analyzing, benchmarking, and improving key customer behavior metrics,
improved loyalty can be achieved. Another important way customer
success teams track loyalty is through customer feedback and surveying,
the most famous of which is the Net Promoter Score (NPS). An NPS is
calculated by asking customers one question: How likely are you to refer
this organization’s product or services to a friend, peer, or colleague?
On a scale of 1 – 10, how likely are you to refer this organization’s
product or services to a friend, peer, or colleague?

Here is how you calculate the Net Promoter Score:

1. Find the percentage of “Promoters” – customers who answered 9

or 10.
2. Find the percentage of “Detractors” – customers who answered six
or below.
3. Subtract the percentage of detractors from the percentage of
promoters. That’s it!

Example: You have 300 customers. 60% of them give you a 9 or 10.
These are your promoters. 30% of them give you a six or below. These
are your detractors. Your NPS score is:

60 – 30 = 30 NPS

NPS is just one way to measure customer loyalty. Other metrics

customer success teams use include:

 Customer Satisfaction Score (CSAT)

 Customer Effort Score (CES)
 Product Engagement Score (PES)
 Customer Health Score
WHAT IS A CUSTOMER LOYALTY PROGRAM?
A customer loyalty program is a customer engagement strategy that
rewards customers who repeatedly purchase, use, and interact with a
company. While in e-commerce, these programs often involve giving
points or discounts designed to drive repeat business, B2B SaaS
companies can create programs to reward engaged and loyal users.
Customer loyalty programs for B2B are typically smaller and reward only
top users and customers. Quality incentives can be cost-effective and
include rewards, discounts, company swag, and early access to new
software features.
 What Is The Difference Between Customer
Retention And Loyalty?

Customer retention and customer loyalty are related concepts in the

realm of business and marketing, but they refer to distinct aspects of
customer behavior and business outcomes.

It is crucial to understand the differences between the two to develop an

effective customer retention strategy.

What Is Customer Retention?

Every business wants to encourage repeat purchases, reduce customer

churn, and ensure current customers continue to choose them over
competitors.

Customer retention refers to a business’s ability to keep existing

customers engaged and maintain an ongoing business relationship with
them.

It starts with your marketing strategy. Focusing on customer success

only after they have signed up for your product or service is often too
late. It will be challenging to retain customers who were poorly targeted
and qualified in the first place.

Your marketers must use a data-driven approach to focus on your ideal

customers and their needs. Customers often sign up with misinformed
expectations and churn when these are unmet. But marketing to the
correct target audience will improve your customer retention.

To better understand your ideal customer persona (ICP), you can ask
your core customers questions about their experiences with your
company and what led to their purchasing decisions.

Customer retention is typically measured by quantitative metrics such as

customer retention rate, churn rate, and average customer lifetime value
(CLV).

Key Aspects Of Customer Retention:

 Providing quality products and services

  Offering excellent customer service
 Consistently meeting customer expectations
 Implementing strategies to minimize churn (such as targeted
marketing, incentives, and promotions)

What Is Customer Loyalty?

Your loyal customers continue to purchase from your business and

actively advocate for your brand. They share their positive experiences
and demonstrate a preference for your brand even when presented with
competitive alternatives.

Customer loyalty goes beyond retention and represents a deeper

emotional connection between your customer and your business.

Whereas customer retention requires actively incentivizing customers to

stay, customer loyalty represents your current customers’ positive
sentiment toward your company.

For example, you can retain customers by offering a better price or high-
value incentives, but loyal customers will stay even if you increase your
pricing. In this sense, customer retention aims to build strong
relationships with your customers so that they become loyal to your
brand.

Customer loyalty is often measured through qualitative metrics such as

user-generated content (UGC), customer feedback forms, and Net
Promoter Score (NPS). Note that NPS also has a quantitative element (a
1–10 score).

Key Aspects Of Customer Loyalty:

 Developing strong emotional connections with customers

 Providing exceptional and personalized customer experiences
 Establishing trust and credibility through transparent
communication
 Creating loyalty programs and reward systems that incentivize
long-term engagement

While customer retention focuses on maintaining ongoing relationships

with customers and encouraging repeat business, customer loyalty
delves deeper into the emotional connections that drive customer
advocacy and preference for a brand.
Understanding And Improving Customer Retention And Loyalty 3

These concepts are crucial for sustainable business growth. To maximize

your CLV, you must address both retention and loyalty.

How To Measure Customer Retention And Loyalty

The proliferation of technology has dramatically altered the way

customers interact with businesses. With the ubiquity of smartphones
and the internet, customers now have unprecedented access to
information, empowering them to make more informed decisions.

Measuring customer retention and loyalty is essential to grasp the

effectiveness of your business strategies and identify areas of
improvement.

Companies utilize various metrics and methods to gauge their success in

retaining customers and fostering loyalty.

Customer Retention Metrics:

 Customer Retention Rate

 Customer Churn Rate
 Customer Lifetime Value (CLV)

Customer Loyalty Metrics:

 Net Promoter Score (NPS)

  Repeat Purchase Rate
 Customer Loyalty Index (CLI)

Customer Retention Rate

This metric calculates the proportion of customers retained over a

specific time period, such as a quarter or a year.

To find your customer retention rate, subtract the number of new

customers acquired during the period from the number of customers at
the end of the period.

Then, divide the result by the number of customers at the beginning of

the period. Multiply the quotient by 100 to obtain the retention rate
percentage.

Customer Churn Rate

Your customer churn rate is the percentage of customers your company

lost over a given period. This metric is used to gauge improvements in
customer retention, often represented by an Objective and Key Result
(OKR) to decrease churn rate by a specific percentage.

To calculate your churn rate, divide the number of customers lost during
a time period by the number of customers you had at the beginning of
the period. Multiply the quotient by 100 to obtain the churn rate
percentage.

The churn rate helps you identify potential improvements that can be
made to retain more customers. It does not indicate how many new
customers you have gained over the same time period.

Customer Lifetime Value (CLV)

This metric estimates the total revenue a business can expect from a
customer during their entire relationship with the company. It helps
determine the long-term value of retaining customers and can inform
customer acquisition and retention strategies.

CLV is calculated by multiplying the average purchase value with the

average purchase frequency and multiplying that number by the average
customer lifespan.

You can find your average customer lifespan by looking at the number of
months or years that your customers make purchases.
You can also use this data to segment your customers according to their
lifetime value and extract insights about your most valuable customer
personas. With this approach, you can find out how to target your ideal
customers more accurately.

Net Promoter Score (NPS)

Fred Reichheld invented the NPS as a way for companies to measure

overall customer satisfaction. It gauges customer loyalty by measuring
the likelihood that customers will recommend a company to others.

Customers are asked to give their recommendation rating on a scale of

0–10. Respondents are classified into three categories:

1. Promoters (9–10 rating)

2. Passives (7–8 rating)
3. Detractors (0–6 rating)

To calculate your absolute NPS, subtract the percentage of Detractors

from the percentage of Promoters. Any score above zero is considered a
positive indication of customer loyalty. If your company scores 80 and
above, it is in the top percentile.

However, you can also more accurately determine how well your
company attends to its customers compared to the average NPS of your
industry. This is the relative NPS. For example, if most of your
competitors score 15 or lower and your company scores above 20, you
know you have high customer loyalty.

NPS has also evolved beyond a metric to a loyalty-focused business

model called the Net Promoter System.

Repeat Purchase Rate

This metric calculates the proportion of customers who make multiple

purchases over a specific period. Most companies make a large portion of
revenue from repeat purchases (or returning customers).

The repeat purchase rate is useful for understanding how effectively your
company encourages ongoing business, which indicates customer
loyalty.

To calculate your business’s repeat purchase rate, divide the number of

customers with multiple purchases by the total number of customers,
and multiply the quotient by 100.
Customer Loyalty Index (CLI)

The CLI combines multiple dimensions of loyalty, such as the likelihood

of recommending the company, repurchase intentions, and resistance to
switching to competitors.

By gathering data through customer surveys, businesses can create a

composite score to assess overall loyalty levels. Customers are asked
three questions:

 How likely are you to recommend our products and services to

your friends and family?
 How likely are you to buy our products and services again?
 How likely are you to try our other products and services?

The responses are evaluated using a scale of 1–6, with 1 indicating a

definite yes and 6 indicating a definite no. The CLI is then calculated by
averaging the customer’s three responses.

We have looked at six ways to measure customer retention and loyalty.

By consistently tracking these metrics, you can gain insights into the
effectiveness of your company’s retention and loyalty strategies.

The insights will help you identify areas of improvement and make data-
driven decisions to enhance customer relationships and ensure long-
term business success.

How Customer Experience Influences Customer Retention And Loyalty

Customer experience is a critical factor in building customer retention

and loyalty. Providing an exceptional customer experience involves
creating positive interactions between the customer and your business at
every touchpoint. This includes pre-purchase, purchase, and post-
purchase experiences.

A customer-centric approach to customer experience design can foster

loyalty and retention in several ways. We will look into some of them
below.

 Establishing Emotional Connections

 Differentiating From Competitors
 Encouraging Repeat Business
 Generating Positive Word-Of-Mouth
Establishing Emotional Connections

Creating an emotional connection with customers is key to building

loyalty.

Customers who feel valued, understood, and appreciated will likely

remain loyal to your business. By understanding customers’ needs and
preferences, you can tailor experiences to help customers develop an
emotional connection with your brand.

This will foster long-term customer relationships with a high CLV.

Differentiating From Competitors

In the competitive marketplace, businesses must differentiate

themselves from competitors to retain customers.

An exceptional customer experience that goes above and beyond

customer expectations can create a competitive advantage that sets your
business apart from your competition.

Customers will likely choose your business because its offering is unique
and memorable.

Encouraging Repeat Business

A positive customer experience can motivate them to return and make

additional purchases. As discussed earlier, repeat purchases comprise a
significant portion of most business’s revenue. This means that increased
repeat business leads to higher revenue.

By delivering consistent, high-quality customer service, you can

encourage repeat business and foster customer loyalty over time.

Generating Positive Word-Of-Mouth

Customers with positive shopping experiences are more likely to share

them with others. It generates positive word-of-mouth marketing and
can attract new customers.

Focusing on providing a remarkable customer experience can turn your

retained customers into loyal brand advocates who help expand your
customer base.
To create a positive customer experience, you must consider factors such
as the ease of use of your products and services, customer service quality,
checkout process efficiency, and personalization.

Measuring Customer Retention And Loyalty

We have examined how businesses can build customer retention and

loyalty over time. It is done by prioritizing their customers’ needs and
preferences and delivering a seamless, consistent, and memorable
experience at every touchpoint.

However, losing customers over time can be anticipated by any business

leader. Let us look at some of the reasons why customer churn happens.

What Causes Customer Loss?

Retaining customers and building customer loyalty is a challenging task

requiring sustained effort and a deep understanding of customer
behavior.

Measuring the types of experiences customers have with your brand is

useful for developing strategies to increase retention rates and foster
greater loyalty.

But several factors must be overcome to retain customers and build

loyalty. We will consider them below.

 Competition
  Changing Customer Preferences
 Lack Of Personalization
 Inconsistent Customer Service
 Negative Reviews And Feedback
 Lack Of Innovation

14 Strategies For Increasing Retention And Loyalty:

1. Develop A Customer-Centric Culture

2. Personalize The Customer Experience
3. Offer Exceptional Customer Service
4. Implement Loyalty Programs
5. Build Emotional Connections
6. Continuously Innovate
7. Encourage And Respond To Feedback
8. Create A Seamless Omnichannel Experience
9. Focus On Customer Education
10. Cultivate Brand Advocates
11. Offer Upsells And Cross-Sells
12.Provide Social Proof
13.Offer Proactive Customer Support
14.Foster A Community

What is CRM?

There can be multiple definitions of CRM from different perspectives −

 From the viewpoint of the Management, CRM can be defined as an

organized approach of developing, managing, and maintaining a
profitable relationship with customers.
 By equating the term with technology, the IT organizations define
CRM as a software that assists marketing, merchandising,
selling, and smooth service operations of a business.
 As per Franics Buttle, World’s first professor of CRM, it is the core
business strategy that integrates internal processes and functions,
and external networks, to create and deliver value to a target
customer at profit. It is grounded on high quality customer data
and information technology.
The primary goal of CRM is to increase customer loyalty and in turn
improve business profitability.
Chapter 4 types of marketing

What is SEO?

Search engine optimization (SEO) is the process of structuring

your website and content so that your pages rank at the top of the
results for search terms that are relevant to your business.

There are countless pages all trying to show for the same searches
(keywords). Google must compare all these pages to decide which ones
to show where.

With SEO, businesses can improve where their pages rank. They can
do so by strategizing effectively and optimizing content according to
what Google wants.

How does SEO Work?

To understand how SEO works, you first need to know how Google
and other search engines find and rank content.

Search engines like Google seek to provide users with the most
relevant answers to their search queries.

They do so by sending little robots known as crawlers across the

internet. These bots “crawl” different websites and pages to analyze
their content.

They then add the pages they find to Google’s index. The index is a
giant record of all the pages the search engine has discovered. Only
indexed pages can show up for search results.

Once pages are in the index, Google weighs them against other pages
to determine which ones to show for different search queries.

There is a long list of factors Google evaluates when ranking pages.

These are broadly characterized as on-page or off-page factors.
SEO Overview
On-page factors are the elements on your website and web pages
that impact search rankings. Some important examples include:

 Headings
 Meta titles and descriptions
 Image alt text
 Page content (keywords used, readability, length, etc.)
 URL structure
 Page speed

Off-page factors are the external factors that contribute to your page
rankings. These factors mostly center around how authoritative your
site is.

In short, Google favors more authoritative sites and prefers to rank its
pages ahead of less popular sites.

A website’s authority is determined by how many other sites are

linking to it and how much traffic the website receives.
SEO tool providers Ahrefs and Moz have created proprietary formulas
that calculate the domain authority score for each website.

With a better understanding of how to optimize your website’s SEO,

here is a quick overview of the steps needed to execute an SEO
strategy:

Choose your target keywords

An SEO strategy begins with keyword research. You want to find all
the relevant search terms that your target audience uses. When you
discover relevant search terms, you should add them to a list.

This list should include the estimated amount of times a keyword is

searched each month as well as how difficult it is to rank for the
keyword. Popular SEO keyword research tools provide this data.

Create content optimized for those terms

Once you have found your keyword targets, you can then create pages
that are optimized for those terms. This involves creating high-quality
content that matches search intent while also following SEO best
practices.

Set up Google Search Console and monitor your

performance

Google Search Console is a platform that you can use to manage your
website’s SEO performance. It provides a lot of useful data including
what pages are currently indexed, which have errors, where pages
rank, and how much traffic they are generating.

You can use the insights to track your SEO performance over time. If
you see a page’s rankings dropping, you will know that you need to
make improvements.

2. Search Engine Marketing (Paid Advertising)

Getting to the top of the organic search rankings isn’t the only way to
market your business through a search engine.
Search engines also allow companies to pay for ads that are shown on
results pages.

This type of digital marketing is known as search engine

marketing. It accounts for a large portion of the digital marketing
budgets for many organizations.

What is SEM?

Search engine marketing (SEM) is the process of using search engines

to market your business.

SEM is similar to SEO in that it presents your business through the

same platform however there is a fundamental difference between the
two.

The difference between SEM and SEO is that SEM focuses on

paid advertising.

These ad placements are highly valuable as they often appear at the

top of the results, before the organic (unpaid) listings.

SEO Vs SEM
One of the most common forms of SEM is pay-per-click (PPC)
advertising. With this advertising model, businesses bid against one
another to have their ads show for different keywords.

After someone clicks on an ad, the business pays the advertising

platform (Google) for the visitor.

When used properly, SEM campaigns can be a great way to build

brand awareness and find new customers.

How does SEM Works?

SEM marketing centers around PPC advertising campaigns. This type

of advertising is based on an ad auction.

Different businesses set bids for how much they are willing to pay for
someone to click on their ad. They are only charged for the ad after
someone clicks it.

The ad auction happens in real-time every time someone searches a

keyword. Google determines the ad auction winner by evaluating
several factors including your maximum bid and the quality score for
your ad.

Building an SEM strategy starts along the same lines as an SEO

campaign. You first need to know what keywords your target audience
is using.

Once you’ve identified your keyword targets you can begin setting up
your advertising account.

A Google Ads account uses the following hierarchical structure:

 Campaigns: these are the highest level grouping of your ad

account. Each campaign has an objective, bid strategy,
budget, and targeting settings
 Ad groups: ad groups exist within campaigns. They let you
organize your campaigns into different themes. For
example, you can create different ad groups for different
types of products.
  Ads: each ad group has its own set of advertisements that
are displayed to visitors.
 Keywords: ad groups also have their own keywords that
are used for audience targeting.

When you create a campaign, it is common to follow a top-down

approach.

Start with the campaign objective, budget, and bidding strategy. You
can move on to segmenting different ad groups and choosing their
respective keywords and creating the ads themselves.

When your campaigns are up and running, you can track the
performance of your ad campaigns directly within your Google Ads
account. You can also connect your Google Ads and Google Analytics
accounts to get more detailed data about your ads’ performance.

3. Social Media Marketing

People across all demographics use various social media networks to

connect with others and discover new products.

Businesses can use the active engagement offered by social platforms

to get in front of their target audience.

What is Social Media Marketing?

Social media marketing is a form of digital marketing where

businesses use social media platforms to engage with their audience
and find new customers.

SMM consists of both organic and paid methods.

Organic SMM involves actively posting content and engaging with the
community to build a following.

Paid SMM involves running various forms of advertisements to drive

people to your website before ultimately turning them into a customer.
How does SMM work?

SMM starts by understanding the user base for different social

networks so that you can know what platforms your audience is using.

Each platform is popular among different types of users. For example,

Pinterest is more popular among women with high incomes while
Facebook has more of a balance of users across gender and age groups.

With an understanding of which platforms your target audience will

use, you can begin crafting a social media strategy and creating
content.

Your content should be specific to each channel that you are using.
This will make it more effective as it will resonate more with that
particular following.

The goal for your SMM doesn’t necessarily need to be bringing in more
sales. Instead, you can use your social media profiles to engage your
audience and improve brand awareness.

For a more sales drive approach, you can run paid advertisements on
social media platforms. Like SEM campaigns, most social media
advertising campaigns tend to follow a PPC model.

Social media advertising differs from SEM advertising in that there are
many more ad formats at your disposal. With social media, you can
use video ads, image ads, gallery ads, stories, and more.

Targeting for social media campaigns focuses more on audience

characteristics rather than keywords. You can define your target
audience by a variety of criteria including age, gender, location, and
interests, among others.

You can also create custom audiences to target a specific group of

people such as those who have visited your website but haven’t made a
purchase.
Social media advertising platforms provide in-depth data and
performance metrics so that you closely monitor the success of your
campaigns.

4. Content Marketing

Content marketing is the jack-knife of digital marketing. Most other

forms of digital marketing whether it is SEO, social media, or email
will involve some use of content.

Content is how you provide value to your audience. You can use it to
strengthen the connection with prospects and stand out from the
competition.

What is Content Marketing?

Content marketing is a type of digital marketing where a business

creates valuable content and distributes it to its target audience to
build a connection and move prospects through its sales funnel.

Content Marketing Strategy Plan

Content can come in a wide range of forms including blog
posts, listicles, videos, social media posts, downloadable resources,
and more.

Content marketing is an important component of any digital

marketing strategy because traditional forms of advertising are less
effective with some people.

Many have been bombarded with ads for years and are no longer
interested in hearing a brand’s commercial messaging.

Content marketing provides a solution to this challenge by giving

organizations a natural way to communicate with their audience.

How does Content Marketing work?

The main purpose of content marketing is to provide your audience

real value while also keeping them engaged with your business.
Like other types of digital marketing, you need to clarify your strategy
before you begin creating content. Your objective will ultimately
determine what type of content is best and how you should promote it.

The objective of your content marketing strategy could be to increase

brand awareness by increasing social followers or it could be to
educate your audience about a topic that is important to them.

Once you’ve established the objective for your content marketing

strategy, you can determine what type of content will best help you
reach your goals. If you want to nurture leads, this could be resources
like eBooks or how-to blog posts. If you want to build brand
awareness, it could be a set of posts on social media.

When you know what type of content you want to create, you can then
decide what channels you will use to distribute the content.

Oftentimes, the type of content you use will determine this for you. If
you want to create a series of social posts, you can only do this through
social platforms.

Content marketing tends to be tied closely to SEO. If you want to use

your content to bring visitors to your website it will likely be heavily
focused on targeting specific keywords.

5. Email Marketing

Email marketing is one of the oldest types of digital marketing. With

its many benefits, it is still commonplace among businesses today.

What is Email Marketing?

Email marketing is a type of digital marketing where businesses

engage with their audience through email.

Customers sign up for a business’ email list, giving the company

permission to contact them via email.
Businesses can then send various types of email messages including
promotional offers, educational material, or just general updates.

How does Email Marketing work?

Email marketing begins and ends with your list of email subscribers.
You need a list of people to market to before you can begin your
campaigns.

The best way to grow your email list is to place sign-up forms
across your website. You can embed these forms in your pages, add
them to your sidebar, or display them in a popup.

A common practice businesses use to increase the rate at which people

opt-in to their email list is to create lead magnets.

A lead magnet is a free resource or gift that you give to a visitor in

exchange for their contact information. For example, a lead magnet
could be a discount for a product or an eBook explaining how to do
something specific.

Once a subscriber joins your email list, you have the ability to contact
them with marketing messages directly.

One of the best parts of email marketing is the ability to set up

automated campaigns.

With an email autoresponder software, you can configure a campaign

to automatically send subscribers a predefined sequence of messages.

This is a highly effective way to move people through your digital

marketing sales funnel as you can send them content related to
each stage of their buying journey.

Here are some common examples of automated email campaigns:

 Abandoned cart campaigns – You can send a follow-up

email to people who add a product to their shopping cart
but leave your site without completing a purchase.
  Weekly newsletter campaigns – You can send a
recurring email series to your subscribers with any updates
and new offers.
 Win back campaigns – You can send an email sequence
to someone who has purchased from your business in the
past but hasn’t returned for a while.
 Remarketing campaigns – You can send a follow-up
message to someone after they view a product on your site.

Another major advantage to email marketing is the level of control you

have over your list.

Most email marketing software lets you group different types of

subscribers into segments.

These segments can be based on any criteria that you specify. For
example, you could create a segment for people in a specific
geographic area. Or you could create a segment for people that have
engaged with your business a certain number of times.

This lets you send personalized messages that often result in higher
conversions.

6. Affiliate Marketing

One of the best ways to market your business is to have other people
do it for you. This is the focus of affiliate marketing.

By creating an affiliate program, businesses can leverage the effort of

others to reach new audiences and grow their customer base.

What is Affiliate Marketing?

Affiliate marketing is a type of digital marketing where third parties

promote another business’ products in exchange for a portion of any
sales revenue that they bring to the business.

These affiliates promote the business by marketing unique

promotional links. When someone completes a purchase after clicking
the link, the affiliate receives credit for the sale. They then earn
whatever commission is agreed upon in their affiliate agreement.

How does Affiliate Marketing work?

How Affiliate Marketing Works

Companies that want to use affiliate marketing must first create an
affiliate program. The program defines the terms affiliates must follow
and specifies the details of how much they can earn.

Businesses must also create an interface for affiliates to view and

manage their accounts.

A business can choose to host their affiliate program themselves or

partner with an affiliate network to host it for them. Popular affiliate
networks include Shareasale, Awin, and CJ Affiliate.

Running an affiliate program through an affiliate network helps the

business offload some of the administrative burdens of having an
affiliate program.

From the affiliate’s perspective, networks offer the advantage of

centralized management. Affiliates can often join multiple programs
within one network and manage them from a single account.

After an affiliate joins a program they are given unique affiliate links.
These links are used to track the traffic that the affiliate brings to the
business’ website.

The affiliate places these links across their marketing channels,

typically a blog or social media profile. Most affiliate programs do not
let affiliates use their links in ad campaigns that target certain
keywords.

Over time, visitors will view the affiliate’s web properties and click the
affiliate links. When a visitor completes a transaction after clicking the
link, the affiliate is rewarded a commission for the sale.
Commissions can either be a flat dollar amount or a percentage of the
order value. The size of commissions varies wildly depending on the
program and the type of product sold.

Note: Most affiliate programs have a cookie duration. This is the

amount of time in which a visitor must complete a purchase after
clicking the link for the affiliate to be rewarded with the sale.

For example, let’s say you’re part of an affiliate program that has a
cookie duration of 30 days— if someone were to buy from the link 27
days after clicking it, you would receive a commission. However, if
they complete the purchase 31 days after clicking the link, you will not
receive a commission.

7. Mobile Marketing

Most of today’s internet traffic comes from mobile devices. Because of

this, businesses have needed to adapt their digital marketing practices
to prioritize mobile users.

Mobile marketing is one of the ways companies can optimize their

marketing efforts for audience members on mobile devices.

What is Mobile Marketing?

Mobile marketing is a digital marketing strategy designed to target

users on mobile devices.

It can involve a variety of communication methods including SMS

messages, push notifications, in-app advertisements, and more.

It can also involve more traditional forms of digital marketing such as

search ads, display ads, and social media ads.

How does Mobile Marketing work?

Mobile marketing is a rather dynamic digital marketing discipline.

How it works varies greatly depending on how the business uses it.
Let’s examine some of the common ways businesses implement mobile
marketing:

Location-based marketing

Businesses can show mobile ads to users that are within a certain
geographic area by using the Google Ads local ad extension.

For example, if you have a restaurant and are targeting keywords such
as “local restaurant”, you can use the extension to show your
restaurant’s location on a map beneath the ad for nearby people who
are searching on a mobile device.

SMS marketing

SMS marketing works similarly to email marketing in that you need to

get someone to subscribe to your marketing list by providing their
phone number

Once someone is on your list, you can send them all sorts of
promotional messaging. SMS campaigns get great engagement.

This is largely to do with notifications from text messages being more

visible than those from email.

In-game and in-app advertisements

Businesses can partner with game creators and app developers to

promote their products within applications.

These ads can appear as pop-ups, banners, full-screen images, or even

embedded into the content itself.

8. Video Marketing

Videos are highly engaging and a great way to market your business.
You can add them to your website, offer them as a free resource on
YouTube, or use them to bring more life to your advertisements.

What is Video Marketing?

Video marketing is the practice of using videos to promote your

products or services to your audience. Videos can serve several use
cases including advertisements, educating potential customers, or
increasing brand engagement.

Here are some of the types of videos you can make:

Video ads – You can create quick short-form videos showcasing your
products or services. You can then display these videos in campaigns
across Facebook, Instagram, or YouTube.

Educational and how-to videos – You can create videos that

provide your audience with some useful knowledge on a subject that is
valuable to them. You can display these videos on your website or on a
free platform like YouTube.

Demo and tutorial videos – You can make videos explaining how
to use your products or services. This can include simple explainer
videos that you list on a feature or product page or a step-by-step
tutorial on a specific topic for current customers.

Webinars and lead magnets – You can record a webinar as a lead

magnet and then offer it to visitors in exchange for a subscription.

How does Video Marketing work?

Like any other type of digital marketing, video marketing begins with a
strategy.

You first need to define the goals you want to achieve with your videos.
You should consider how you are going to use video at different stages
of your marketing funnel.
Digital Marketing Funnel
You also want to clarify your target audience before you begin creating
your videos.

This will give you insights into how to design videos that are engaging
and meaningful.

After you define your audience, you can begin making your videos.
How long this process takes depends on the type of video you are
making. If you only need a short-form video, the recording process
won’t take too long.

The same applies to tutorial videos. You can have someone

knowledgeable about your business walk through an explainer in one
sitting.

You’ll also need to consider the budget for your videos. Different types
of videos and features incur different costs so it’s important to plan for
what you can afford.

Once you’ve created your videos you can distribute them through the
appropriate channels. You want to closely monitor the engagement of
your videos to see if your audience enjoys them.
9. Influencer Marketing

Companies have long used celebrities and popular figures to market

their products. As social media has blossomed, it has given rise to
another type of endorsement— influencer marketing.

What is Influencer Marketing?

Influencer marketing is a type of digital marketing where companies

can promote their products or services through endorsements or
recommendations from popular figures known as influencers.

An influencer does not need to be a celebrity, but simply a person with

some authority in a niche and the ability to influence others’ decisions.

Because they often have massive social followings, an influencer can

get their promotions in front of large numbers of people.

Many people look up to influencers and will be quick to purchase an

item after seeing someone they admire connected to it.

How Does Influencer Marketing Work?

Influencer marketing begins with finding influencers to promote your

business.

There are several different approaches you can take. You can start with
a social media platform you want to grow your presence on and start
searching for relevant influencers with a strong following.

If you want to begin by establishing yourself in your niche, you can

start by searching for industry authorities regardless of what their
primary platform is.

There are also many influencer programs that essentially serve as a

middleman between businesses and influencers. You can connect with
one of these services to find relevant influencers in your niche.
Once you find influencers worth working with, there are various
approaches you can take to how you structure your partnership.

You can choose to pay the influencer a flat retainer upfront, pay them
per post/promotion, or pay them based on the results that they bring.

The influencer will promote your products to their following and you
should see a good amount of highly-engaged web traffic as a result.

Similar to affiliate marketing it is important to have tracking links.

This will let you attribute any sales and conversions to your influencer
campaign so that you can be clear on the results it is generating.

How AdSense works

Google AdSense provides a way for publishers to earn money from their
online content. AdSense works by matching ads to your site based on
your content and visitors. The ads are created and paid for by advertisers
who want to promote their products. Since these advertisers pay
different prices for different ads, the amount you earn will vary.

AdSense in three steps

1. You make your ad 2. The highest paying ads 3. You get
spaces available appear on your site paid
AdSense is a free-of-charge, simple way to earn money by displaying ads
next to your online content. With AdSense, you can show relevant and
engaging ads to your site visitors and even customize the look and feel of
ads to match your site.
The benefits of using Google AdSense

Not sure whether to use Google AdSense to run ads on your site? Here
are 10 advantages of the program:

1. Google AdSense enables you to monetize your website, offering a

way to earn passive income through your site.
2. All you have to do is a little setup and then Google handles the
rest, including sizing ads to properly fit desktop and mobile screens.

3. Google AdSense is free to use, so there’s no financial risk in getting

started with it as part of a wider marketing strategy.

4. There’s a wide range of advertisers working with Google AdSense,

so you can display ad content relevant to your niche. Advertisers paid
Google $147 billion in 2020 to appear in search, on YouTube, as well as
on Google AdSense-enabled websites.

5. Ads that appear on your site have been vetted by Google, so you can be
assured that the ads meet certain quality standards.

6. Ads that appear on your site are compatible with your content and
cater to visitors’ interests. As a result, they’re unobtrusive and add
value to your visitors’ experience.

7. You get to choose which types of ads to use and where they go on
your website.

8. You can customize the design of the ads to match the look and feel
of your site.

9. You’ll get paid monthly by direct deposit so long as you make at

least $100, so this could realistically become a steady paycheck.

10. As your website traffic grows and your audience becomes more
engaged, you’ll incrementally increase your earnings through Google
AdSense.
What is keyword research?

Keyword research is the process of researching popular online search

terms that people type into search engines. Knowing what these search
terms are is important so that they can be used strategically in website
content to help the website rank higher on the search engine results
pages (SERP). Keyword research is a key practice of search engine
optimization (SEO).

Why is keyword research important?

For best practices, keyword research should happen when campaigns,

content and future projects are still in the planning stage. SEO experts
prioritize keyword research because it helps in the development of other
important work. Keyword research is important because you can:

 Get people to find you: The most important thing a website

needs to be successful in is traffic. The right audience is crucial for
website goals to be met. Goals could be newsletter sign-ups, selling
products or getting in touch with one of the company's
representatives to name a few examples. Accordingly, being at the
top of the search engine page where a person can easily click on
your website should be your top priority, and this is what using the
right keywords can do.
 Write focused content: With the keywords in mind, you can
write content that is focused on the keywords you want to rank for.
Search engines now favor quality content rather than articles that
have been stuffed with keywords. For example, you are more likely
to rank well for an article about boats if it has subheadings with the
right keywords and is useful to the reader. This is compared to an
article that prioritizes keyword density (putting the focus on how
many times the keyword is included in the article) but brings no
value to the reader.
 Decide on name features: The right keywords can also help
you decide on the names of your product features. Product features
are descriptions of your products.
 Direct your campaigns: Keywords can help you decide on the
direction your campaigns should take. With the right keywords in
mind, you can create better-branded campaign names, pay-per-
click (PPC) campaigns, better ad groups and more.
 Know your audience: Having the right keywords is crucial
because it means you have a good understanding of your target
market. By researching keywords, you can understand what your
target audience needs and how they are searching for it.
  Understand the demand: Keywords can give you insight into
how high the demand for your product, service or content is.
Moreover, you will gain an understanding of how high the demand
is for certain keywords and how fierce the competition is. Use
high-ranking keywords with low competition to have a better
chance of ranking high on SERP.
 Explore the subject: Keyword research provides insight into the
subject you are researching. It is a way of exploring the topic and
expanding it as you come across the many different words people
are using to find information about your topic.
 Convert traffic: The right keywords will bring the right audience
to your website, making it more likely for this traffic to turn into
conversions. Conversions are the goals you set for your website. A
conversion for a fashion blogger may be getting the audience to
sign up for a weekly newsletter or click to buy shop items. For an
insurance company, conversions may be getting readers to contact
the company to set up an appointment.

How to do keyword research

The following is a step-by-step guide of best practices when doing

keyword research:

1. Start with intent.

2. Make a list.
3. Figure out the monthly search volume.
4. Study the related search terms.
5. Include long-tail keywords.
6. Check on the competition.
7. Establish your keyword list.

Here are some best practices for SEO that can help you improve your
website’s performance:

1. Match your content with search intent: Search intent is the

underlying reason for a user’s search in Google. It’s important
because Google’s main job is to provide the best result for its user’s
search queries. Understanding and satisfying search intent is
Google’s ultimate priority. Pages that rank on the first page have all
passed Google’s test on search intent. For instance, take a look at
the search results for “how to make oatmeal cookies.” The top
search results are blog posts or videos. Not ecommerce pages
selling oatmeal cookies. Google understands that people who are
searching for this keyword are looking to learn. Not to buy. On the
 other hand, the results for a query like “buy oatmeal cookies” are
product ads and ecommerce pages. If you’d like to rank on page 1
of Google, you need to understand search intent and create content
that matches it 1.
2. Leverage primary keywords: A primary keyword (or “target
keyword”) is a keyword that best represents the topic of a page.
And every page on your site should target one primary keyword. (If
you want it to rank on Google.) Where you use your primary
keyword also matters. It helps optimize the page. So, if possible,
add your target keyword to elements like: The title tag, the main
headers (especially the H1), the introduction, and the page’s URL 2.
3. Write unique titles, descriptions, and content: Unique titles
and descriptions help search engines understand what your page is
about and why it’s relevant to a user’s search query. Unique
content is also important because it helps differentiate your site
from others and provides value to your users 3.
4. Optimize your title tag for SEO: The title tag is an HTML
element that specifies the title of a web page. It’s displayed in the
browser’s title bar and in the search results. Your title tag should
be concise, descriptive, and include your primary keyword 3.
5. Optimize your site’s loading speed: Site speed is a critical
factor in SEO. A slow-loading site can negatively impact your
rankings and user experience. You can use tools like Google’s
PageSpeed Insights to analyze your site’s speed and identify areas
for improvement 3.
6. Track your results with the Google Search Console: Google
Search Console is a free tool that helps you monitor and maintain
your site’s presence in Google search results. It provides valuable
insights into how Google crawls and indexes your site, and can
help you identify and fix issues that may be impacting your
rankings 3.
7. Optimize images for SEO: Images can help improve the visual
appeal of your site and provide additional context to your content.
However, they can also slow down your site if they’re not optimized
properly. To optimize your images for SEO, make sure they’re
compressed, have descriptive file names, and include alt text 3.
8. Use internal linking: Internal linking is the practice of linking
to other pages on your site. It helps search engines understand the
structure of your site and the relationships between pages. It can
also help distribute link equity throughout your site, which can
improve your rankings 3.
9. Publish amazing content: Ultimately, the best way to improve
your SEO is to publish amazing content that provides value to your
 users. If you create high-quality content that satisfies search intent,
you’ll be well on your way to ranking on the first page of Google 1.

 1. Add Your Main Keyword Early On In Your Content ...

 2. Write Unique Titles, Descriptions and Content ...
 3. Optimize Your Title Tag for SEO ...
 4. Optimize Your Site’s Loading Speed 5- Track Your Results
With The Google Search Console
Difference between Inbound Marketing and Outbound
Marketing
1. Inbound Marketing:
Inbound Marketing is a technique to attract customers to buy products
and services with the help of Social Media Marketing, Content
Marketing, Search Engine Optimization , and branding, etc.
Some examples of inbound marketing tactics include:
 Content marketing (blogs, articles, e-books, webinars, etc.)
 Search engine optimization (SEO)
 Social media marketing
 Email marketing
 Video marketing
 Referral marketing
Advantages of Inbound Marketing:
 Cost-effective: Inbound marketing is often more cost-effective
than outbound marketing as it focuses on organic traffic and
creating valuable content that can be shared across various
channels.
 Builds credibility: Inbound marketing helps businesses build
trust and credibility with their target audience by providing
valuable information and resources that address their needs
and pain points.
 Better engagement: Inbound marketing allows for more
engagement and interaction with the target audience, as it
focuses on creating content and resources that are relevant and
helpful to them.
 Disadvantages of Inbound Marketing:
 Requires time and patience: Inbound marketing can take time
to yield results as it requires businesses to build an audience
and establish a reputation as a credible source of information.
 Less control: With inbound marketing, businesses have less
control over the timing and frequency of interactions with the
target audience.
2. Outbound Marketing:
Outbound Marketing is a technique to attract large number of
customers to buy products and services with the help of tv ads, e-mails,
p print ads, etc.

Some examples of outbound marketing tactics include:

 TV and radio advertising
 Print advertising (newspapers, magazines, etc.)
 Direct mail
 Cold calling
 Trade shows and events
Advantages of Outbound Marketing:
 Control over messaging: Outbound marketing allows
businesses to control the messaging and frequency of their
communication with the target audience.
 Quick results: Outbound marketing can yield quick results, as
businesses can reach a large audience in a short amount of
time.
 Better targeting: Outbound marketing allows businesses to
target specific demographics and geographic regions, which
can help to improve the effectiveness of marketing campaigns.
Disadvantages of Outbound Marketing:
 Costly: Outbound marketing is often more expensive than
inbound marketing due to the cost of producing and
distributing advertisements.
 Less engagement: Outbound marketing is often less engaging
and interactive than inbound marketing, as it relies on one-way
communication.
 Lower credibility: Outbound marketing may be seen as less
credible and trustworthy by the target audience, as it is often
perceived as intrusive and disruptive.

Similarities :

 Both aim to generate leads and increase sales: The primary

goal of both inbound and outbound marketing is to generate
leads and increase sales for the business.
 Both require a clear understanding of the target audience: Both
inbound and outbound marketing require a clear
understanding of the target audience, their needs, and pain
points to create effective marketing campaigns.
 Both require a strong value proposition: Both inbound and
outbound marketing require a strong value proposition that
 communicates the unique benefits of the product or service to
the target audience.
 Both require a well-executed strategy: Both inbound and
outbound marketing require a well-executed strategy that
leverages the strengths of each approach to achieve the desired
marketing goals.
 Both rely on technology: Both inbound and outbound
marketing rely on technology to reach the target audience and
measure the effectiveness of marketing campaigns.
 Both require constant optimization: Both inbound and
outbound marketing require constant optimization to improve
the effectiveness of marketing campaigns and generate better
results.
Difference between Inbound Marketing and Outbound Marketing :
S.
No. Inbound Marketing Outbound Marketing

It pulls in interested It pushes regardless of

1. customer. interest.

It is written according to It is written according to

2. customer’s needs. product needs.

It is a part of content It disrupts content

3. consumption. consumption.

It is also called New It is also called Old

4. Marketing Technique. Marketing Technique.

Inbound Marketing is Outbound Marketing is

5. cheap. expensive.

Inbound Marketing is also Outbound Marketing is

known as “Magnetic also known as “Push
6. Marketing”. Marketing”.

In Inbound Marketing, the In Outbound Marketing,

marketer gets permission the marketer interrupts the
7. from the customer. customer.
 It has two way It has one way
8. communication. communication.

It includes organic search It includes paid search

9. ranking. ranking.

Some examples are blogs, Some examples are display

10. social media etc. ads, tv ads etc.

It is challenging to quantify
It is measurable using the attribution of physical
11. digital marketing software. advertising.

It complements the user It interferes with user

12. experience. experience.

13. It is for specific audience. It is for general audience.

The availability of several

tools makes the selection
easier of the most relevant
material for your audience. There is no availability of
Analytics are also available such tools and analytics for
14. for inbound marketing. outbound marketing.

Outbound marketing
As a general rule, for should be employed when
increasing brand you have something new
awareness or visibility for your users and they
among customers pull or might not be familiar with
inbound marketing should that but are ready to buy
15. be employed. the product.

Using marketing strategies Using marketing strategies

tactfully to pique the tactfully to persuade
16. audience’s attention. customers to buy.
Conclusion:

Inbound and outbound marketing are two distinct approaches to

marketing with their own set of advantages and disadvantages. Inbound
marketing focuses on attracting and engaging the target audience
through valuable content and resources, while outbound marketing
relies on interrupting the target audience through various channels to
promote products or services. Ultimately, the choice between inbound
and outbound marketing depends on the business’s goals, target
audience, and available resources.

Chapter 5 MIS, Marketing Research and Analytics.

Marketing Information System

With the increasing use of the computer, companies are becoming
more interested in the development of a corporate wide, integrated
management information system. The purpose of such a system is to
bring all of the flows of recorded information in the entire company
into a unified whole. Thereby it is hoped that the manager’s capacity
to plan and control the company’s activities will be improved. Such a
system is often seen as a marked improvement over current
procedures.

ADVERTISEMENTS:

As companies have attempted to introduce such a system, however, a

consensus seems to be growing, especially among some computer
hardware manufacturers, that a more realistic approach is to begin
with smaller systems, such as one in marketing, or in production.

As Business Week recently put it, “Skeptics are backing of and asking
whether one big system is such a good idea after all.” The reason for
this change in view is the growing awareness that these smaller
subsystem, such as one for marketing, can perhaps be conceptualized
in enough detail to be operational, whereas, in the current state of the
art, the larger systems probably cannot.

The human mind simply cannot grasp the whole management

operation with efficient clarity and detail to permit it to be structured
and modeled. New concepts will probably have to be developed to aid
us in thinking about such a complex phenomenon. In the meantime,
management can proceed to develop the smaller systems. In building
the smaller systems too, we can benefit by learning from the mistakes
that were made with global systems.

ADVERTISEMENTS:

Marketing information systems are really the frameworks used for

managing, processing and accessing data. They can be simply a
sharing of information by key departments, but are more likely to be
some form of integrated system based around information technology.
The important issue is that the information from such a system is
presented in a way that is useful to the marketing decisions.

Even in quite small companies they can involve large quantities of

data. One apparently logical approach to the problem of extensive
data is to develop, using computer technology, a system which stores
and provides access to the information needed by those making
marketing decisions.
The term ‘marketing information system’ or MkIS is used to describe
such a system. Such systems are generally discussed in the context of
marketing information or marketing research. (It should be observed
that the term MIS is commonly used for the somewhat more far
reaching ‘management information system’).

While it is essential for organisations to have systems by which

marketing information can be stored, processed and accessed, it
should be clear from the points made regarding the nature of
information in general, and marketing information in particular, that
such systems have fundamental limitations. At best the system can
only handle such tangible and intangible information as is made
available to it.

There are three basic components of a good marketing

information system:

1. Information acquired via market intelligence

2. Information from operating data

3. Information library.

What a MkIS does is to bring together data from these sources,

usually into a computerised database. By structuring it appropriately
this allows the interrogation and linking of the data. It is important
for the systems to be designed by marketers, not computer people, as
the form of the output is critical to good decisions.

Marketing information system is a set of procedures and methods for

regular and planned collection, analysis and presentation of
information in making marketing decisions. It is an interacting,
continuing, future-oriented structure of persons, machines and
procedures designed to generate an orderly flow of information
collected from internal and external sources of information.
It is an integrated combination of information, information
processing and analysis, equipment and tools (i.e., software and
hardware) and information specialists who analyse and interpret the
collected information and provide it to decision-makers to serve their
analysis, planning and control needs.

Need for a Marketing Information System (MIS):

 1. Data Management: Businesses generate vast amounts of data
daily, including sales figures, customer data, and market trends.
An MIS helps manage this data efficiently.
2. Market Analysis: To understand customer preferences, market
trends, and competition, companies require comprehensive data
and analysis, which an MIS can provide.
3. Competitive Advantage: An effective MIS helps businesses gain
a competitive edge by enabling timely and data-driven decisions.
4. Efficient Decision-Making: Marketing decisions based on
accurate and up-to-date information are more likely to be
successful. An MIS facilitates this process.

Importance of a Marketing Information System (MIS):

1. Data Accessibility: MIS ensures that the right information is

available to the right people at the right time, reducing delays in
decision-making.
2. Improved Decision-Making: Informed decisions lead to better
outcomes. An MIS provides data and insights that support
marketing strategies, product development, and customer
relationship management.
3. Market Research: It helps in market research, enabling
businesses to identify customer needs and preferences, and
respond effectively.
4. Resource Allocation: MIS helps allocate marketing resources
efficiently by identifying areas of high return on investment.
5. Monitoring and Control: It provides tools to monitor
marketing activities and track performance against goals, allowing
for course corrections when necessary.

Elements and Components of a Marketing Information System

(MIS):

1. Data Collection: The MIS collects data from various sources,

including internal sources (sales records, customer databases) and
external sources (market research, competitors' data).
2. Data Processing: Once data is collected, it's processed to convert
it into useful information. This may involve data cleaning, analysis,
and reporting.
3. Database: A central database stores all the marketing data. This
database can be organized for easy retrieval and analysis.
4. Software and Technology: MIS relies on software and
technology tools for data analysis, reporting, and visualization.
 These can include data analytics software, CRM systems, and
reporting tools.
5. Decision Support Systems (DSS): DSS software helps
marketing professionals make data-driven decisions by providing
insights and simulations.
6. User Interface: The user interface allows marketing managers
and other stakeholders to access and interact with the MIS, usually
through user-friendly dashboards and reports.
7. Human Resources: Skilled professionals are needed to manage
the MIS, interpret data, and make informed decisions. Training
and expertise are essential components.
8. Security Measures: Protecting the data within the MIS is
critical. Security measures, including access controls and
encryption, ensure data integrity and confidentiality.
9. Feedback Mechanism: MIS should incorporate feedback loops
to assess the effectiveness of marketing strategies and adjust them
as needed.
10. Reports and Dashboards: MIS generates reports and
dashboards that provide a visual of data, making it easier for
decision-makers to understand trends and insights.
What is marketing research?

Marketing research is defined as any technique or a set of practices that

companies use to collect information to understand their target market
better. Organizations use this data to improve their products, enhance
their UX, and offer a better product to their customers. Marketing
research is used to determine what the customers want, and how they
react to products or features of a product.

Areas of Marketing Research:

1. Market Analysis:
 Assess the size, growth potential, and segmentation of target
markets. Understand customer needs and preferences.
2. Product Research:
 Evaluate product features, pricing, packaging, and
positioning. Test new product concepts and gather feedback.
3. Competitive Analysis:
 Investigate competitors' strategies, strengths, weaknesses,
and market share. Identify opportunities and threats.
4. Consumer Behavior:
  Study consumer buying behavior, motivations, and decision-
making processes. Understand factors that influence
purchasing choices.
5. Advertising and Promotion Research:
 Assess the effectiveness of advertising campaigns, message
delivery, and media channel selection.
6. Brand Research:
 Study brand perception, brand equity, and brand loyalty.
Determine how consumers perceive and interact with your
brand.
7. Pricing Research:
 Analyze pricing strategies, elasticity of demand, and
competitive pricing. Determine optimal price points.
8. Distribution Research:
 Evaluate distribution channels, logistics, and supply chain
efficiency.
9. Customer Satisfaction and Feedback:
 Collect feedback from customers to measure satisfaction,
identify areas for improvement, and enhance customer
loyalty.
10. Social and Cultural Trends:
 Monitor societal and cultural shifts that may impact
consumer behavior and preferences.
11. Digital Marketing Research:
 Study online consumer behavior, website analytics, and
social media engagement.
12.International Marketing Research:
 Research markets in different countries, including cultural
differences and market entry strategies.
The recommended core five steps in the marketing research process are:
define the problem or opportunity,
develop your marketing research plan,
collect relevant data and information,
analyze data and report findings,
and put your research into action.
1. Market Basket Analysis:
 Market Basket Analysis, often used in retail and e-commerce,
is based on the idea that if customers buy one product, they
are likely to buy related or complementary products. This
analysis identifies patterns in customer purchase behavior to
 understand which products are frequently bought together.
Retailers can use this information for strategies such as
product placement, cross-selling, and recommendations. For
example, if customers frequently buy cereal and milk
together, a store might place these items in close proximity to
encourage joint purchases.
2. RFM Analysis:
 RFM stands for Recency, Frequency, and Monetary Value,
and it's a customer segmentation technique. Recency refers
to how recently a customer made a purchase, Frequency is
how often they make purchases, and Monetary Value relates
to the total spending by the customer. By segmenting
customers based on these three factors, businesses can target
marketing efforts more effectively. For example, "high RFM"
customers (recent, frequent, high spenders) might receive
special promotions to retain their loyalty.
3. Customer Lifetime Value (CLV):
 CLV is a metric that quantifies the total value a customer is
expected to bring to a business throughout their relationship.
It involves estimating future revenue based on past and
predicted customer behavior. CLV is valuable for guiding
customer acquisition and retention strategies. Businesses can
allocate resources more effectively by identifying high CLV
customers and investing in their satisfaction and loyalty.
4. Big Data Analytics:
 Big Data Analytics refers to the process of analyzing vast and
complex datasets, often from multiple sources, to extract
insights and patterns. In marketing, this could involve
examining data from various touchpoints like websites, social
media, customer databases, and more. By applying advanced
analytics techniques, businesses can uncover trends, segment
audiences, and make data-driven decisions.
5. Text Mining and Sentiment Analytics:
 Text mining involves extracting and analyzing information
from unstructured text data, such as customer reviews, social
media comments, and survey responses. Sentiment analytics
assesses the sentiment or emotion expressed in this text,
helping businesses understand how customers perceive their
products or services. For example, a restaurant might use
sentiment analysis to gauge customer satisfaction based on
online reviews and adapt their offerings accordingly.
6. Multi-Dimensional Scaling (MDS) for Brand Positioning:
 Multi-Dimensional Scaling is a statistical technique used to
visualize the relationships between brands or products in a
multi-dimensional space. By collecting data on how
consumers perceive brands (e.g., in terms of quality, price,
innovation), MDS can create visual maps or positioning
charts that show the relative proximity of brands. Businesses
can use this to identify their brand's unique positioning and
how it compares to competitors, helping them refine
marketing strategies and better target their audience.