PACKAGE AND LABELLING
Meaning and Definition
 According to Philip Kotler, Packaging
is an activity of designing and
producing the container for a
product.
 Labelling involves attaching a small
piece of paper, fabric, plastic, or
similar material that is part of the
package, to identify it or give
instructions or details concerning its
ownership, use, nature, destination,
etc.
Functions
 Protection and preservation
 Information transmission
 Containment
 Product Promotion
 Product Identification
 Convenience
 Product Positioning
 Enhances product image and
Appeal
Packing
Decisions
Multiple
Packing
Reuse
Packing
Ecological
Packing
Family
Packing
STEPS IN PRICE DETERMINATION
1. DEVELOP PRICING OBJECTIVES:
2. ESTIMATING DEMAND, COST AND REVENUE
3. ANTICIPATE COMPETITION
4. DETERMINING EXPECTED MARKET SHARE
5. CHOOSE A PRICING STRATEGY
6. IMPLEMENTATION AND REVIEW
METHODS OF PRICING OR PRICING STRATEGIES
& TACTICS
Based on
Customer
Based on
competition
Cost and
Demand
Geography
Pricing
• Odd-even
pricing
• Psychological
pricing
• Prestige pricing
• Dual pricing
• Price lining
• Penetration
pricing
• Skimmed
Pricing
• Monoploy
pricing
• Admisitrated
• Cost based
pricing
• Demand based
pricing
• Target rate
pricing
• FOB Pricing
• Zone Pricing
• Basic point
pricing
 1.
Odd-even pricing
 The odd-even pricing method lowers the rounded-up price of a product by a
paise or so, which people perceive as significantly lower than the rounded-up
price.
 For example, if the top price range for a jeans pant is Rs. 500 then the
marketer would probably reduce it to Rs. 499.95 because most customers
think this price is much cheaper.
 2.
Psychological pricing

In Psychological pricing marketer uses the customer's emotional response to
encourage sales.

Consumer often assumes that a higher product price indicates a higher level of quality
and vice versa.
 3. Prestige pricing

Prestige pricing, also known as premium pricing, in prestige pricing strategy prices are
set higher than normal to create an image of superior quality and social status.

The strategy behind prestige pricing is not tied to its quality but more to its image.
 4.
Dual pricing
 In dual pricing marketers sell the same or identical product at different prices
in different markets.
 Dual pricing is not necessarily an illegal pricing practice as it done with an
objective of dumping in different markets or due to government regulations.
 5.
Price Lining
 Price lining, also referred to as product line pricing, is pricing process
wherein prices are set with certain price points believed to be attractive
to customer.
 The objective behind this is to appeal to different segments of the market.
 For example, a car sellers in India come up three variants in the same model: a
value model, a standard model and a limited model. While each model has a
different price point, the costlier model is seen as higher-end when compared
to the base model, while both retain the same brand name.
 Similarly a movie theatre offer tickets at three levels of prices, such as Rs. 200
(for Balcony), Rs. 150 (middle class) and Rs. 75(front stall) three distinct areas
within the theatre offered for the customers to match the range they can
afford.
 Penetration pricing
 A pricing strategy in which a firm introduces a new product at a very low price to
encourage more customers to purchase it.
 Skimmed pricing
 Price skimming is a pricing strategy in which a marketer charges a very high
premium price for a given product or service.
 Monopoly pricing
 A monopoly is when a business dominates the entire business segment with no
competitors, monopolies are usually bad for an economy because they restrict free
trade, which allows the market itself to set prices.
 Administered pricing
 In administered pricing the price of a products or services is set by government or
regulatory bodies, instead of being determined by regular market forces of supply
and demand.
B: BASED ON COMPETITION
 Cost plus pricing method
 In this method of setting prices in which the seller totals all the costs for the
product and then adds an amount to arrive at the selling price.
 Target return pricing
 Target rate of return pricing is a pricing method in which firm determines the
price that would yield its target rate of return on investment (ROI).
 Demand based pricing method
 In this method prices are based on demand for the product, if the demand is
high then the prices are raised and if the demand is low the prices are cut off.
C: BASED ON COSTS AND DEMAND
 FOB pricing (Free on Board)
 FOB pricing means a price which includes goods plus the services of loading
those goods onto some vehicle or vessel at a named location.
 Zone pricing
 Zone pricing strategy involves setting prices of goods or services based on the
location where they will be offered for sale to customers.
 Base point pricing
 Base point pricing is a pricing system under which marketers set on the basis of
a base point cost plus transportation costs to a given market.
D: BASED ON GEOGRAPHICAL LOCATION
 Profitability depends on pricing
 Price is determinant of buying decision
 Price influences customer perception
 Price is weapon to fight competition
 Price is an important part of sales promotion
ROLE & IMPORTANCE
OF PRICING
PLACE/PHYSICAL DISTRIBUTION
IN ORDER TO MOVE GOODS FROM THE PRODUCER TO THE CONSUMER, A CHANNEL OR
NETWORK OF INTERMEDIARIES ARE REQUIRED.
Physical distribution in marketing implies to set of activities
dealing with Handling, movement, and storage of goods from
the point of origin to the point of consumption.
Scope of
Physical
Distribution
The Supply
Chain
Logistics
THE SUPPLY CHAIN
Supply chain refers to set of activities that control flow of goods
amongst network of interconnected businesses to maximize
total profitability.
LOGISTICS

Scope and Function of Logistics management

Order Management


It is important to note the availability of resources required by industries such as labour, raw
materials are scattered or concentrated in certain geographical regions and in order to integrate
these resources transportation plays an instrumental role.
Material Management


Once the stock is procured and assembled the next important process is to preserve the stock
systematically for which proper storage and warehousing is required.
Transportation


Order management is a process of dealing with purchase requests of customers, this includes
order entry, picking, packing, shipping, and billing.
Warehousing


Logistics is the managing, designing and improving flow
of resources between the point of origin and the point
of destination through the supply chain.
Materials management is an important part of logistics that deals with planning, organizing, and
controlling flow of from the suppliers up to the end of production process.
Inventory Control

Inventory control is the process of monitoring and coordinating supply, storage, distribution, and
recording of materials in order to insure an adequate supply without excessive oversupply.
TYPES OF CHANNELS OF DISTRIBUTION
FUNCTIONS OF CHANNEL INTERMEDIARIES
 Procurement & Assembling
 Warehousing and storing
 Grading and Packing:
 Selling
 Assumption of Risk:
 Financing:
 Supply of Market Information:
 Advertising & Communication
A: Product Factors
FACTORS AFFECTING CHOICE OF
DISTRIBUTION CHANNEL
 Physical Nature

Physical nature of the product signifies perishability, sizes & weight of the product.

Perishable products (E.g. milk, butter, cheese, fish, etc.) should have a short distribution
channel as products gets decay or spoiled very fast.
 Technicality of product

The technicality requirement confines special training and expertise to practically handle
and use the products. Therefore product with technical nature are usually sold directly by
the producer to consumers
 Product range

A product a variety products of the same product platform that appeal to different
market segments manufactured by a single company. In case producer offer a narrow
product range then it is ideal to distribute through wholesalers and retailers
FACTORS AFFECTING CHOICE OF
DISTRIBUTION CHANNEL
 Product Price

Products with low unit price (e.g. salt, sugar, wheat, rice etc.) are generally consumed
on very large scale and therefore it should be sold through middlemen (through a long
channel) as producer cannot bear the cost of direct selling.

On the other hand products with high unit price (e.g. gold, silver) involves low
turnover and therefore a smaller distribution channel is required.
B: Market Factors
FACTORS AFFECTING CHOICE OF
DISTRIBUTION CHANNEL
 Government Regulations

In case of some products Government regulations influences choice of distribution channel. For
instance products liquor, arms and ammunition, drugs etc. can be distributed only through licensed
shops.
 Buyer's Behaviour

Buyer’s may or may not intend to apply time and effort on shopping, buyers have different expectation
like personal attention, one-stop shopping, customized service, credit facilities and some prefer selfservice. Depending on these expectation the most appropriate trade channel should be selected.
 Composition of target market

If the customers is very large, then requires services of the middlemen. In contrast limited customer
base requires direct marketing as it is easy to manage limited customers.
 Availability of channel

Finally the Choice of a channel is also influenced by the availability of distribution partners. On
account of non-availability of desired type of middlemen producer may have to set up self owned
distribution system.
FACTORS AFFECTING CHOICE OF
DISTRIBUTION CHANNEL
Institutional Factors
Organisational Factors
 Financing Capacity
 Financial Resources
 Promotional Ability
 Reputation
 After sales service
 Marketing Policy
 Channel Cost
DISTRIBUTION APPROACH
Type
Intensive
Distribution
Exclusive
Distribution
Selective
Distribution
Description
In this approach Marketers sells its products
through as many outlets as possible (wholesalers or
retailers that are willing to stock and sell the
product), so that the consumers encounter the
product everywhere they go.
In this approach a product is sold only through a
single outlet in a particular region. Usually, exclusive
distribution is undertaken when the manufacturer
desires more aggressive selling from channel
partners.
In selective distribution, the number of outlets that
may carry a product is limited, but more than
exclusive distribution.
Example
Soft drinks,
Biscuits and
films
Cars, Bikes
and Premium
apparel
Clothing,
Home
furnishings
PROMOTION
 Promotion is a set of activities designed to inform and persuade consumers
about the products or services offered by the marketer.
Objectives of Promotion
Objective
How it is Done?
Create Awareness
Frequent advertisements, Slogans and jingles and Publicity stunts
Educate customer
Brochures, websites, newsletters and Personal selling
Persuade
Celebrity endorsements, Status appeals and Sex appeals
Reinforce to buy
Coupons, Discounts, offers and Samples
Retain customer
Follow and feedback, reward and recognition
ELEMENTS OR METHODS OF SALES
PROMOTION
Advertising
Sales
promotion
Public
relations
Personal
selling
Publicity
ADVERTISING
 According to John E. Kennedy, “Advertising is simple way of selling something in
the most effective methods possible. Good advertising creates sales and not just
attention”

In the words of R.H. Colley, “Advertising is mass period communication the
ultimate purpose of which is to impart information, develop attitudes and induce
action beneficial t the advertiser”

 American Marketing Association says, “Any paid form of non-personal
presentation of ideas, goods or services by an identified sponsor”.
MEDIAS OR METHODS OF ADVERTISEMENTS
Media of
Advertisement
Broadcast
Media
Non-Broadcast
Media
Outdoor
Media
Direct
Response
Internet
Television
Cinema
Hoardings
Mailers
Social
Networks
Radio
Cable TV
Boards
Pamphlets
Search Engines
Discs
Posters
Telemarketing
Youtube
PROS AND CONS OF VARIOUS METHODS OF
ADVERTISEMENTS
Television
Pros
Cons

TV is extremely creative and flexible.


Network TV is the most cost-effective way
to reach a mass audience.
The message is quickly forgotten unless it is repeated
often.

The audience is increasingly fragmented.

Cable and satellite TV allow the advertiser to
reach a selected group at relatively low cost.

Although the relative cost of reaching the audience is
low, prices are still high on an absolute basis—

often too high for smaller companies. A 30-second spot
on a prime-time TV sitcom costs well over Rs
1,50,000.

Fewer people view network television.

People switch from station to station and zap
commercials.

Rising costs have led

A prestigious way to advertise.

Can demonstrate the product in use.

Can provide entertainment and generate
excitement.

Messages have high impact because of the
use of sight and sound.
PROS AND CONS OF VARIOUS METHODS OF
ADVERTISEMENTS
Radio
Pros

Good for selectively targeting an audience.

Is heard outside the home.

Can reach customers on a personal and
intimate level.

Can use local personalities.

Relatively low cost, both for producing a spot
and for running it repeatedly.

Because of short lead time, radio ads can be
modified quickly to reflect changes in the
marketplace.

Use of sound effects and music allows listeners
to use their imagination to create a vivid scene.
Cons

Listeners often don’t pay full attention to what they
hear.

Difficulty in buying radio time, especially for national
advertisers.

Not appropriate for products that must be seen or
demonstrated to be appreciated.

The small audiences of individual stations means ads
must be placed with many different stations and must
be repeated frequently.
PROS AND CONS OF VARIOUS METHODS OF
ADVERTISEMENTS
Newspapers
Pros
Cons

Wide exposure provides extensive market
coverage.

Most people don’t spend much time reading the
newspaper.

Flexible format permits the use of colour,
different sizes, and targeted editions.

Readership is especially low among teens and young
adults.

Provides the ability to use detailed copy.


Allows local retailers to tie in with national
advertisers.
Short life span—people rarely look at a newspaper
more than once.

Offers a very cluttered ad environment.


Readers are in the right mental frame to
process advertisements about new products, 
sales, etc.

Timeliness, i.e., short lead time between
placing ad and running it.
The reproduction quality of images is relatively poor.
Not effective to reach specific audiences.
PROS AND CONS OF VARIOUS METHODS OF
ADVERTISEMENTS
Outdoor
Pros
Cons

Most of the population can be reached at
low cost.

Hard to communicate complex messages because of
short exposure time.

Good for supplementing other media.

Difficult to measure advertisement’s audience.

High frequency when signs are located in
heavy traffic areas.

Controversial and disliked in many communities.

Cannot pinpoint specific market segments.

Effective for reaching virtually all segments of
the population.

Geographic flexibility.
ROLE AND IMPORTANCE OF ADVERTISING
 Persuades customer
 Provides information
 Image creation
 Image creation
 Motivates distribution partners
 A tool to fight competition
ADVERTISEMENT A BOON OR BANE
Boon
 Helps in promotion of products or
services
 Assist channels partners to sell
 Creates brand awareness
 Encourages salesman
 Provides information to the customers
 Advertising increases sales,
employment and profits.
 Source of entertainment for the
people
Bane
 Increases product costs
 Misleads the Consumer
 Advertisements are annoying and
stupid
 Influences purchasing power
 Creates unwanted desires
 Encourage monopoly
 Vulgar advertisements offend public
decency
 Wastage of national resources
PERSONAL SELLING
 According to Philip Kotler, "Personal Selling: face to face
interaction with one or more perspective purchasers for the
purpose of making presentations, answering questions, and
procuring orders"
 Personal Selling adds personal touch to promotional
activities, personal selling is usually adopted by firm that uses
a “push strategy” in which the objectives is to “push” or sell
the product through channel partners such as retailers, sales
personnel.
STEPS IN PERSONAL SELLING

Prospecting


Preapproach


Clear the doubts that the customer may have with a positive approach and asks the buyer to clarify
the objection.A good sales man turns the objection into a reason for buying.
Close the Sale


Sales presentation is to attract the prospect's attention, stimulate interest and desire for the
product. It is also important to invite the customer’s involvement in the conversation.
Handle Objections


Making initial contact with the potential customer and creating a favorable impression about the
product
Presentation


Learn as much as possible about the prospect prospective customers and planning the sales
interview
Approach


Identify potential buyers and preparing a list of prospects or sales leads (potential buyers)
Climax of selling process in which salesperson actually asks the customer to buy the product.
Follow up

Activities after the sale that provide important services to customers.
ROLE, BENEFITS AND IMPORTANCE OF
PERSONAL SELLING

Provides flexibility: Salesman can tailor his sales presentation to fit the needs,
motives and attitudes of prospective customer.
 Builds Relationships: Personal touch, extensive care and customized service
makes the most for building strong customer relationships.
 Persuasive impact: By comprehending effectively a salesman attracts the
attention of customer and drives the customer to take up the product.
 Educates Customer: By providing information and guidance to customers a
salesman assists customers in satisfying their wants.
 Interactive: Personal selling involves two-way flow of communication between
the salesman and prospective customer which helps in understanding the needs
and behaviour customers.
PERSONAL SELLING SUFFERS FROM THE
FOLLOWING DRAWBACKS:
 Widely misunderstood: Customers perceives most of the salespeople
as arrogant, aggressive, greedy and manipulative.
 High cost: To attract top-quality sales reps, the company has to develop
an attractive salary package and further spend huge money on formal
training programs.
 Labour intensive: It is difficult to build and develop a professional sales
force.
 Limited Reach: Cannot reach as many customers as quickly through
personal sales.
 Sales Pressure: Most sales jobs bear a striking resemblance to a
pressure cooker.