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
Indian Institute Of Finance

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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.
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.

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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

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A compact fluorescent lamp used outside of a building.
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

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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.
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.
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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.
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
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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.
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.

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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 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

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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[update], 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.

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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
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

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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

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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%.

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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.

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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.
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
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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.
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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

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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

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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

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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.
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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

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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.

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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.

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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.

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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.

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➢ 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

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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

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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:

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MODEL: THUNDER 305
Key Specification
○ Specification: 220V/120v, 50Hz

○ Light flux: 3450lm
○ Color temperature: 2700K/4000K/6400K
○ Color rendering index: 80
○ Specifications: 5W, 9W, 15W, 500W
○ Lamp cap: E27/E40

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MODEL: THUNDER 306
Key Specification
 Specifications: 5W, 9W, 15W, 500W
 Performance frequency: 50-60HZ
 Performance life: >8,000hours
 Base: E14/E27/E26/B22

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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

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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

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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

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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.

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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.

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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

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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.
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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

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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

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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

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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

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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
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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.

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➢ 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.

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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:
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.
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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.
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
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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.

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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.

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➢ 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 SEGMENTATION
A 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:

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(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

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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.

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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

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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

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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.

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Pricing
Price 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

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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.

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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.

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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

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➢ 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

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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%.

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➢ 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.

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➢ 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:

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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

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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:

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➢ 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:

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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
CFL power
Characteristic luminous power (lumens) Incandescent power (W)
(W)
450 9–13 40
800 13–15 60
1,100 18–25 75
1,600 23–30 100
150
2,600 30–52
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

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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

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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

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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 Cap BC, Glass Shell -
140
BC 12mm
Cap BC, Glass Shell -
ECOLUX 15W SPIRAL 215
10mm
Cap BC, Glass Shell -
ECOLUX 15W SPIRAL WARMLITE 215
10mm
The company offers a wide variety of product and is seen as one of the most
expensive brand in india.

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• Crompton :
the company offers different types of cfl:
5 watt cfl @ Rs 100 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.

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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.

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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

Page 73
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.

Page 74
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.

Page 75
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3 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

Page 76
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

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Successful value creation needs successful value delivery.
Marketing Channels and Value Networks

Most 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.

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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.

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➢ 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 Networks
The 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:

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➢ 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

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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.

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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

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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

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➢ Franchisees
➢ Electronic channels
➢ Wholesalers
➢ Retailers
Channel Design Decisions

A 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.
➢ 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
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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

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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

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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.

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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.

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Channel Management Decisions
Company 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.
Those who pass are formally recognized as Microsoft Certified Professionals, and
they
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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
1. 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.

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2. 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.
3. 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.
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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.

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➢ 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.
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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
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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 Conflict

Some 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

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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

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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.

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➢ 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

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➢ 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

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➢ 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

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➢ 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.

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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.
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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

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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

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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

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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.

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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
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.

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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
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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.
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➢ 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

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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.
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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.

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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
name, preceded by a qualifying adjective, has been given too many objects of
artistic or antiquarian interest.
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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.

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Various kind of CFL manufacture by AMBEY ELECTRICAL

Page 116
“We are offering consumers the first ‘cradle-to-cradle’ solution for CFL usage,” says

Page 117
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.
Advertising Objectives:-
Media advertising can achieve the following:
➢ Introduce a new product
➢ Alter perception/ attitudes
➢ Convey information
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➢ 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
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➢ 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.
Target audience, - what do they

already know about the product
or service?
What do they know about the
Who
competitors?
What kind of people are they?
How do we describe identify
them?
Response do we wish to achieve
through advertising?
What 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

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appropriate and acceptable to our
audience?
Which are the most cost effective
Where places to make our
communications?
When are communications going
to be made to clients?
When What is the reasoning for our
scheduling of advertisements/
communications over time
How much money do the
activities need?
Budget How much money is available?
How is expenditure going to be
controlled?
Who is to do what and when?
Schedule 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

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➢ 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

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➢ 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.

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➢ 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.

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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

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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.

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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.

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➢ 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

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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.
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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.
1. Sales Promotion

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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 Direct Indirect Direct Indirect Direct Indirect

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market
Guarantees
co-operative
Free group
Price advertising
goods Samples andparticipation
Consumer reduction Premium or stamps
free gifts demonstratio events
promotion and money bonus offers coupons
trade-in n special
refund vouchers for
offers exhibitions
services
and displays
Guarantees
group
Stamps,
participation
Trade or Cash and Display and Buy back coupons
Gift and events Free
dealer trade advertising allowanc Vouchers for
novelties services
promotion discount allowance e services
Risk
Competitions
reduction
schemes
Coupons
Coupon Coupons Vouchers
Free Free
vouchers Vouchers points
Bonus gifts services
Sales force Points Points systems for
commissio sales Group
promotion system systems services
n force participation
Money Money Event
contest events
equivalent equivalent admission
Competitions
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.

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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

Page 133
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

Page 134
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:
○ www.google.com
○ www.wikkipedia.com
○ www.ask.com
○ www.rediff.com
○ www.prenhall.com

Page 135

Final Project of Marketing

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Final Project of Marketing

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Product

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

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

A THUNDER designation identifies homes equipped with a comprehensive set of

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Benefits of the THUNDER

Energy Bill Savings.

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Indian Institute Of Finance

Electronic ballast of a compact fluorescent lamp

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

Comparison with incandescent lamps

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Efficacy and efficiency

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

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

Indian Institute Of Finance

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

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Broken and discarded lamps

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According to the Northwest Compact Fluorescent Lamp Recycling Project, because

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Design and application issues

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

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Incandescent replacement wattage inflation

Perceived Coldness of Low Intensity CFL

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Use with timers, motion sensors, and other electronic controls

Differences among manufacturers

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CFL product characterstics and

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Differentiation arises and competition increasingly occurs on the basis of product

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

Convenience goods: the consumer usually purchases Convenience goods

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

Five Reasons to Install a Shining Home CFL This Earth Day

2. They last 10 times longer than incandescent bulbs.

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Customization: marketers can differentiate products by making them customized to

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

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

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

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Indian Institute Of Finance

➢ Circuit characteristics: Adopt technology of Active Power Factor

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➢ Specifications: 5W, 9W, 15W, 500W.

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➢ Lamp dimension: 64x54x54

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➢ Start Time(S) ＜0.5

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○ Specification: 220V/120v, 50Hz

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 Specifications: 5W, 9W, 15W, 500W

 Performance frequency: 50-60HZ

 Performance life: >8,000hours