Tuesday 22 January 2013

Meaning and Definition of Marketing


Meaning and Definition of Marketing
Market:-
            The term market, refers to a place where actual buying  and selling take place or where buyers and sellers personally meet together to effect purchase and sales. Market needn't mean any particular place . It is the sum total of the situations or environment in which the resources, activities and attitudes of the buyers and sellers affect the sales for the product in a given area.
Definition :
            Chapman defines a market as "not to a place but to a community or commodities and buyers and sellers who are in direct competition with one another."
Marketing :-
            Philip Kotler is of the view that "any interpersonal or inter organizational relationship involving an exchange is marketing" . Marketing is a  total system of business activities designed to plan, price, promote and distribute  want satisfying  goods and services to the benefit of the present and potential customers.
            The American Marketing Association defines marketing as "the performance of business activity that direct in the flow of goods and services from producers to the consumer or users". Marketing is the process of discovering and translating consumer needs and wants into product and services specification,  creating demand for these product and services and then is turn expanding this demand.
Market and Marketing :-
            The term market refer to the total demand of the potential buyers for a product. The term marketing refers to all the activities aimed at consumer satisfaction . market covers only exchange function. The term marketing on the other hand covers not only exchange function, but also others facilitating functions like financing, risk bearing, standardization etc. The principal object of market is to facilitate the flow of goods and exchange but the main objective of marketing is consumer satisfaction . Thus marketing is a broader term.
Selling and Marketing :
            In selling the emphasis is on the product. Selling focuses on the needs of the seller, marketing on the needs of the buyer. Selling is preoccupied with the seller's needs to convert his product into cash; marketing with the idea of satisfying the needs of the consumer by means of the product.
Evolution of Marketing Concepts :
            The modern concept  of marketing is not the result of a sudden change. It is the result of changing situation which compelled the business people to give an important place to the consumer and his wants , The various stages is the evolution of marketing concept are :-
1.         Self Sufficient Stage :-
In the earlier stages of human history each family was self sufficient. It produces the goods needed by itself and there was no oriented stage.
2          Exchange Oriental Stage :-
When the people began to realise the importance and uses of division of labour and specialization  , the next stage ie., exchange oriented stage came into being. Competition was totally absent in those days. This is the first step in the evolution of marketing.
3.         Production Oriented stage :-
The Production Oriented stage is the result  of industrial revolution. Large Scale Production become the rule of the auction side , ignoring the problems of marketing.
4.         Sales Oriented Stage :-
Only in this stage the business managers began to realize the importance of marketing . The place of the customers was though accepted no serious steps were taken to satisfy their wants. The consumer has no other alternative other than to accept only those goods produced by the producers.
5.         Marketing Oriented State :-
During this stage the competition became more stiff than it was in the previous stage. In this stage the business units began to expand their production and produce more than the immediate needs of the society. The producers began to realise that their products can't be sold without an effective sales force and marketing.
6.         Consumer Oriented  Stage :-
Satisfaction of the consumers is the main object of marketing. But until recently the importance of consumption was overlook by the producer and all other agencies and institutions involved in marketing process. The business men began to realize that their  objective of profit making could be possible only through consumer satisfaction. Now a days all business men are trying their best to ascertain the consumer reactions, their preference, their attitudes and variation etc. Only on the basis of information collection , the producers can adjust his production to suit the taste, preference and choice of the consumer. Therefore he task of marketing starts with the consumer and ends with the consumer.

Functions of Marketing

1.         Buying and Assembling :-
Buying is the first step in the process of marketing. Manufacturers buy raw materials for converting them into finished product. Similarly Wholesales and  Retails buy goods for the purpose of resale.
Assembling starts after the goods have been purchased. Assembling refers to bringing together variety of goods at different quantities  or of a large quantities of  similar items. It is done by the middlemen and such assembled goods are sold to the retailer.
2.         Selling :-
Selling is the crucial function  in the process of marketing . It is the actual point where transfer of ownership occurs. Now a days the selling activity involves a number of problem such as advertising, creating demand for new products, conducting market research, supply of goods in the right time and place.
3.         Transportation :-
Since markets are geographically separated from production area, transportation is an essential marketing activity. Transportation involves the movement of goods from the point of production to the place of consumption. Transportation provides place utility to the product. Land, water and air are the principal means of transport.
4.         Storage and Warehousing :-
Most of the mass consumption goods are produced in anticipation of demand. In fact all middlemen engaged in the process of marketing should do some sort of storage work because they should hold sufficient stock to meet the anticipated demand and to ensure smooth supply of goods.
5.         Financing :-
Money is required at each stage in the process of marketing . Without  adequate finance even the very existence of business concern shall be affected. Although  procurement of funds is the responsibility of the finance department, amount of capital required in the marketing division is considerably influenced by the decisions of the marketing managers.
6          Risk bearing :-
Risks are involved at almost all stages in the process of marketing. From the product policy itself risk is possible due to various reasons like changes in demand and supply conditions, loss in shortage and transport etc. By carefully anticipating the risks that may arise in future a market can avoid or at least minimise the risks.
7.         Standardization and Grading :-
The term standardization refers to the establishment of standards for a product. A standard is a measure which is generally recognized as having fixed value. Standards are generally determined on the basis of weight, colour, quantity etc.
8          Market Information :-
                        For the formulation of marketing programmes, the marketing executive must be adequately informed not only about the market for his product but also the attitudes of the customer using the producer etc. For this information should be collected, analysed  and interpreted. In fact the success in marketing largely depends on the volume of information the management have.

Marketing Management
            Marketing Management represents the important functional  area of business Management under which goods and service flows from the producers to the consumers. Marketing Management involves planning, implementation and control of Marketing Programmes included in the process of marketing.
            Philip Kotler has defines marketing management as "the analysis, planning, implementation and control of programmes designed to bring about desired exchange in target audiences. For the purpose of mutual or personal gain". Thus marketing management  is the process of ascertaining consumer needs, working up through product planning, organizing , directing, controlling and evaluating the effects of the group of people towards a common goal, which emphasis on profitability with an optimum use of available resources.
Functions of marketing Management
1.         Determining objectives :-
Objectives form the foundation of marketing management . So the marketing management must first determine the goals carefully. It is necessary that these goals should be set forth clearly in writing and communicated to the process concerned . The objective should be realistic and relevant.
2.         Planning :-
The next is to determine the manner in which the objectives are to be achieved. Without  planning  a company's operations have no  meaning. Planning  may be for a short period or a long period. Planning is concerned with laying  plans for a new product or sales forecast or the product distribution  channel and promotional programmes. When an overall plan of action is adopted , it is known as strategy.
3.         Organizing :-
It is the process of arranging activities and the people in such a way as to achieve the maximum output with highest degree of efficiency. Under  direction and guidance of marketing manager the organisation drafts promotional programmes and campaigns set up of marketing methods and procedures and makes other decisions and take other actions for executing the policies and implementing the marketing plans.
4.         Co-Ordination :-
Within  the marketing department activities in sales, advertising, marketing research, customer service, new product development etc. require effective  co-ordination trying these, more dosely to the overall corporate programme. marketing can furnish sales estimated so that the  production department can better plan to work. Outside the marketing department and the company , co-ordination is needed with advertising transportation and other agencies.
5.         Controlling :-
Primary purpose of any system of controlling is to set the stage for decision and action. There are four faces of controlling function namely establishment of performances, standards, measurement of performance, results, evaluation of actual performance against the standards and the corrective action as initiated by evaluation.
6.         Staffing :-
One of the important functions of marketing management is to assemble the human resources. Proper selection  of personnel is the key to elimination for substantial reduction in many management problems.
7.         Operating :-
Under this the plan or the programme is implemented. No plan is worth much unless it is carried out efficiently. Success depends upon the way in which the business is operated. The function of operating includes operating a sales force and directing and advertising programme. The results of companies activities are analysed and evaluated to determine whether they have been successful.
8.         Establishment of Marketing policies:-
Marketing policies is very essential for guiding executives in their decision making that may frequently arise. Such a force is to afford uniform executive action and uniform treatment to all customers. The policies to be adopted are made stable yet flexible.

Market Segmentation
            The marketers may divide the total market into smaller groups of consumers on the basis of significant differences in buyers characteristics or buyer response to marketing programme. Market can be segmented  on the basis of population , age, income, occupation, education, sex and degree of Urban population.
"Market segmentation consist of taking the total hetrogeneous market for a product and dividing it into several sub market each of which tends to be homogeneous in all significant aspects." - Philip Kotler.

Types of Segmentation
1.         Geographic Segmentation :-
Dividing a market into different geographical units such as nation, states, regions, countries, cities etc.
2.         Demographic Segmentation :-
Dividing the market into groups based on demographic variables such as age, sex, family size, family life cycle ,income, education, religion, race, occupation and nationality.
3.         Psychographic Segmentation :-
Dividing a market into different groups based on social class, life style or personality, characteristics etc.
4.         Benefit Segmentation :-
Dividing the market into groups according to the different benefits that consumers seek from the product.
5.         Behavioural Segmentation :-
                        Dividing the market into based on consumer knowledge attitude or response to a product.

Criteria for Segmentation
1.         Identity :-
The marketing manager must have some means of identifying members of the segments. That is some basis for classifying an individual as being or not being a member of the segment. Members of segment  are readily indentifiable by common characteristic which display similar behaviour.
2.         Accessibility :-
It must be possible to reach different segments in regard to both promotion and distribution. In other words organization must be able to focus its marketing effort on the total segments. The firm must be able to make them aware of the product or services and they must get these products to them through distribution systems at reasonable costs.
3.         Responsiveness :-
A clearly defined segment must react to changes in any of the elements of the marketing mix.  e.g.. If a particular segment is defined as being cost conscious , it should react negatively to price rises. If it doesn't , it is an indication that the segment needs to be refined.
4.         Size :-
The segment must be reasonably large enough to be a profitable target. It depends upon the number of people  in it and their purchasing power. The idea is that enough potential buyers should exist to conver the cost of production and marketing required in that segment.

Benefits  of Market Segmentation
            If properly used market segmentation can be a benefit to the company, the consumer and the community. Generally it offers the following benefits :-
1.         A more precise definition of the Market :-
Segmentation improves a company's understanding of why the consumers do or do not buy certain products. By knowing this the company can make adjustments to meet changing marketing demands.
2.         A more efficient Marketing programme
Effective marketing programme can be prepared to satisfy the needs of the consumer, if the company understands the consumer needs.
3.         Better assessment of the strength and weaknesses of the competitor :-
If the competing product is deeply entrenched in one segment, then effort may be needed to  capture new market rather than wasting the resources on the older one.
4.         Better allocation of Marketing resources :-
If the Market segment is clearly identified, promotional appeals can be co- ordinated effectively and the marketer may decide how much marketing  may be allotted to different segments.

Levels of Market Segmentation
1.         Mass Marketing :-
In mass marketing seller engages in mass production, mass distribution and mass promotion of one product for all buyers.
2.         Segment Marketing :-
A market segment consists of a large identifiable group with in a market. A company that practices segment marketing recognizes, the buyers differ in their wants, purchasing power, buying attitudes and buying habits. Segmentation is the mid point between mass marketing and individual marketing.
3.         Niche Marketing :-
The Niche is a narrowly defined group typically a small market whose  needs are not well served. So a Niche is a sub segment of a segment.
4.         Local Marketing :-
In this case marketing programme are being tailored to the needs and wants of local customer groups.
5.         Individaul Marketing :-
The ultimate level of segmentations leads to segments of one to one in the market. Here consumers are served as individuals with tailor made products, exclusively for that customer.
6.         Self Marketing :-
Self marketing is a form of individual marketing in which the individual consumer takes more responsibility to determine the product and trends.
e.g. A consumer searching internet web for purchasing a product.
Target Marketing
Target market is a group of customers on whom the organization specially intends  to aim its marketing efforts.

Steps in target Marketing
1.         Evaluate the market segment :-
This evaluate looking for three factors namely; segment size and growth, segment structural attractiveness and company's objectives and resources.
2.         Selecting the market segments :-
                        Having evaluated different segment  the company must now decide which and how many segments to have.  Company can opt for a single segment concentration, selective specialization, product specialization, market specialization or all market coverage.

Product Positioning
            Positioning is the act of designing the company's offer and image so that it occupies a distinct and valued place in the target customer's mind. A company should develop a unique selling production (USP) for each brand and stick to it. Company can try for single benefit positioning or double benefit positioning. Each brand should put an attribute and project it  towards the consumers. The company's positioning must be rooted in an understanding of how the target market defines value and makes choices among vendors.








Consumer Behaviour
Introduction :-
            One thing that we have in common is that we are all  consumers. Everyday we are buying different goods and services.. Each consumer is unique and this uniqueness is reflected in the consumption. Consumer behaviour can be defined as "those acts of individuals that is involved in obtaining, using and disposing of economic goods and services, including the direction process that precede and determine these acts.

A simple model of consumer behaviour
All marketing managers should find the answer to the following questions:-
1.
Who constitute the market?
-
Occupants
2.
What does the market buy?
-
Objects
3.
Why does the market buy?
-
Objectives
4.
Who participate in buying?
-
Organizations
5.
How does the market buy?
-
Operations
6.
When does the market buy?
-
Occasions
7.
Where does the market buy?
-
Outlets

Market Stimuli
Other Stimuli

Buyers characteristic
Buyers decision process

Buyers decision
Product
Economic

Social
Problem recognition

Product Choice
Price
Technical
Cultural
Information search
Dealer choice
Place
Political

Personal
Evaluation Decision

Brand choice
Promotion
Cultural

Psychological
Post purchase behaviour

Purchase timing






Purchase quantity

Figure presents the detailed model of factors influencing consumer buying behaviour. A consumer optimise various types of stimulus from his surroundings. It includes marketing stimuli and other stimuli. A stimulus is marketing stimuli that affect the senses. This is also known as a sensory input. This includes product, brand names, advertising and other marketing strategies. Other stimuli includes the sensory input from consumer  political, cultural, technological and economic conclusions.
            Consumer decision involves the choice  of product, brand, dealers, purchase quantity, purchase timing etc. Buyer makes a decision through various selection and rejection process which are mainly affected by buyer characteristics.

Factors influencing consumer behaviour
I.          Cultural Factors :-

1.         Culture :-
                        Culture is the most fundamental determinant of a person's wants and behaviour. A growing child acquires a set of values, perceptions, preferences and behaviour through his or her family and other key institutions. The interest in various products will be different from culture to culture.
2.         Sub culture :-
                        Each culture consists of smaller sub-cultures that provide more specific identifications and socialization for its members. Sub cultures include nationality, religions, social groups and geogrpahical regions. Marketers often design products to the needs of sub -culture groups.
3.         Social Class :-
                        Social classes are relatively  homogeneous and enduring devision in a society which are hierachcally ordered and whose members share similar values, interest and behaviour. Social classes show distinct product and brand preferences in such area like clothing, home furnishings, automobiles and leisure activities.

II.         Social Factors:-

1.         Reference groups:-
                        Many groups influence a persons behaviour. A person's reference  group consist of all the groups that have a direct or indirect influence on the person's attitude or behaviour. Groups having direct influence on a person are called membership groups. Group influence is strong for products that are visible to others whom the buyer respects.
2.         Family :-
                        Family member constitute most influential primary reference groups. Parents, children, wife etc influences the buyers behaviour. Family can be considered as the most important consumer buying organization in a society. Purchase can be of three types  - Husband dominant, wife dominant and equal participation.
3.         Roles and Status :-
                        A person participates in many groups through out his life. The persons position in each group can be defined in terms of roles and status. each role carries a status. A role consists of the activities people are expected to perform according to the persons around them. Marketers are aware of status symbol and potential of each product and brand.

III.        Personal Factors :-

1.         Age and life cycle stage :-
                        People consume goods and services over their lifetime. The consumption is based on the life cycle stages of each individuals. Marketers pay a close attention to changing life cycle circumstances and changing stages.
2.         Occupation :-
                        A person's occupation affects the goods and services bought by him. Marketers try to  identify occupational groups that have interest in their products and services.
3.         Economic circumstances
                        Product choice is greatly affected by a person's economic situations. This consist of their spentable income and savings and assets.
4.         Life style
            Life style is the person's pattern of living in the world. It is expressed in the person's activities, interest and opinion. (AIO)
5.         Personality and self concept:-
                        Personality influence product and brand choices. A person uses products according to his self concept and self image.

IV.       Psychological Factors:-

1.         Motivation :-
                        A person has many needs at any given time. Needs are satisfying according to the person's priority and interest. According to Maslow's Need Heirarchy Theory a person fulfills his needs in a series like basic needs, safety  needs, social needs, esteem needs and self actualization needs. Satisfying the needs reduces the felt tension with the unfulfillment of a particular need.
2.         Perception :-
                        Perception is a process by which an individual selects  organizes and interprets information inputs to create a meaningful picture of the world. Marketers must take into account the different perception of the same objects.
3.         Learning :-
                        Learning involves changes in an individual's behaviur arising from experience. Learning theory teaches marketers that they can build up demand for a product by associating it with strong drives and providing positive reinforcement . A consumer learns from the purchase of every product, every time and the feed back of this purchase determines the next purchase.
4.         Beliefs and attitudes:-
                        A belief is a descriptive thought that a person holds about something. People carry different befiefs and make up different product images. These beliefs may be based on knowledge, opinion or faith. An attitude describes  a person's enduring favourable or unfavourable cognitive evaluations emotional feelings and action tendancies towards some object or idea. People have attitude towards almost everything - religion, politics, cloths, music, food and so on.

Stages in the buying decision process
            Consumer passes through five stages namely problem recognition, information search, evaluation of alternatives, purchase decision and post purchase behaviour.
1.         Need or problem Recognition :-
                        The buying process starts when the buyer recognizes a problem or a need. A need can be aroused by an external stimulus or any other case. A person passing through a bakery seas baked cake and this stimulate his or her hunger. Marketers should develop marketing strategy that trigger consumer interest.
2.         Information Search :-
                        An interested consumer will be inclined to search for more information. Consumer then goes into active information search where he learns about the needed product and he moves from limited problems solving to extensive problem solving. The main sources of information include;
            a.         Personal sources like family friends, relatives, neighbours etc
a.         Commercial sources like advertising, sales persons, dealer, displays etc.
c.         Public sources like mass media, consumer rating organization etc.
d.         Experiential sources like handling the product, examining and using the product etc.
Through gathering information consumer learns about competing branches and their features.
3.         Evaluation of Alternatives:-
                        Consumer processes the competitive brands and their information and makes final information of value. Consumer is looking for a bundle of attributes with varying capacities of delivering the benefits and satisfying the needs. Consumer carries  an attitude  towards the brand alternatives through an evaluation procedure. This is based on brand beliefs and images.
4.         Purchase Decision:-
                        In the evaluation stage consumer forms preferences among the  various brand choices. Purchase decision is based on two factors.
            a.         Attitude of others
            b          Un anticipated situational factors .
                        In executing a purchase decision, a consumer makes brand decision, dealer decision, quantity decision, timing decision and payment method decision.

5.         Post Purchase behaviour :-
                        After purchasing a product a consumer may  detect a defect. Buyer satisfaction is a function of the closeness between his expectation  and the product  performance. If the product performance falls below customer expectation customer is disappointed. If it meets expectation customer is satisfied . If it exceeds expectation customer is delighted.
            After purchasing the product any consumer may detect a few problems and consumer will expects some level of satisfaction and dissatisfaction.  This will influence the subsequent purchase behaviour of the consumer. Marketers should make necessary steps to minimise post purchase dissatisfaction.

Customers value Satisfaction
            Customer delivered value is the difference between total customer value and total customer cost. Total customer value is the bundle of benefits customers expect from a given product or services.
            Seller must assess the total customer value and total customer cost associated with the offer of each competitor.

Customer Satisfaction
            Satisfaction is the level of a person's self stage resulting from comparing the product practical performance in relating to person's expectation. A consumer could experience three levels of satisfaction depending on the difference between expectation and performance. They are dissatisfaction, satisfaction and delight. Depending on the results whether it is negative, positive or highly positive.
            Companies use the following methods to measure how much satisfaction they are creating:
1.         Complaint and suggestion systems:
                        A customer centered organization will make it easy for its customers to deliver suggestions and complaints. These information flows provide the companies with many good ideas and enable them to act more rapidly to solve the problems.
2.         Customer satisfaction surveys:-
                        Studies show that one out of every four purchases makes dissatisfaction and less than 5 percentage of the dissatisfied customers will complain. So it is essential to conduct surveys among the consumers to know their problems.

Retaining Customers
            Companies need to pay close attention to their customer tallying in rate and undertake steps to reduce it. A company would lose hundred customers a week and gain another hundred customers and sales can be made satisfactorily. But customer turnover is costly and it is more profitable to retain all hundred customers and acquire no new one. It is essential to create loyal customers and customer life time has to be increased for continuous  purchase. A loyal customer makes repeat purchase and are less attentive to competitors product. A need for customer retention is based on the theory of giving emphasis to relationship rather than transactions.
            Customer profitability is the  basis for creating relationship with a customer. A profitable customer is a person, household or company that yields a revenue stream over time, exceeding by an acceptable amount over the company cost stream of attracting, selling and servicing that customer. A company should develop a long lasting relationship with the profitable customers. So relationship marketing is a process through which customers  are retained for a longer time and here company personnel work on increasing their social bonds with customers by learning their individual needs and wants and individualizing and personalizing their service. This turn their customers in to clients.




















Marketing Mix
Product :-
            A product is anything that can be offered to the market to satisfy a want or a need. It can be physical goods, services, persons, places, organizations ands ideas.
Levels of Product
            These are five levels of a product. They are potential product, augmented product, expected product, basic product and core benefit. Core benefit is the first level and potential product is the last level.
1.         The most fundamental level of a product is core benefit ie. the fundamental service or benefit that a customer is really buying  eg.: In a hotel when a guest is hiring a room he is buying rest and sleep.
2.         The second level market turns the core benefit into a basic product . Thus the hotel room include  a bed, a table, a chair, bathroom etc.
3.         At the third level marketers prepare an expected product. eg: a guest expect  a clean bed, working lamps and a clean bathroom etc.
4.         At the fourth level a marketer prepares an augmented product. Here they offer customers beyond the expectation of customer. A hotel can augment its product by including a remote control T.V, fresh flowers, telephones and room services.
5.         At the fifth level stands the potential product which is designed for future. This gives surprise and delight to the customers.

Product Classification
1.         Non-durable goods
2.         Durable goods
3.         Service.
            Customer goods:-
            a.         Convenience goods :-
                        1. Staples, 2. Impulse goods, 3. Emergency goods
            b.         Shopping goods:-
                        1. Homogeneous products 2. Hetrogeneous products
            c.         Speciality goods
            d.         Unsought goods
a)         Convenience Goods:-
                        They are goods that the customer usually purchases frequently, immediately and with minimum effort.
            e.g. newspaper, cigarettes, soaps etc
                        Convenience goods can be classified into staples, impulse goods and emergency goods. Staples are goods that the consumer purchase on a regular basis.
            e.g. tooth paste, soaps etc.
                        Impulse goods are goods purchased on an impulse
            e.g. magazines, fancy  articles etc.
                        Emergency goods are goods purchased when a need is urgent.
            e.g. umbrella during a rain.
b.         Shopping Goods :-
                        Shopping  goods are goods the customer in the process of selection and purchase compares on such basis as quality, price, suitability, style etc.
            e.g. furniture, clothing etc.
            They can be classified into two types :-
            1.         Homogeneous shopping goods   and
2          Heterogeneous Shopping goods
            c.         Speciality goods :-
                        Speciality  goods are goods with unique characteristic  and brand identification for which a significant group of buyers are habitually willing to  make the special purchasing effort.
            e.g. Consumer taking special efforts  to buy premium brand like Vanhusen shirts, Tayota cars etc.
d.         Unsought goods:-
                        Unsought goods are goods that the consumer does not know about or know about, but doesn't normally think of buy.
            e..g. Smoke detectors, products from insurance corporations, cemetry plot etc.
New Product Developments
                        Development of new product is the toughest stage in the manufacturing industry. There is a saying "Great ideas need landing gears as well as wings". By new product, it includes original product, improved products, modify products and new brands the firm developed to its on R and D ( Research and Development) wing. The stages involved in the new product development process is given by a blocks schematics.
1.         Idea Generation :-
                        New product development starts with search for ideas. The main idea generating techniques are attribute  listing, brain  storming, need or problem identification etc. New product ideas can come from main sources like customers, competitors, employees, top management, scientists etc. A company can gather good ideas by organizing properly.
2.         Idea screening :-
                        The purpose of idea generation is to create a large number of ideas. But in this stage the purpose is to reduce the number of ideas to attractive practicable few. In screening ideas the company must avoid two types of errors.
a.         A go error occurs when the company permits a poor idea to move into development and commercialization.
b.         A drop error occurs when the company dismisses a good idea. The purpose of screening is to drop poor ideas  as early as possible.
3.         Concept development and testing :-
                        A product idea is a possible product that  the company might offer to the market. But a product concept is an elaborated version of the idea expressed in  meaningful consumer terms. In this stage concept is made about positioning of the product and this concept is tested with an appropriate group of consumers. The concept can be presented symbolically and physically.
4.         Market Strategy and development :-
                        In this stage company anayises market size, structure and behaviour , product positioning, market share and profit goals. The second part of marketing strategy outlines price, distribution strategy and marketing budget. Third part describes long run sales and profit goals.
5.         Business Analysis :-
                        This contains estimating total sales and revenue and making a projected cash flow statements  for a few years.
6.         Product Development:-
            If the concept passes the business test it moves to R and D and the concept is developed into a physical product. R and D department will develop one or more physical versions of the product concept. Developing a successful prototype can take days, weeks, months, or even years . When the prototypes are ready they must  pass through rigourous functional and consumer test.
7.         Market testing:-
                        A product after functional test and psychological performance is ready for a market test. In testing a consumer product company estimates four variables i.e a trial, first repeat, adoption and purchase frequency. Test marketing is the ultimate way to test a new product. In test marketing management faces several questions.
            1.         Howmany test cities
            2.         Which cities
            3.         Length of test
            4.         What information to collect
            5.         What action to take.
8.         Commercialization :-
                        Market testing gives enough information to decide the launch of a product. When, where and to whom are to be decided if the company goes with commercialization.
Product Life Cycle
            PLC is an important concept which provides insight into a products competitive dynamics.
Stages in the product Life cycle :-
            Product life cycle figures distinct stages in the sales history of a product.
To say that a product has a life cycle we ascertain four things ;
            a).        Products have a limited life
b).        Product sales passes through distinct stages - each passing different challenges to the seller.
c).        Profit rise and falls at different stages of the PLC
d).        Product requires different strategies in each stage of a life cycle.
The sales history of a typical product is following an 'S' shape curve.

            This curve is typically divided into hour stages known as introduction, growth, maturity and decline stage.
1.         Introduction stage :-
                        This is a period of low sales growth as the product is introduced in the market. Profits are non-existent in this stage, because of the heavy expenses of product introduction.
2.         Growth stage :-
                        This is a period of rapid market acceptance and substantial profit improvement.
3.         Maturity stage :-
            It  is a period of slow down in sales growth because  a product has achieved , accepted by most potential buyers. Profit may become  declined because of increasing marketing expenditure to defend the product against competition.
4.         Decline stage :-
                        In this period sales show a downward drift and profit decreases.


Product Mix(Product Assortment)
            A product mix is the set of all product lines and item that a particular seller offers for sales to buyers. A company's product mix will have a certain width, length, depth and consistency. Width refers to how many product line the company carries. Length of product mix  refers to total number of items in its product mix. Depth of product mix refers to how many variants are offered of each product in the line.
Hindustan Lever Ltd. Product Mix
           

                        Detergents    Soap               Toothpaste    Shampoo       Cosmetics

Text Box: Product Line
 






Product line :-
            A product line is a group of products that are closely related because they perform a similar function; are sold to the same customer group, are moved through the same channel  or make up a particular price range, product  lines tend to length over time. A company can enlarge the length of its product line in two ways.
1.         Line Stretching :-
                        Every companies product line will cover a certain part of the total product range. Line stretching occur when a company lengthens its product line beyond its current range. A company can offer low price, average price, high price and very high priced items. They can offer economic goods, standard goods, good products and superior product quality wise. Stretching can be done downward, upward or both ways. Companies in the lower end market try to enter the high end.  Companies located in the higher level market stretches downwards. Companies serve in the middle market stretches both ways.
2.         Line Filling Decisions :-
                        A product line can also be lengthened by adding more items with in the present range of the line. There are several motives for line filling like for additional profits, satisfy dealers who complain about lost sales, because of missing items in the lines, trying the utilize excess capacity and trying to make the company a full line company.
Brand Decisions
            Branding is a major issue in product strategy. Developing a branded product requires a great deal of investments, especially for advertising, promotion and packaging. But it is a fact that power lies with branded companies.
Definition :-
            American Marketing Association defines a brand as "a name, term, sign, symbol or design or a combination of them intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors."
            A brand is essentially a seller's promise to constituently deliver a specified set of features, benefits and services to the buyers. A brand can convey up to six level of meaning.
1.         Attributes :-
                        A brand first brings to mind certain attributes
2.         Benefits :-
                        A brand conveys a product functions or emotional benefit.
3.         Values :-
                        The brand also says something about producct values.
4.         Cultures:-
This may additionally represents certain culture of the company offering a product.
5.         Personality :-
                        A brand can also project the type of personality.
6.         Uses :-
                        A brand suggest the kind of consumer who buys or uses the product.
Brand Equity
            Brand equity is the amount of power and value of a particular brand in the market place. It is measured by the degree of brand awareness, brand preferences and brand loyalty attached to a particular product. A high brand equity provides a number of competitive advantages to a company. As an asset a brand name needs to be carefully managed. So that its brand equity doesn't depreciate. This requires improving the products quality, brand awareness, skillful advertising , excellent  trade and consumer service and other measures.
Packaging and labelling Decisions.
            Packaging is defined as the activities of designing and producing the container or wrapper for a product. The container or wrapper is called the package. The package might include up to three levels of material.
            1.         A primary package
            2.         Secondary package
            3.         Shipping package or Tertiary package
Package can play a minor role or a major role according to the nature of the product delivered. Many marketers are called packaging as the fifth 'P' after product, price, place and promotion.
            Decisions must be made on additional packaging elements such as size, shape, materials, colour, text and brand mark. After the packaging is designed it must be tested.
            Labelling is a part of packaging which perform several functions. Label may be a simple tag attached to the product or elaborately designed graphic that is a part of the package - Label might carry a brand name and other necessary information. the label identifies the product., grade the product, describe the product and promote the product.

Marketing mix
            Marketing mix is the set of marketing tools that the firms uses to pursue  its marketing objectives in the target markets. It consists of the following four major activities usually referred to as elements of marketing mix:
1.         Product :-
                        Activities related to the product, service, or idea to be offered.
2.         Price :-
Activities related to price to be charged for the product, service o idea.
3.         Promotion :-
                        Activities related to promotion of the product, service or idea.
4.         Place:-
Activities relating to distribution of the product, service or idea(physical distribution or channels or distribution)
            Mc Carthy proposed the four factors classification of different marketing activities.
Services
            A service is any activity or benefit that one party can offer to another that is essentially intangible  and doesn't result in the ownership of anything. its production may a mayn't be ties to a physical product.
1.         Intangibility:-
                        Service intangibility means that service cannot be seen, tasted, heard, felt  or smell before they are bought. People undergoing service cannot see the result before the purchase. To reduce the uncertain thing buyers looks  for signs of service quality
2.         Inseparability :-
                        Service inseparability means that service cannot be separated from the provider; whether the providers are people or machine. Providers client interaction is a special features of service marketing.

3.         Variability:-
                        Service variability means that the quality it services depends on who provides them as well as when , where and how they are provided. Services are variable according to the employers, machine, place, and time.
4.         Perishability:-
                        Service perishability means that services cannot be stored for later sale or use.
























Pricing
            Price is the amount of money charged for a product or service. It is the sum of the value that consumers exchange for the benefits having or using the product or services. Price is present every where around us in  forms like rent for an apartment, fee for a doctor, fare for a taxi or bus, interest for money in a bank, premium for insurance, toll for pathway etc.
            Price is the only element in the marketing mix that produce revenue. All other elements result cost but price is the only one element which can be charged quickly.
Needs of pricing decisions
1.         Ensuring return on investments
2.         Achieving desired market share
3.         Preventing competition
4.         Maximising profit
5.         Stabilising the price
                        Essentials of a sound pricing policy
1.         Selecting the pricing objective :-
                        Goals setting is an important task on the part of the management to perform any job efficiently. Pricing is not an exception to it. Before fixing the price the management should decide the objectives of pricing . The main objectives includes target return, profit, stability in price, market share.
2.         Determining Demand:-
                        In modern concept of marketing consumers are influenced  by the price. The value of a particular product to the buyer is the main consideration. If the consumer feels that the value of the product is worth the price he will buy otherwise he will refuse to buy. Hence the demand of the product and pricing are co-related.
3.         Establishing cost:-
                        Cost set the floor for the price that the company can charge for its product. Company want to  charge a price that both covers all its cost for producing, distributing and selling the product and expect fair rate of return for its effort and risk. A company's cost may be an important element in its pricing strategy.  Cost takes two forms - variable cost and fixed cost.
4.         Analyse competitors price, cost, offer etc :-
                        These are the external factors affecting the companies pricing decision. Competitors cost, price, offer and their reactions are very important to a company. A consumer who is considering a particular brand will consider the price of other brands also. hence marketers while  fixing prices for their products should first consider the competitive conditions prevailed in the market. They should consider competitors cost, price and their offer.
5.         Selecting the pricing method:-
                        Company set the prices by selection of the general pricing approach that includes one or more of these three set of factors. They are product cost, consumer perceptions of the product value and the other external and internal factors. There are three approaches namely cost based approach, buyer based approach and competition based approach.
6.         Selecting the final prices:-
                        In selecting the final price companies must consider additional factors including psychological factors, marketing mix, companies  pricing policies etc. while fixing the final price, interest of  various parties like producers , middlemen and consumer should also be considered. The price should be fixed in such a fashion to give fair return to the producers, a good profit margin to the middlemen and a nominal price to the consumers.

New Product Pricing Strategies
            When new products are introduced it may appeal many people as novel items. the new products are hard to be priced especially with a right price. Wrong pricing will definitely  lead to product failure. For setting a price of a new product there are two options available;
1.         Skimming pricing method :-
                        Many companies who invent new product initially set high prices to skim revenues layer by layer from the  market. They charge the highest prices giving the benefit  of its new products. After an initial sales slow down, they lower the price to catch the next price sensitive layer of customers.  Skimming makes sense only under certain conditions. First the product quality and image must support its higher price. Second the cost of producing should be low to get the advantage of charging more.
2.         Market  Penetration Pricing:-
                        Rather than setting a high initial price to skim off small but profitable market segments, Some, company set a low initial prices in order to penetrate the market quickly and deeply to attract a large number of buyers quickly and win a large market share. Here the company should build a large plant to make it cost of production as low as possible. They charge low prices to attract high volume. Several producers favour a lower price. If the market is high price sensitive, a low price producers a high market growth.

Price quality strategies
Price
High

Medium

Low
Product Quality
Premium strategy
1.
Premium strategy
2.
High Value Strategy
3.
Superb-value strategy
Over changing strategy
4.
Over charging Strategy
5.
Medium Value Strategy
6.
Good value Strategy
Low
7.
Rip off strategy
8.
False Economy Strategy
9.
Economy Strategy

            A company that plans a new product faces a product positioning problem. It must decide where to position the product in terms of quality and price . Figure shows nine possible price quality strategies.
Product mix Strategies
            The strategy for setting a product's price often has to be changed when the product is a part of product mix. In this case firm looks for a set of pieces that maximise the profits on the total  product mix. There are five common product mix pricing situations:-
1.         Product line pricing:-
                        This is the method of setting up price steps between the products in the product line. The price steps should take into account ; cost differences between the various products, customer evaluation of their features and competitors prices.
2.         Optional product pricing :-
                        Many companies use this type of pricing offering to sell optional or accessory products along with the main products eg. car buyers may choose to order power stearing, power windows, air conditioners , special rear view mirrors etc. In this case automobile companies have to design which items to increase in the base price and which to offer as options. The economy model is without many comforts and convenience.
3.         Captive product pricing:-
                        This is the method of pricing for products that must be used along with a main product such a film for a camera, blades for a razor. Producers of main products often price them low and set high price on the supplies.
4.         By product pricing:-
                        This is the methods of setting a price for by products in order to make the main product more competitive. In producing petroleum products, chemicals etc there are often by products. If the by products have no value and if getting rid off them is costly this will affect the pricing of the main product. Using by product pricing the manufacturer will seek market for these byproducts and should accept any price that covers more than the cost of storing and delivering them.
5.         Product Bundle Pricing:-
                        This is a method of combining several products and offering the bundle at a reduced price. Price bundling can promote the sales of products but the combined price must be low enough to get them to buy the bundle.
e.g. Season tickets from railway, theaters, price package from hotels offering food accomodation, entertainment etc.

General Pricing Approaches
1.         Cost plus pricing or mark-up pricing:-
                        This is the simplest method where price is obtained by adding a standard mark up to the cost of the product. Mark up price is given by the formula:
Mark up price            =         
Mark up pricing is more popular since sellers are more certain about their cost than about demand.
2.         Target return pricing:-
                        Here in the firm, price is determined as the price at which the product will break even or make the target profit. A target return is fixed based on the investment made. This given by the formula
Target return price   =          Unit Cost +
3.         Buyer based pricing:-
                        A number of companies are basing their prices on the products  perceived value not mainly on the cost of the product. Perceived value pricing uses buyer perceptions of value as the key to pricing.
4.         Competition based pricing:-
                        Here the firm bases its price largely on competitors price, with less attention paid to its own cost or demand. The firm might charge the same, more or less than its major competitors. Competition based pricing is done in cases like going  rate pricing and sealed bid pricing.

Price Adjustment Strategies
            Companies usually adjust their basic prices to amount for various customers differences and changing situations. there are seven price adjustment strategies.
1.         Discriminatory pricing:-
                        Companies often adjust their basic price to allow for difference in customers, products and locations. In discriminatory pricing the company sells a product or service at two or more prices even though the difference is not based on cost.
2.         Psychological pricing:-
                        In using psychological pricing sellers consider the psychology of prices and not simply the economics. When consumer can't judge quality because they lack the information skill, price becomes an important quality signal. Even small differences in price can suggest big  difference consider a product at 300 rupees compared to another priced at Rs. 299.95. The actual price difference is only five paise. But the psychological difference can be much greater.
3.         Promotional Pricing:-
                        With promotional pricing companies will temporarily  price their product below list price and sometimes even below cost. Super market and department stores will price a few products as "Loss leaders". To attract customers to the store in the hope that they will buy other items at normal prices. Special event pricing, rebates, longer warranties, low interest financing, free smaples are certain techniques to reduce the consumers price.
4.         Value pricing:-
                        Marketers have adopted value pricing strategies offering just the right quality and good service at a fair price. In many cases this had introduced less expensive versions of the same brand name products.
5.         Geographical Pricing:-
                        A company must decide how to price its products to customers located in different parts of the country. Zone pricing and freight absorption are the two popular method used to price the product at different location.
6.         International Pricing:-
                        Companies that market their products internationally must decide what prices to charge in the different countries in which they operate. This depends on many factors like economic condition, competitive situations the particular state regulations and other marketing systems.
7.         Discount and allowance pricing:-
                        The price adjustment based on early payment of bills, volume purchased, functions carried out etc are called discount and allowances.
            A cash discount is a price reduction to buyer who pay their bills promptly.
            A quality discount is a price reduction to buyer who buy large volume.
            A functional discount  or trade discount is offered by the sellers to trade channel members who perform certain functions such as selling, storing, record keeping etc.
            A seasonal discount is a price reduction to buyer who purchases goods or services out of season.
            Allowance are another type of reduction from the list of price. eg.: Trade in allowance are price reductions given for turning in an old item when buying a new one.

Price Changes
            Price changes may be either a price cut or a price increase.
Price Cuts :-
            Price cuts are normally  resorted under the following circumstances:-
1.         To utilise the excess capacity of the plant
2.         During declining market share to prevent losses.
3.         To dominate the market by putting a low price.
4.         During the periods of economic recession and depression.
Price increases :-
            Price increases may be initiated under the following situations:-
1.         A price increase during cost inflation
2.         Over demand by customers

Buyer's Reaction to Price Changes
            While considering a price change which may either be a price cut or a price increase, the customers and competitors  reactions are to be carefully considered by the firm;
1.         Reactions to price cuts:-
            A price cut may be interpreted by the buyers in the following ways:
a.         The product is going to be withdrawn and a new model is to be introduced by the company.
b.         The product is defective and is not moving well
c.         The firm is having financial problem.
d.         The firm mayn't withstand in the market to supply future parts.
e.         The price will come down even further and the company will have to wait for some more time.
f.          The quailty has gone down.
2.         Reactions to price increases:-
            A price increase may be interpreted by the buyers in the following ways;
a.         The product will sell away like a hot cake and mayn't be available if it is not purchased soon.
b.         The product is worth buying even at an increased price.
c.         The seller is greedy and is taking advantage of buyers.

Competitors Reaction in Price Changes
I.          Reactions to price cuts:-
                        Competitors reactions are as follows;
1.         The company is trying to steal the market.
2.         The company is performing poorly and trying to promote its sales.
3.         The company wants the whole industry  to reduce prices to stimulate total demand.
II          Reactions to price increases:-
                        A price increase may be interpreted by the competitors as follows:
1.         The company wants to earn more money through increased sales
2.         The company wants to become the market leader.
3.         The product represents an usually good value

Factors Influencing Pricing Decisions
            A business man while setting a price of goods has to consider various factors as given below:
a.         Objective of business:-
            The objective of the firm are the real deciding factor. There may be different objectives namely market share, return on investment etc.
b.         Cost of the product:-
                        It is one of the most decisive factor since prices will not be less than the cost of its manufacture.  Price will be fixed in such a way to cover the cost of the product and to get a reasonable profit.
c.         Market demand:-
                        The modern concept of marketing which is consumer oriented, consumer influence the price. Therefore consumer demand is another important factor which influence the pricing decision.
d.         Prices of competitors:-
                        Manufacturers should consider the competitive situations existing in the market. Price should be fixed either equal to or lower than the price of competitors.
e.         Distribution Channels:-
                        Another factor which influences pricing decision is distribution channel policy. Prices will be directly proportional to the length of the distribution channel.
f.          Stage in product life cycle:-
            Pricing decision varies with the stage in product life cycle. Pricing strategies will be different in introduction, growth, maturity and decline stages of the product.
g.         Promotional Pricing:-
            Promotional strategy also affects pricing decisions, massive advertisement, promotional offers ands other similar programmes will probably increase the price of the product.
h.         Buyers psychology and behaviour
                        The effectiveness  of relative  price as an aid in making sales varies with buyers psychology and behaviour. Pricing will be different for high fashion items, industrial products, durable goods and consumer fast moving goods.
i.          Government policy:-
                        The rules and regulations regarding pricing policy should be followed strictly when fixing prices of products.
j.          Economic Environment :-
                        Pricing decision is also affected by the strength of the economy. During depression prices are reduced and during periods of boom prices are increased.












Channels of Distribution
Meaning and Definition:-
            Distribution is the act of carrying goods or services from the producer to the consumer. It consists of an operation or series of operations which physically brings the goods from the producers in to the hands of the final user.
Channel:-
            The channel of distribution refers to the path way taken by the goods as they flow from the point of production to the point of consumption.
Definition of A.M.A.:-
            "A channel of distribution or marketing channel is the structure of intra company organization units and extra company  agents and dealers, wholesalers  and retailers through which a commodity, product or service is marketed".
Cundiff and still :
They define a distribution channel as " a path traced in the direct or indirect transler of the title to the product as it moves from a producer to the ultimate consumer or industrial users".

Factors influencing the selection of a channel
The main factors which considerably influence the selection of a channel can be discussed under the following heads:
1.         Distribution Policy:-
                        The distribution policy is governed by the intensity of distribution or the exposure of sales.

2.         Product characteristics:-
                        The marketer must consider the type of the product that means whether the goods are speciality goods or industrial goods or goods which are used by a limited number of users or mass consumption goods. Besides they must study the frequency of purchase , perishability changes in question the service required etc.
3.         Supply characteristics:-
            If the number of manufacturers is small, short channels can be employed on the other hand when the number of producers is large, a long channel is to be used.
4.         Consumer characteristics:-
                        The characteristics of customers include their number, geographical dispersion, frequency of purchase, their acceptability to different selling methods and average quantities bought by them. These characteristic strongly influence the channel selection.
5.         Middlemen characteristics :-
                        Selection of a marketing channel is also influenced by the strength and weakness of various types of middlemen performing various marketing functions, Their number, behavioural differences, product lines, location et., affect the design of channel.
6.         Channel competition:-
                        Competition between channel members, completion among channel members and competition between channels largely influence the selection of distribution  channel, wholesaler-wholesaler-retailer, wholesaler-retailer, producer-retailer, producer-wholesaler type of competition influence the selection of channel.
7.         Company Characteristics:-
                        Selection of channel is also governed by the characteristics of the company. Such as soundness size of the company, product mix, past experience and overall marketing policies.

8.         Environmental Characteristics:-
            Decisions on distribution channels are also influenced by the economic conditions and law of the land. When economic conditions are depressed shorter channels are preferred.

Middlemen (Intermediary)
Definition:-
            "A middlemen  is one who specialises in performing operations or rendering services that are directly involved in the purchase and sale of goods in the process of their flow from the producer to the final buyers" (A.M.A) They are institutions or business concerns situated in the marketing channels at points between the producer and the final buyers.

Classification of middlemen
            They can be classified into two kinds:-
1.         Agent middlemen
2.         Merchant middlemen
I.          Agent Middlemen:-
            Agent middlemen or functional middlemen are those intermediates who negotiate purchase or sales or both. But doesn't take the title of the goods. They are also known as merchantile agents. the various types of agent middlemen cane be listed as follows:-
a.         brokers
b.         Commission agents
c.         Manufacturers agent
d.         Selling agent
e.         Auctioners
f.          Packing and forwarding agents
g.         Export and import agents
h.         Purchase agents
II.         Merchant Middlemen:-
                        They are those intermediates who don't take the title to goods in which they deal and result them in a profit. Wholesalers and retailers are the two important classes of merchants middlemen in the distribution of consumer goods. Merchant middlemen act in their own right and they are independent  agencies who work for profit.

Wholesalers and Retailers
1.         Wholesalers:-
                        Wholesalers means marketing of goods in relating larger quantities. They are the connecting link between the manufacturer and retailers.
            "Wholesalers buy and resell merchandries to the retailewrs and other merchants and not to sell in the significant amiunt to ultimate consumers. Their functions include:-
a.         Buying and assembling
b.         Warehousing
c.         Transporting
d.         Financial assistance to retailers
e.         Risk bearing
f.          Grading and packaging
g.         Selling to retailers
2          Retailers:-
Definition by A.M.A.:-
            'Retailing consist of the activities involved in selling directly to the utimate consumer for personal non-business use.
Basic Characteristics :_
1.         A retailer generally sells in small quantities.
2.         He is the last link in the chain of distribution.
3.         He may buy the goods from the wholesaler or n\manufacturers either on his own amount or as an agent for them.
4.         His sales volume is less when compared to the wholesalers where as his profit margin is high.

Functions of Retailers
            retailers perform all the functions involved in the process of marketing. They are :-
1.         Buying and assembling of goods from various producers or wholesalers
2.         Storing  of goods.
3.         Risk bearing
4.         Transportation of goods from the godown of wholesalers
5.         Grading and packaging
6.         Providing market information
7.         Extension of credit facilities to the consumer
Types of Retail Business
Hawkers and
Peddlers
Pavement Shops
Cheap jacks
Market traders
Steer stalls
Second had goods dealers
General Shops
Single line stores
Speciality shops
Small scale
Large scale
Itinerant
Departmental stores
Super market
Chain shops or multiple shops
Mail Order Houses
Co-operative Stores
Hire Purchase trading organization
I.          Itinerant Retailers:-
1.         Hawkers and Peddlers:-
                        They move from door to door in residential locality to sell their goods.
2.         Pavement shops:-
                        They generally arranged their goods at busy street corner or pavements. e.g. small books shop, pen dealer etc.
3.         cheap jacks :-
            Such traders generally hire small shops and display their goods there.
4.         Market traders:-
            They sell their goods at periodical markets, weekly, monthly, and annually.
II          Fixed shop Retailers:-
                        Fixed shop retailers trade in fixed premises. They may be divided into two sub groups:-
1.         Small sale shops
2.         Large scale shops  

Small scale Retail Shops
a.         Street stall holders:-
            Such stalls are generally located at a street crossing or in the main street. They are engaged in setting inexpensive articles of low conversant.
b.         Secondhand goods dealers:-
                        These relations deal in second hand goods trade articles include clothes, books, furniture items and other household items
c.         General stores:-
                        General merchants generally start up their shops in residential localities. They stock a wide variety of goods needed by the local residents.
d.         Single line stores:-
            A single line retails carries a brand assortment of goods with in a single merchandise line.
e.         Speciality Shops:-
                        They carry only a part of a merchandise lines with in this restricted range of offerings he stores a complete assortment of speciality range of products.
eg., shops for kids wear.

Large Scale Retail Shops
            The important types of large scale retail shops include:-
1.         Departmental stores:-
                        A departmental store is a collection of shops under one roof and ownership, each shop or department specialising in  selling a special range of goods.
Merits:-
a.         Convenience  to consumer
b.         Higher efficiency
c.         Economy in advertising
d.         Economies of large scale buying
e.         Better services
Demerits:-
a.         Higher investment
b.         Lack of personal touch and care
c.         Higher rent for premises
d.         Higher cost of doing business
e.         Excessive departmentalisation
2.         Super Markets:-
            Super market is defined as "a departmentalised retail store  usually handling a variety of merchandise  and in which the sale of goods much of which is on a self service basis, plays a major role". Thus a super market is similar to a departmental store dealing in numerous varities of products. The most distinctive  feature of the supermarket is the absence of salesmen and shop assistants to help the customers.
Advantages:-
a.         Low prices
b.         Large volume of sales
c.         Convenient shopping
d.         Economics of large scale buying

Limitations:-
a.         large and extensive -require more space
b.         Unsuitable for rural areas
c.         No personal contact
d.         Need of huge capital
3.         Chain stores or multiple shops:-
                        A chain store system is " a group of stores of essentially  the same type centrally owned with same degree of centralised control of operation" :- Cuntiif and still.
The main features include
1.         Standardisation and uniformity of all shops"-
            Shops are having the same setting and follows the unified practice.
2.         Specialisation of goods
3.         Centralised buying and decentralised selling
4.         Limited variety of goods
Advantages of multiple shops:-
1.         Standardised methods of operation.
2.         Low  and uniform prices
3.         Elimination of bad debts
4.         Elimination of middlemen charges
Disadvantages:-
1.         Lack of personal attention
2.         Rise in operation cost
3.         Limited services