CLASSIFICATION AND TYPES OF ADVERTISING

1. Product – Related Advertising

• Pioneering Advertising
• Competitive Advertising
• Retentive Advertising

2. Public Service Advertising

3. Functional Classification

A. Advertising Based on Demand Influence Level.

·         Primary Demand (Stimulation)

·         Selective Demand (Stimulation)

B. Institutional Advertising

C. Product Advertising

·         Informative Product Advertising

·         Persuasive Product Advertising

·         Reminder-Oriented Product Advertising

4. Advertising based on Product Life Cycle

• Consumer Advertising
• Industrial Advertising

5. Trade Advertising

• Retail Advertising
• Wholesale Advertising

6. Advertising Based on Area of operation

• National advertising
• Local advertising
• Regional advertising

7. Advertising According to Medium Utilized

1. Product – Related Advertising

It is concerned with conveying information about and selling a product or service. Product advertising is of three types, viz,

• Pioneering Advertising
• Competitive Advertising
• Retentive Advertising

i. Pioneering Advertising:

This type of advertising is used in the introductory stages in the life cycle of a product. It is concerned with developing a “primary” demand. It conveys information about, and selling a product category rather than a specific brand. For example, the initial advertisement for black – and – white television and colour television. Such advertisements appeal to the consumer’s emotions and rational motives.

ii. Competitive Advertising:

It is useful when the product has reached the market-growth and especially the market-maturity stage. It stimulates “selective” demand. It seeks to sell a specific brand rather than a general product category. It is of two types:

A. Direct Type: It seeks to stimulate immediate buying action.

B. Indirect Type: It attempts to pinpoint the virtues of the product in the expectation that the consumer’s action will be affected by it when he is ready to buy. Example: Airline advertising. Air India attempts to bid for the consumer’s patronage either immediately - direct action-in which case, it provides prices, time tables and phone numbers on which the customer may call for reservations; or eventually – indirect action – when it suggests that you mention Air India’s name when talking to your travel agent.

iii. Retentive Advertising:

This may be useful when the product has achieved a favourable status in the market – that is, maturity or declining stage. Generally in such times, the advertiser wants to keep his product’s name before the public. A much softer selling approach is used, or only the name may be mentioned in “reminder” type advertising.

2. Public Service Advertising

This is directed at the social welfare of a community or a nation. The effectiveness of product service advertisements may be measured in terms of the goodwill they generate in favour of the sponsoring organization. Advertisements on not mixing drinking and driving are a good example of public service advertising. In this type of advertising, the objective is to put across a message intended to change attitudes or behaviour and benefit the public at large.

3. Functional Classification

Advertising may be classified according to the functions which it is intended to fulfill.

• Advertising may be used to stimulate either the primary demand or the selective demand.
• It may promote either the brand or the firm selling that brand.
• It may try to cause indirect action or direct action.

i. Advertising Based on Demand Influence Level.

A. Primary Demand Stimulation

Primary demand is demand for the product or service rather than for a particular brand. It is intended to affect the demand for a type of product, and not the brand of that product. Some advertise to stimulate primary demand. When a product is new, primary demand stimulation is appropriate. At this time, the marketer must inform consumers of the existence of the new item and convince them of the benefits flowing from its use. When primary demand has been stimulated and competitors have entered the market, the advertising strategy may be to stimulate the selective demand.

B. Selective Demand Stimulation

This demand is for a particular brand such as Charminar cigarettes, Surf detergent powder, or Vimal fabrics. To establish a differential advantage and to acquire an acceptable sort of market, selective demand advertising is attempted. It is not to stimulate the demand for the product or service. The advertiser attempts to differentiate his brand and to increase the total amount of consumption of that product. Competitive advertising stimulates selective demand. It may be of either the direct or the indirect type.

ii. Institutional Advertising

Institutional Advertising may be formative, persuasive or reminder oriented in character. Institutional advertising is used extensively during periods of product shortages in order to keep the name of the company before the public. It aims at building for a firm a Positive public image in the eyes of shareholders, employees, suppliers, legislators, or the general public. This sells only the name and prestige of the company. This type of advertising is used frequently by large companies whose products are well known. HMT or DCM, for example, does considerable institutional advertising of its name, emphasizing the quality and research behind its products.

Institutional advertisements are at consumers or focus them upon other groups, such as voters, government officials, suppliers, financial institutions, etc. If it is effective, the target groups will respond with goodwill towards, and confidence in the sponsor. It is also a useful method or introducing sales persons and new product to consumers. It does not attempt to sell a particular product; it benefits the organization as a whole.

It notifies the consumers that the company is a responsible business entity and is patriotic; that its management takes ecologically responsible action, is an affair- motive-action employer, supports the socialistic pattern of society or provides employment opportunities in the community.

When Indian Oil advertisements describe the company’s general activities, such as public service work, this may be referred to as institutional advertising because it is intended to build an overall favorable attitude towards the company and its family of products. HMT once told the story of the small-scale industries supplying it with component parts, thus indicating how it aided the development of ancillary industries.

iii. Product Advertising

Most advertising is product advertising, designed to promote the sale or reputation of a particular product or service that the organization sells. Indane’s Cooking Gas is a case in point. The marketer may use such promotion to generate exposure attention, comprehension, attitude change or action for an offering. It deals with the non-personal selling of a particular good or service. It is of three types as follows:-

• Informative Product Advertising
• Persuasive Product Advertising
• Reminder-Oriented Product Advertising

A. Informative Product Advertising:

This form of advertising tends to characterize the promotion of any new type of product to develop an initial demand. It is usually done in the introductory stages of the product life cycle. It was the original approach to advertising.

B. Persuasive Product Advertising:

Persuasive product advertising is to develop demand for a particular product or brand. It is a type of promotion used in the growth period and, to some extent, in the maturity period of the product life cycle.

C. Reminder-Oriented Product Advertising:

The goal of this type of advertising is to reinforce previous promotional activity by keeping the brand name in front of the public. It is used in the maturity period as well as throughout the declining phase of the product life cycle.

4. Advertising based on Product Life Cycle

• Consumer Advertising
• Industrial Advertising

A. Consumer Advertising

Most of the consumer goods producers engage in consumer product advertising. Marketers of pharmaceuticals, cosmetics, scooters, detergents and soaps, cigarettes and alcoholic beverages are examples. Baring a few, all these products are all package goods that the consumer will often buy during the year. There is a heavy competition among the advertisers to establish an advantage for their particular brand.

B. Industrial Advertising

Industrial executives have little confidence in advertising. They rely on this form of promotion merely out of fear that their competitors may benefit if they stop their advertising efforts. The task of the industrial advertiser is complicated by the multiple buying influence characteristics like, the derived demand, etc. The objectives vary according to the firm and the situation. They are:

• To inform,
• To bring in orders,
• To induce inquiries,
• To get the advertiser’s name on the buyer’s list of sources,
• To provide support for the salesman,
• To reduce selling costs,
• To help get items in the news column of a publication,
• To establish recognition for the firm or its product,
• To motivate distributors,
• To recognition for the firm or its products,
• To motivate distributors, to create or change a company’s image,
• To create or change a buyer’s attitude, and

The basic appeals tend to increase the rupee profits of the buyer or help in achieving his non-monetary objectives. Trade journals are the media most generally used followed by catalogues, direct mail communication, exhibits, and general management publications. Advertising agencies are much less useful in industrial advertising.

5. Trade Advertising

• Retail Advertising
• Wholesale Advertising

A. Retail Advertising

This may be defined as “covering all advertising by the stores that sell goods directly to the consuming public. It includes, also advertising by establishments that sell services to the public, such as beauty shops, petrol pumps and banks.” Advertising agencies are rarely used. The store personnel are usually given this responsibility as an added task to be performed, together with their normal functions. The result is that advertising is often relegated to a secondary position in a retail store. One aspect of retail advertising is co-operative advertising. It refers to advertising costs between retailers and manufacturers. From the retailer’s point of view, co-operative advertising permits a store to secure additional advertising that would not otherwise have been available.

B. Wholesale Advertising

Wholesalers are, generally, not advertising minded, either for themselves or for their suppliers. They would benefit from adopting some of the image-making techniques used by retailers – the need for developing an overall promotional strategy. They also need to make a greater use of supplier promotion materials and programmes in a way advantageous to them.

6. Advertising based on Area of Operation

It is classified as follow:

• National Advertising
• Regional Advertising
• Local Advertising

A. National advertising

It is practiced by many firms in our country. It encourages the consumer to buy their product wherever they are sold. Most national advertisements concentrate on the overall image and desirability of the product. The famous national advertisers are:

• Hindustan Levers
• DCM
• ITC
• Jay Engineering
• TISCO

B. Regional advertising

It is geographical alternative for organizations. For example, Amrit Vanaspati based in Rajpura claims to be the leading hydrogenated oil producer in the Punjab. But, until recently, it mainly confined itself to one of the vegetable oil brands distribution to Malihabad district (in U.P. near Lucknow).

C. Local advertising

It is generally done by retailers rather than manufacturers. These advertisements save the customer time and money by passing along specific information about products, prices, location, and so on. Retailer advertisements usually provide specific goods sales during weekends in various sectors.

7. Advertising According to Medium

The most common classification of advertising is by the medium used. For example: TV, radio, magazine, outdoor, business periodical, newspaper and direct mail advertising. This classification is so common in use that it is mentioned here only for the sake of completeness.

OBJECTIVES AND IMPORTANCE OF ADVERTISING

Advertising Objectives

Each advertisement is a specific communication that must be effective, notjust for one customer, but for many target buyers. This means that specific objectives should be set for each particular advertisement campaign. Advertising is a form of promotion and like a promotion; the objectives of advertising should be specific. This requires that the target consumers should be specifically identified and that the effect which advertising is intended to have upon the consumer should be clearly indicated. The objectives of advertising were traditionally stated in terms of direct sales. Now, it is to view advertising as having communication objectives that seek to inform persuade and remind potential customers of the worth of the product. Advertising seeks to condition the consumer so that he/she may have a favourable reaction to the promotional message. Advertising objectives serve as guidelines for the planning and implementation of the entire advertising programme.

The basic objectives of an advertising programme may be listed as below:

• To stimulate sales amongst present, former and future consumers. It involves a decision regarding the media, e.g., TV rather than print.
• To communicate with consumers. This involves decision regarding copy.
• To retain the loyalty of present and former consumers. Advertising may be used to reassure buyers that they have made the best purchase, thus building loyalty to the brand name or the firm.
• To increase support. Advertising impliedly bolsters the morale of the sales force and of distributors, wholesalers, and retailers, ; it thus contributes to enthusiasts and confidence attitude in the organizational. :
• To project an image. Advertising is used to promote an overall image of respect and trust for an organization. This message is aimed not only at consumers, but also at the government, shareholders, and the general public.

Importance of Advertising

Generally, advertising is a relatively low-cost method of conveying selling messages to numerous prospective customers. It can secure leads for salesmen and middlemen by convincing readers to request more information and by identifying outlets handling the product. It can force middlemen to stock the product by building consumer interest. It can help train dealers salesmen in product uses and applications. It can build dealer and consumer confidence in the company and its products by building familiarity. Advertising is to stimulate market demand.

While sometimes advertising alone may succeed in achieving buyer acceptance, preference, or even demand for the product, it is seldom solely relied upon. Advertising is efficiently used with at least one other sales method, such as personal selling or point-of-purchase display, to directly move customers to buying action.

Advertising has become increasingly important to business enterprises – both large and small. Outlay on advertising certainly is the voucher. Non-business enterprises have also recognized the importance of advertising. The attempt by army recruitment is bases on a substantial advertising campaign, stressing the advantages of a military career. The health department popularizes family planning through advertising Labour organizations have also used advertising to make their viewpoints known to the public at large. Advertising assumes real economic importance too.

Advertising strategies that increase the number of units sold stimulate economies in the production process. The production cost per unit of output is lowered. It in turn leads to lower prices. Lower consumer prices then allow these products to become available to more people. Similarly, the price of newspapers, professional sports, radio and TV programmes, and the like might be prohibitive without advertising. In short, advertising pays for many of the enjoyable entertainment and educational aspects of contemporary life.

Advertising has become an important factor in the campaigns to achieve such societal-oriented objectives such as the discontinuance of smoking, family planning, physical fitness, and the elimination of drug abuse.

Though in India, advertising was accepted as a potent and recognized means of promotion only 25 years ago, its growing productive capacity and output necessitates the finding of consumers and advertising plays an important role in this process. Advertising helps to increase mass marketing while helping the consumer to choose from amongst the variety of products offered for his selection.

In India, advertising as a profession is in its infancy. Because of this fact, there is a tremendous scope for development so that it may be productively used for the benefit of producers, traders, consumers, and the country’s economy.

WHAT ARE INCLUDED AND EXCLUDED FROM ADVERTISEMSNT ?

What is Included in Advertising?

• The information in an advertisement should benefit the buyers. It should give them a more satisfactory expenditure of their rupees.
• It should suggest better solutions to their problems.
• The content of the advertisement is within the control of the advertiser, not the medium.
• Advertising without persuasion is ineffective. The advertisement that fails to influence anyone, either immediately or in the future, is a waste of money.
• The function of advertising is to increase the profitable sales volume.
• That is, advertising expenses should not increase disproportionately.

Advertising includes the following forms of messages: The messages carried in-

• Newspapers and magazines;
• On radio and television broadcasts;
• Circular of all kinds, (whether distributed by mail, by person, thorough tradesmen, or by inserts in packages);
• Dealer help materials,
• Window display and counter – display materials and efforts;
• Store signs, motion pictures used for advertising,
• Novelties bearing advertising messages and Signature of the advertiser,
• Label stags and other literature accompanying the merchandise.

What is excluded from Advertising?

Advertising is not an exact science. An advertiser’s circumstances are never identical with those of another; he cannot predict with accuracy what results his future advertising efforts will produce.

• Advertising is not a game, because if advertising is done properly, both the buyer and the seller benefit from it.
• Advertising is not a toy. Advertiser cannot afford to play with advertising. Advertising funds come from sales revenue and must be used to increase sales revenue.
• Advertisements are not designed to deceive. The desire and hope for repeat sales insures a high degree of honesty in advertising.

The activities excluded from advertising are:

• The offering of premiums to stimulate the sale of products;
• The use of exhibitions and demonstrations at fairs, show and conventions;
• The use of samples and activities, involving news releases and the activities of personal selling forces;
• The payment of advertising allowances which are not used for advertising;
• The entertainment of customers

DEFINITION OF ADVERTISISNG

The word advertising originates from a Latin word advertise, which means to turn to. The dictionary meaning of the term is “to give public notice or to announce publicly”.

Advertising may be defined as the process of buying sponsor-identified media space or time in order to promote a product or an idea.

The American Marketing Association, Chicago, has defined advertising as “any form of non-personal presentation or promotion of ideas, goods or services, by an identified sponsor.”

What Advertisement Is?

Advertisement is a mass communicating of information intended to persuade buyers to by products with a view to maximizing a company’s profits.

The elements of advertising are:

• It is a mass communication reaching a large group of consumers.
• It makes mass production possible.
• It is non-personal communication, for it is not delivered by an actual person, nor is it addressed to a specific person.
• It is a commercial communication because it is used to help assure the advertiser of a long business life with profitable sales.
• Advertising can be economical, for it reaches large groups of people.
• This keeps the cost per message low.
• The communication is speedy, permitting an advertiser to speak to millions of buyers in a matter of a few hours.
• Advertising is identified communication. The advertiser signs his name to his advertisement for the purpose of publicizing his identity.

ORIGIN AND DEVELOPMENT OF ADVERTISING

It has been wrongly assumed that the advertising function is of recent origin. Evidences suggest that the Romans practiced advertising; but the earliest indication of its use in this country dates back to the Middle Ages, when the use of the surname indicated a man’s occupation. The next stage in the evolution of advertising was the use of signs as a visual expression of the tradesman’s function and a means of locating the source of goods. This method is still in common use.

The seller in primitive times relied upon his loud voice to attract attention and inform consumers of the availability of his services. If there were many competitors, he relied upon his own personal magnetism to attract attention to his merchandise. Often it became necessary for him to resort to persuasion to pinpoint the advantages of his products. Thus, the seller was doing the complete promotion job himself.

Development of retail stores, made the traders to be more concerned about attracting business. Informing customers of the availability of supplies was highly important. Some types of outside promotion were necessary. Signs on stores and in prominent places around the city and notices in printed matters were sometimes used.

When customers were finally attracted to the store and satisfied with the service at least once, they were still subjected to competitive influences; therefore, the merchant’s signs and advertisements reminded customers of the continuing availability of his services. Sometimes traders would talk to present and former customers in the streets, or join social organizations in order to have continuing contacts with present and potential customers.

As the markets grew larger and the number of customers increased, the importance of attracting them also grew. Increasing reliance was placed on advertising methods of informing about the availability of the products. These advertising methods were more economical in reaching large numbers of consumers. While these advertising methods were useful for informing and reminding and reminding, they could not do the whole promotional job. They were used only to reach each consumer personally. The merchant still used personal persuasion once the customers were attracted to his store.

The invention of hand press increased the potentialities of advertising. By Shakespeare’s times, posters had made their appearance, and assumed the function of fostering demand for existing products. Another important event was the emergence of the pamphlet as an advertising medium. The early examples of these pamphlets disclose their sponsorship by companies want to generate goodwill for their activities. The low cost of posters and handbills encouraged a number of publishers to experiment with other methods.

Marketing environment: Internal and External

The company’s marketing environment consists of micro environment and macro environment. The micro environment consists of the actors in the company’s immediate environment that affects its ability to serve the markets: the company, suppliers, market intermediaries, customers, competitors and publics. The macro environment consists of the larger societal forces that affect all of the actors in the company’s micro environment the demographic, economic, physical, technological, political, legal and socio-cultural forces.

MICRO ENVIRONMENT

Every company’s primary goal is to serve and satisfy a specified set of needs of a chosen target market. To carry out this task, the company links itself with a set of suppliers and a set of marketing intermediaries to reach its target customers. The suppliers – company – marketing intermediaries – customers chain comprises the core marketing system of the company. The company’s success will be affected by two additional groups namely, a set of competitors and a set of publics. Company management has to watch and plan for all these factors.

SUPPLIERS

Suppliers are business firms who provide the needed resource to the company and its competitors to produce the particular goods and services. For example Bakery Desotta must obtain sugar, wheat, cellophane paper and other materials to produce and package its breads. Labour, equipment, fuel electricity and other factors of production are also to be obtained. Now the company must decide whether to purchase or make its own. When the company decides to buy some of the inputs, it must make certain specification call for tender etc. and then it segregates the list of suppliers. Usually company choose the suppliers who offer the best mix of quality, delivery schedule credit, guarantee and low cost.

Any sudden change in the ‘suppliers’ environment will have a substance impact on the company’s marketing operations. Sometimes some of the inputs to the company might cost more and hence managers have continuously monitored the fluctuations in the suppliers side. Marketing manager is equally concerned with supply availability. Sudden supply shortage labour strikes and other events can interfere with the fulfillment of delivery promise customers and lose sales in the short run and damage customer goodwill in long run. Hence many companies prefer to buy from multiple sources to avoid overdependence on any one supplier. Some times even for the appendage services to marketing like marketing research, advertising, sales training etc. the company use service from outside. This dependency may also create some bottlenecks, at times, due to the behaviour of these agencies and consequently affect the marketing operations of the company.

COMPANY

Marketing management at any organisation, while formulating marketing plans have to take into consideration other groups in the company, such as top management, finance, R&D, purchasing, manufacturing and accounting. Finance department has to be consulted for the funds available for carrying out the marketing plan apart from others. R&D has to be continuously doing new product development. Manufacturing has to be coordinated based on the market demand and supply of the products. According has to measure revenues and costs to help marketing in achieving its objectives. Usually marketing department has to face the bottlenecks put up by the sister departments while designing and implementing their marketing plans.

MARKETING INTERMEDIARIES

Channel members are the vanguard of the marketing implementation part. They are the people who connect the company with the customers. There are number of middle men who operate in this cycle. Agent middle men like brokers and agents find customers and establish contacts, merchant middlemen are the wholesalers, retailers, who take title to and resell the merchandise. Apart from these channel members, there are physical distribution firms who assist in stocking and moving goods from the original locations to their destinations. Warehouse firms store and protect goods before they move to the next destinations. There are number of transporting firms consists of rail, road, truckers, ship, airline etc. that mover goods from one location to another. Every company has to decide on the most cost – effective means of transport considering the costs, delivery, safety and speed. There are financial intermediaries like banks, insurance companies, who support the company by providing finance insurance cover etc.

The behaviour and performance of all these intermediaries will affect the marketing operations of the company and the marketing executives have to prudently deal with them.

COMPETITORS

If one company plans a marketing strategy at one side, there are number of other companies in the same industry doing such other calculations. Coke has competitors in Pepsi. Maruti has competitions from Tata Indica, Santro etc. Not only that the competition comes from the branded segment but also from the generic market, where there are only few branded products of rice but there are numerous generic variety of rice according to the local tastes in each region the country. Sometimes competition comes from different forms. Airlines have to

overcome competitions not only from the other Airlines but also from Railways and Ships. Basically every company has to identify the competitor, monitor their activities and capture their moves and maintain customer loyalty. Hence every company comes out with their own marketing strategies.

PUBLICS

A public can facilitate or seriously affect the functioning of the company, Philip Kotler defines public as any group that has an actual or potential interest or impact on a company’s ability to achieve its objectives. Kotler notes that there are different types of publics, Government publics, citizen action publics, local publics, general public and internal publics. Since, the success of the company will be affected by how various publics view their activity, the companies have to monitor these publics, anticipate their moves dealing with them in constructive ways.

CUSTOMERS

Customers are the fulcrum around whom the marketing activities of the organisation revolve. The marketer has to face the following types of customers.

• Customer Markets: Markets for personal consumption.
• Industrial Markets: Goods and services that could become the part of a product in those industry.
• Institutional Buyers: Institutions like schools, hospital, which buy in bulk.
• Reseller Markets: The organizations buy goods for reselling their products.
• Government Markets: They purchase the products to provide public services.
• International Markets: Consists of Foreign buyers and Governments.

MACRO ENVIRONMENT

Macro environment consists of six major forces viz, demographic, economic, physical, technological, political/ legal and socio-cultural. The trends in each macro environment components and their implications on marketing are discussed below:

DEMOGRAPHIC ENVIRONMENT

Demography is the study of human population in terms of size, density, location, age, gender, occupation etc. The demographic environment is of major interest to marketers because it involves people the people make up markets.

The world population and the Indian population in particular is growing at an explosive rate. This has major implications for business. A growing population means growing human needs. Depending onpurchasing powers, it may also mean growing market opportunities. On the other hand, decline in population is a threat so some industrial and the boon to others. The marketing executives of toy-making industry spend a lot of energy and efforts and developed fashionable toys, and even advertise “Babies are our business-our only business”, but quietly dropped this slogan when children population gone down due to declining birth rate and later shifted their business to life insurance for old people and changed their advertisement slogan as “the company has not babies the over 50s”.

The increased divorce rate shall also have the impact on marketing decisions. The higher divorce rate results in additional housing units, furniture, appliances and other house-hold appliances. Similarly, when spouses work at two different places, that also results in additional requirement for housing, furniture, better clothing, and so on. Thus, marketers keep close tract of demographic trends developments in their markets and accordingly evolve a suitable marketing programme.

ECONOMIC ENVIRONMENT

Markets require purchasing power as well as people. Total purchasing power is functions of current income, prices, savings and credit availability. Marketers should be aware of four main trends in the economic environment.

(i) Decrease in Real Income Growth

Although money incomer per capita keeps raising, real income per capita has decreased due to higher inflation rate exceeding the money income growth rate, unemployment rate and increase in the tax burden.

These developments had reduced disposable personal income; which is the amount people have left after taxes. Further, many people have found their discretionary income reduced after meeting the expenditure for necessaries. Availability of discretionary income shall have the impact on purchasing behaviour of the people.

(ii)Continued Inflationary Pressure

The continued inflationary pressure brought about a substantial increase in the prices of several commodities. Inflation leads consumers to research for opportunities to save money, including buying cheaper brands, economy sizes, etc.

(iii) Low Savings and High Debt

Consumer expenditures are also affected by consumers savings and debt patterns. The level of savings and borrowings among consumers affect the marketing. When marketers make available high consumer credit, it increases market opportunities.

(iv) Changing Consumer Expenditure Patterns

Consumption expenditure patters in major goods and services categories have been changing over the years. For instance, when family income rises, the percentage spent on food declines, the percentage spent on housing and house hold operations remain constant, and the percentage spent on other categories such as transportation and education increase.

These changing consumer expenditure patterns has an impact on marketing and the marketing executives need to know such changes in economic environment for their marketing decisions.

PHYSICAL ENVIRONMENT OR NATURAL Environment

There are certain finite renewable resources such as wood and other forest materials which are now dearth in certain parts of world.

Similarly there are finite non-renewable resources like oil coal and various minerals, which are also not short in supply. In such cases, the marketers have to find out some alternative resources. For instance, the marketers of wooden chairs, due to shortage and high cost of wood shifted to steel and later on fiber chairs. Similarly scientists all over the world are constantly trying to find out alternative sources of energy for oil due to dearth in supply.

There has been increase in the pollution levels in the country due to certain chemicals. In Mumbai-Surat-Ahemedabed area, are facing increased pollution due to the presence of different industries. Marketers should be aware of the threats and opportunities associated with the physical environment and have to find our alternative sources of physical resources.

SOCIO CULTURAL ENVIRONMENT

The socio-cultural environment comprises of the basic beliefs, values and norms which shapes the people. Some of the main cultural characteristics and trends which are of interest to the marketers are:

(i) Core Cultural Values

People in a given society hold many core beliefs and values, that will tend to persist. People’s secondary beliefs and values are more open to change. Marketers have more chances of changing secondary values but little chance of changing core values.

(ii)Each Culture Consists of Sub-Cultures

Each society contains sub-cultures, i.e. groups of people with shared value systems emerging out of their common life experiences, beliefs, preferences and behaviors. To the extent that sub-cultural groups exhibit different wants and consumption behaviour, marketers can choose sub-cultures as their target markets.

Secondary cultural values undergo changes over time. For example ‘video-games’, ‘playboy magazines’ and other cultural phenomena have a major impact on children hobbies, clothing and life goals. Marketers have a keen interest in anticipating cultural shifts in order to identify new marketing opportunities and threats.

TECHNOLOGICAL ENVIRONMENT

Technology advancement has benefited the society and also caused damages. Open heart surgery, satellites all were marvels of technology, but hydrogen bomb was on the bitter side of technology. Technology is accelerating at a pace the many products seen yester-years have become obsolete now. Alvin Toffler in his book ‘The Future Shock’ has made a remark on the accelerative thrust in the invention, exploitation and diffusion of new technologies. There could be a new range of products and systems due to the innovations in technology.

This technology developments has tremendous impact on marketing and unless the marketing manager cope up with this development be cannot survive in the competitive market.

POLITICAL AND LEGAL ENVIRONMENT

Marketing decisions are highly affected by changes in the political/ legal environment. The environment is made up of laws and government agencies that influence and constraint various organizations and individuals in society.

Legislations affecting business has steadily increased over the years. The product the consumes and the society against unethical business behaviour and regulates the functioning of the business organizations. Removal of restrictions to the existing capabilities, enlargement of the spheres open to MRTP and FEMA companies and broad banding of industrial licenses were some of the schemes evolved by the government. The legal enactments and rules and regulations exercise a specific impact on the marketing practices, systems and institutions in the country. Some of the acts which have direct bearing on the marketing of the company include, the Prevention of Food Adulteration Act (1954), The Drugs and Cosmetics Act (1940), The Standard Weights and Measures Act (1956) etc. The Packaged Commodities (Regulative) Order (1975) provides for clearly making the prices on all packaged goods sold in retail excluding certain items.

Similarly, when the government changes, the policy relating to commerce, trade, economy and finance also changes resulting in changes in business. Very often it becomes a political decisions. For instance, one Government introduce prohibition, and another government lifts the prohibition. Also, one Government adopts restrictive policy and another Government adopts liberal economic policies. All these will have impact on business.

Hence, the marketing executives needs a good working knowledge of the major laws affecting business and have to adapt themselves to changing legal and political decisions.

All the above micro environmental actors and macro environmental forces affect the marketing systems individually and collectively. The marketing executives need to understand the opportunities and threats caused by these forces and accordingly they must be able to evolve appropriate marketing strategies.

products - product life cycle

Businesses should manage their products carefully over time to ensure that they deliver products that continue to meet customer wants. The process of managing groups of brands and product lines is called portfolio planning.

The stages through which individual products develop over time is called commonly known as the "Product Life Cycle".

The classic product life cycle has four stages (illustrated in the diagram below): introduction; growth; maturity and decline

Introduction Stage

At the Introduction (or development) Stage market size and growth is slight. it is possible that substantial research and development costs have been incurred in getting the product to this stage. In addition, marketing costs may be high in order to test the market, undergo launch promotion and set up distribution channels. It is highly unlikely that companies will make profits on products at the Introduction Stage. Products at this stage have to be carefully monitored to ensure that they start to grow. Otherwise, the best option may be to withdraw or end the product.

Growth Stage

The Growth Stage is characterised by rapid growth in sales and profits. Profits arise due to an increase in output (economies of scale)and possibly better prices. At this stage, it is cheaper for businesses to invest in increasing their market share as well as enjoying the overall growth of the market. Accordingly, significant promotional resources are traditionally invested in products that are firmly in the Growth Stage.

Maturity Stage

The Maturity Stage is, perhaps, the most common stage for all markets. it is in this stage that competition is most intense as companies fight to maintain their market share. Here, both marketing and finance become key activities. Marketing spend has to be monitored carefully, since any significant moves are likely to be copied by competitors. The Maturity Stage is the time when most profit is earned by the market as a whole. Any expenditure on research and development is likely to be restricted to product modification and improvement and perhaps to improve production efficiency and quality.

Decline Stage

In the Decline Stage, the market is shrinking, reducing the overall amount of profit that can be shared amongst the remaining competitors. At this stage, great care has to be taken to manage the product carefully. It may be possible to take out some production cost, to transfer production to a cheaper facility, sell the product into other, cheaper markets. Care should be taken to control the amount of stocks of the product. Ultimately, depending on whether the product remains profitable, a company may decide to end the product.

Examples

Set out below are some suggested examples of products that are currently at different stages of the product life-cycle:

INTRODUCTION	GROWTH	MATURITY	DECLINE
Third generation mobile phones	Portable DVD Players	Personal Computers	Typewriters
E-conferencing	Email	Faxes	Handwritten letters
All-in-one racing skin-suits	Breathable synthetic fabrics	Cotton t-shirts	Shell Suits
iris-based personal identity cards	Smart cards	Credit cards	Cheques books