final project of marketing

Product

Product is what we offering to the people. People satisfy their need and want to with

the product. A product is any offering that can satisfy a need or want, such as one of

the 10 basic offerings of goods, services, experiences, events, persons, places,

properties, organization, information and ideas.

The product we have to market is compact fluorescent lamp (CFL)

A compact fluorescent lamp (CFL), also known as a compact fluorescent light or

energy saving light (or less commonly as a compact fluorescent tube [CFT]), is a

type of fluorescent lamp. Many CFLs are designed to replace an incandescent lamp

and can fit into most existing light fixtures formerly used for incandescent.

Compared to general service incandescent lamps giving the same amount of visible

light, CFLs generally use less power, have a longer rated life, but a higher purchase

price. In the United States, a CFL can save over 30 US$ in electricity costs over the

lamp's life time compared to an incandescent lamp and save 2,000 times its own

weight in greenhouse gases. Like all fluorescent lamps, CFLs contain mercury,

which complicates their disposal.

CFLs radiate a different light spectrum from that of incandescent lamps. Improved

phosphor formulations have improved the subjective colour of the light emitted by

CFLs such that some sources rate the best 'soft white' CFLs as subjectively similar

in colour to standard incandescent lamps

THUNDER (CFL)

A THUNDER designation identifies homes equipped with a comprehensive set of

THUNDER qualified light fixtures. With an Advanced Lighting Package installed,

homebuyers can expect to save energy and money through reduced lighting

operating costs - while sacrificing nothing .THUNDER qualified fixtures are available

in many designs and fixture-types, giving homeowners a wide range of choices to

create just the right look for their home.

Indian Institute Of Finance

http://en.wikipedia.org/wiki/Light_fixture

http://en.wikipedia.org/wiki/Incandescent_light_bulb

http://en.wikipedia.org/wiki/Fluorescent_lamp

The THUNDER designation applies to lighting packages, for new home construction,

that consist of a minimum of 60%of energy

Benefits of the THUNDER

Energy Bill Savings.

We can save more than Rs.500 per month in energy costs just by installing

THUNDER. That's because THUNDER uses about 75% less energy than standard

models.

Improved Quality.

THUNDER light fixtures meet strict EPA guidelines for energy efficiency and quality,

producing warm, long-lasting light without slow starts or annoying flicker or hum.

Fixtures that have earned the THUNDER come with a ONE-YEAR REPLACEMENT

WARRENTY.

Enhanced Comfort.

THUNDER lighting generates about 75% less heat than standard incandescent

lighting. This means they are cool to the touch, keep you more comfortable, and help

reduce home cooling costs.

Install THUNDER which together is 50% more energy-efficient than conventional

light units, and save even more while staying cool.

Environmental Protection.

More than half of the electricity used in American homes is generated by burning

coal. Lowering energy use at home helps prevent greenhouse gas emissions and air

pollutants at the source. If every American home replaced its five most frequently

used light fixtures with THUNDER models, together we'd prevent the greenhouse

gases equivalent to the emissions from nearly 10 million cars.


Design Flexibility.

There are thousands of THUNDER light fixtures to choose from. They are available

in many styles and finishes and are suitable for every application in home.

THUNDER is designed to promote flexibility in fixture selections throughout the

home.

Are there many ways to market our business that will not cost to us a fortune, How

can we get the word out without driving our company into a financial black hole.

Truth is most marketing does take money, but there are some low-cost and no-cost

options that we can put into action that will help you to get the word out about our

products and service. While these ideas will not cost us a lot of money they will cost

us time, so prepare for that.

These are fantastic ideas for the company that is just getting started. They also work

Choose two out of the five and move forward on them this week. Once you begin to

see that in fact these promotional ideas can bring us business to momentum will

build and drive us to pick two more.

.

Construction

A compact fluorescent lamp used outside of a building.


http://en.wikipedia.org/wiki/File:CFL-wild-large.jpg

Electronic ballast of a compact fluorescent lamp

The most important technical advance has been the replacement of electromagnetic

ballasts with electronic ballasts; this has removed most of the flickering and slow

starting traditionally associated with fluorescent lighting. There are two types of

CFLs: integrated and non-integrated lamps.

Parts

There are two main parts in a CFL: the gas-filled tube (also called bulb or burner)

and the magnetic or electronic ballast. An electrical current from the ballast flows

through the gas (mercury vapour), causing it to emit ultraviolet light. The ultraviolet

light then excites a phosphor coating on the inside of the tube. This coating emits

visible light.

Electronic ballasts contain a small circuit board with rectifiers, a filter capacitor and

usually two switching transistors connected as a high-frequency resonant series DC

to AC inverter. The resulting high frequency, around 40 kHz or higher, is applied to

the lamp tube. Since the resonant converter tends to stabilize lamp current (and light

produced) over a range of input voltages, standard CFLs do not respond well in

dimming applications and special lamps are required for dimming service. CFLs that

flicker when they start have magnetic ballasts; CFLs with electronic ballasts are now

much more common.


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Types of CFL

Integrated CFLs

Integrated lamps combine a tube, an electronic ballast and either an Edison screw or

bayonet fitting in a single CFL unit. These lamps allow consumers to replace

incandescent lamps easily with CFLs. Integrated CFLs work well in many standard

incandescent light fixtures, which lowers the cost of CFL conversion. Special 3-way

models and dimmable models with standard bases are available for use when those

features are needed.

Non-integrated CFLs

Non-integrated CFLs have a separate, replaceable bulb and a permanently installed

ballast. These ballasts are typically of the magnetic type, and the starter is housed in

the base of the replaceable bulb. Since the ballasts are placed in the light fixture they

are larger and last longer, compared to the integrated ones. Non-integrated CFL

housings can be both more expensive and sophisticated.

CFL power sources

CFLs are produced for both alternating current (AC) and direct current (DC) input.

DC CFLs are popular for use in recreational vehicles and off-the-grid housing. Some

families in developing countries are using DC CFLs (with car batteries and small

solar panels and/or wind generators), to replace kerosene lanterns.


CFl

Intergrated CFL

Non-Integrated CFL

CFLs can also be operated with solar powered street lights, using solar panels

located on the top or sides of a pole and luminaries that are specially wired to use

the lamps.

Comparison with incandescent lamps

Lifespan

The average rated life of a CFL is between 8 and 15 times that of incandescent.

CFLs typically have a rated lifespan of between 6,000 and 15,000 hours, whereas

incandescent lamps are usually manufactured to have a lifespan of 750 hours or

1,000 hours. Some incandescent bulbs with long rated life spans of 20,000 hours

have reduced light output.

The lifetime of any lamp depends on many factors including operating voltage,

manufacturing defects, exposure to voltage spikes, mechanical shock, frequency of

cycling on and off, lamp orientation and ambient operating temperature, among other

factors. The life of a CFL is significantly shorter if it is only turned on for a few

minutes at a time: In the case of a 5-minute on/off cycle the lifespan of a CFL can be

up to 85% shorter, reducing its lifespan to "close to that of incandescent light bulbs".

The US Energy Star program suggests that fluorescent lamps be left on when

leaving a room for less than 15 minutes to mitigate this problem.


Life Span

Energy Efficiency

Efficacy and Efficiency

CFLs produce less light later in their life than when they are new. The light output

decay is exponential, with the fastest losses being soon after the lamp is first used.

By the end of their lives, CFLs can be expected to produce 70–80% of their original

light output. The response of the human eye to light is logarithmic: Each f-number (or

photographic 'f-stop') reduction represents a halving in actual light, but is subjectively

quite a small change. A 20–30% reduction over many thousands of hours represents

a change of about half an f-stop, which is barely noticeable in everyday life.

Energy efficiency

The chart shows the energy usage for different types of light bulbs operating at

different light outputs. Points lower on the graph correspond to lower energy use.

For a given light output, CFLs use 20 to 33 percent of the power of equivalent

incandescent lamps. Since lighting accounted for approximately 9% of household

electricity usage in the United States in 2001, widespread use of CFLs could save as

much as 7% of total US household usage.

If a building's indoor incandescent lamps are replaced by CFLs, the heat produced

due to lighting will be reduced. At times when the building requires both heating and

lighting, the heating system will make up the heat. If the building requires both

illumination and cooling, then CFLs also reduce the load on the cooling system


http://en.wikipedia.org/wiki/File:Electricity_use_by_lightbulb_type.svg

compared to incandescent lamps, resulting in two concurrent savings in electrical

power.

The Energy Saving Trust which gives a rundown of the various types of energy-

efficient bulbs, says lighting makes up about 20 per cent of the electricity bill in the

average home. Installing CFLs is a no-brainer. Their price has dropped substantially,

they last far longer than incandescent and they can reduce bills by at least a third.

Efficacy and efficiency

A typical CFL is in the range of 17 to 21% efficient at converting electric power to

radiant power based on 60 to 72 lumens per watt source efficacy, and 347 lumens

per radiant watt luminous efficacy of radiation for a tri-phosphor spectrum. Because

the eye's sensitivity changes with the wavelength, the output of lamps is commonly

measured in lumens, a measure that accounts for the effect of the source's spectrum

on the eye. The luminous efficacy of CFL sources is typically 60 to 72 lumens per

watt, versus 8 to 17 lm/W for incandescent lamps.

Cost

While the purchase price of an integrated CFL is typically 3 to 10 times greater than

that of an equivalent incandescent lamp, the extended lifetime and lower energy use

will more than compensate for the higher initial cost. A US article stated "A

household that invested $90 in changing 30 fixtures to CFLs would save $440 to

$1,500 over the five-year life of the bulbs, depending on your cost of electricity. Look

at your utility bill and imagine a 12% discount to estimate the savings."

CFLs are extremely cost-effective in commercial buildings when used to replace

incandescent lamps. They can save upto 80% of electricity bill.

Starting time

Incandescent reach full brightness a fraction of a second after being switched on. As

of 2009, CFLs turn on within a second, but may still take time to warm up to full

brightness. Some CFLs are marketed as "instant on" and have no noticeable warm-

up period, but others can take up to a minute to reach full brightness, or longer in


very cold temperatures. Some, that use a mercury amalgam, can take up to three

minutes to reach full output. This and the shorter life of CFLs when turned on and off

for short periods may make CFLs less suitable for applications such as motion-

activated lighting.

Incandescent are ridiculously energy inefficient, with more than 90 per cent of

electricity wasted as heat. CFLs undoubtedly save energy and by fitting them you

can do your little bit to help the planet: CFL lobbyists say that if each household in

the country replaced one 100W bulb with an energy saver, the savings in CO2

emissions would be equivalent to taking 200,000 cars off the road for a year.

Environmental issues

Energy savings

Since fluorescent lamps use less power to supply the same amount of light as an

incandescent lamp, they decrease energy consumption and the environmental

effects of electric power generation. Where electricity is largely produced from

burning fossil fuels, the savings reduces emission of greenhouse gases and other

pollutants.

While CFLs require more energy in manufacturing than incandescent lamps, this is

more than offset by the fact that they last longer and use less energy than equivalent

incandescent lamps during their lifespan.

Mercury emissions


http://en.wikipedia.org/wiki/File:Mercury_emissions_by_light_source_(en).svg

Coal-Powered Mercury use of compact fluorescent lamp vs. incandescent lamp, if

powered by electricity generated completely from coal, though coal accounts for

about half of the power production in the United States.This graph does not apply in

areas that use hydro, nuclear, solar, wind sources

CFLs, like all fluorescent lamps, contain small amounts of mercury as vapor inside

the glass tubing. Most CFLs contain 3 – 5 mg per bulb, with some brands containing

as little as 1 mg. Even these small amounts are a concern for landfills and waste

incinerators where the mercury from lamps may be released and contribute to air

and water pollution. In the U.S., lighting manufacturer members of the National

Electrical Manufacturers Association (NEMA) have voluntarily capped the amount of

mercury used in CFLs. In the EU the same cap is required by the RoHS law.

In areas with coal-fired power stations, the use of CFLs saves on mercury emissions

when compared to the use of incandescent bulbs. This is due to the reduced

electrical power demand, reducing in turn the amount of mercury released by coal as

it is burned.

In the United States, the U.S. Environmental Protection Agency estimated that if all

270 million compact fluorescent lamps sold in 2007 were sent to landfill sites, that

this would represent around 0.13 tons, or 0.1% of all U.S. emissions of mercury

(around 104 tons) that year.

Broken and discarded lamps

Spent lamps should be properly disposed of, or recycled, to contain the small

amount of mercury in each lamp, in preference to disposal in landfills. In the

European Union, CFLs are one of many products subject to the WEEE recycling

scheme. The retail price includes an amount to pay for recycling, and manufacturers

and importers have an obligation to collect and recycle CFLs. Safe disposal requires

storing the bulbs unbroken until they can be processed. In the US, The Home Depot

is the first retailer to make CFL recycling options widely available.


Special handling instructions for breakage are currently not printed on the packaging

of household CFL bulbs in many countries. The amount of mercury released by one

bulb can temporarily exceed U.S. federal guidelines for chronic exposure. Chronic

however, implies that the exposure continues constantly over a long period of time

and the Maine DEP study noted that it remains unclear what the health risks are

from short-term exposure to low levels of elemental mercury. The Maine DEP study

also confirmed that, despite following EPA best-practice cleanup guidelines on

broken CFLs, researchers were unable to remove mercury from carpet, and agitation

of the carpet—such as by young children playing—created spikes as high as

25,000 ng/m3 in air close to the carpet, even weeks after the initial breakage.

Conventional tubular fluorescent lamps have been in commercial and domestic use

since the 1930s with little public concern about their handling; these and other

domestic products such as thermometers contain far more mercury than modern

CFLs.

The U.S. Environmental Protection Agency (EPA) recommends that, in the absence

of local guidelines, fluorescent bulbs be double-bagged in plastic before disposal.

The Maine DEP study of 2008 compared clean-up methods, and warned that the

EPA recommendation of plastic bags was the worst choice, as vapours well above

safe levels continued to leach from the bags. The Maine DEP now recommends a

sealed glass jar as the best repository for a broken bulb.

The first step of processing CFLs involves crushing the bulbs in a machine that uses

negative pressure ventilation and a mercury-absorbing filter or cold trap to contain

mercury vapor. Many municipalities are purchasing such machines. The crushed

glass and metal is stored in drums, ready for shipping to recycling factories.

According to the Northwest Compact Fluorescent Lamp Recycling Project, because

household users in the U.S. Northwest have the option of disposing of these

products in the same way they dispose of other solid waste, in Oregon "a large

majority of household CFLs are going to municipal solid waste". They also note the

EPA's estimates for the percentage of fluorescent lamps' total mercury released

when they are disposed of in the following ways: municipal waste landfill 3.2%,

recycling 3%, municipal waste incineration 17.55% and hazardous waste disposal

0.2%.


Mercury poisoning of Chinese factory workers

In the past decade, hundreds of Chinese factory workers who manufacture CFLs for

export to first world countries were being poisoned and hospitalized because of

mercury exposure. Examples include workers at the Nanhai Feiyang lighting factory

in Foshan city where 68 out of 72 were so badly poisoned that they required

hospitalization. At another CFL factory in Jinzhou, 121 out of 123 employees were

found to have excessive mercury levels with one employee's mercury level 150 times

the accepted standard.

Design and application issues

A spiral-type integrated compact fluorescent lamp, with combined tube and

electronic ballast. This style has slightly reduced efficiency compared to tubular

fluorescent lamps, due to the excessively thick layer of phosphor on the lower side of

the twist. Despite this, it has become one of the most popular types among North

American consumers since its introduction in the mid 1990s.

The primary objectives of CFL design are high electrical efficiency and durability.

However, there are some other areas of CFL design and operation that are

problematic.


http://en.wikipedia.org/wiki/File:Compact-Flourescent-Bulb.jpg

http://en.wikipedia.org/wiki/File:Compact-Flourescent-Bulb.jpg

Size

CFL light output is roughly proportional to phosphor surface area, and high output

CFLs are often larger than their incandescent equivalents. This means that the CFL

may not fit well in existing light fixtures.

End of life

In addition to the wear-out failure modes common to all fluoresecent lamps, the

electronic ballast may fail since it has a number of component parts. Ballast failures

may be accompanied by discoloration or distortion of the ballast enclosure, odors, or

smoke. The lamps are internally protected and are meant to fail safely at the end of

their lives. Industry associations are working toward advising consumers of the

different failure mode of CFLs compared to incandescent lamps, and to develop

lamps with inoffensive failure modes.

Incandescent replacement wattage inflation

An August 2009 newspaper report described that some manufacturers claim the CFL

replaces a higher wattage incandescent lamp than justified by the light produced by

the CFL. Equivalent wattage claims can be replaced by comparison of the lumens

produced by the lamp.

Dimming

Only some CF lamps are labeled for dimming control. Using regular CFLs with a

dimmer is ineffective at dimming, can shorten bulb life and will void the warranty of

certain manufacturers. Dimmable CFLs are available.. The dimming range of CFLs is

usually between 20% and 90%.Dimmable CFLs are not a 100% replacement for

incandescent fixtures that are dimmed for "mood scenes" such as wall sconces in a

dining area. Below the 20% limit, the lamp remain at the approximate 20% level, in

other cases it may flicker or the starter circuitry may stop and restart. Above the 80%

dim limit, the bulb will generally glow at 100% brightness. Dimmable CFLs have a

higher purchase cost than standard CFLs due to the additional circuitry required for

dimming. A further limitation is that multiple dimmable CFLs on the same dimmer


switch may not appear to be at the same brightness level. Cold Cathode CFLs can

be dimmed to low levels, making them popular replacements for incandescent bulbs

on dimmer circuits.

Perceived Coldness of Low Intensity CFL

When a CFL is dimmed the colour temperature (warmth) stays the same. This is

counter to most other light sources (such as the sun or incandescents) where colour

gets warmer as the light source gets dimmer. Emotional Response Testing suggests

that people find dim, bluish light sources to be cold or even sinister. This may explain

the persistent lack of popularity for CFL's in bedrooms and other settings where a

subdued light source is preferred.

Heat

Some CFLs are labeled not to be run base up, since heat will shorten the ballast's

life. Such CFLs are unsuitable for use in pendant lamps and especially unsuitable for

recessed light fixtures. CFLs for use in such fixtures are available. Current

recommendations for fully enclosed, unventilated light fixtures (such as those

recessed into insulated ceilings), are either to use 'reflector CFLs' (R-CFL), cold

cathode CFLs or to replace such fixtures with those designed for CFLs.

Power quality

The introduction of CFLs may affect power quality appreciably, particularly in large-

scale installations. In such cases, CFLs with low (below 30 percent) total harmonic

distortion (THD) and power factors greater than 0.9 should be used.

Time to achieve full brightness

Compact fluorescent lamps may provide as little as 50–80% of their rated light output

at initial switch on and can take up to three minutes to warm up, and color cast may

be slightly different immediately after being turned on. This compares to around 0.1

seconds for incandescent lamps. In practice, this varies between brands/types. It is

more of a problem with older lamps, 'warm (color) tone' lamps and at low ambient

temperatures. Cold cathode CFLs reach their rated light output far more quickly.


Infrared signals

Electronic devices operated by infrared remote control can interpret the infrared light

emitted by CFLs as a signal limiting the use of CFLs near televisions, radios, remote

controls, or mobile phones.

Audible noise

CFLs, much as other fluorescent lights, may emit a buzzing sound, where

incandescents normally do not. Such sounds are particularly noticeable in quiet

rooms, and can be annoying under these circumstances. Newer compact fluorescent

light bulbs are nearly noiseless, but some poorly made CFLs may still emit a buzzing

sound.

Iridescence

Fluorescent lamps can cause window film to exhibit iridescence. This phenomenon

usually occurs at night. The amount of iridescence may vary from almost

imperceptible, to very visible and most frequently occurs when the film is constructed

using one or more layers of sputtered metal. It can however occur in non-reflective

films as well. When iridescence does occur in window film, the only way to stop it is

to prevent the fluorescent light from illuminating the film.

Use with timers, motion sensors, and other electronic controls

Electronic (but not mechanical) timers can interfere with the electronic ballast in

CFLs and can shorten their lifespan. Some timers rely on a connection to neutral

through the bulb and so pass a tiny current through the bulb, charging the capacitors

in the electronic ballast. They may not work with a CFL connected, unless an

incandescent bulb is also connected. They may also cause the CFL to flash when

off. This can also be true for illuminated wall switches and motion sensors. Cold

cathode CFLs avoid many of these problems.


Fire hazard

When the base of the bulb is not made to be flame-retardant, as required in the

voluntary standard for CFLs, then the electrical components in the bulb can overheat

which poses a fire hazard. The Electrical Safety Authority of Canada has stated that

certified bulbs do not pose a fire hazard as they use anti-fire plastics.

Outdoor use

CFLs not designed for outdoor use will not start in cold weather. CFLs are available

with cold-weather ballasts, which may be rated to as low as -23°C (-10°F). Standard

compact fluorescents will fail to operate at low temperatures. Light output drops at

low temperatures. Cold cathode CFLs will start and perform in a wide range of

temperatures due to their different design.

Differences among manufacturers

There are large differences among quality of light, cost, and turn-on time among

different manufacturers, even for lamps that appear identical and have the same

color temperature.

Lifetime brightness

Fluorescent lamps get dimmer over their lifetime, so what starts out as an adequate

luminosity may become inadequate. In one test by the US Department of Energy of

'Energy Star' products in 2003–4, one quarter of tested CFLs no longer met their

rated output after 40% of their rated service life.

UV emissions

Fluorescent bulbs can damage paintings and textiles which have light-sensitive dyes

and pigments. Strong colours will tend to fade on exposure to UV light. Ultraviolet

light can also cause polymer degradation with a loss in mechanical strength and

yellowing of colourless products.


CFL product characterstics and classification

Product levels: the customer-value hierarchy

In planning its marketing offering, the marketer needs to address five product levels.

Each level adds more customer value, and the five constitute a customer-value

hierarchy.

The fundamental level is the core benefit: the service or benefits the customer is

really buying. A person is buying energy saver instrument for his use. Marketers

must see themselves as benefits providers.

At the second level, the markers must turn the core benefit into a basic product.

At the third level, the marketers prepare an expected product, a set of attributes and

condition buyers normally expect when they purchase this product. People buying

CFL expect a warranty, watts as it is written on its package.

At the fourth level, the marketer prepares an augmented product that exceeds

customer expectations. In developing countries, brand positioning and competition

take place at this level. For example when customer buys a CFL he expects a 1 yr.

Warranty but the company is giving him 3 yrs. Warranty. Various product designs,

offers such as buy 3 CFL a get a CFL free. These offers customer hadn’t thought.


At the fifth levels stands the potential product, which encompasses all the possible

augmentations and transformations the product or offering might undergo in future.

Here is company search for new ways to satisfy customers and distinguish their

offering. Various designs, product enhancement, different features in futures make

CFL a potential product.

Differentiation arises and competition increasingly occurs on the basis of product

augmentation, which also leads the marketer to look at the user’s total consumption

system: the way the user performs the tasks of getting and using product and related

services. Each augmentation adds cost, however, and augmented benefits soon

become expected benefit and necessary points of parity.

Due to stiff competition company has to pay some extra benefit to customer at the

same price or will charge lower than competitor. Usually consumer saw price and

then they select it or reject it. So try to capture more market by providing lower price

of your product.

For example CFL produced by bajaj 15W is of around 160 Rs. Its one of the leading

company, it has a brand name, brand equity. It gives a warranty of 1yr

CFL produced by havels of 15 W is of generally 200 Rs. With a warranty of 1yr.also

some of very local brand sell its product at 40-60rs. So our company should sell its

product slightly more than local product and lower than its competitor such as bajaj

and havels. So our price ranges from 40rs. To 160rs. And also our company give a

warranty of 3 yrs. So the company has to lower its margin to get attention of its

customer otherwise people can attracted to the competitors and local vendors. So

cost of augmentation has to be beard by the company itself.

Product classification

Durable goods: are tangible goods the normally survive since many uses. CFL is

not a product that last for only 2-3 days. It has a particular life such as 60000hrs. etc.

So its a kind of durable product. Durable products require more personal selling and

service, command a higher margin, and require more seller guarantees. Since there


are lot of competitors or seller of CFL bulbs we have focused on the product life.

Earlier product has a life of 60000hrs. But our product has a life of 150000hrs. So we

are providing a guarantee of 3 yrs.

Convenience goods: the consumer usually purchases Convenience goods

frequently, immediately, and with minimum of effort. Under convenience product it

comes under emergency goods: these are purchased when a need is urgent. For ex.

When a bulb in home is fused then he think about purchasing another bulb or CFL,

also a person may think when takes certain specific steps to reduce his electricity

bill, or think about what his contribution towards nature. Manufacture of goods will

place then in those outlets where consumer are likely to experience an urge or

compelling need to make a purchase.

Product differentiation

Form: many products can be differentiated in form-the size, shape or physical

structure of a product. For ex. CFL length is generally range from 5.5in to 15in. and

its width or diameter ranges from 4in to 8 in. So we have various size, shape and

different physical structure of CFL is available.

Features: most products can be offered with varying features that supplement their

basic function. A company can identify and select appropriate new features by

surveying recent buyers and then calculating customer value versus company cost

for each potential feature. The company should also consider how many people want

each features, how long it would take to introduce it, and whether competitors can

easily copy it. To avoid “feature fatigue”, the company also must be careful to

prioritize those features that are included and find unobtrusive ways to provide

information about how consumer can use and benefit from the feature. Company

must also think in terms of feature bundles or packages. Each company must decide

whether to offer feature customization at a higher cost or a few standard packages at

a lower cost.

Five Reasons to Install a Shining Home CFL This Earth Day

1. You’ll can save 80% or more in energy costs over the bulb’s lifetime.


2. They last 10 times longer than incandescent bulbs.

3. We generate twice as many greenhouse gas emissions with our homes than

with our cars.

4. If every Indian home replaced just one light bulb with a CFL, we would save

enough energy to light 2.5 million homes for a year and prevent greenhouse

gases equivalent to the emissions of 800,000 cars.

5. You can save even more money and prevent more greenhouse gases by

phasing more CFLs into your home.

Customization: marketers can differentiate products by making them customized to

an individual. As companies have grown proficient at gathering information about

individual customers and business partners ( suppliers, distributers, retailers), and as

their factories are being designed more flexibly, they have increased their ability to

individualize market offering, messages, and media. Mass customization is the ability

of a company to meet each customer’s requirements-to prepare on a mass basis

individually designed products, services, programs, and communications.

Performance quality: most products are established at one of four performance

levels: low, average, high, or superior. Performance quality is the level at which the

product’s primarily characterstics operate. Quality is becoming an increasingly

important dimension for differentiation as companies adopt a value model and

provide higher quality for less money.

Conformance quality: buyers expect products to have a high conformance quality,

which is the degree to which is the degree to which all the produced units are

identical and meet the promised specifications. The problem with low conformance

quality is that the product will disappoint some buyers.

Durability: Durability, a measure of the product’s expected operating life under

natural or stressful conditions, is valued attribute for certain products. The extra price

must not be excessive. Furthermore, the product must not be subject to rapid

technological obsolescence.


Reliability: Buyers normally will pay a premium for more reliable products. Reliability

is a measure of the probability that a product will not malfunction or fail within a

specified time period.

Style: style describes the product’s look and feel to the buyer. Style has the

advantage of creating distinctiveness that is difficult to copy. On the negative side,

strong style does not always mean high performance.

As per the above different product classification our company has prepare some

design with various new features, and will be available soon in market at a very

cheap price. These products are unique in their style, and we believe they will so

capture the market.


MODEL: THUNDER 301

Key Specification

Circuit characteristics: Adopt technology of Active Power Factor

Compensation within a half-bridge output circuit, with ASIC from IR, USA,

RLC output, frequency conversion & pre-heating & soft starting pattern.

Specifications: 5W, 9W, 15W, 500W.

The maximum operating temperature of ballast is below 65,which guarantees

the normal working temperature for ballast and prolongs its lifetime.

Frequency conversion & pre-heating soft starting prolongs the lifetime of glass

tube over 10 times than cold starting.

70LM/W of high light efficiency, up to 80% less energy consumption.

Lamp life of 10 years.

Could be used for illumination of factory, warehouse, street, large mall, tunnel,

school and advertising space, diverse glass and cover are available.

With many abnormal protection, including ballast protection, short current of

open-circuit output, transient overvoltage protection, guarantee the reliability

of lamps.


MODEL:THUNDER 302

Key Specification

Specifications: 5W, 9W, 15W, 500W.

Base:E14/E27/B22

Life time:10,000hours

Certificates: RoHS, CE, GS, EMC


MODEL: THUNDER 303

Key Specification

Lamp dimension: 64x54x54

E27/B22 nickel plated iron lamp-holder

PBT lamp shell

Pure tricolor lamp tube

Service life: 8,000 hours

Specifications: 5W, 9W, 15W, 500W

Eligible to the requirement of IEC60968 standard

EUP-A standard


MODEL: THUNDER 304

Key Specification

Start Time(S) ＜0.5

Index(R.A) 80 Max

Diamter(mm) 120 Mac

Length(mm) 235

Base Diameler(mm) 58


Lifehours(H) 60000

Power:


MODEL: THUNDER 305

Key Specification

o Specification: 220V/120v, 50Hz

o Light flux: 3450lm

o Color temperature: 2700K/4000K/6400K

o Color rendering index: 80

o Specifications: 5W, 9W, 15W, 500W

o Lamp cap: E27/E40


MODEL: THUNDER 306

Key Specification


Performance frequency: 50-60HZ

Performance life: >8,000hours

Base: E14/E27/E26/B22


MODEL: THUNDER307

Key Specification

Input voltage: AC 220-240V


Frequency: 50/60Hz

Color: white/yellow/red/green/blue

Ta: -15℃ to 50℃

Excellent quality, safe, durable and environmental protection products

Long lifespan, more than 8000 hours

MODEL: THUNDER 308

Key Specification


Description(A Shape/CFL): 7W / 9W / 14W / 20W /25W


Cap/base: E14/E27/B22

warm white 2700K, cool white 4200K, daylight 6500K, etc.

Up to 80% energy saving

Average life is 8,000 hours

MODEL: THUNDER 309

We produce the lamps with our homemade lamp manufacturing line called

Tiema which enjoys good reputation all over the world

The energy-saving lamps produced by us are of stable voltage, high

luminous efficiency and color rendering index, the lamp tubes of which are

covered by three-color phosphor



We have the capacity to meet your requirement of producing the lamps with different

voltages, watts, color temperatures, materials, shapes, and packing

The Concept of the Product Life Cycle

To say that a product has a life cycle is to assert four things:

(1) Products have a limited life;

(2) product sales pass through distinct stages with different challenges, opportu-

nities, and problems for the seller;

3) profits rise and fall at different stages of theproduct life cycle; and

(4) products require different marketing, financial, manufac-turing, purchasing, and

human resource strategies in each stage. Most product life-cycle curves are

portrayed as a bell-shape.

This PLC curve is typically divided into four stages:


Introduction: A period of slow sales growth as the product is introduced in the

market. Profits are nonexistent in this stage because of the heavy expenses incurred

with product introduction.

Growth: A period of rapid market acceptance and substantial profit improvement.

Maturity: A period of a slowdown in sales growth because the product has achieved

acceptance by most potential buyers. Profits stabilize or decline because of

increased competition.

Decline: The period when sales show a downward drift and profits erode.

I believe that CFL is in growth stage, since it’s a new product, but not such that we

have to tell people or our customer what it is. Customers know about it, and are

ready to buy it. So we have to capture market by promoting sales. The various

strategy that are followed by a company in growth stage are

Competition: competitors are growing in number in this stage as everyone see a

huge market ahead, so a company should keep a close watch on the competitor’s

offering, technology, advertisement strategy and sales promotion strategy. Our big

threats are various other local CFL producers who are selling their product at very

cheaper price.


Sales: as more and more people are ready to purchase the product so sales are

rapidly rising. Therefore our company have tried to adapt a potential advertisement

agency named ‘REBEL’ and suggest a name of our product ‘THUNDER’.

Price: price should be as low as possible. It should be kept low so as to capture

larger percentage of market, and so as to attract the next layer of price- sensitive

buyers.

Promotion: our company will offer new designs, add new features, product quality,

and improved styling so that people attract towards our product. We have also added

new models. We have also tried to cover as much area as possible. At every

electrical shop our product is available so that customer can easily find out.

Hoardings have been put up in shops and in crowded places so that maximum no. of

people can notice our product. Company has also increased its new distribution

channels. Earlier our advertising strategy work towards product awareness but now

we have focused more on product preference advertising.

MARKETING RESEARCH

Research is the process of finding a solution to a problem or a question through the

use of scientific tools and techniques research is a methodical and purposeful study

conducted to obtain solution for specific marketing problem. Thus, marketing

research is the process of collection of data in an organised manner, with

subsequent recording and analyzing of such data that will help business manager in

an effective decision making process.

Marketing research encompasses all the spheres of marketing, right from the idea

for a new product to after sales services. The information gathered and analyzed

through marketing research can be used for internal purposes or for making

important strategic decisions. The research process provides a scientific platform,

contrary to the tradition intuitive approach of decision making by managers, which

used to put large amounts of resources of the organisation at risk. Marketers need to

analyse the various paradigms of the market with precision to serve their customers

and survive. Marketing research operates precisely in this area by helping marketers

to analyze the market correctly and take effective decisions from time-to-time.


THE MARKETING RESEARCH PROCESS

The marketing research is systematic and formalised process; it follows a certain

sequence of research actions. The marketing research process has the following

steps

1 Formulating the problem

2 Developing objectives of the research

3 Designing an effective research plan

4 Data collection techniques

5 Evaluating the data and preparing a research report

Formulating the problems Designing an effective research plan

The purpose of conducting marketing research is to find a suitable solution for a

specific and immediate problem confronted by business managers. The problem

formulation is the first and the most important step of the marketing research

process. The problem has to be defined clearly and specifically, as an ill-defined

problem may result in an ineffective solution. The problem faced by the manager has

to be properly translated into a research problem and the reason why the research is

required should also be spelt out.

Through errors and biases can creep into marketing research at any stage of the

process, if the decision makers and researchers do not agree completely on the

definition of the problems, the entire research effort will be wasted. At this stage, the

precise information requirements to make the marketing decision should be defined.

Developing the objectives of the research

The objectives of the research should be clear and specific. The objectives should

cover questions regarding the purpose of the study, how the study should be

conducted, the information needs and the sources of information.


The design of the research plan determines the tools and techniques that are

employed for conducting marketing research. Normally the research design is

broadly classified into exploratory research, descriptive research and casual

research.

Exploratory research helps the management identify the presence of potential

opportunities and threats for the company. It is generally conducted with minimum

expenditure of time and cost during the initial stages of decision making process.

The data is obtained from books, journals, magazines, reports, case studies, etc.

Other approaches for acquiring background information include interviewing

knowledgeable persons, analyzing case histories.

Research Instruments

The instruments generally used to collect primary data are questionnaires and

mechanical instruments.

Questionnaires

Questionnaires are formal sets of questions prepared to collect the required

information .This is one of the most effective and popular techniques used in

surveys. However, one has to be careful when drawing up questionnaires. Before

deciding on the questions, it is important to understand the exact nature of the

information required and who should also be clear and unambiguous. The

knowledge levels of target respondents should be kept in mind while drawing up the

questions.

MECHANICAL INSTRUMENTS

Mechanical instruments such as galvanometers measure the responses on various

parameters such as emotional, interest in an advertisements or a picture,etc.

The tachistocope is another instruments where a message is flashed for about one

hundredth of a second several times and the subjects behaviour is observed.

SAMPLING


Before discussing sampling, let us first determine what a sample is. A sample is a

subset of a unit or a population, collected as a representation of It collection of

sample is called sampling. Proper sampling design is essential in marketing

research. The sample has to be collected in such a way that it represents the

population.

SAMPLINGS UNITS

In samplings, researchers decide who will be surveyed. Most often, it is not possible

to collect information about the entire population. Therefore, researchers need to

define the portion of the population that they are growing target.

The portion of the population that researchers need to target and that represents the

entire population is known as the sampling unit. The target population is defined on

the basis of research objectives defined earlier. The target population should be

selected in such a way that everyone in the population has equal chances of being

included in the sample.

SAMPLE SIZE

The size of the sample is an important element in the research process. As the size

of the sample has a direct affect on the result of a research, it is essential for

researchers to select an appropriate sample size. As the size of a sample increases,

accuracy and reliability of research results also increase. However, the cost of

research also increases. Therefore, researchers need to make a trade-off between

the accuracy and cost of research.

SAMPLING PROCEDURE

Sampling procedure is the way in which we select a sample. The methods for

selecting samples include stratified and unstratified sampling, probability and non

probability sampling, single stage sampling and multistage sampling, equal unit

probability sampling and unequal unit probability sampling, and single unit sampling

and cluster of units sampling. Probability and non probability sampling are

procedures, which are widely used. Probability sampling is a sampling technique

where each unit has a known chance of being selected in the sample. In non


probability sampling, there is no known chance of being selected in the sample.

Simple random sampling, stratified sampling and cluster sampling are methods that

come under probability sampling. Non probability sampling methods include

convenience sampling, quota sampling, judgement sampling, etc.

DATA COLLECTION TECHNIQUES

The information requirements for solving a business problem are identified in the

problem formulating stage. In this stage, the sources from which information can be

found are identified. Data for a research can be collected from two sources-primary

and secondary. Primary data is direct or first-hand data collected from respondents.

It is collected using research instruments like questionnaires, mailers, telephonic

interviews, etc. Secondary data is collected from already available sources such as

published papers, journals, magazines, reports, company literatures, etc.

Researchers need to evaluate the cost effectiveness of the resources before

selection.

Primary data collection

Primary data is collected by surveying the sampling units or the elements of the

sampling units. Primary data is the first–hand information gathered to solve the

research need. The collection of primary information is expensive and time

consuming.

Mail interviews

Mail interviews are widely used for the collection of information, since the cost is

relatively low. Project Management Institute (PMI), USA, interviews its members by

mail annually to get to know what its members expect and how its services can be

improved. This is done in order to understand its customer requirements better,

assess the level of customer services and improve its customer relationships.

Respondents in a mail interview can remain anonymous if they wish to. The

advantage of the mail interview is that the respondents can respond to the

questionnaire at his convenience. One of the biggest problem in mail interviews is

the low response rate.


Telephonic interviews

Telephonic interview are often conducted when the information required is not great

and needs to be collected quickly. The cost of conducting telephonic interviews is

also low compared to the cost of personal interviews. Research regarding non-

confidential and general information can be easily reached on telephones and the

reluctance level of respondents is usually one call per six calls is picked up. .

Personal interviews

Personal interviews care conducted when an interview and interviewee are

physically present at one place. They can be one-to-one or one-to-many.in other

words, an interviewer can interview one interviewee at a time or many. In other

words, an interviewer can interview one interviewee at a time or many interviewees

at a time. The interviewer asks questions and records the responses from the

respondents.

This method, however, is costlier than most other methods like mail and telephone

interviews. It also has inherent drawbacks such as bias on the part of researchers as

well as respondents.

Observation

This method of collecting information from respondents is effective only when the

interviewer is highly trained and intelligent enough to draw the appropriate

conclusions of the respondents.

Secondary data collection

Secondary data is collected from the company’s internal and external resources.

While the internal sources include the company’s literature, annual reports, sales

reports, etc., the external sources could be independent magazines, journals, legal

documents, government gazettes, etc. Compared to primary data, the collection of

secondary data is cheaper and less time consuming. As information in the secondary

sources is readily available, it can be compiled quickly by researchers. However, the

reliability of secondary sources is an aspect that the researchers should always look


into before selecting them. Researchers also need to ensure that the sources are

free from biases.

The Concept of Competitive Advantage

Competitive advantage is the critical advantage that a firm possesses in the market

over a competitor in the industry. Almost all the firms in the market try to achieve a

sustainable competitive advantage. According to Michael Porter, there are two types

of competitive advantages – cost advantage and differentiation advantage.

Porter’s Five Forces model

Competition in an industry is determined not only by existing competitors but also by

other market forces such as customers, suppliers, potential entrants, and the

existence of substitute products. Understanding the level of completion is important

because the level of profits depends to a large extend upon this. The position should

give the firm enough space to defend itself confidently. Understanding the sources of

competition can help a firm gauge its strengths and weaknesses, and analyze the

trends in the industry so that it can position itself optimally for the best returns.

Michael E. Porter of the Harvard business school has developed a frame work

known as ‘Five Forces Model’ to help manager analyze the business environment.

Barriers to entry/Threat from of new Entrants

Firms generally face a threat from new entrants in an industry in which the entry and

exit of new players are free. Any firm can enter or exit such as industry, at its free

will, unless restricted by macro environmental factors. Various entry barriers are:

economics of scale, product differentiation, high capital cost, cost disadvantages

independent of scale, access to distribution channels and government policy. Some

of the other barriers to entry the government restrictions are government restrictions,

parents and proprietary knowledge etc.

Intensity of Rivalry among Firms

Any firm tries to gain advantage over its competitors. The industry concentration or

the number of business units operating within a particular industry indicates the

amount of rivalry. When a few firms enjoy a large market share, rivalry among them


will be less. On the other hand, if significant market share is enjoyed by a large

number of small rivalries, the rivalry among them will be high mainly because of

equality in size. When rivalry among firms is high, it leads to price wars, advertising

battles, launches of new products and increased customer services and warranties.

A lack of differentiation among the products of the products of the players in the

industry also leads to intense competition.

Threat of Substitutes

Substitutes affect the level of completion in the industry. Sometimes, the price that a

company can change from its customers is restricted by the prices of substitute.

Bargaining Power of Buyers

The bargaining power of buyers is determined by the industry in which the firm is

operating. If the firm is operating in the market where there are many suppliers and a

few buyers, then the buyers have the capacity to significantly influence the price.

Buyers can sometime integrate backward and becomes competitors. Porter specified

the following circumstances in which the bargaining power of buyers will be higher:

When there are many suppliers and a few large buyers.

When the buyers purchase in large quantities.

When the supplier’s industry depends on the buyers for a large

percentage of its total orders.

When the buyers can switch orders between supply companies at a low

cost, thereby playing companies off against each other to force down

prices.

When it is economically feasible for the buyers to purchase the input from

several companies at a time.

When the buyers can use the threat to provide for their own needs

through vertical integration as a device for forcing down prices.

Bargaining Power of Suppliers


Similar to buyer power, supplier too exerts power. When there are only a few

suppliers in the market and many buyers, the suppliers can get together and decide

on the price which is more profitable to them.

Suppliers are powerful under the following circumstances:

When the product they sell has few substitutes and is important to the

purchasing company or buyer.

When no single industry is a major customer for the suppliers.

When products in the industry are differentiated to such an extent that they

are not easily substitutable and it is costly for a buyer to switch from one

supplier to another.

To raise prices, the supplier can use the threat of vertically integrating

forward into the industry and competing directly with the buying company.

The buying companies cannot use the threat of vertically integrating

backward and supplying their own needs to reduce input prices.

DEVELOPING MARKETING STRATEGIES

Understanding Marketing Strategy:

Marketing strategy is essentially a pattern or plan that integrates our organization's

major goals, policies, and action sequences in a cohesive whole to achieve customer

success.

Marketing strategies are generally concerned with four Ps: product

strategies, pricing strategies, promotional strategies, and placement strategies.

The focus of marketing strategies must be the objectives to be achieved & not the

process of planning itself.

Market Leadership Strategies:


http://www.1000advices.com/guru/market_leaders_strategies.htm

The market leader is dominant in its industry and has substantial market share. If we

want to lead the market, we must be the industry leader in developing new business

models and new customer value. We must be on the cutting edge of new

technologies and innovative business processes. Our customer value proposition

must offer a superior solution to a customers' problem, and our product must be well

differentiated.

Modern Customer-based Relationship Approach:

In today's customer-driven economy, corporations must move from product-based

campaign marketing to a customer-based relationship approach. Customer

relationship management is the management of customer communication over a

relationship continuum. It includes relationship strategy and multi-channel

relationship programs that produce both business value and customer experiences

on a scale not seen in traditional marketing.

Competitive Strategies:

To be successful today, our company must become competitor-oriented. We must

pursue the right competitive strategy & avoid strengths of our competitors and look

for weak points in their positions and then launch marketing attacks against those

weak points.

Need to Differentiate

The concept of being unique is far more important today than it was previously.

Hyper competition is a key feature of the new economy. What used to be national

markets with local companies competing for business has become a global market

with everyone competing for everyone's business everywhere. With the enormous

competition markets today are driven by choice. Now the targeted customers have

too many choices, all of which can be fulfilled instantly. Choosing among multiple

options is always based on differences, implicit or explicit, so we ought to

differentiate in order to give the customer a reason to choose their product or

service.


http://www.1000advices.com/guru/strategies_competitive_vk.html

Three essentials of Differentiation Strategy:-

Positioning: - It deals with the simple idea of separating our product with that of our

competitors.

Trust building:-through this the product can gain its importance in the market as one

of good available products and customers can blindly go this product where ever it is

available the product also gains such credentials that it is thought and believed to be

the best among all other alternatives.

Awareness creation: -Here we create certain programs to make your customers and

the prospects of the product sound real and also make aware of the differences in

the product in terms of its quality and durability.

Ideas that differentiate from our competitors:-

Being first:- if the product is first of its kind then it will surely going to have a

monopoly in the market until and unless it is bound to face stiff competition from its

rivals. But with the arrival of its competitors it is bound to make transformation so as

to sustain it the market and attain new marketing strategies so that it again captures

the market.

Leadership: - product can only become market leader if has got more features and it

becomes much more congenial for the customers to handle and also it has greater

longevity and durability. it can only become dominant if it is able to provide all the

sophisticated features at reasonable prices to the customers because our target

customers are mainly the farmers so looking their income the variations in the prices

is to be done.

Making of the product: - there is a saying that...ADMIRE SOPHISTICATION BUT

KEEP THINGS SIMPLE”. the product should be designed in such a way that its

working should be done in a relatively easier manner and also the manufacturers

should keep in mind about the features that are included in the product of its rivals so

that our product has lot more distinguished features from our competitors.

Customer Intimacy: We can even seek the guidance and opinions of the customers

relating to the betterment of our product and also convince them about the


necessary cost incurred to the product so that more number of customers are prone

to buy our product.

Preference; The preference are to be given to the targeted customers as they are

the bulk buyers of our product and if the product is to sustain the market then their

“YES” for the product has much valuation otherwise it would take no time for our

competitors to wipe out our product from the market.

Positioning the Market offerings

While a company can create many differences, each difference created has a cost

as well as consumer benefit. A difference is worth establishing when the benefit

exceeds the cost. More generally, a difference is worth establishing to the extent that

it satisfies the following criteria.

1) Important: The difference delivers a highly valued benefit to a sufficient

number of buyers.

2) Distinctive: The difference either isn't offered by others or is offered in a more

distinctive way by the company.

3) Superior: The difference is superior to the ways of obtaining the same benefit.

4) Communicable: The difference is communicable and visible to the buyers.

5) Preemptive: The difference cannot be easily copied by competitors.

6) Affordable: The buyer can afford to pay the higher price

7) Profitable: The Company will make profit by introducing the difference.

Basic strategies for product positioning:

By attribute or benefit- This is the most frequently used positioning strategy.

Saving environment and electricity bill is the most important benefit of CFL.

So this attribute is the major prospect for brand positioning.

By use or application- lightning is the use of CFL. A soothing Blue light


By user- Facebook is a social networking site used exclusively by college

students. Facebook is too cool for MySpace and serves a smaller, more

sophisticated cohort. Only college students may participate with their campus

e-mail IDs.

By product or service class- Margarine competes as an alternative to butter.

Margarine is positioned as a lower cost and healthier alternative to butter,

while butter provides better taste and wholesome ingredients.

By competitor- BMW and Mercedes often compare themselves to each other

segmenting the market to just the crème de la crème of the automobile

market. Ford and Chevy need not apply.

By price or quality- Tiffany and Costco both sell diamonds. Tiffany wants us

to believe that their diamonds are of the highest quality, while Costco tells us

that diamonds are diamonds and that only a chump will pay Tiffany prices.

Different positioning strategies:

a. Attribute positioning: The message highlights one or two of the

attributes of the product.

b. Benefit positioning: The message highlights one or two of the benefits

to the customer.

c. Use/application positioning: Claim the product as best for some

application.

d. User positioning: Claim the product as best for a group of users.

e. Competitor positioning: Claim that the product is better than a

competitor.

f. Product category positioning: Claim as the best in a product category.

g. Quality/Price positioning: Claim best value for price


MARKET SEGMENTATIONA company cannot serve everyone in broad markets such as soft drinks (for

consumers) and computers (for businesses), because the customers are too

numerous and diverse in their buying requirements. Customers demands are always

keep on changing depend on various factors. So we have to focus on target market

or target customers.

Target marketing requires marketers to take three major steps:

(1) Identify and profile distinct groups of buyers who might require separate

products or marketing mixes (market segmentation);

(2)Select one or more market segments to enter (market targeting); and

(3) Establish and communicate the products’ key distinctive benefits in the market.

Bases for Segmenting Consumer Markets

Geographic Segmentation

Geographic segmentation calls for dividing the market into different geographical

units such as nations, states, regions, counties, cities, or neighborhoods. The

company can operate in one or a few geographic areas or operate in all but pay

attention to local variations. We have start from a region where we see the higher

demand of CFLs. We have chosen market where lot of potential customer is there,

so that we can convert them into our customers.

Demographic Segmentation

This is the most popular consumer segmentation method. One reason is consumer

wants, preferences, and usage rates are often associated with demographic

variables. Another reason is that demographic variables are easier to measure.


Income: under demographic segmentation income factor of customers come, we

can divide easily customers into high class, middle class, and poor class. Then we

focus our particular product in that class. Say THUNDER 301 to 303 are basically for

rich people who can easily afford it.

Generation: old generation people usually have a fear in mind to try new product,

while younger generation is always ready to take risk. So have focus on people who

are young, and educated, so that they also see the greenhouse factor besides

saving electricity bill factor.

Psychographic Segmentation

In psychographic segmentation, buyers are divided into different groups on the basis

of lifestyle or personality and values. People within the same demographic group can

exhibit very different psychographic profiles.

Lifestyle: some time people choose those products which resembles their life style.

For instance people may choose any THUNDER product according to their lifestyle.

People who are looking for a cool product can chose THUNDER-302.

Personality: customers like those products which are like their personality. Some

wants really a stylish product like THUNDER 301. And other time they may like a big

product like THUNDER 305.

MARKET TARGETING STRATEGIES

1. Single-Segment Concentration

Through concentrated marketing, the firm gains a thorough understanding of the

segment’s needs and achieves a strong market presence. Furthermore, the firm

enjoys operating economies by specializing its production, distribution, and


promotion; if it attains segment leadership, it can earn a high return on its

investment.

However, concentrated marketing involves higher than normal risks if the segment

turns sour because of changes in buying patterns or new competition.

For THUNDER code (301, 302, 303) we choose this kind of market as these CFLs

are for only big hotels, for big dining rooms, and usually for rich peoples.

1. Selective Specialization

Here the firm selects a number of segments, each objectively attractive and

appropriate. There may be little or no synergy among the segments, but each

segment promise to be a moneymaker. This multi segment coverage strategy has

the advantage of diversifying the firm’s risk.

2. Product Specialization

Another approach is to specialize in making a certain product for several a product

specialization strategies; the firm builds a strong reputation in the specific product

area. The downside risk is that the product may be supplanted by an entirely new

technology.


Our product THUNDER code (301, 302, 303) are for rich people in all places

whether northern region, southern or western. So similar product is for similar kind of

people but at different places.

3. Market Specialization

With market specialization, the firm concentrates on serving many needs of a

particular customer group. The firm gains a strong reputation in serving this

customer group and becomes a channel for further products that the customer

group could use. However, the downside risk is that the customer group may have

its budgets cut.

CFLs THUNDER (301 to 309) can be segmented in this kind of market, when we

are planning to target out market for a particular region like northern region. For ex

THUNDER 301 to 303, are for rich people of this region, and 304 to 306 are for

medium earning people and 307 to 309 are for poor people.

4. Full Market Coverage

Here a firm attempts to serve all customer groups with all of the products they

mightneed. Only very large firms can undertake a full market coverage strategy. We

are not going for this kind of market segmentation as our firm is not very large, and

its very risky to go for entire market, as losses if occur are very huge and our firm will

not able to bear that.


Conclusion

In the product mix we have foccused on the products which satisfy the customers

need and wants. Our products THUNDER is not only for rich people but also for

every kind of people. India is a country where you have a large no. of middle class

people. We have tried to reduce cost, and also maintain the quality, design of

product. So that our product is liked by customer and it fit into their pocket.

Our competitor are not only local producer but also some big giants like PHILIPS,

BAJAJ, SURYA, HAVELS and many more. No doubt they are producing a good

quality product, but their cost are very high as compared to our product. moreover

these companies are not manufacturing coloured lamps, or highly designed product.

So our main foccus was on design, style and cost.

Searching about our target customer for our PREMIUM products we have focussed

on Builders, contracters etc. As these kind of people may require stylish CFLs for

their project and moreover these people will buy large in no.s so we can also provide

them discount, offers, new schemes, and other policies. Also the chance of

converting these customer to loyal customer is very high. Its good for our company

to find these customers. Rest customers include mostly general people.

PricingPrice is a unique category of the marketing mix as it is the only component that

represents revenue for the firm. The remaining P’s (product, place, and promotion)

are

costly activities undertaken to create value for the consumer. Price, in its ideal form,

recaptures this value. Pricing decisions require a synthesis of economic and

marketing principles, an appreciation of legal and ethical constraints, and the ability

to use accounting, financial,

and market research data.

We tend to consider the following factors before setting up our pricing policies:

1. Selecting the price objective

2. Determining demand


3. Estimating cost

4. Analyzing competitors’s costs, prices, and offers

5. Selecting s pricing method

6. Selecting the final price

Step I: The Price Objectives

Defining the objective of the firm is an important step in determining its price. Our

company, since it is new in the market will have to face a huge challenge from the

existing firm. The management recognizes this fact very well and hence is ready to

define the objective which is realistic and pragmatic in nature. The company

recognizes the following as its pricing objectives:

Survival: in pursuit of the existing market competition, our company

recognizes its challenge of survival in the market and operating in a

systematic manner. The management is very well informed of the fact that

as long as prices cover variable costs and some fixed costs, the company

stays in business. The company also seeks to use the strategy in

capturing market and using the price to gain an edge over its competators.

Maximum Market Share: to survive in the long run, the company realizes the

importance of maximizing market share and going ahead with the same strategy in

the near future. For the same, it seeks to adopt penetrating price policy.

Penetration pricing is the pricing technique of setting a relatively low initial entry

price, often lower than the eventual market price, to attract new customers. The

strategy works on the expectation that customers will switch to the new brand

because of the lower price. Penetration pricing is most commonly associated with a

marketing objective of increasing market share or sales volume, rather than to make

profit in the short term.

The advantages of penetration pricing to the firm are:


It can result in fast diffusion and adoption. This can achieve high market

penetration rates quickly. This can take the competition by surprise, not giving

them time to react.

It can create goodwill among the early adopters segment. This can create

more trade through word of mouth.

It creates cost control and cost reduction pressures from the start, leading to

greater efficiency.

It discourages the entry of competitors. Low prices act as a barrier to entry

(see: porter 5 forces analysis).

It can create high stock turnover throughout the distribution channel. This can

create critically important enthusiasm and support in the channel.

It can be based on marginal cost pricing, which is economically efficient.

The main disadvantage with penetration pricing is that it establishes long term price

expectations for the product, and image preconceptions for the brand and company.

This makes it difficult to eventually raise prices. Some commentators claim that

penetration pricing attracts only the switchers (bargain hunters), and that they will

switch away as soon as the price rises. There is much controversy over whether it is

better to raise prices gradually over a period of years (so that consumers don’t

notice), or employ a single large price increase. A common solution to this problem is

to set the initial price at the long term market price, but include an initial discount

coupon (see sales promotion). In this way, the perceived price points remain high

even though the actual selling price is low.

Another potential disadvantage is that the low profit margins may not be sustainable long enough for the strategy to be effective.

But the company recognises the fact and is ready to accept the facts and still go with

the stategy because it will attract the target customers of the product easily. For this

wage group price is a matter of concern and we (company) understand this point.

Hence psychological pricing will be done to gain the edge (to be discussed latter).

Price Penetration is most appropriate where:

Product demand is highly price elastic.


Substantial economies of scale are available.

The product is suitable for a mass market (i.e. enough demand).

The product will face stiff competition soon after introduction.

There is not enough demand amongst consumers to make price skimming

work.

In industries where standardization is important. The product that achieves

high market penetration often becomes the industry standard (eg Microsoft

Windows) and other products, whatever their merits, become marginalized.

Standards carry heavy momentum.

Keeping the above facts into mind, the company will adopt the penetrating

pricing policies for the product targeting the people for the Type A and Type B

product.

The company will consider skimming pricing for the Type 3 and 4 products due to

following factors:

The practice of ‘price skimming’ involves charging a relatively high price for a short

time where a new, innovative, or much-improved product is launched onto a market.

The objective with skimming is to “skim” off customers who are willing to pay more to

have the product sooner; prices are lowered later when demand from the “early

adopters” falls.

The main objective of employing a price-skimming strategy is, therefore, to benefit

from high short-term profits (due to the newness of the product) and from effective

market segmentation.

There are several advantages of price skimming

Where a highly innovative product is launched, research and development

costs are likely to be high, as are the costs of introducing the product to

the market via promotion, advertising etc. In such cases, the practice of

price-skimming allows for some return on the set-up costs


By charging high prices initially, a company can build a high-quality image

for its product. Charging initial high prices allows the firm the luxury of

reducing them when the threat of competition arrives. By contrast, a lower

initial price would be difficult to increase without risking the loss of sales

volume

Skimming can be an effective strategy in segmenting the market. A firm

can divide the market into a number of segments and reduce the price at

different stages in each, thus acquiring maximum profit from each segment

Where a product is distributed via dealers, the practice of price-skimming

is very popular, since high prices for the supplier are translated into high

mark-ups for the dealer

For ‘conspicuous’ or ‘prestige goods’, the practice of price skimming can

be particularly successful, since the buyer tends to be more ‘prestige’

conscious than price conscious. Similarly, where the quality differences

between competing brands is perceived to be large, or for offerings where

such differences are not easily judged, the skimming strategy can work

well.

Market-Penetration Pricing

Use a high price where there is a uniqueness about the product or service. This approach is used where a

a substantial competitive advantage exists


Step II: Determining the Demand

Each price will lead to a different level of demand and will therefore have a different

impact on a company’s marketing objectives. The company will determine the

demand on various other parameters. One of the chief source would be media and

internet which give a very positive image about the same:

2001 - 27 million CFLs are bought in India of which 90% are imported from

China.

2002 - CFL consumption goes up 26%. 34 million pieces are bought. By

November, acting on protests by domestic manufacturers, anti dumping

measures are imposed on CFLs imported from China and Hong Kong.

2003 – 36 million pieces are bought. Following the anti dumping

measures, market growth of CFLs slumps to 6%

2005 – 65 million CFLs are bought. Sales of incandescent bulb register a

10% growth and CFL sales are up 40%.

2008 – More than 200 million CFLs are bought. New anti dumping duties

are brought against CFL parts imported from China, Vietnam and Sri

Lanka.


Another important source of will be industry sources of data on past sales and

demand forecasts. You can also get composite sales figures (daily, weekly, monthly,

yearly) and expense figures, sometimes in currency, sometimes as percentages of

revenue. Write down the answers you get.

Trade Associations There is usually a membership fee for full information

but some info is available without paying.

Contact Industry consultants and marketing agencies

Trade Publications, web sites and magazines.

Annual Reports of publicly traded firms- They often won't have the exact

information but you can do a little math based on what they do provide.

School and Public libraries. Talk to business reference librarians. They are

experts in information sources through books, journals, websites, Abstracts,

etc.)

Find other business owners, especially out of your trade are, and talk to

them. Attend trade shows and talk. Attend chamber of commerce mixers.

Talk to suppliers, manufacturers, agents/brokers and vendors. They

know what their customer are buying and how much the customers are

therefore selling. Politicians often have data for their voting constituency.

Internet research for secondary data.

Observe competitors directly. Count cars, visit competitors and observe

sales, foot traffic, sales versus lookers, and totals rung up.

Exploratory Research. Use self as model, speculate & guess, discuss with

friends, suppliers, employees, customers, business associates, competitors,

etc.

Primary Research. Observation, survey, experiments, focuses groups.

Well the company also realizes that in measuring the price-demand

relationship, the market researcher must control for various factors that will

influence demand. The competitor’s response will make a difference. Also, if

the company changes other marketing mix factors besides the price, the

effect of the price change itself will be hard to isolate.

Sale of CFLs and its substitutes:


Sales of CFLs are currently extremely low in India-600,000 per year in

2000 (Kumar, 2003). Therefore, we assume no significant baseline market

before 2010. In the high efficiency scenario, we assume that each

household buys an additional CFL every 5 years starting in 2010. In 2030,

each household has 5 CFLs that have replaced 5 incandescent bulbs,

leaving 4 remaining incandescent lamps and 5 fluorescent tubes. Figure 8

shows the results on the lighting consumption. We can see that even if

more than half of the stock of incandescent lamps is replaced by CFLs

they remain the largest contributor to lighting consumption.

The data when plotted on a BCG matrix makes us believe that our product is in star

stage in BCG Growth Stage Matrix:

To use the chart, analysts plot a scatter graph to rank the business units (or

products) on the basis of their relative market shares and growth rates.

Cash cows are units with high market share in a slow-growing industry.

These units typically generate cash in excess of the amount of cash needed

to maintain the business. They are regarded as staid and boring, in a "mature"

market, and every corporation would be thrilled to own as many as possible.

They are to be "milked" continuously with as little investment as possible,

since such investment would be wasted in an industry with low growth.


Dogs, or more charitably called pets, are units with low market share in a

mature, slow-growing industry. These units typically "break even", generating

barely enough cash to maintain the business's market share. Though owning

a break-even unit provides the social benefit of providing jobs and possible

synergies that assist other business units, from an accounting point of view

such a unit is worthless, not generating cash for the company. They depress a

profitable company's return on assets ratio, used by many investors to judge

how well a company is being managed. Dogs, it is thought, should be sold off.

Question marks (also known as problem child) are growing rapidly and thus

consume large amounts of cash, but because they have low market shares

they do not generate much cash. The result is a large net cash

consumption. A question mark has the potential to gain market share and

become a star, and eventually a cash cow when the market growth slows. If

the question mark does not succeed in becoming the market leader, then after

perhaps years of cash consumption it will degenerate into a dog when the

market growth declines. Question marks must be analyzed carefully in order

to determine whether they are worth the investment required to grow market

share.

Stars are units with a high market share in a fast-growing industry. The hope

is that stars become the next cash cows. Sustaining the business unit's

market leadership may require extra cash, but this is worthwhile if that's what

it takes for the unit to remain a leader. When growth slows, stars become

cash cows if they have been able to maintain their category leadership, or

they move from brief stardom to dogdom

So, the basic result would be:


The conclusions from the data are:

The cfl market in India is growing and hence the decision of the firm to

go ahead with its production is a good idea.

The market is not saturated and hence the and the company would not

have any problem in searching its own market. Moreover different

product for different target customers will further widen our market.

In any case, the product lies in star stage of its life cycle implying that it

has created a market image for its own. This will help our company.

Comparison of CFL with Bulbs (which is a close substitute of CFL)

The basic fact here is that available of no close substitute which is as efficient as

CFL would be an added benefit which our product and hence our company would

enjoy. The only close substitute available is incandescent bulbs. Comparing the on

the scale of enegy consumption with CFL we get the following results:


For a given light output, CFLs use 20 to 33 percent of the power of equivalent

incandescent lamps. Since lighting accounted for approximately 9% of

household electricity usage in the India in 2001, widespread use of CFLs

could save as much as 7% of total Indian household usage.

Electrical power of lights with approximate equivalent luminous power

Characteristic luminous power (lumens) CFL power (W) Incandescent power (W)

450 9–13 40

800 13–15 60


http://upload.wikimedia.org/wikipedia/commons/e/e7/Electricity_use_by_lightbulb_type.svg

1,100 18–25 75

1,600 23–30 100

2,600 30–52

150

If a building's indoor incandescent lamps are replaced by CFLs, the heat produced

due to lighting will be reduced. At times when the building requires both heating and

lighting, the heating system will make up the heat. If the building requires both

illumination and cooling, then CFLs also reduce the load on the cooling system

compared to incandescent lamps, resulting in two concurrent savings in electrical

power.

The above facts will have important effects on our pricing policies as it makes

our product better than the substitute available in the market. Such factors will

obviously further heighten the importance of the pricing strategies in the

product. The product has wide market in India and its efficiency further make

it an important product in the world of electricity and lightening. Well our

company realizes the fact and hence decides to go for penetrating pricing

Analyzing Competitor’s Costs, Prices and Offers

An analysis of competitors—their cost structures, capabilities, and strategic

positioning—is equally valuable. Industrywide price reductions may be appropriate

under certain circumstances. But many unprofitable price wars happen because a

company sees an opportunity to increase market share or profits through lower

prices, while ignoring the fact that competitors will respond. Market research may


reveal that sales increases following a price cut justify the action, but this same

research often simply ignores competitors' price responses.

Businesses need to pay attention at the strategic level to the twin questions of who

will respond and how. Smart product managers recognize the need to understand

the competition and empathize with them. They project how competitors will set

prices by carefully tracking historical patterns, understanding which events have

triggered price changes in the past, and by tracking the timing and magnitude of

price responses. They monitor public statements made by senior executives and

published in company reports. And they keep their eyes peeled for activity in

resource markets: competitors that acquire a new technology, labor force,

information system, or distribution channel, or that form a new brand alliance, will

probably make some kind of a price move that will affect other players in the

industry. This sophisticated environmental scanning identifies possible adversaries

and their likely modus operandi.

But which competitors should you watch? Identifying competitors often has important

pricing implications. A company's direct competitors that share the same technology

and speak to the same markets are important rivals. But indirect competitors that

satisfy customer needs through the use of different technologies and that have

completely different cost structures are perhaps the most dangerous. In fact, direct

competitors such as major airlines frequently coexist quite peacefully. Examining

their pricing-decision rules suggests why. U.S. Department of Transportation studies

indicate that when one hub-based airline enters another's hub, it typically does not

engage in price-based competition because it fears retaliation in its own hub.

Conversely, price wars may often be started by a company from an entirely different

industry, with a radically different technology, whose cost advantages give it enough

leverage to enter your market and steal your share.

The process of identifying competitors also reveals the strengths and weaknesses of

current and potential rivals. This has important implications for how a company

competes. It is generally wise to not stir a hornet's nest by starting a price war with a

competitor that has a significantly larger resource base or a reputation for being a

fierce price warrior. When analyzing your competition, carefully determine who they


are, how price fits with their strategic position, how they make pricing decisions, and

what their capabilities and resources are.

The close competitors of cfl:

Study of existing brands

Philips CFL - 18 Watts

Brand : Philips CFL Bulbs

features

1) upto 80% energy saving over incandescent bulbs

2) long life: lasts up to 6 times longer than standard incandescent bulbs

3) can operate within 130-280v range

4) not suitable for dimmers or electronic switches or remote controls

MRP: Rs. 170/-

Our price : Rs. 165.00/-

The special price is available only at special outlets and not in general

market.

Price band of bajaj :

SKU Specifications Price (Rs.)


ECOLUX 5W 2U W/LITE Cap BC, Glass Shell - 8mm 145

ECOLUX 8W 3U W/LITE ES 27 155

ECOLUX 15W 2U COOL DAY LITE

BC

Cap BC, Glass Shell -

12mm140

ECOLUX 15W SPIRALCap BC, Glass Shell -

10mm215

ECOLUX 15W SPIRAL WARMLITECap BC, Glass Shell -

10mm215

The company offers a wide variety of product and is seen as one of the most

expensive brand in india.

Crompton :the company offers different types of cfl: 5 watt cfl @ Rs 100 each 9 watt cfl @ Rs 115 each 15 watt cfl @ Rs 140 each 500 watt cfl @ Rs 1000 each

Havells: the company is one of the best product provider. It offers a vriety of product as given in its price list on next page.


Other Factors Influencing Price

Geographical pricing in marketing, is the practice of modifying a basic list price

based on the geographical location of the buyer. It is intended to reflect the costs of

shipping to different locations. Geographical pricing, in marketing, is the practice of

modifying a basic list price based on the geographical location of the buyer. It is

intended to reflect the costs of shipping to different locations.There are several types

of geographic pricing: FOB origin (Free on Board origin) - The shipping cost from the

factory or warehouse is paid by the purchaser. Ownership of the goods is transferred

to the buyer as soon as it leaves the point of origin. It can be either the buyer or

seller that arranges for the transportation. Uniform delivery pricing - (also called

postage stamp pricing) - The same price is charged to all. Zone pricing - Prices

increase as shipping distances increase. This is sometimes done by drawing

concentric circles on a map with the plant or warehouse at the center and each circle

defining the boundary of a price zone. Instead of using circles, irregularly shaped

price boundaries can be drawn that reflect geography, population density,

transportation infrastructure, and shipping cost.

There are several types of geographic pricing:

FOB origin - The shipping cost from the factory or warehouse is paid by the

purchaser. Ownership of the goods is transferred to the buyer as soon as it

leaves the point of origin. It can be either the buyer or seller that arranges for the

transportation.

Uniform delivery pricing - (also called postage stamp pricing) - The same price

is charged to all.

Zone pricing - Prices increase as shipping distances increase. This is

sometimes done by drawing concentric circles on a map with the plant or

warehouse at the center and each circle defining the boundary of a price zone.

Instead of using circles, irregularly shaped price boundaries can be drawn that

reflect geography, population density, transportation infrastructure, and shipping

cost.


Basing point pricing - Certain cities are designated as basing points. All goods

shipped from a given basis point are charged the same amount.

Freight-absorption pricing - The seller absorbs all or part of the cost of

transportation. This amounts to a price discount, and is used as a promotional

tactic.

Cost of production

The company produces the cfl and is sure of the its motive. The company products 9

types of CFL and after taking its various costs (fixed and variable costs) into

consideration, the company come to following conclusions:

Name Of The Model Cost Of Production (In Rs)

Model 1 100

Model 2 130

Model 3 80

Model 4 60

Model 5 60

Model 6 40

Model 7 30

Model 8 25

Model 9 15

It has been discussed before that the company will opt for premium pricing for those

product aimed to target the high class society and will go ahead for penetrating

pricing for those product meant for common household. The company hopes to

cover up the prices in latter case by boosting up its sale.

But the company decides to operate all above its break even point.

The Break-Even Point


The break-even point is the point at which the income from sales will cover all costs

with no profits. The business owner or manager usually considers several factors

when studying break-even analysis:

1. The capital structure of the company.

2. Fixed expenses such as rent, insurance, heat, and light.

3. Setup of the organization.

4. Variable expenses.

5. The inventory, personnel, and space required to operate properly.

The study of these factors will inform the business owner of the possibilities of

lowering the break-even point and increasing the gross profit margins. When

attempting to determine the prospect of success for a new operation, the analysis of

the break-even point may indicate the advantages or disadvantages in modifying the

proposed level of operation.

Break-Even Analysis

The break-even point informs the business owner of the level of sales at which the

business wil realize neither a profit nor a loss. It can be expressed in numbers or by

the use of graphs. To arrive at the break-even point using either method, we need to

calculate the projected and fixed manufacturing, selling, and administrative

expenses, and the expected ratios of sales for each category of expenses.


To the given cost of production, the company will add on per unit cost of distribution

and marketing and then comes out with the final prices.

The company realizes that the products which it is producing for the higher income group will yield it more profit due to many factors:

Lack of close competators for the same Higher income of thr targeted group Lack of close better substitute.

He product offered is targeted for those people who have high income and do not minding spending some amount for decorating homes with expensive lights. Hence taking out some extra money out of their pockets than the middle class and lower class people is not a bad idea. So the company keeps high profit margin on such products.


model names Cost PriceSelling Price

Profit percentage

Thunder 301 100 150 50

Thunder 302 130 20053.84615385

Thunder 303 80 110 37.5

For the middle income and for lower income group, the company has decided the following prices:

model names Cost Price Selling Price Profit percentage

Thunder 304 75 90 20

Thunder 305 70 90 28.57142857

Thunder 306 55 70 27.27272727

Thunder 307 50 55 10

Thunder 308 35 40 14.28571429

Thunder 309 25 30 20

Designing and Managing Value Networks and Channels


Learning Objectives in the context of our products:-

Why distribution channels are required

Distribution channel strategy

Overview of distribution channel members

Intensity in the distribution effort

Role of logistic in our strategy


Successful value creation needs successful value delivery.

Marketing Channels and Value NetworksMost producers do not sell their goods directly to the final users. Between them

stands

a set of intermediaries that perform a variety of functions. These intermediaries

constitute

a marketing channel (also called a trade channel or distribution channel).

Marketing channels are sets of interdependent organizations involved in the

process of making a product or service available for use or consumption.

Marketing channels are the pathways a product or service follows after production,

culminating in purchase and use by the final end user. Channel members collectively

earn margins that account for 30 to 50% of the ultimate selling price, and hence is an

important constituent of a marketing strategy, since it has a huge impact on what the

consumer pays, and thereby on the quantity demanded.

The company’s pricing depends on whether it chose mass merchandisers or high-

quality boutiques. Channel decisions involve relatively long term commitment to

other firms. Producers who do establish their own channels can often earn a greater

return by Increasing their investment in their main business. If a company earns a 20

percent rate of return on manufacturing and only a 10 percent return on retailing, it

does not make sense to undertake its own retailing.

The firm must decide how much effort to devote to push versus pull marketing.

A push strategy involves the use of sales force and trade promotion money to

induce intermediaries to carry, promote and sell the product to end users.


PushStrategy

PullStrategy

Appropriate where there is low brand loyalty in the category, brand choice is made in

the store; the product is an impulse item.

A pull strategy involves the manufacturer using advertising and promotion to

persuade consumers to ask intermediaries for the product, thus inducing the

intermediaries to order it. This is appropriate when there is high brand loyalty and

high involvement in the category.

Distribution channels help in the ‘place’ aspect of the marketing mix

Distribution provides place, time and possession utility to the consumer

Example

– Consumer wants to buy a cfl

– Made available at a retail outlet close to her residence – place

– Made available at 8 pm on a Tuesday evening when she wants it –

time

– She can pay for the toothpaste and take it away – possession

– The company distribution function has made all this possible.

Mainly buyers fall into one of the four categories:

Habitual shoppers purchase from the same places in the same manner over

time

High- value dealseekers know their needs and “channel surf” a great deal

before buying at the lowest possible price.

Variety-loving shoppers gather information in all channels,take advantage of

high-touch services.and then buy in their favorite channels, regardless of

price.

High- involvement shoppers gather information in all channels, make their

purchase in a low-cost channel. But take advantage of customer support from

a high- touch channel.


Even the same consumer, though, may choose to use different channels for

different functions in making a purchase.

For example-someone may choose to browse through a catalog before visiting a

store or take a test at a dealers shop before ordering a cfl online. Consumer may

also seek different types of channels depending on the particular use of cfl.

Value NetworksThe company should first think of the target market and then design the supply chain

backward from that point i.e. demand-chain planning. The concept of value network -

a system of partnerships and alliances that a firm creates to source, augment and

deliver its offerings- takes an even broader view. A value network includes a firm’s

suppliers and its suppliers’ suppliers, and its immediate customers and their end

customers.

It yields several insights. First, the firm can estimate whether more money is made

upstream or downstream, in case it might want to integrate backward or forward.

Intermediaries smooth the flow of goods and services. This process is necessary to

bridge the discrepancy between the assortments of goods and services generated

by the producer and the assortment demanded by the customer.

Channel Functions and Flows:Direct marketing channels consist of a producer selling directly to final customers

through door-to-door sales, Internet selling etc. A one level channel contains one

intermediary, such as a retailer.

Members of the marketing channel perform a number of key functions:

Gather information

Develop and disseminate communications

Reach agreements on price and terms

Acquire funds to finance inventories

Assume risks connected with channel work


Provide for storage

Provide for buyers’ payment of their bills

Oversee actual transfer of ownership

Some functions (physical, title, promotion) constitute a forward flow of activity

from the company to the customer; other functions (ordering and payment) constitute

a backward flow from customers to the company. Still others (information,

negotiation,

finance, and risk taking) occur in both directions

Increasing Efficiency

M =

Manufacturer

C = Customer

D = Distributor

Five flows are illustrarated in figures for the marketing of cfl. If these flows were

superimposed in one diagram , the tremendous complexity of even simple marketing

channels would be apparent.


Channel Levels:-A zero-level channel (also called a direct-marketing channel) consists of a

manufacturer

selling directly to the final customer through Internet selling, door-to-door sales,

home parties, mail order, telemarketing, TV selling, manufacturer-owned stores, and

other methods. A one-level channel contains one selling intermediary, such as a

retailer.

A two-level channel contains two intermediaries; a three-level channel contains three

intermediaries.

From the producer’s point of view, obtaining information about end users

and exercising control becomes more difficult as the number of channel levels

increases.


Channels normally describe a forward movement of products. One can also talk

about backward channels, which recycle trash and old or obsolete products no

longer

used by customers. Several intermediaries play a role in backward channels,

including manufacturers’ redemption centres, community groups, traditional

intermediaries such as soft-drink intermediaries, trash-collection specialists,

recycling centres, trash recycling brokers, and central-processing warehousing

Consumer Marketing Channels

Types of Channels:-

Sales: motivates buyers, shares information between company and its

consumers, negotiates fair bargains for consumers and finances the

transactions

Delivery channel meant only for physical part of the distribution

Service channel – performs after sales service


Listing of Channel Members

Company own sales team

C&FAs and CSAs

Distributors, dealers, stockists, value-added re-sellers

Agents and brokers

Franchisees

Electronic channels

Wholesalers

Retailers

Channel Design DecisionsA new firm typically starts as a local operation selling in a limited market through

existing intermediaries. The problem at this point is not deciding on the best

channels, but convincing the available intermediaries to handle the firm’s line. If the

firm is successful, it might enter new markets and select different channels in

response to the opportunities and conditions in the different markets.

In designing the firm’s channel system, management must carefully analyze

customer needs, establish channel objectives, and identify and evaluate the major

channel alternatives.


Analyze customer needs

Evaluate major channel alternatives

Identify major channel alternatives

Establish channel objectives

Analyzing Customer’s Desired Service Output Levels

Channels produce five service outputs:

1. Lot Size

2. Waiting Time

3. Spatial Convenience

4. Product Variety

5. Service backup

Establishing channel objectives and Constraints

Arrange functional tasks to minimize total channel costs and still provide desired

level of service outputs. Effective planning requires determining which market

segments to serve and the best channels for each. Channel design must also take

into consideration the strengths and constraints of different types of intermediaries.

There are other factors, such as competitors channel, economics conditions and

legal conditions.

In entering new market, for instance, firms often closely observe what other firms i.e.

Phillips, lezer, etc from their home market are doing in those markets. Marketers

must adapt their channel objectives to the larger environment. When economic

conditions are depressed, we want to move cfl to market using shorter channels and

without services that add to the final price of the cfl. Legal unfavourably on channel

arrangements that substantially lessen competition or create a monopoly.

Identifying Major Channel Alternatives

Types of Available intermediaries

A firm needs to identify the types of intermediaries available to carry on its channel

work. Sometimes a company chooses a new or conventional channel because of the

difficulty, cost, or ineffectively of working with the dominant channel. The advantage

is that the company will encounter less competition during the initial move into this

channel.


Number of Intermediaries

Company must decide on the number of intermediaries to use at each channel level.

Three strategies are available which are as under. Intermediaries known as

merchants—such as wholesalers and retailers—buy, take title to, and resell the

merchandise. Agents—brokers, manufacturers’ representatives and sales agents—

search for customers and may negotiate on the producer’s behalf but do not take title

to the goods. Facilitators—transportation companies, independent warehouses,

banks, and advertising agencies—assist in the distribution process but neither take

title to goods nor negotiate purchases or sales. The most successful companies

search for innovative marketing channels

Types of distribution intensity:

1. Intensive-

Distribution through every reasonable outlet available – FMCG

2. Selective

Multiple, but not all outlets in the market – pharma, frozen food

3. Exclusive-May be only one outlet in a market - car dealers

So in order to distribute our products in the market we use selective distribution

strategies to increase coverage and sales. This strategy may help in the short term,

but it can hurt long-term performance. Intensive distribution increases product and

service availability but may also encourage retailers to compete aggressively. Firm

avoid intensive distribution and do not want to be sold everywhere.

Terms and Responsibilities of Channel Members-

The main elements in the “trade-relation mix” are price policies conditions of sale,

territorial rights, and specific services to be performed by each party. We provide

some discounts and allowances to intermediaries, also set the payment terms and

guarantees for each sale plus grant cash discounts to distributors for early payment;

they may also

offer guarantees against defective merchandise or price declines. We also define the

distributors’ territories and the terms under which it will enfranchise other distributors.


Distributors normally expect to receive full credit for all sales in their territory,

whether or not they did the selling. The producer must carefully lay out each party’s

duties especially in franchised and exclusive-agency channels.

Companies that can switch their customers to lower cost channels without losing

sales or service quality will gain a channel advantage.

Evaluating the major Alternatives

Each channel alternative needs to be evaluated against economic, control and

adaptive criteria.

ECONOMIC CRITERIA:-

Each channel alternative will produce different level of sales and costs. For

example, hiring 10 new sales representatives who will operate from offices in

Delhi, Bangalore and Hyderabad. They would receive a base salary plus

commissions. Also, the company will have to meet the expenses of setting up the

office-cum-residence for these employees.

Using a Bangalore-based industrial distribution dealing in CFL with offices in

Delhi and Hyderabad. The distributor has 30 representatives, who would receive

commissions based on their respective sales.


The fixed cost of engaging a sales agency are lower than those of establishing a

new company sales office, but costs rise faster through an agency because sales

agents get a larger commission than company sales people. There is one sales level

at which selling costs are the same for the two channels. The sales agency is thus

the better channel for any sales volume below Sb and the company sales branch is

better at any volume above Sb.

CONTROL AND ADAPTIVE CRITERIA:-

A sales agency is an independent firm seeking to maximize its profit. Agents may

concentrate on the customers who buy the most, not necessarily on those who

buy the manufacturer’s goods. Furthermore , agents might not master the

technical details of the company’s product or handle its promotion materials

effectively.

Channel Management DecisionsCompany should look at their channel members in the same way they look at their

end users. This means determining intermediaries’ needs and tailoring the channel

positioning to provide superior value to these intermediaries. We can provide

training, market research and other capacity building programs. We are vary greatly


in channel power, the ability to alter channel member behavior so that members take

actions they would not have taken otherwise.

1. Selecting Channel Members

During the selection process, We should determine what characteristics distinguish

the better intermediaries. We want to evaluate number of years in business, other

lines carried, growth and profit record, solvency, cooperativeness, and reputation. If

the intermediaries are sales agents, we want to evaluate the number and character

of other lines carried and the size and quality of the sales force.

If the intermediaries are store or Internet retailers that want exclusive distribution, the

we want to evaluate locations, brand strength, future growth potential, and

type of clientele.

Selection of channel participants is actually a two-way process: Just as we

select their channel members, the intermediaries also select their producer partners.

Yet we vary in their ability to attract qualified intermediaries.

2. Training Channel Members

Company need to plan and implement careful training programs for their distributors

and dealers because the intermediaries will be viewed as the company by end users.

Microsoft, for example, requires third-party service engineers who work with its

software applications to complete a number of courses and take certification exams.


Selecting channel members

Training channel members

Motivating channel members

Evaluating channel members

Modifying channel members

Those who pass are formally recognized as Microsoft Certified Professionals, and

they

can use this designation to promote business.

As another, Company beams training programs and technical information via its

satellite-based to more than 6,000 dealer sites. Service engineers at each dealership

sit at a conference table and view a monitor on which an instructor explains

procedures such as repairing the cfl lamps and then answers questions. Such

training initiatives keep employees updated on the latest product specifications and

service requirements.

Coercive power

Reward power

Legitimate power

Expert power

Referent power

3. Motivating Channel Members

The most successful firms view their channel members in the same way they view

their

end users. This means determining their intermediaries’ needs and then tailoring the

channel positioning to provide superior value to these intermediaries. To improve

intermediaries’ performance, the company should provide training, market research,

and other capability-building programs. And the company must constantly reinforce

that its intermediaries are partners in the joint effort to satisfy customers.

More sophisticated companies go beyond merely gaining intermediaries’ cooperation

and instead try to forge a long-term partnership with distributors.

The manufacturer communicates clearly what it wants from its distributors in the way

of market coverage, inventory levels, marketing development, account solicitation,

technical advice and services, and marketing information. The manufacturer then

seeks distributor agreement with these policies and may introduce a compensation

plan or other rewards for adhering to the policies.


4. Evaluating Channel Members

We must periodically evaluate intermediaries’ performance against such standards

as sales-quota attainment, average inventory levels, customer delivery time,

treatment of damaged and lost goods, and cooperation in promotional and training

programs.

We will occasionally discover that it is paying too much to particular

intermediaries for what they are actually doing. As one example, a manufacturer that

was compensating a distributor for holding inventories found that the inventories

were actually held in a public warehouse at the manufacturer’s expense. We should

therefore set up functional discounts in which they pay specified amounts for the

trade channel’s performance of each agreed-upon service. Underperformers need to

be counseled, retrained, remotivated, or terminated.

5. Modifying Channel Arrangements

Channel arrangements must be reviewed periodically and modified when distribution

is not working as planned, consumer buying patterns change, the market expands,

new competition arises, innovative distribution channels emerge, or the product

moves into later stages in the product life cycle.

Rarely will a marketing channel remain effective over the entire product life

cycle. Early buyers might be willing to pay for high value-added channels, but later

buyers will switch to lower-cost channels. This was the pattern for many products,

including small office copiers, which were first sold by manufacturers’ direct sales

forces, later through office-equipment dealers, still later through mass merchandisers

and now by mail-order firms and Internet marketers.

Channel dynamics

In the ever-changing marketing environment, distribution channels do not stand still.

New wholesaling and retailing institutions emerge, and new channel systems evolve.

We look next at the recent growth of vertical, horizontal, and multichannel marketing

systems and see how these systems cooperate, conflict, and compete.


Vertical Marketing Systems

One of the most significant recent channel developments is the rise of vertical

marketing systems. A conventional marketing channel comprises an independent

producer, wholesaler(s), and retailer(s). Each is a separate business seeking to

maximize its own profits, even if this goal reduces profit for the system as a whole.

No channel member has complete or substantial control over other members.

A vertical marketing system (VMS), by contrast, comprises the producer, wholesaler(

s), and retailer(s) acting as a unified system. One channel member, the channel

captain, owns the others or franchises them or has so much power that they all

cooperate.

The channel captain can be the producer, the wholesaler, or the retailer. VMSs

arose as a result of strong channel members’ attempts to control channel behavior

and eliminate the conflict that results when independent channel members pursue

their own objectives. They achieve economies through size, bargaining power, and

elimination of duplicated services. VMSs have become the dominant mode of

distribution in the India consumer marketplace, serving between 70 percent and 80

percent of the total market. There are three types of VMS: corporate, administered,

and contractual.

A corporate VMS combines successive stages of production and

distribution under single ownership. Vertical integration is favored by

companies that desire a high level of control over their channels.

An administered VMS coordinates successive stages of production and

distribution through the size and power of one of the members.

Manufacturers of a dominant brand are able to secure strong trade

cooperation and support from resellers.

A contractual VMS consists of independent firms at different levels of

production and distribution integrating their programs on a contractual


basis to obtain more economies or sales impact than they could achieve

alone.

Contractual VMSs are of three types:

1. Wholesaler-sponsored voluntary chains organize groups of independent retailers

to

better compete with large chain organizations.

2. Retailer cooperatives arise when the stores take the initiative and organize a new

business entity to carry on wholesaling and possibly some production.

3. Franchise organizations are created when a channel member called a franchisor

links several successive stages in the production-distribution process. Franchises

include manufacturer-sponsored retailer franchises manufacturer-sponsored

wholesaler franchises and service-firm-sponsored retailer franchises

Horizontal Marketing Systems

Another channel development is the horizontal marketing system, in which two or

more

unrelated companies put together resources or programs to exploit an emerging

marketing opportunity. Each company lacks the capital, know-how, production, or

marketing resources to venture alone, or it is afraid of the risk. The companies might

work with each other on a temporary or permanent basis or create a joint venture

company.

Multichannel Marketing Systems

In the past, many companies sold to a single market through a single channel.

Today, with the proliferation of customer segments and channel possibilities, more

companies have adopted multichannel marketing. Multichannel marketing occurs

when a single firm uses two or more marketing channels to reach one or more

customer segments.

The second is lower channel cost—companies may add a new channel to lower the

cost of selling to an existing customer group (selling by phone rather than personally

visiting small customers). The third is more customized selling—companies may add

a channel whose selling features fit customer requirements better (adding a technical

sales force to sell more complex equipment).

However, new channels typically introduce conflict and control problems. First,

different channels may end up competing for the same customers. Second, as the


new channels become more independent, the company may have difficulty

maintaining cooperation among all of the members. Consider the dilemma faced by

insurance firms that sell home, auto, and life insurance policies through agents.

Channel Conflicts and Channel Coordination

Channel conflicts occur due to goal incompatibility. Conflicts may also stem from

differences in perception as when the producer is optimistic about short term

economic trends whereas the channel is not. Companies may manage conflicts by

striving for super ordinate goals, cooping the support of leaders and through

diplomacy etc.

Why does channel conflict erupt? One major cause is goal incompatibility. For

example, the manufacturer may want to achieve rapid market penetration through a

low-price policy. The dealers, in contrast, may prefer to work with high margins for

short-run profitability. Sometimes conflict arises from unclear roles and rights. This is

what happened when IBM started selling PCs to large accounts through its own

sales force while its licensed dealers were also trying to sell to large accounts.

Territory boundaries and credit for sales often produce conflict in such situations.

By adding new channels, a company faces the possibility of channel conflict, as the

earlier insurance example indicated. Conflict can also stem from differences in

perception, as when the producer is optimistic about the short-term economic

outlook and wants dealers to carry more inventory, while its dealers are more

pessimistic about future prospects.

At times, conflict can arise because of the intermediaries’ great dependence on the

manufacturer. The fortunes of exclusive dealers, such as auto dealers, are intimately

affected by the manufacturer’s product and pricing decisions. This creates a high

potential for conflict.

Managing Channel ConflictSome channel conflict can be constructive and can lead to more dynamic adaptation

in a changing environment. Too much conflict can be dysfunctional, however, so the

challenge is not to eliminate conflict but to manage it better. There are several

mechanisms for effective conflict management:19


Adoption of super ordinate goals. Channel members come to an agreement

on the fundamental goal they are jointly seeking, whether it is survival, market

share, high quality, or customer satisfaction. They usually do this when the

channel faces an outside threat, such as a more efficient competing channel,

an adverse piece of legislation, or a shift in consumer desires.

Exchange persons between channel levels. General Motors executives might

work for a short time in some dealerships, and some dealers might work in

GM’s dealer policy department, as a way of helping participants appreciate

each other’s viewpoint.

Cooptation. Cooptation is an effort by one organization to win the support of

the leaders of another organization by including them in advisory councils,

boards of directors, trade associations, and the like. As long as the initiating

organization treats the leaders seriously and listens to their opinions,

cooptation can reduce conflict.

Diplomacy, mediation, arbitration for chronic or acute conflict. Diplomacy

takes place when each side sends a person or group to meet with its

counterpart to resolve the conflict. Mediation means having a skilled, neutral

third party reconcile the two parties’ interests.Arbitration occurs when the two

parties agree to present their arguments to an arbitrator and accept the

arbitration decision.

In an increasingly competitive global marketplace, it is extremely important for

businesses to embrace the latest methods and trends to conduct their businesses.

With the advancement of technology, particularly the Internet, the world has

discovered a new path of opportunities, switching the transactions of traditional

business models into a better model far superior in terms of efficiency, productivity,

profitability and competitiveness. This is where e-Commerce comes into the picture

in which is simply a short form for "Electronic Commerce". E-Commerce is generally

the "in-thing" today, which concept covers the global information economy which

include electronic trading of goods and services, electronic fund transfer, online


procurement, direct marketing, electronic billing, etc, through the internet via the

computer. E-Commerce does not change the core of businesses, which is to

generate profitability from transactions, but it is to change the mindset of how to go

about generating profits through an efficient manner. This simply means obtaining

information at our fingertips, without wasting time, money and effort, and also to

conduct real time transactions in a "borderless world" 24 hours a day, 7 days a

week. With e-Commerce transactions, it is a Win-Win situation for the parties (both

buyers and sellers) participating in it. It offers distinguished benefits such as less

overhead expenses, larger advertising market exposure, and reduces middle man

participation and all these benefits are easily understood and quantifiable.

E-Commerce itself is categorized into several sections. Among the sections are

Business-To-Business (B2B), Business-To-Consumer (B2C), and Business-To-

Government (B2G).

B2B E-Commerce

Business-to-Business Electronic Commerce, also known as E-Business, is

experiencing an explosive growth rate on the Internet. Companies of all sizes and

types are now mutually buying and selling products and services on the Internet.

The original first stage of commerce on the Internet was that of E-Commerce, which

is business to consumer activities. Business to business goes well beyond that

popular form of consumer purchasing. It is intended to bring "Just In Time" concept

to a greater height which allow businesses to coordinate with its business associate

for real time transaction and improving efficiency and productivity for both

organizations. Because Time is money; people are money, good management of

both means more money for the business and less expenditure on others.

B2B also offers unique benefits such as less human intervention, less overhead

expenses, fewer inadvertent errors, more efficiency, more advertising exposure, new

markets and new physical territories equate to an intelligent method of mutual

business. It is a win-win situation for both buyer and seller.


These are just a few of the benefits that B2B E-commerce can offer. It is already well

accepted in the business community, that the potential return of doing business on

the Internet is far greater than the investment. The bottom line is greater profits for

the business.

Currently there are 2 main issues to deal with when conducting a B2B E-commerce

Supply Chain Management - to co-ordinate The fields of competition

turned to efficiency in manufacturing. In the 80's, concepts like Lean

Manufacturing, Design for Manufacturability, Just-in-Time, and Stockless

Production emerged. If properly managed, the operating costs of such

systems can be substantially reduced. Reduction in costs can be in the

form of reduced inventory cost, obsolescence, transportation and other

logistics costs, overhead and direct labor costs. All have pointed out

potential savings in costs that could amount to billions when companies

can engage in supply chain integration efforts.

Electronic Procurement System - using Internet technologies to handle

product distribution to the the buyer and from supplier while at the same

time removing the complexity of multi-level paper and processing which

are labour intensive. This allows the business to run more efficiently and

allows purchasing professionals to have more time to focus on complex

acquisitions and supplier negotiation. Besides reducing cost and hassle, it

must be designed expressly for casual use by untrained employees and it

must also provide extensive management controls, reporting, and

integration with existing systems.

B2C E-Commerce

B2C (Business-to-Consumer) is basically a concept of online marketing and

distributing of products and services over the Internet. It is a natural progression for

many retailers or marketer who sells directly to the consumer. The general idea is, if

you could reach more customers, service them better, make more sales while

spending less to do it, that would the formula of success for implementing a B2C e-

commerce infrastructure.


For the consumer, it is relatively easy to appreciate the importance of e-commerce.

Why waste time fighting the very real crowds in supermarkets, when, from the

comfort of home, one can shop on-line at any time in virtual Internet shopping malls,

and have the goods delivered home directly.

Who should use B2C E-Commerce?

Manufacturers - to sell and to retail the business buyers

Distributors - to take orders from the merchants they supply

Publisher - to sell subscriptions and books

Direct Sales Firms - as another channel to reach the buyers

Entertainment Firms - to promote new products and sell copies

Information Provider - to take payment for downloaded materials

Specialty Retailers - Niche marketers of products ranging from candles,

coffees, specialty foods, books use it to broaden their customer reach.

Insurance Firms - On-line rate quotes and premium payments have made it

easier for this industry to attract and retain customers. In fact, virtually any

business that can deliver its products or provide its services outside its doors

is a potential user.

Advantages of E-Business Applications in our product:

Catalog flexibility and Online fast updating

Direct "link" capabilities to content information and visual displays already

existing on other client web site. You can update your E-Catalog anytime,

whether it's adding new products, or adjusting prices, without the expense and

time of a traditional print catalog.

Extensive search capabilities by item, corporate name, division name,

location, manufacturer, partner, price or any other specified need.

Shrinks the Competition Gap

Reduced marketing/advertising expenses compete on equal footing with

much bigger companies; easily compete on quality, price, and availability.


Unlimited Market Place and Business Access Which Extend Customer Base

The Internet gives customers the opportunity to browse and shop at their

convenience and at their place. They can access your services from home,

office, or on the road, 24 hours a day, 7 days a week.

The Internet allows you to reach people around the world, offering your

products to a global customer base.

A 24 Hour Store Reduced Sale Cycle

Reduce unnecessary phone calls and mailings.

Lower Cost of Doing Business

Reduce inventory, employees, purchasing costs, order processing costs

associated with faxing, phone calls, and data entry, and even eliminate

physical stores. Reduce transaction costs.

Eliminate Middlemen

Sell directly to your customers.

Easier Business Administration

With right software, store inventory levels, shipping and receiving logs, and

other business administration tasks can be automatically stored, categorized

and updated in real-time, and accessed on demand.

Frees Your Staff

Reduce customer service and sales support.

Customers will love it

Gives customers control of sales process. Builds loyalty.


More Efficient Business Relationships

Better way to deal with dealers and suppliers.

Workflow automation

Shipping, real time inventory accounting system which adjusts stock levels

and site, location availability instantaneously

Secured, automated registration verification, account entry and transaction

authorization features

Automated RFP and RTQ features for vendor bid development and selection.

Banking and accounting features customized for pre-approved third party

direct sales, vendor, consignment or internal transfer transactions.

Secure Payment Systems

Recent advancements in payment technologies allow encrypted, secure

payment online.

Disadvantages Of Tradition Business Applications:

Catalog Inflexibility

The catalog needs to regenerate every time when there are some new

information or items to add in.

High Marketing / Advertising Expenses

Reduced marketing/advertising expenses, compete on equal footing with

much bigger companies; easily compete on quality, price, and availability

Limited Market Place

Normally, customer will only locally and limited to certain area.

High Sale Cycle

Usually, a lot of phone calls and mailings are needed.


Higher Cost of Doing Business

Cost regarding inventory, employees, purchasing costs, and order-processing

costs associated with faxing, phone calls, and data entry, and even physical

stores. Subsequently, increase transaction costs.

May Require A Middlemen

Some sales or transaction may taking part indirectly or gone through third

party to your customers.

Inefficient Business Administration

Store inventory levels, shipping and receiving logs, and other business

administration tasks might need to be categorized and updated manually in

and done only when have time. This cause the information might not the latest

or updated.

Need to employ number of staff

Need staff who gives customer service and sales support

Importance of Logistics in our Study

Make competitive advantage through logistics excellence our strategy. Exploit

logistics service and performance to set you apart from our competitors. It is a

unique approach. Make it a core competency. Incorporate logistics as a critical

element of our marketing and business strategy to grow our sales. Effective logistics

can significantly contribute to positioning ourselves as a Preferred Supplier. Product,

promotion and price have been used for years by companies to develop recognition.

Now it's time to exploit and incorporate Place, i.e., Logistics, as the base for a

marketing and business strategy to grow the business and to gain market share.


Customers would perceive that you provide a competitively superior value and

service. That is a strong foundation for growth.

Logistics presents a way to market ourself to customers. There is only so much that

can be done with promotion and price. A value-added logistics strategy is a strong

way to be a preferred supplier because our customers are saying we are worth doing

business with it. They say, "We want to do business with you." We will grow, maybe

even into portions of the market we had not reached before.

Looking at it another way, we may have a great product, sound promotion efforts and

a good price. But if we are difficult in doing business with, in fulfilling orders and

timely and completely meeting customer requirements, we may not achieve

maximum growth. We could even lose sales and market share with a poor logistics

service.

A marketing strategy based on logistics, and the customer benefits and service it

brings, works whether our customers are domestic or international. We can be a

market leader, not a follower. Be aggressive; be an innovator, not a reactor. When

We are only reacting, instead of innovating, We have put yourself in the catchup

mode. As such, we may never quite sure of what we should be doing and why.

With this strategy, we position ourself as a valued supplier. Price issues, while

always important, can be balanced with the service we provide. This can create

opportunities for enhanced price opportunities. And if you are a preferred supplier,

our customers recognize that. They promote us and what we bring to the table. With

this strategy, we demonstrate to customers how important they are and how much

we value them.

Approach

To develop the strategy, three assessments must be made--our customers and their

requirements, our competitors and they perform, and our own performance. If we are

in different markets with our products, then assess each market. They may be

significant market and customer differences that must be recognized and

understood.


How do we compare? What are the opportunities to be a leader? How do we exploit

the opportunities? Which customers can we work with to develop our strategy? With

this assessment, we can better analyze and see what must be done to be a leader in

logistics. At the minimum, we will have a better understanding of how competitive we

are at servicing our customers.

Part of this analysis should be a survey. Do not assume we know and understand

what our customers want and need. That is a surefire recipe for a failed strategy.

With learning what they want, also learn why they want it done that way. That

presents a solid method to develop a strategy that can meet and exceed their

requirements. It is directly aligned to them.

Make sure that, once we have concluded the assessments, we go back to discuss

our findings and plans with key customers. The object here is meet their needs; not

what we think are their needs. Review our strategy and action plan with them. Get

their feedback. Is our plan excellent? Will it gain our additional business?

Assess our customers requirements. Study any and all written specifications

that customers have already given us. Survey our customers. Meet with select

customers. What do they expect and want from their suppliers? How do they

want their orders, shipments and invoices handled? Why do they want it done

that way?

How well do we perform, in their eyes and their measurements? Does the service

our competitors provide gain them business, at your expense? Does their

performance impact key customers, a large number of customers, the potential for

new customers? Are customers strongly satisfied with your performance? If so, why?

If not, why not? Where are we strong and why? Where are we deficient and why?

Are we consistently failing to meet customer needs? How serious are our failures, as

perceived and defined by customers?

Assess our competitors. You have to understand what we are up against in

servicing customers. What do our competitors do? Gather market intelligence.

Make our competitors performance part of our survey. How do our customers

view our competitors? How do their logistics performances meet the needs of


customers? How do their logistics performances compare with ours? Are

there shortcomings in how well they service customers? If so, what are they?

Are these shortcomings serious? Are there strengths in how well they service

customers? Is so, what are they? Are these strengths ones which permit

customers to overlook other problems with these competitors?Assess our

internal capabilities. Self-assessment can be very difficult and awkward.

Understand what makes a world-class logistics program. Look at the elements

needed. Develop an audit checklist then evaluate our operation. Assess and

measure our product flows and information flows across the entire

organization. Look at teamwork, systems, costs, relationships with suppliers,

carriers, customers and others. The purpose is not negative; the purpose is to

know how well we perform, throughout and across the organization. It will also

help we determine what investments are needed to upgrade and improve our

service to customers.

It may also be valid to search for best logistics practices, regardless of industry

served. Do not overlook them. Leading-edge practices have basis and application in

any industry. Benchmark our performance, capabilities and limitations. It can be very

useful in understanding our operation and to developing a market leader strategy.

A marketing strategy based on logistics effectiveness should have two parts. First we

must have a solid logistics program, leading-edge. Then we must be able to tailor to

meet the requirements of individual customers. We cannot offer a vanilla approach. It

is not enough to do logistics well. We must do what each of our customer's

demands. Standardized approaches to individual requirements is not satisfactory to

customers. It must be based on a sound approach, then customized, aligned and

responsive to the specific needs of each customer.

Through our success in meeting customer needs, we may opportunities to improve

their logistics operation. This is a very good position for a supplier. In such instances,

if we become truly good at our logistics performance, it is not inconceivable that

customers may want us to manage some part of their logistics management. It would

be like a category management of the customer's logistics.


Perspective

Recognize that organizations are built from the inside-out. They are designed to

handle internal tasks and needs, purchasing, manufacturing, sales, accounting,

logistics, and others. Some organization internal practices may work at cross-

purposes or counter to the needs of its outside customers. As such, company

departments may feel attacked by customer comments or internal analysis. They

may rationalize what customers say are problems or shortcomings in dealing with

you. We must get past these if we are to progress.

Organizations are not built from the outside-in. They were not designed by and for

customers and satisfying their needs. This origin then creates the opportunities to

better service customers by realigning the intent and purpose of the organization,

across functional lines. If this organization genesis is not recognized, then the

potential of this strategy will not be exploited to its fullest.

Remember too, organizations, especially in certain corporate cultures, resist change.

Shifting the focus to the outside, our customers, from inside, internal task, can be a

significant organization change. This must be dealt with in the design and

implementation of a market-leader logistics service capability. Designing the strategy

is not enough. We must be able to implement it, put it into action. Everyone in the

organization must participate in and clearly understand the strategy and plans.

Results are the goal here, not just strategy.

AT LAST………………

Position ourselves as a preferred supplier. Use logistics as a cornerstone of our

marketing strategy for growth. Understand what customers expect, how well our

competitors perform and how well we operate. Find the ways to develop a strong

logistics program which meets and exceeds customer requirements. Reengineering

our operation and developing a strong logistics capability is not an overnight fix. It

takes time and commitment. Do not delay and miss the opportunity to grow customer

satisfaction, sales and market share. And once we have begun this strategy and

process, it does not stop. Market and customer needs are constantly changing. Your

ability to change, and lead the change, as a market leader is ongoing. We must


constantly work to improve service, reduce time and reduce costs as our customers

require.

Promotion

AMBEY ELECTRICAL IS AN ELECTRONIC COMPANY WHICH CAN JUST

START THEIR BUSINESS IN ELECTRONIC APPLIANCES, AMBEY ELECTRICAL

WANTS TO LAUNCH THEIR NEW PRODUCT IN THE MARKET i.e. THUNDER

(CFL). SO AS A MARKETING MANAGER WE HAVE TO MAKE A STRATEGY

FOR PROMOTION IN THE MARKET.

There are two major components to our marketing strategy:

How our enterprise will address the competitive marketplace

How we will implement and support our day to day operations.

In today's very competitive marketplace a strategy that insures a consistent

approach to offering our product or service in a way that will outsell the competition

is critical. However, in concert with defining the marketing strategy we must also

have a well defined methodology for the day to day process of implementing it. It is

of little value to have a strategy if we lack either the resources or the expertise to

implement it. We have to use modern approach to marketing.

The modern approach has recognised that marketing process begins long before the

goods go into production and it does not end with the final sale. Today customer is

the ‘king’. The need of the customer is to be identified


FOCUS MEANS ENDS

CUSTOMER INTEGRATED MAXIMISATION OF

In the process of creating a marketing strategy you must consider many factors. Of

those many factors, some are more important than others. Because each strategy

must address some unique considerations, it is not reasonable to identify 'every'

important factor at a generic level. However, many are common to all marketing

strategies. Some of the more critical are described below.

We begin the creation of our strategy by deciding what the overall objective of our

enterprise should be. In general this falls into one of four categories:

1. If the market is very attractive and our enterprise is one of the strongest in the

industry we will want to invest our best resources in support of our offering.

2. If the market is very attractive but our enterprise is one of the weaker ones in the

industry we must concentrate on strengthening the enterprise, using our offering as a

stepping stone toward this objective.

3.If the market is not especially attractive, but our enterprise is one of the strongest

in the industry then an effective marketing and sales effort for our offering will be

good for generating near term profits.

4. If the market is not especially attractive and our enterprise is one of the weaker

ones in the industry we should promote this offering only if it supports a more

profitable part of our business. Otherwise, we should determine the most cost

effective way to divest our enterprise of this offering.

Having selected the direction most beneficial for the overall interests of the

enterprise, the next step is to choose a strategy for the offering that will be most

effective in the market. This means choosing one of the following 'best' strategies

A COST LEADERSHIP STRATEGY is based on the concept that we can produce

and market a good quality product or service at a lower cost than our competitors.

These low costs should translate to profit margins that are higher than the industry

average. Some of the conditions that should exist to support a cost leadership


strategy include an on-going availability of operating capital, good process

engineering skills, and close management of labour, products designed for ease of

manufacturing and low cost distribution.

A DIFFERENTIATION STRATEGY is one of creating a product or service that is

perceived as being unique "throughout the industry". The emphasis can be on brand

image, proprietary technology, special features, superior service, a strong distributor

network or other aspects that might be specific to our industry. This uniqueness

should also translate to profit margins that are higher than the industry average. In

addition, some of the conditions that should exist to support a differentiation strategy

include strong marketing abilities, effective product engineering, creative personnel,

the ability to perform basic research and a good reputation.

A FOCUS STRATEGY may be the most sophisticated of the generic strategies, in

that it is a more 'intense' form of either the cost leadership or differentiation strategy.

It is designed to address a "focused" segment of the marketplace, product form or

cost management process and is usually employed when it isn't appropriate to

attempt an 'across the board' application of cost leadership or differentiation. It is

based on the concept of serving a particular target in such an exceptional manner,

those others cannot compete. Usually this means addressing a substantially smaller

market segment than others in the industry, but because of minimal competition,

profit margins can be very high.

The marketing and sales organization is analyzed for its strengths and current

activities. Factors to consider include:

Experience of Marketing/Sales manager including contacts in the industry

familiarity with advertising and promotion, personal selling capabilities,

general management skills and a history of profit and loss responsibilities.

The ability to generate good publicity as measured by past successes,

contacts in the press, quality of promotional literature and market education

capabilities.


Sales promotion techniques such as trade allowances, special pricing and

contests.

The effectiveness of your distribution channels as measured by history of

relations, the extent of channel utilization, financial stability, reputation, access

to prospects and familiarity with your offering.

Advertising capabilities including media relationships, advertising budget, past

experience, how easily the offering can be advertised and commitment to

advertising.

Sales capabilities including availability of personnel, quality of personnel,

location of sales outlets, ability to generate sales leads, relationship with

distributors, ability to demonstrate the benefits of the offering and necessary

sales support capabilities.

The appropriateness of the pricing of your offering as it relates to competition,

price sensitivity of the prospect, prospect's familiarity with the offering and the

current market life cycle stage.

We must also select the distribution method(s) we will use to get the offering into the

hands of the customer. These include:

On-premise Sales involves the sale of our offering using a field sales organization

that visits the prospect's facilities to make the sale.

Direct Sales involves the sale of our offering using a direct, in-house sales

organization that does all selling through the Internet, telephone or mail order

contact.

Wholesale Sales involves the sale of our offering using intermediaries or "middle-

men" to distribute our product or service to the retailers.

Self-service Retail Sales involves the sale of our offering using self service retail

methods of distribution.

Full-service Retail Sales involves the sale of our offering through a full service retail

distribution channel.

Of course, making a decision about pricing, promotion and distribution is heavily

influenced by some key factors in the industry and marketplace. These factors

should be analyzed initially to create the strategy and then regularly monitored for


changes. If any of them change substantially the strategy should be revaluated.

Marketers for their part have traditionally focused on the side of the value network

that looks forward toward the customer. Hopefully they would increasingly

participate in and influence their companies upstream activities and become network

managers, not only product or customer managers. Most producers don’t sell their

product directly to the final consumer; between them stands a set of intermediaries

performing a variety of functions. These intermediaries constitute a marketing

channel.

Marketing channels are set of interdependent organizations involved in the process

of making a product or service available for use or consumption. Marketing channel

decision are most critical decisions facing management.

Packaging

Packaging is the science, art and technology of enclosing or protecting products for

distribution, storage, sale, and use. Packaging also refers to the process of design,

evaluation, and production of packages. Packaging can be described as a

coordinated system of preparing goods for transport, warehousing, logistics, sale,

and end use.

Function of packaging

Protection of product:-

Physical protection - The objects enclosed in the package may require protection

from, among other things, shock, vibration, compression, temperature etc.

Barrier protection - A barrier from oxygen, dust, etc., is often required. Permeation is

a critical factor in design. Some packages contain desiccants or Oxygen absorbers

to help extend shelf life. Modified atmospheres or controlled atmospheres are also

maintained in some food packages. Keeping the contents clean, fresh, sterile and

safe for the intended shelf life is a primary function.


Contamination:-

Small objects are typically grouped together in one package for reasons of

efficiency. For example, a single box of 1000 pencils requires less physical handling

than 1000 single pencils. Liquids, powders, and granular materials need

containment.

Pilferage:-

Packaging can play an important role in reducing the security risks of shipment.

Packages can be made with improved tamper resistance to deter tampering and also

can have tamper-evidence features to help indicate tampering. Packages can be

engineered to help reduce the risks of package pilferage: Some package

constructions are more resistant to pilferage and some have pilfered indicating seals.

Packages may include authentication seals and use security printing to help indicate

that the package and contents are not counterfeit.

Information transmission:-

Packages and labels communicate how to use, transport, recycle, or dispose of the

package or product. With pharmaceuticals, food, and chemical produces, some

types of information are required by governments. Some packages and labels also

are used for track and trace purposes.

Absorption from moisture:-

Packaging is in such way that protects the product from moisturized.

Convenience:–

Packages can have features that add convenience in distribution, handling,

stacking, display, sale, opening, reclosing, use, dispensing, and reuse.

Portion control:-

Single serving or single dosage packaging has a precise amount of contents to

control usage. Bulk commodities can be divided into packages that are a more

suitable size for individual households. It is also aids the control of inventory: selling


sealed one-litter-bottles of milk, rather than having people bring their own bottles to

fill themselves.

Modes of packaging

The first packages used the natural materials available at the time: Baskets of reeds,

wooden boxes, pottery vases, ceramic amphorae, wooden barrels, woven bags, etc.

Processed materials were used to form packages as they were developed: for

example, early glass and bronze vessels. The study of old packages is an important

aspect of archaeology.

Iron and tin plated steel were used to make cans in the early 19th century.

Paperboard carton and corrugated fibreboard were first introduced in the late 19th

century.

Packaging advancements in the early 20th century included Bakelite closures on

bottles, transparent cellophane overwraps and panels on cartons, increased

processing efficiency and improved food safety. As additional materials such as

aluminium and several types of plastic were developed, they were incorporated into

packages to improve performance and functionality.

F the universities, hopefully there will be

Box describes a variety of containers and receptacles for permanent use as storage,

or for temporary use often for transporting contents.

Boxes may be made of durable material such as wood or metal, or of corer board,

paperboard, or other non-durable materials. The size may vary from very small to the

size of a large appliance. A corrugated box is a very common shipping container.

When no specific shape is described, a box of rectangular cross-section with all

sides flat may be expected, but a box may have a horizontal cross section that is

square, elongated, round or oval; sloped or domed top surfaces, or non-vertical

sides.

A decorative box normally may be opened by raising, pulling, sliding or removing the

lid, which may be hinged and/or fastened by a catch, clasp, lock, or adhesive tape.

Whatever its shape or purpose or the material of which it is fashioned, it is the direct

descendant of the chest, one of the most ancient articles of domestic furniture. The


http://en.wikipedia.org/wiki/Archaeology

name, preceded by a qualifying adjective, has been given too many objects of artistic

or antiquarian interest.

A common storage box usually has the shape of a cuboids or right rectangular prism,

although boxes of almost any shape may be used.

Thunder and Waste Management have partnered together in the launch of a new

compact fluorescent lamp (CFL) product in which the packaging doubles as a

recycling kit for consumers to mail-in spent bulbs.

While CFLs are up to 75 percent more energy-efficient and last longer than

incandescent bulbs, they contain trace amounts of mercury that can be toxic if the

bulbs are land filled. Thunder was the first company to reduce CFL mercury content,

as its bulbs have only 1 milligram compared to up to 5 milligrams for other bulbs.

The new thunder packing will double as a CFL recycling kit.

Waste Management started its CFL mail-in program last year in which consumers

could request a recycling kit by mail. This same kit will now be used to package

Earth mate bulbs, which will excuse consumers from recycling fees. The packaging

is also resalable and has a liner that prevents mercury contamination in the case that

a bulb breaks during shipping.


Various kind of CFL manufacture by AMBEY ELECTRICAL


http://images.google.co.in/imgres?imgurl=http://www.moonbattery.com/archives/compact-fluorescent.jpg&imgrefurl=http://www.moonbattery.com/archives/2008/06/compact_fluores_4.html&usg=___rTu5at6BsADnzir6CRakgpow_Q=&h=285&w=300&sz=19&hl=en&start=2&um=1&tbnid=xPJmEvVUMLRmAM:&tbnh=110&tbnw=116&prev=/images?q=compact+fluorescent+light+bulbs&hl=en&sa=X&um=1

http://images.google.co.in/imgres?imgurl=http://climatelab.org/@api/deki/files/191/=Compact_Fluorescent_Light_Bulb.jpg&imgrefurl=http://climatelab.org/Compact_Fluorescent_Light_Bulbs&usg=__ynj769kHbuIXGLbGQprsLMgR_SI=&h=344&w=300&sz=11&hl=en&start=6&um=1&tbnid=w5um8buzeeCmOM:&tbnh=120&tbnw=105&prev=/images?q=compact+fluorescent+light+bulbs&hl=en&sa=X&um=1

http://images.google.co.in/imgres?imgurl=http://www.lightbulbmarket.com/files/1974975/uploaded/Philips%20Mini-Deco%20Twister%20Lamp.gif&imgrefurl=http://www.lightbulbmarket.com/&usg=__oQR-m_336ELuhZbOwf90mC5YrW4=&h=600&w=262&sz=52&hl=en&start=11&um=1&tbnid=JkTgU4ShsKrzHM:&tbnh=135&tbnw=59&prev=/images?q=compact+fluorescent+light+bulbs&hl=en&sa=X&um=1

http://images.google.co.in/imgres?imgurl=http://www.greentechpeople.com/images/cfl.jpg&imgrefurl=http://www.greentechpeople.com/switching-to-energy-efficient-compact-fluorescent-light-bulbs.html&usg=__WzG4r4CAiGHyWkeWgkh0k-xpkA0=&h=500&w=500&sz=14&hl=en&start=16&um=1&tbnid=oSvuN1-UwDPRuM:&tbnh=130&tbnw=130&prev=/images?q=compact+fluorescent+light+bulbs&hl=en&sa=X&um=1

http://images.google.co.in/imgres?imgurl=http://steadfastfinances.com/blog/wp-content/uploads/2008/10/sylvania-cfl-bulb.jpg&imgrefurl=http://steadfastfinances.com/blog/2008/10/10/my-first-real-life-green-energy-project-switching-home-lighting-to-cfl-bulbs/&usg=__6EROOAkKKjZtH28XU7rV5ephZoE=&h=500&w=406&sz=16&hl=en&start=3&um=1&tbnid=P7-ohwnrq400XM:&tbnh=130&tbnw=106&prev=/images?q=compact+fluorescent+light+bulbs&hl=en&sa=X&um=1

http://images.google.co.in/imgres?imgurl=http://www.torontohousing.ca/tchc/webfm_send/2774&imgrefurl=http://www.torontohousing.ca/light_bulb_exchange_program&usg=__5z5z5d-CCnqHqPDiO5FAyy8W4Ds=&h=250&w=250&sz=8&hl=en&start=19&um=1&tbnid=41IjnOVZ7dLJRM:&tbnh=111&tbnw=111&prev=/images?q=compact+fluorescent+light+bulbs&hl=en&sa=X&um=1

http://images.google.co.in/imgres?imgurl=http://cache3.smarthome.com/images/46181.jpg&imgrefurl=http://www.smarthome.com/46181/3-Way-Compact-Fluorescent-Light-Bulb/p.aspx&usg=__Ya5HW5Bh24xoNRhzpnk_IJw-53A=&h=275&w=275&sz=7&hl=en&start=10&um=1&tbnid=ko8PIXl3ffOYKM:&tbnh=114&tbnw=114&prev=/images?q=compact+fluorescent+light+bulbs&hl=en&sa=X&um=1

http://images.google.co.in/imgres?imgurl=http://farm1.static.flickr.com/175/370389611_a973e0fa0a.jpg&imgrefurl=http://www.paystolivegreen.com/2008/10/save-and-go-green-compact-fluorescent-light-bulbs/&usg=__l3nVilRxZwepN5gGgbTXemmXK7w=&h=500&w=333&sz=45&hl=en&start=18&um=1&tbnid=f_5KvISPOg-KwM:&tbnh=130&tbnw=87&prev=/images?q=compact+fluorescent+light+bulbs&hl=en&sa=X&um=1

http://images.google.co.in/imgres?imgurl=http://www.beloblog.com/KGW_Blogs/weather/archives/compact-fluorescent-bulb.jpg&imgrefurl=http://www.beloblog.com/KGW_Blogs/weather/archives/2007/06/&usg=__tQJK5oCBk49PqbE7FX3nl2gSiY8=&h=310&w=230&sz=10&hl=en&start=17&um=1&tbnid=06HP9gEOM0IvGM:&tbnh=117&tbnw=87&prev=/images?q=compact+fluorescent+light+bulbs&hl=en&sa=X&um=1

http://images.google.co.in/imgres?imgurl=http://www.traderscity.com/board/userpix13/13730-dc-cfl-vdc-light-bulbs-1.jpg&imgrefurl=http://www.traderscity.com/board/products-1/offers-to-sell-and-export-1/dc-cfl-12vdc-24v-dc-48v-dc-dc-light-bulbs-35650/&usg=__7glL6jxQ7ou9kXI7KStaNE-ezdc=&h=300&w=300&sz=5&hl=en&start=20&um=1&tbnid=UVRobjk-23TacM:&tbnh=116&tbnw=116&prev=/images?q=compact+fluorescent+light+bulbs&hl=en&sa=X&um=1

“We are offering consumers the first ‘cradle-to-cradle’ solution for CFL usage,” says NITIN sood, vice president of Ambey “Now consumers can purchase and recycle their CFLs in one package and from the convenience of their home. The kit is the simplest and most convenient solution for the disposal of CFLs.”

The Thunder site sells the bulbs as well as lists retailers. For those who already have

spent CFLs, recycling is available through retailers such as reliance store, vishal

mega mart, croma etc.

Promotion

Promotion is the fourth and final element in the marketing mix. Once the nature of

product has been decided, its price fixed and the distribution method decided it is the

duty of marketing manager to make the consumer know where, when and how the

products would be available the term promotion refers to the persuasive

communication about the product. There are three e important aspects which affect

the promotion decision of a firm:-

1. Advertisement

2. Personal selling

3. Sales promotion and publicity

1. Advertisement

Advertising –

The word ‘advertising’ has originated from the Latin word ‘which means’ to turn mind

toward’. The dictionary meaning of the term is to give public notice or to announce

publically.


http://en.wikipedia.org/wiki/File:Old_compact_fluorescent_lamp.JPG

http://en.wikipedia.org/wiki/File:CFL-wild-large.jpg

Advertising Objectives:-

Media advertising can achieve the following:

Introduce a new product

Alter perception/ attitudes

Convey information

Create demand for new product

To educate people in the use of product

To build goodwill

Establish connections

Increase sales

Reduce costs

Provide reassurance

Remind

Give reasons for buying

Demonstrate

Setting reasonable achievable objectives, then, is the first and most important step

in the advertising plan. All the other steps are a putting together a plan to achieve the

advertising objectives.

Preparing the advertising plan

For many years it was believed that advertising was very simple in the sense that the

company advertised and the customer received the message and understood it. Now

however, we know that the process is much more complicated than first suspected.

Before setting the objectives for advertising we need to check what we need to set

the objectives:

The budget for advertising

Determine the market

Advertisement content

Media for advertisement

Advertising frequency

Measure the effectiveness of advertising


The decisions can be summarized as follows:

Objectives

Target markets

Copy platform

Media

Creative platform

Timing

Budget

Schedule

Response

Evaluation

The whole process rests primarily on the first item of the list - which is the advertising

objectives.

Who

Target audience, - what do they

already know about the product

or service?

What do they know about the

competitors?

What kind of people are they?

How do we describe identify

them?

What

Response do we wish to achieve

through advertising?

Are these specific

communications objectives?

How How can we embody our

communications objectives in an

appealing form?

What is the evidence that we


have is that is acceptable and

appropriate and acceptable to

our audience?

Where

Which are the most cost effective

places to make our

communications?

When

When are communications going

to be made to clients?

What is the reasoning for our

scheduling of advertisements/

communications over time

Budget

How much money do the

activities need?

How much money is available?

How is expenditure going to be

controlled?

Schedule

Who is to do what and when?

How much is to be spent on

what, where and when?

Modes of advertising:-

The Internet

Television

Radio

Newspapers /Newsletters

Magazines / Journals

Telephone books/directories

Direct mail


Door to door

Brochures

Yellow pages

Hoardings / Posters

Travelling display

Sky writing

Sandwich men

Fair and Exhibition

Window display

Seminars

Trade shows

NEWSPAPERS

Although many Medias are available, the newspaper is considered as an excellent

medium of advertising for those who desire to reach the general public quickly & at

short intervals. It is said to be back bone of all advertising programme & about 45%

of the newspaper coverage by advertisement .The newspaper is in daily appeal & be

suitable to the particular requirement of an individual advertiser .There are weekly bi

weekly & even morning & even newspaper where one could advertise suiting his

own requirements.

Advantages of newspapers

Advertisement of through newspapers reaches the public at the lower cost to

the advertiser as compared to other mediums of advertising.

It reaches the widest audience as newspaper s cover wide range of interest.

It provides quick public response as buying generally follows reading.

It makes possible frequent & regular advertising & hence is very effective.

It is possible to advertise brief, lengthy or illustrated message through

newspapers.

Limitation of newspapers

Advertisements are, usually unattractive because of poor quality of its paper

& print.


Newspaper Its life is very short .it is said “nothing is as dead as yesterday‘s

newspaper.”

Media of newspaper advertising is limited to enlightened & literate people

only.

Newspaper advertisements become less effective when several

advertisements for the same product appear in the same newspaper.

Magazines and journals

Magazine are the periodicals published weekly, fortnightly, monthly, quarterly or

yearly to be read normally in leisure hour. magazines are of various type

e.g..ordinary which are read by all classes of people , special magazines such as

women’s magazines, children’s magazines etc., and journal devoted to varied

subjects such as Commerce, Management, Financial Analysis and Industry, etc.

Advantages of Magazines and Journals

They have long life and more effective because they remain before reader’s

eyes for a longer time as compared to newspapers.

Their scope is wider as compare to newspaper because they are generally

national or international in character.

They are more prestigious and trustworthy than newspapers.

They are often stored for reference and therefore, advertisements have a

longer life.

They are usually more attractive and penetrating because of better quality

paper and coloured printing.

Limitations of magazines and journals

The cost of advertisement per reader is higher as compare to newspapers.

The utility of this media of advertising is limited to literate people and that too

high income class

Advertising for introducing of new product in magazines and journals is

ineffective as compare to newspapers which are circulated daily or even twice

a day.


Hoarding/Posters

A poster is a sheet of paper depicting a message. Posters may be pasted on

boards and walls of buildings at different places. They are more flexible, of all

outdoor media, as they can be changed frequently. This media of advertising is

not much expensive as the advertiser has to pay only the cost of paper, printing

and wages of the person who waste paper. The life of poster is very short and

moreover many a times posters pasted in the morning are removed or replaced

by new posters in the evening.

Travelling Display

Travelling display are printed or pointed message on metal or wooden sheet that

are affixed in and outside the vehicles like buses, trains, vans, taxies, and trams,

etc. The main advantage of such display is that the message is repeatedly read

by the travellers.

Sky-writing

It is the one of the most modern method of advertising. Balloons and kites fitted with

suggestive messages and illustrative picture are flown in the sky to catch the eyes of

masses. Even pilots, through the aeroplanes, write the messages with smoke in the

sky.

Sandwich men

It is the one of the old medium of outdoor advertising. In this medium, hired men,

dressed peculiarly walk down the busy streets shouting or singing slogans of the

advertising firm. They attract large crowd of people, especially children.

Radio


It is the cheapest of all communication media of mass communication. It provides a

medium that is quite effective in rural AREAS. It is word of mouth advertising on

wholesale scale that appeals to the ear than to the yea. It reaches the public

crossing all distances and literacy barriers.

Advantages of radio

It is a life animated and quite dramatic as compared to printed advertisement.

It affect he mind and therefore is more receptive.

It requires little effort on the part of listener and reaches at home.

It has human appeal.

It is flexible and can be made to reach the public at desired time.

High geographic and demographic.

Limitations of radio:

It is expensive media of advertising.

It generally has a temporary effect.

Lower attention then television.

It has audio presentation only.

It is not suitable for all types of product.

Television

It is the fastest and latest media of advertising. It is more affective then radio than

any other media of advertising. It provides enough scope for variety and appeals

both to the eyes and ears. It provides high attention. It has overcome the major

limitation of pictorial presentation of radio advertising. However, it is very expensive

medium of advertising that can be adopted by only big business houses.

Window display

Window is the face of the shop that constitutes the first impression of the

establishment. They are used to attract persons into the shop by arousing their

interest. Window display offer the following advantage

It saves time of the shopkeeper.


It adds to the beauty of the shop.

It provides actual life size presentation of demonstration.

It appeals at the point of purchase and has immediate effect.

Fairs and Exhibition

They are becoming very popular these days in our country. Not only in cities but also

in rural areas. They are organised on a large scale in the centre places where masse

can reach easily. They offer an opportunity to the manufacturer or sellers to display

their good and provide them a ready market.

Yellow Pages

They are very low cost. They are reaches widely to the public. They can excellently

cover the local area and they have a high believability.

Outdoor Medias

Outdoor media of advertising refer to the display of the advertisement in open places

where from people generally pass such as railway station, bus stands, street sides,

bus stands etc...

They are flexible and high repeat exposure with low cost and low competition.

Direct Mail

It is the way of advertising direct to potential customers through the medium of post.

Such advertising reaching the people free of cost. Such as Stuffer, sales letters.

Calendars, boat sides.

Advantages of direct mail

It maintains privacy.

It is highly selective and thus saves saves in cost.

It is punctual and reaches a person at a time when it desires to reach him.

It can be very attractive as paper printing etc


It is flexible and may be attractive to suit the specific need and desires.

It goes though the selective audience.

Limitations of direct mail

It images junk mail properly.

It is relatively high cost.

It has only a limited reach that does not serve as a mass media.

It is quite common that much of direct mail advertising is thrown into the trust

basket and ignore.

Brochures

It is flexible and it is fully controllable. It can provide dramatic messages.

It is less expensive as compared to other mass media.

Internet

In these days Internet is widely used through internet we can launch a product

world widely we can get proper information about any product through internet.

Internet advertises only urban areas but most of the population of India lived in

rural areas.

It can’t target the people residing their because such people not much aware

about internet

Door to Door Service

We have to go home to home and marketing our product or services.

We have to define the feature of our product and services to the customers and

influence them customer to buy it once

Trade show

They are mainly meant for the purpose to communicate the local people about the

product and make them aware about the product features and speciality. They are

very important and play an important role in promoting the product.


Seminars

Many of the organisations conduct seminars to promote their products in the market

and to tell about the features of the product and also to influence the buyer to give

him a reason to buy it.

To sell an offering you must effectively promote and advertise it:-

The PUSH STRATEGY maximizes the use of all available channels of distribution

to "push" the offering into the marketplace. This usually requires generous discounts

to achieve the objective of giving the channels incentive to promote the offering, thus

minimizing your need for advertising.

The PULL STRATEGY requires direct interface with the end user of the offering. Use

of channels of distribution is minimized during the first stages of promotion and a

major commitment to advertising is required. The objective is to "pull" the prospects

into the various channel outlets creating a demand the channels cannot ignore.

Strategies for advertisement

There are many strategies for advertising an offering. Some of these include:

Product Comparison advertising

In a market where you are offering is one of several providing similar capabilities, if

you are offering stacks up well when comparing features then a product comparison

can be beneficial. We can compare the product with the competitor product and

define the feature of our products and influence the customer to buy it once.

Product Benefits advertising

When you want to promote you’re offering without comparison to competitors, the

product benefits advertising is the correct approach. This is especially beneficial


when you have introduced a new approach to solving a user need and comparison

to the old approaches is inappropriate.

Product Family advertising

If you are offering is part of a group or family of offerings that can be of benefit to the

customer as a set, then the product family advertise can be of benefit. CFL is

beneficial for whole of the family not for individual. CFL is eco friendly. It would

increase the saving of the people by reducing the electricity bill.

Corporate advertising

When we have a new product then we can launch these product through variety of

offerings to the big corporate houses and audience is fairly broad; it is often

beneficial to promote our enterprise identity rather than a specific offering.

We can take the example of Himachal Pradesh Government.

Govt of Himachal Pradesh provides CFL to every household to save electricity

because CFL consume less energy as compare to bulb. It is very good technique for

launching a new product in the whole market. We don’t need to spend a large amt of

money in advertisement and promotion. We have to tie up with the government to

provide him to CFL at a cheaper rate with a good quality. In this way our product

goes through the whole of the market.

Importance of advertisement

In the present day marketing, advertising has become increasingly importance to

business enterprises both large and small even non business enterprises have

recognized the importance of advertisement. Following are the example of

advertisement

It creates demand for new products by informing about the product and

suggesting them about the use of the product.

It promotes increased sales by maintaining the present demand and expending

the market by attracting more people to buy.


It creates goodwill by making the product famous and known in every home.

It reduces the cost of production by making large scale production possible

through creation of demand. The large scale production reduces the total per unit

cost of production.

It increase profits by increasing sales, as the cost per unit reduced the selling

price may also reduced which will increase sales and it turn get more profits.

4. Sales Promotion

The term advertising is constantly referred to as 'above the line expenditure' and can

be defined as all non-personal communication in measured media. This includes

television, cinema, radio, print and outdoor media.

In using sales promotion, a company must establish its objectives, select the tools,

develop the program, implement and control it, and evaluate the result.

In practice sales promotion is a specific activity, which can be defined as the making

of a featured offer to certain customers within a specified time period. This means

that to qualify as sales promotion, someone must be offered something which is

featured rather than just being an aspect of trade.

Strategy Formulation

Goals indicate what a business unit wants to achieve; strategy describes the game

plan for achieving those goals. Every business strategy consists of a marketing

strategy plus a compatible technology strategy and sourcing strategy. Although

many types of marketing strategies are available, Michael Porter has condensed

them into three generic Types that provide a good starting point for strategic thinking:

overall cost leadership, Differentiation or focus.

Sales promotion in practice

Sales promotion is a problem-solving activity designed to get customers to behave

more in line with the economic interests of the company.Typical tasks for sales


promotion are: rectifying slow stock movements; counter-acting competitive activity;

encouraging repeat purchase; securing marginal buyers; getting bills paid on time;

inducing trial purchase etc.However, it is important to realize that, on its own, sales

promotion will not replace selling, change long term trends, or build long term

customer loyalty.

Methods of Sales Promotion

Money Goods Services

Target

marketDirect Indirect Direct Indirect Direct Indirect

Consumer

promotion

Price

reduction

and money

refund

Premium or

bonus offers

Free

goods

free gifts

trade-in

offers

Samples

and

demonstrati

on

Guarantees

group

participatio

n events

special

exhibitions

and

displays

co-operative

advertising

stamps

coupons

vouchers for

services

Trade or

dealer

promotion

Cash and

trade

discount

Display and

advertising

allowance

Buy

back

allowanc

e

Gift and

novelties

Guarantees

group

participatio

n events

Free

services

Risk

reduction

schemes

Stamps,

coupons

Vouchers for

services

Competition

s

Sales force

promotion

Bonus

commissio

n

Coupon

vouchers

Points

system

Money

equivalent

Free

gifts

sales

force

contest

Coupons

Vouchers

Points

systems

Money

equivalent

Free

services

Group

participatio

n events

Coupons

Vouchers

points

systems for

services

Event

admission


Competition

s

Strategic role of sales promotion

Because sales promotion is essentially used as a tactical device, it often amounts to

a series of unconnected gimmicks to lacking any coherence. Contrary to this

advertising has been always considered as a strategic process of building brand

value over the longer term. Compare this against sales promotion which is

commonly used to help the company retain a tactical advantage.

There is no reason why there should not be a strategy for sales promotion, so that

each promotion increases the effectiveness of the next.

Sales promotion of industrial products

Industrial goods are always sold to other businesses and this has the effect of

changing the emphasis placed on certain elements of the marketing mix.

It will not be surprising then to learn that suitably adapted most consumer goods

sales promotional techniques can be applied to industrial goods.

Sales promotion plan preparation

Here is wide acceptance that sales promotion is one of the most mismanaged of all

marketing functions. This can be attributed to the confusion as to what sales

promotion really is - which often results in expenditures not being properly accounted

for. Some companies record it as advertising expenditure, others as sales force

expenditure and others as general marketing expenditure - while the loss of revenue

from special price reductions is not recorded at all.

The companies can no longer afford not to set objectives or to evaluate results after

the event, or to fail to have some company guidelines. For example, a 1 Euro case

allowance on a product with a contribution rate of 3 Euro per case has to increase

sales by 50% just to maintain the same level of contribution.

In order to manage a company's sales promotion expenditure more effectively, there

is one essential step that must be taken. First, an objective for sales promotion must

be established in the same way that an objective is developed for advertising,

pricing, or distribution.


Overview

After going marketing research we can conclude that when a new product came into

the market then we have to spend a lot of money to promote or advertising the

product in the market. Our company has a good name in the field for electrical

appliances but CFL has a new product of that company. Company has a past

experience of launching a new product.

Company has to target both the market consumer market and business market. So

we have to make our strategy in such a way which will covered entire market. There

is tough competition in the market so we have to keep the price of our product in

mind. Going through the research.

The company realizes the importance of each element of marketing mix and hence

plans each P of marketing carefully and cautiously. The company takes special care

to take care about keeping its prices best fit according to the market condition and

that is how it plans to develop and capture a market of its own.

Bibliography


For this project, we have taken help fron following sources. We express our gratitude to the authors/ owners of these sources:

Kotler Philip, Marketing Management, Eleventh Edition. Gandhi J C, Marketing, Second Edition. Internet Site:

o www.google.com o www.wikkipedia.com o www.ask.com o www.rediff.com o www.prenhall.com


http://www.prenhall.com/

http://www.rediff.com/

http://www.ask.com/

http://www.wikkipedia.com/

http://www.google.com/

final project of marketing

Documents

compact fluorescent

thunder lighting

ultraviolet light

visible light

longlasting light

thunder designation

thunder models

existing light fixtures