Sales Promotion at different Level and different programme

One of the most difficult marketing decisions facing companies is how much to spend on promotional John Wanamaker, the departmental - store magazine, said, "I know that half of my advertising is wasted but I don't know which half." Thus it is not surprising that industries and companies vary considerably in how much they spend on promotion. Promotional expenditures might amount to 30-50% of sales in case in cosmetics industry and only 10-20% in the industrial equipment industry. Within a industry, a low and high spending companies can be found. How do companies decide on their promotion budget? There are mainly four methods of this : Affordable Method : Many companies set the promotion budget at what they think the company can afford. One executive explained this method as follows : "Why, its simple. First I go upstairs to the controller and how much they can afford to give us this year. He says a million and half. Later, the boss comes to me and asks how much we should spend and I say Oh about a million and half." It is a method which is uncertain one and makes long term planning difficult. Percentage of Sales Method : Many companies set their promotion expenditures at a specified percentage of sales. Accordingly the sales is set on the basis of sales. In this a specified sales percentage is decided for the promotional budget Advantages of this method :

First, its use means that promotional budget vary with what a company can afford. Second, it encourages the management to think in terms of the relationship among promotion costs, selling price, and profit per unit, Third, it encourages the competitive stability to the extent that competing firms spend approximately the same % of their sales on promotion. Inspite of the advantages, the % sales method has little to justify it. Its reasoning is circular : It views sales as the determiner of the promotion rather than as a result. It leads to budget setting by availability of funds rather than by marketing opportunities. Competitive Parity Method : Some companies set their promotional budget to achieve share-of-voice parity with other competitors. Two arguments are made in support of competitive parity method. One is that the competitors expenditure represents the collective wisdom of the industry. The other is that maintaining a competitive parity helps prevent promotional wars. Neither argument is valid. There are no grounds for believing that competition knows better what should be spent on promotion. Objective and Task Method : The objective & task method calls upon marketers to develop their promotion budgets by defining their specific objectives, determining the task that must be performed to achieve these objectives, and estimating the cost of performing these tasks. Deciding on the promotion mix : Companies face the task of distributing the total promotion budget over the five promotional tools : Advertising

 Sales Promotion Public Relations and Publicity Sales Force Direct Marketing. Whatever method a company adopt for promoting its product it must be from above mentioned method.

Sales Promotion
Promotion is the final element in the marketing mix. After the nature of product is decided, its price fixed and the methods of distribution decided, the manufactures has to take effective steps in meeting the consumers in the markets. In the present consumer oriented markets it is the duty of manufacturers to know what is required by the consumer. It is also their duty to make the customers know where, when how and at what prices. The products would be available.

Meaning of Promotion The term promotion is the term and includes mainly three type of sales activity : 1. Mass impersonal selling methods (Advertising). 2. Face to face personal selling (Salesman ship). 3. Activities other than personal selling and advertising such as point of purchase display (P.O.P.) show and exhibitions, demonstrations and other non securing selling efforts. This form of activity is called Sales Promotion. There are two type of promotion blends :1. Pull Blend.

2. Push Blend. Both of these are closely related to the channel of Distribution. 1. A pull blend is one in which mass impersonal, sales efforts are given the greatest emphasis. The purpose of pull blend to pre-sell to the final consumers. So that they demand the product at the retail level of distribution. The firm adopting this strategy would spend more on advertising and sales promotion rather than in personal selling. These efforts pull down the product from the manufacturer. 2. A push blend emphasizes personal selling. Naturally firms adopting this method develop a strong sales force at both the distributor and the dealer level. This method would tends to push the product through the channel of distribution.

Promotion and Selling

The term promotion is very often used as a synonym for selling. But selling is a narrow term which includes only transfer of title or personal selling. Promotion on the other hand is broader in its outlook and includes a variety of activities used ultimately for increasing sales volume.

Promotion and Sales Promotion

Similarly the terms sales promotion can not be taken to mean what is commonly does. Sales promotion, is only a part of the promotion. Basically promotion is an "exercise" in information persecution and influence. Promotion has come to mean the over all co-ordination of advertising selling, publicity and public relations. Promotion is a helping function designed to make all other marketing activities more effective and efficient. But sales promotion as such helps only the selling activity still, there exit same difference of opinion on the real connection of the term sales promotion.

Acc. to A.H.R. Delons :-

"Sales promotion means any step that are taken for the purpose of obtaining or increasing sales".

Acc. to W.Q. Kelly Opines :"Muddled misused misunderstood that is sales promotion Acc. to him the field of sales promotion as a marketing activity is still vaguely defined and organized.

Sales Promotion and Advertising

There is no universally accepted distribution between these two terms. To same advertising includes all forms of mass media communication directed towards influencing the end consumer. Sales promotion on the other hand, includes the form of mass communication directed towards information and influencing the channel of distribution (e.g. distributors, retailers etc.). Hence a price of product literature distributed by retailers in sales promotion. These sales promotion merges on one side in to advertising and on the other in to personal salesman ship. It is concerned with the dissemination of information to whole salers, retailers, customers (both actual and potential, and to the salesman). Sales promotion is concerned with the creation. Application and dissemination of material and techniques that supplement advertising and personal selling. Sales promotion makes use of direct mail, catalogues, trade shows, sales contests, premiums, samples, windows displays and other aids. Its purpose is to increase the desire of salesman, distributors and dealers to sell a certain brand to make consumers more eager to buy that brand. Personal selling and advertising do include prospects to make these decisions. Sale promotion provides an extra stimulus.

Objective of Sales Promotion 1. To increase sales directly by publicity through media which are complementary to press and poster advertising.

2. To disseminate information through sales man dealers etc. So as to insure the product getting in to satisfactory use by the ultimate consumer. 3. To attract new consumer. 4. To face the competition effectively. 5. To help salesman in selling more to the retailers and consumers. 6. To check seasonal decline in sales. Generally speaking sales promotion involves rendering the following services:(a) Services to dealers. (b) Services to own salesman. (c) Special publicity.

Sales Promotional at different levels 1. Sales promotion at Dealers Level :It may include various schemes some of which are discussed here. (i) Advertising Materials :The advertising material prepared by the company such as store signs, banners, shelf signs, board etc. are distributed to sub dealer for display purposes this is in fact a method of advertising. (ii) Store Demonstration :In the promises of the whole saler or the retailer the products sales personnel will conduct special demonstration for the companies product. A personal demonstration is good to introduce a new product at its peculiar advantage can be high lightened and the consumers doubt clear. It can be used to restimulate an old product. A good

demonstration with a great dealer of action will draw heavy crowds in to the store and will attract attention to the product. (iii) Special Display and Shows :These are in seasonal in character but could be arranged in an elaborate manner and for all the products of an company. Usually these are arranged along with trade fair and exhibition. Besides effecting sales these shows impress the companys name generally on the public. Sales promotion at consumers level The various schemes of sale promotion at Consumers Level may include. 1. Coupons (A Chit of Stated Value) :These are given directly to the consumer these coupons are in most cases kept inside the package. The consumers many receive a price reduction of the stated values of the coupon at the time of purchase. The retailer receives reimbursement for the value of the coupon form the manufacturer. Coupons act as a short run stimulus to the sale of the product, since they are directly tied with the purchase of the item. They encourage the retailer to stock the product. What is important is that a coupon offer does not spoil the named price of the brand nor does it un pair the margin of the dealers. But it is not easy to measure the effectiveness of a coupon offer. One over knows how many customer would have bought the product without the incentive. It is also difficult to find out how many customers were held after the coupon offer expired. 2. Price-off-offer (Also known as bargain offer price packs) :This offer is intended to stimulate the sales during a slump season. In this method the customer is offered a reduction from the printed price list. It is also used when a substitute for competing product enters the market.

Many experts on sales promotion fed that Off Schemes are among the weaker and less desirable methods of promotion. These can be trade resentment particularly when the retailer raises the price to retain his margin. Secondly that is not conductive to building up brand loyalty. Consumers may simply shift to the products that offer this scheme. 3. Samples :In the hope of converting a prospect into a customer a sample (Some quantity of the product) may be given. This helps the consumer to verify the real quality of the product. Various pair manufacturing companies offer this method. For developing brand loyalty this method is quite useful. Sampling is a fast method of demand creation because one knows the result as soon as the consumer has had time to use the sample and buy the brand. Disadvantage of Sampler :Offering sample in quit expensive. There is the cost of producing samples. The distribution costs are also high. Sample have to be mailed to potential customers or to be distributed through retail shops. There are also problems when the real product does not resemble the sample supplied. 4. Money Refund Offer :An offer usually stated on the package is that manufacturers will return with in a stated period part or all of the purchasers money if he is not completely satisfied with the product. 5. Trading Stamps :A premium in the form of stamps is given by the sellers to consumers while selling goods. The number and value of stamp that the buyer receives depends on the values of the purchase. These stamps are redeemable through premium catalogues at the stamp redemption centres.

6. Buy-Back Allowance : This an allowance following a previous trade deal not offer a certain amount of money for new purchases based on the quantity of purchases on the first trade deal. It extends the life of a trade deal and helps to prevent part deal sales decline. It greatly strengthens the buyers motivation to co-operate on the first deal. 7. Premium :There are various forms of premiums provided by the manufacturer as sales promotional devices :(a) Coupons are supplied for effecting price reductions. (b) Factory in pack premium these are popular in the case of Body food and Tin food items, Spoons, Cups, Measuring, Glass etc. and such other items are packed with the product in the box itself. Factory in pack premium are particularly goods for product meant for children. The Binaca Toothpaste packs contain animal shape toys. These are very attractive and qutie popular among the children. (c) Self Liquidating Premiums :The cost of the premium is collected from the buyer himself. But when the buyers pays for it he has to pay only a considerably low price for the premium. This is possible for the manufacturer purchases the items in bulk at a premium and his cost per unit as is substantially low.

Other Steps by Manufacturer for Promoting Sales Dealers can be helps in different ways :1. Communicating Market News :-

Often this service is reciprocal the manufacturer may acquaint his dealer with the fact relating to his production and prices while the dealer may familiarize him in return with the information bearing on charges in the consumer's demand, their like and dislike complaints and criticism, substitutes etc. 2. Inviting to Sales Conference and Convention :The gestures of regard and respect pave the way for better relation and co-operation. 3. Offering Reasonable Terms of Sale :Of all the forms of encouragement, the monetary incentive evokes immediate response. Hence every producer must offer the most responsible terms of sale such as longer periods of credit and higher rates of descants. 4. Supplying suitable packages and useful things. 5. By taking the return back. 6. By furnishing them with sales literature and display materials.

Aggressive Selling Meaning :Goods are produced for market. Manufacturers have to make efforts to sell all they produce. When the manufacturers uses various sales efforts to obtain increased sales volume for his product it is called aggressive selling or offensive selling. The sales efforts which a manufacturer makes to retain his customers i.e. to protect his already established market against against his competitors is termed as defensive selling. In contrast to this aggressive selling is concerned with the sales efforts made with the express objective of selling more by expanding the market for the product of the selling firm.

Aggressive Selling and Defensive Selling :Aggressive selling is based on the answer to the question how much does the firm gain (in term of sales with profit) by using this method defensive selling is based on consideration as to how much the firm will lose if it does not use this method increase of sales can be obtained from two sources:1. New customers if the market is expending. 2. From the competitors i.e. those consumers who were purchasing similar product of competiting firms, if the market for the product is static. Acc. to H. Whitehead :"In case of an expanding market all the firm may stand to gain by following the methods of aggressive selling but if the market is static manufacturer of a new market will have to be much more aggressive to capture the established market of competitors". When Aggressive selling is resorted ? Usually manufacturer of a new product has to do aggressive selling :1. When the product has been improved. 2. When the manufacturers product is supervisor in quality to the product of the established competitor. 3. When the total market for the product or line of product to expanding. 4. If the manufacturers share of the market is comparatively small. 5. If the manufacturer has unused production capacity with heavy investment in plant and equipment he will like to develop the demand for his product rapidly so that demand for his product is equal to the optimum production capacity of his plant ; and

6. When primary demand for a product must be created and provision must be made in the channel of distribution to educate consumers regarding the new product and to instruct them in its use. Method of Aggressive Selling :Sales promotion efforts use for aggressive selling may be divided in two classes. 1. Trade Promotion. 2. Consumer Promotion. 1. Trade Promotion :Under trade promotion methods special incentives are offered to the trader to buy products of the firm. Such incentive may take one or more of the following firm :(a) Cash Allowance :A definite percentage of discount is allowed on the purchase of given unit of a product. (b) Extra Product :Instead of giving any cash allowance extra product is given with each unit of product ordered. For instance if a box normally contains 20 Cakes of Soap, special box contains 25 cakes may be made and sold at the same price as that of the box of 20 cakes. (c) Gifts :Various gifts are awarded in return for an order of a particular magnitude.

2. Consumer Promotion :-

Under consumer promotion method special incentives are offered to the consumers to buy the firms product. The more prominent amongst such incentives are as following. (a) Coupons :A coupon of a giving value is sent to the consumer. By presenting this coupon to the retailer consumers can purchase a particular product mentioned on the coupon at a reduced price. The retailer sells the products mentioned. In the coupon to such consumer (consumers presenting the coupons) under and agreement with the manufacturer at a price lower than the user retail price. Thus the consumer get the benefit of reduced price to the extent of the value of the coupons. (b) Self Liquidating Offers :Under this system, the firm offers an article at an attracting price if the consumer send a given sum of money accompanied by a given number of box tops from the packages of a particular product the benefit to the consumer is that he receives the articles at a bargain price. (c) Bargain Packs :Under this system a product is sold at a reduced price for a short period Bargain pack method encourages new consumers to try the product. It is also helpful in obtaining large displays in the shops. (d) Sampling :The method involves giving the product or a small quantity of the product to a consumer free with the hope that the customer will be favourable impressed with its actual use and will eventually become a regular purchaser of the product. A firm selling new product or an extensively improved product finds this methods useful. Also a firm whose market is hold by competitors whose free sampling almost expensive.

The above mentioned methods may be reinforced by adopting. (i) Direct method of selling through. (ii) Offer of door to door selling. (iii) Hire purchase and installment payment methods of selling and by forming combination. Other Methods of Aggressive Selling :(i) Employment of Missionary Salesman also known as Promotional Salesman. These salesman call upon retailers and aggressively promote a product. (ii) Instead of using wholesalers, the firm may develop its own sales force to call directly on retailers. (iii) The firm may follow a compromise method by employing a manufacturers agent and giving him a large enough commission to encourage him to sell product intensively and aggressively. (iv) New territory exploitation sales promotion has a particularly important role in developing the companys product in new territories. (v) Increment and promotions. (vi) Letters to dealer and Customer. In fact, an ingenious sales manager can devise any number of incentives schemes for promoting the sales volume.

Research Methodology

Data Collection :-

There are two main sources for collecting data. These are :1. Primary Data. 2. Secondary Data. 1. Primary Data : It is the data that is collected for the first time. It is fresh and the originally collected by the surveyor. In this Project - Sales Promotion Schemes, the researcher contacted 250 customers and situated on the various points of the Sonepat, Panipat, Karnal & nearby areas. The response were collected personally by the reasearch through a structural questionnaire, consisting of 20 questions. 2. Secondary Data : Secondary data is the one which is collected by the some one else and already used in some or the other form. Here the secondary data used was the theoretical aspects of promotional tools and the statistical method made use of. Sample :A sample of 250 customers was chosen from Sonepat, Panipat, Karnal & nearby areas. The sample chosen was fully on the basis of convince of the researcher. It was a non-probability sample. Analysis and interpretation :The total data was presented in simple tables, graphs and percentage method was used for interpretation. Limitation :Due to time and money constrains the present study was confined only to a sample of 250 customers and that too of Sonepat, Panipat, Karnal & nearby areas.

Questionnaire
Name :

Age : 18-30 30-40 Profession : Income : 3000-5000

Above 40

5000-7500 7500-10000

10000-15000

Above 15000

1. Have you heard about the brand Grasim/Grasim Suiting? Yes No

2. Have you ever seen the Advertisement of Grasim ? Yes No

3. Where did you saw the Advertisement On T.V. In Magazine Hoarding Others

4. Does it provides the sufficient information about the product you needed ? Yes No Partially

5. Can you recall the content of Grasim Advertisement ? Yes No Partially

6. What do you think about the consistency of Grasims advertisement ? Excellent Good Average Poor

7. Which channel do you watch most frequently ? DD1 DD2 Zee T.V. Sony Star Plus Zee News Others

8. Have you ever heard about "Mr. India" "Mr. International" Contest organised by Grasim ? Yes No

9. Do you found these events as are effective advertisement medium ?

Yes

No Partially

10. What type of advertisement do you like the most ? Personality Symbol Musical Fantasy Life Style

11. Which other advertisement can you recall ? Raymonds Siyaram Vimal OCM Mayur Dinesh Grasim Digzam

12. Which advertisement is most consistent ? Raymonds Siyaram Vimal OCM Mayur Dinesh Grasim Digzam

13. Which brand in the fabric is the most frequently advertised on T.V. ? Raymonds Siyaram Vimal OCM Mayur Dinesh Grasim Digzam

14. Have you purchased Grasim Product ? Yes No

15. Have you satisfied with the product ? Fully Satisfied Partially Satisfied Dissatisfied

16. Do you know the new product launched by Grasim viz. coolers, WWF, SUMO ? Yes No

17. Do you recommend the product to others if you are satisfied with it ? Frequently Occasionally When asked Never

18. Which Media do you like is the most efficient for advertising fabric ? Electronic Print Outdoor Mail Word of mouth

19. Do you feel good when you see the advertisement of the brand which you have purchased ? Yes No

20. What time of the day do you feel the best for the advertisement on TV ? Morning Mid-day Evening Late night

ROJECT REPORT ON CONSUMER BEHAVIOUR COMPUTER INDUSTRY COMPUTER INDUSTRY AN INTRODUCTION

INTRODUCTION COMPUTER INDUSTRY

Every one knows the time of manual working and now we have different set of machines for the different work, it makes our work very easy and fast. In these machines computer is Wonderful invention of the men among the different machines and result is that today this machine is ready to beat the man mind, but before this computer was not as it looks and works today. In the age of 1940 computer was invented by Americans for the purpose made easy the chemical equation, which were used later on in Second World War as atom bomb, for which equations were firstly made on computers. That time size was very big and requires a one room space for this machine, but time to time technology advancement and its necessity in different fields increase it utility and on the other hand decrease in its size. Today computer is portable that we can wear it on wrist as wristwatch. That is possible due to of the changes in the IC technology and result is that today computer is emerged as big industry of the world. Computer ranked as industry in the age of 1970 in USA and after that in other countries of world, because it creates the lots of business, employment, business resource, foreign exchange etc.

TYPES OF COMPUTER INDUSTRY Computer industry is broadly in two types. 1. Computer Software Industry :- Computer software means all those application programs, which we cannot touch but see and computer software industry means that providing the business opportunities and employment in the field of computer software development.

2. Computer Hardware Industry :- Computer hardware means all those parts, which we can touch and see and computer hardware industry means that providing

the business opportunities and employments in the field of computer software development.

COMPUTER INDUSTRY - MAJOR PLAYER IN INDIA Computer industry has the number of player in each software and hardware industry in the world. Now we have a look over the major players of this industry in India. They are: -

SOFTWARE INDUSTRY TCS WIPRO INFOSYS HCL CISCO

HARDWARE INDUSTRY INTEL SEGATE HP HCL MICROTEK

COMPUTER INDUSTRY - THEIR SHARE :y In USA Computer industry shares the 48% of the total income where as in INDIA it shares only 12% of the income and major portion goes to software industry. In USA Computer industry provides the employment about 5.5 Iakhs and in INDIA 78 thousands approx. yearly and also the major portion goes to software industry. In USA 62% of population is dependent on the computer industry and where as in INDIA this ratio only is 8% of population. In INDIA computer industry shares the 10.9% of Export in form of software industry and 20 % of Import in form of hardware industry.

In India only the 6-computer hardware companies and 13 computer software industry companies are listed in Indian stock exchanges. Today the computer industry shares the 28.9% of the total of world income. Today INDIA have 5computer behind 100 peoples and whereas in USA ration is 98 computer behind 100 people.

y y

AN INTRODUCTION - DIFFERENT PROCESSORS BRANDS INTRODUCTION Everyone related with the IT or Infotech knows that a processor is the one a chip heart of the computer. There no. of companies thats provides the sales support services and product services worldwide. In India there are only no. of companies thats provides the computer processors for the home PC and as well as for the office use. The each of the companies having the set of different processors thats are segmented on the basis of price and technology. Because in the computer processor market the price and technology plays the interchangeable role, but the technology advancement creates a mark able and vital role as competitive weapon. The different companies that are present in India, They are follows :-

COMPUTER PROCESSOR COMPANIES IN INDIA INTEL AMD CYRIX CELERON

In India there is only four companies is exist, but present scenario tells about only the three companies except Celeron because its near about to end from the Indian processor market.

ABOUT INTEL Intel is the world first, largest processor manufacturing company. Intel was established in the age of 1960 with its first product a computer processor named with 8080 and after that in every decades Intel launched the many versions of the processor named in number terminology i.e. 8084, 8085 etc till the age, of 1980s After 1980s Intel uses name terminology of processor named PentiumI, Pentium 2 etc. With the advancement of technology in ICs technology for the personal computers. After 1995 along with the processor and chipset Intel launched the motherboards and other networking peripheral i.e. Hub, WebCamera, VGA cards and Network cards. After that Intel launches the processor for the PC as welt as for the servers named XEON and for notebook computers named Pentium4 M. Intel keeps the range of products of different segments to meet out the competition and change. Intel R & D division is continuously engaged to come out with the latest state of the art product in the IT hardware sector. Today Intel is worlds only company that produces more than the 8 hardware devices for the computer with world best rated technology.

SOME UNIVERSAL TRUTH ABOUT INTEL:- WHERE DOES INTEL STAND y Intel is the 4th known brand In the world and 2nd in the world Infotech scenario. Intel comes under the list of top 10 companies of the world. Intel is first, largest and ranked as number one processor and chipset manufacturing company in the world. Intel has presence in 45 countries worldwide but has representatives in 22 offices around the world. Intel is only Company that has the first largest investment in IT Hardware Sector.

y y

y y y y

Intel is an ISO9001 and ISO9002 company. Intel employs approximately 80,000 people in 45 nations worldwide. Intel satisfies the approx.92.5% of the IT people worldwide. Intel is only World Company that produces more than 8 devices of computers. Intel is only world company that produces the all type of processors i.e. server processors, PC processors, notebook processors etc. Intel have their alliance and premium provider in each of operating country. In India Intel enjoying the approx. 93% market share of IT hardware since 1998.

y y

ABOUT INTEL IN INDIA In India Intel enjoying the approx. 93% market share of IT hardware since 1998. Intel products in India in age of 1980s but with their representatives in 1997. Now in India Intel have one head office and two marketing office whose address are below.

Intel Head Office in India : INTEL INDIA TECHNOLOGY PVT. LTD. 136, Airport Road, Banglore 560017 Intel Marketing Office in India :INTEL TECHNOLOGY INDIA PVT. LTD. 45, Tech Park, Mumbai

INTEL TECHNOLOGY INDIA PVT. LTD. Gresco Corporate Center, Nehru Place, New Delhi

INTEL - PRODUCTS INTEL has number of products that are used worldwide computers. They are :y Processors

y Mother boards y Chipsets y Communication devices y Storage products

Intel processors are bringing desktop and notebook computing to new levels of speed and convenience, and extending Intel Architecture to new levels of technical computing performance, offering you all the compatibility and reliability youd expect from Intel.

Highlighted Processors products of Intel are: --

INTEL STRATEGIC ALLIANCES AND PREMIUM PROVIDERS

INTEL has eight strategic alliances worldwide and premium providers are exclusive of operating country those provide the sales support services and product services worldwide. They are: -

STRATEGIC ALLIANCES BEA Alliance IBM And Intel Microsoft And Intel Broad vision Alliance Oracle Alliance SAP And Intel SAS And Intel Intel i2 Alliance

Premium Provider in India TCS IDBI N ICON SYSTEMS KARISHMA SOFT HCL HP

Provides Customized Business Softwares Financial Assistance Hardware Assistance Doctors Software Assembler Assembler

ABOUT AMD

The era of technology for technologys sake is behind us. Innovation driven by real customer needs customer-Hector Ruiz Founded in 1969 and based in Sunnyvale, California, AMD provides microprocessors, Flash memory devices, and silicon-based solutions for our customers in the communications and computer industries worldwide. However, our focus goes beyond integrated circuits and transistors. AMD is committed to helping our customers and their customers take advantage of the phenomenal capacity of silicon to add value and help differentiate their offerings. To that end, AMD products are developed with customer needs always in mind and not for the sake of innovation alone. Stated more plainly, it means that AMD exists to provide real solutions for real customer problems that exist in the real world today. AMD refer to this philosophy as customer-centric innovation and it represents the guiding principle behind everything. AMD provide the different solutions in: y Recommended motherboards. y Cooling solutions. y y Power supplies. Storage devices.

y Chipsets. y Communication devices.

AMD PRODUCT PROCESSORS

AMD PRODUCT - MIX AMD has number of products at their different percentage as their product mix. Products Processors Mother Boards Chipsets Communication Devices Storage Devices %age 65% 18% 10% 5% 2%

AMD LOCATIONS

AMD has manufacturing facilities in the United States, Europe, Japan and Asia, and sales offices in major cities around the globe. Founded in 1969 and based in Sunnyvale, California, AMD had revenues of approximately $2.7 billion in 2002. A truly global company, AMD derives more than half of its revenues from international markets. Shares of the company trade on the New York Stock Exchange under the symbol AMD.

One AMD Place P.O. Box 3453 Sunnyvale, California 94088-3453

(408) 749-4000 TWX:910-339-9280 TELEX:34-6306

AMD SUPPORT SERVICES AMD provides the support services to their consumers, to get the maximum consumer satisfaction. The services are: -y After sales services.

y Warranty and credit facility. y y Services by premium provider in each country. The download area offers software, drivers, plug-ins and other utilities for your products,

y Quickly locate a variety of product support information throughout the Technical Support site.

AMD - FLASH BACK     May 1, 1969 - AMD incorporates with $100,000. September 1969 - The company moves to new headquarters at 901 Thompson Place, Sunnyvale. November 1969 - First good die emerges from Fab 1, the Am-9300, a 4-bit MSI shift register. 1970 - First proprietary product introduced, the Am-2501.

              

January 1973 - First overseas manufacturing base in Penang, Malaysia, in volume production. 1975 - AMD enters the RAM market with the AM-9102. April 1987 - AMD and Monolithic Memories Inc. agree to merge. March 1991 - AMD introduces the AM386 microprocessor family, breaking the Intel monopoly. February 1992 - Five-year arbitration with Intel ends, with AMD awarded full rights to make and sell the entire Am-386 family of microprocessors. April 1993 - First members of the Am-486 microprocessor family are introduced. January 1994 - Compaq Computer Corp. and AMD form long-term alliance und which Am486 microprocessors will power Compaq computers. March 10, 1994--Federal court jury confirms AMDs right to Intel microcode in 287 math coprocessor trial. 1997 - AMD introduces AMD-K6 processor. 1998 - AMD and Celeron announce long-term alliance to develop copper 2001AMD introduces AMD AthlonTM XP processor. 2001AMD introduces AMD Athlon MP dual processor for servers and workstations. 2002AMD introduces first Flash memory device based on Mirror BitTM architecture. 2003AMD introduces AMD OpteronTM processor for servers and workstations. 2003AMD introduces AMD Athlon 64 processor for desktop and notebook PCs.

2003AMD introduces the AMD Athlon 64 FX processor, enabling cinematic computing on the desktop

WORLDWIDE LOCATIONS OF THESE COMPANIES These companies having the presence over 45 countries but has representatives in offices around the world. They are: Asia Pacific Region Australia China Hong Kong India Korea Singapore Taiwan Sweden Latin America Region Chile Brazil Costa Rica Mexico Europe Middle East & Africa Region Belgium France Germany Ireland Israel Poland Russia United Kingdom North America Region United States Japan Tokyo

Project Report on Intel Processors Vs. AMD Processors RESEARCH OBJECTIVES

After the formulation of the problem for the study and the having the significance of problem we have the some of the research objectives for that we are doing the

study because with out any objective nothing is to be a study report. The research objectives of this study are as below stated: -

 First and utmost findings the consumer and business buying behavior for Processors.          Perception and awareness level of all companies in the market. Determination of customer satisfaction level in regard to various brands with Intel. Factor affecting the buying behavior of processors. Physical distribution of these companies competing with others. Difference between these companies in terms of product attributes. Find out the consumer and business target groups. To know the consumer and dealer profile of these companies customer and dealers. Identify the problem of consumer and dealer with these companies. Taking the suggestions and complaints of the consumer and dealer.

So that we are taking these some of the research objectives on which our study is based.

PRELIMINARY INVESTIGATION

After getting through of the research objectives now we go through step of the preliminary investigation to find out the necessary information to fill out the objectives of the study. The information expected to be collect on the basis of the preliminary investigation are:     The various brands and available companies in the market. The various feature of various brands competing with the Intel List of all dealer and auth. assembler in New Delhi. Various promotional, marketing, advertisements, sales activity and physical distribution of these companies.  Competition in terms of price and technology between different brands.    Future marketing plan from point of competition. List of strategic alliances and premium providers and their services. Mapping of buying behavior.

So that to fill out the objectives of study I have done the preliminary Investigation on overstated defined points and after that a list of needed information prepared in next chapter.

REVIEW OF EXISTING LITERATURE To study the buying behavior it necessary to aware with the market change in few years, because day by day the awareness of the computers is

growing bind along with that the entry of new players in the market grow rapidly. That has drastically hits the traditional processors market and makes the many changes in the few years. As to in the processor market the change is not only due to of competition but along with the change of technology. To see the market changes in few years we have to go through with the existing literature of processor market. In the computer studies as to not of such of studies are done only of few studies were done regarding computers and their perspectives by foreign as well as by the foreign writers. So some of the content can be used for this study, the few studies are used they are: -

 DR. S.P Joseph, Computer and Human Relation of IC and Blood, A.M.K. University, South Africa, 1998.  Louis. E. Frenzel, Computers Futures Man By Man, Parsons Electronics, USA, 2001.  Dr. A.K. Shiva Computer Impact over Human lives, Banglore University, India, 1998.  Mr. Arun Jain, Customer Satisfaction Level of Intel Products, Trainee at INTEL, G.G.S. University, 2002.

The some of useful and meaningful point of existing literature for this study are: - Customers of the processors are not only interested to the price but they pay more stress towards the advancement of technology for easy and speedy work.

Computer has made greater impact over human lives rather than the other technology invention and advancement.

Computer is another name of change, with that in each one or two years in computers technology changes is not a big and new thing.

Initially computers only provide the limited range of services but today we can not think any service without computers.

Till 1960 computers have the presence only in 5 countries around the globe but today approx. each and every country of world have computers.

So these are the extract of the computer literature that is useful towards the solution of buying behavior.

FOCUS OF STUDY Satisfaction is a person felling of pleasure or disappointment resulting from comparing a products perceived performance in relation to his or her expectations. So this study mainly focuses on:  The satisfaction level of customers the study based on the feedback collected from the filled questionnaire.   Whether the customer is satisfied with the supplied product and not. If customer is satisfied up to what extent and if is not satisfied why. What is the reason behind this?

Factors that affect the buying behavior as well as the customer satisfaction.

How customer taste and preferences affects the company marketing strategy.

How company is able to cater the demand and need of different target groups.

FUTURE SCOPE OF STUDY This study report has scope of understanding the different aspects of buying and this can be used in future for further study for: -       To understand the future demand of consumer and dealer To understand the future processor market characteristics. For making of better competition strategy in changing environment. Future marketing war and promotional plans decisions. For the study of future buying behavior affecting factor prediction. To check the customer satisfaction and brand awareness. Suggestions and complaints can be considered for future products.

So, those are the points of the future scope this study, in which this study can be used.

RESEARCH METHODOLOGY INTRODUCTION The research is a systematic, collection, recording and analyzing of data about the problem relating to the marketing of goods and services, It involves the diagnosis of information needs and the selection of relevant inter-related variables about which valid and reliable information is gathered, recorded and analyzed. This chapter of research methodology of report consisting of the series of steps of research process for the study BUYING BEHAVIOR OF COMPUTER PROCESSORS. This chapter consisting of the research process in both the aspect i.e. consumer buying behavior and business buying behavior for different computer processors. Along with this it explains the all of the research tools from collection of data till analyzing of collected data. Sample Size : Sales Persons Dealers Consumers Sampling Method Data Collection : : : : : 7 20 55 Convenience Sampling. Primary & Secondary Data.

DATA COLLECTION After making of the list of the needed information, source of data and the sampling plan the next step is taken out for the collection of data. In this study of the data is collected from primary as well as secondary data. The details of the source of the data are :  Primary & Secondary Data. Primary Data : Primary data are collected with the help of :  Questionnaire, Survey and feedback form.  Through interviewing of consumer and dealer.  Product supplement and Manual.  Product warranty cards. Secondary Data : Secondary data are collected with the help of :  From the books and journals of Intel.  From the

site www.intel.com, www.amd.com www.computertoday.com  Information from different officials.  From the magazines and newspapers article of Intel and others.

ANALYSIS INSTRUMENT After identify the variables and other factor on that basis the data is to be analyzed it is necessary to identify the tools and instrument through which the analysis of data is to be done and presented. So that it lead to the meaningful and good results from the analysis. In this study, we use the following instrument of analysis of data :     Tables Graphs and Charts Ratios Ranking Percentage

MACRO ANALYSIS  Most of the owners belongs to the income group of 300,000 and student category but on the other hand dealer have turnover around Rs. 15,00,000.  85 % respondents have the PC and on other hand only 5% have the laptop computer own and in that 92 have Intel Based processors.

97% are aware and performance about the Intel Brand and only 2% are aware about the AMD Processors.

90% are overall satisfied with the Intel Processors but on the other hand AMD have the 5% of the overall customer satisfaction level.

74% of the population says that the effective product education and supplement is to be supplied with the product and 90% of the Population know about the Intel service providers and overall satisfied with that.

92% of the population are strongly agreed that Intel uses the world best Technology in their processors.

84% of the population considered the technology first while purchasing the processors and the consumer perception about speed, company, technology, after sale service, warranty policy and price is excellent.

Friends and family members have the more influence in buying decision.

95% of the Intel Dealers says that the Intel have the maximum sale, most population, customer satisfaction than others.

88% of the dealers are the authorized dealer of Intel and they deal in genuine Intel Products.

Dealers say our 92% customers are satisfied and Intel influences the choice of consumers rather than the other brand in the market.

Dealers says the frequency of visit of Intel supervisor is mostly 2- 4 days in a week and 80% of the dealer are unsatisfied with the promotional activities of Intel and provides the marketing support to big dealers only.

91% of the dealer grades the Intel as the first position among other brands.

BUYING BEHAVIOR FINDINGS The most preferred and strong points are observed and find during the study are:     Intel products have the more customers irrespective of other competitors i.e. AMD. Intel premium providers are very happy with the Intel business criteria. As the advertisement expenses of Intel are very low but in comparison to others the brand awareness of Intel is very high. In India Intel is only company that providing the Laptop products and other accessories up to latest technology and also the number of range of products in laptop computers rather than other companies i.e. AMD and Cyrix. Intel divides its buying behavior consumer and business buyers in SMB unlike other competitors for facilitating the quality products and services. Friends and family members influence respondents more advertisements have comparatively less influence on buying decision. Relatives have negligible influence on purchase decision.

   

Irrespective of price the technology and speed are most preferred element. Perception of consumer about the attributes like product, company, technology is favorable to Intel. The main problem of consumer is find to be the price of product irrespective to others competitor i.e. AMD and Cyrix. The main problem of dealer is find to be that no advertisement assistance any other sales promotional and discount schemes for dealers. The customer satisfaction of Intel consumer and dealer is remarkable in comparison of other competitors.

RESPONDENT COMPLAINTS The complaints that are encountered during the study period from dealer as well as customers in suggestions columns of questionnaire are:  The first ever complaint of Intel product is that price of all product in comparison to other is very high.  Consumer says Intel gives 5-year warranty on their product but dealers gives only for 1 year.    Number of Advertisement on television is very less. Intel after sale service towards laptop products is not satisfactory. No range available for laptop products in any of brands.

 

Intel after sales service is not satisfactory. Procedure for replacement of product is very lengthy and it takes lots of time.

Service cost of premium provider is very costly and not satisfactory up to cost.

Dealer says any company does not give the advertisement assistance.

 

Intel attitude towards sub dealer is not up to remark. Dealer says that sales and promotional activities are not satisfactory.

RECOMMENDATIONS As the recommendations that are given by the dealer and consumer in suggestions columns of questionnaire for Intel are:  As price is most preferred attribute, so prices of product should be reduced as to make price competitive.  After sales service should be improved, by the arrangement of authorized service centers and dealers.  More advertisement should be given on television, newspapers etc. and based on childrens and family members.

The Company should provide promotional schemes & discount scheme to satisfy the consumers.

Advertisement

for business

buyers

should be

given and

advertisement assistance should be given to dealers.  Service of premium providers should be in reach of each user by reducing the prices and more service centers should be opened.  Intel should sponsors the T.V. programs, films and public services to promote the brand.  The company should promote its brands so that the target consumers hear its name about the technology.  The number of Authorized whole seller and dealer should be increased.  The more support should be given to authorized assemblers.

LIMITATIONS OF STUDY Though every effort was put in to make this report authentic in every sense, yet there were few factors, which might have their influence on the final report. Hence limitations of the study are:  This study is based on the primary data and observations; hence the probability of personal bias cannot be over rule.

Limited time is also a limitation due to much of the dealer and target consumers are not to be surveyed.

This study is conducted only in some part of Delhi due to of limited time constraints, so that results are confined to that area only.

Data could not be collected correctly as sometimes respondents did not respond seriously to the questions an d their response may not reflect the real picture.

Some times the dealers does not respond correctly due to of business time and due to of ill mood for conversation but tries to make possible and unbiased. Respondents, no matter, how honest they, normally do not exhibit their attribute and this kind of study retains such limitations.

In-co-operation of few dealers and consumers is another limitations of the study.

Major limitations number of respondent was very small which may not be true representative of population. CONCLUSION

In Delhi near about all dealers and retailer of computer hardware deals in Intel Processor.

Latest Technology and speed are the first attribute of choice of consumer and dealers.

All companies divides its buying behavior consumer and business buyers in SMB unlike other competitors for facilitating the quality products and services.

Dealer says if promotional activities and advertisements are to be increased then sale can be increased.

  

Discount schemes and gifts should be introduced for big Dealers. Credit period should be allowed. Consumer buyer decision mainly influenced by the friends and already user views.

Mostly consumers are interested in buying the computers during budget time.

Most of Intel based PC and laptop are happy with their performance.

 

Most of consumers are waiting for the other range of processors. Most of the consumer preferred the technology and speed first rather than the price and advertisement.

Please Tick () on Choice: QUESTIONNAIRE CONSUMER 1) Do You Own A Computer?

A) Yes B) No 2) If No Which Processor Based Computer Would You Like To Purchase A) And Intel B) Celeron C) Cyrix Specify D) AMD Why

___________________________________________. 3) If Yes Please Specify Type of Computer? A) 4) PC B) Notebook C) Server

For Whom Did You Buy PC? A) Personal B) Spouse HP C) D) Acer D) AMD Why This Children

5) Which PC Do You Own? A) Assembled B) HCL C) 6) Which Processor Your Computer Own? A) Intel B) Celeron C) Cyrix 7) Specify

___________________________________________. 8) Which processors uses The World Best Technology In Their Products A) Intel B) Celeron C) Cyrix D) AMID

9) Performance Of Your Computer With above specified Processors Is A) Excellent B) Very Good C) Good D) Poor E) Fair 10) Have You Ever Avail Service Of any processors Premium A) Yes B) No If Yes Specify Name _______________________________________ 11) Product Education And Supplement With The Product. A) Manual B) Warranty Card

C)

Credit Facility

D) All Mentioned

12) Would You Recommend Any Person To Purchase which Processor? Specify ______________________________________________. 13) Which Factor You Consider Most While Purchasing A Processor A) Technology 14) What is Your Perception About The Following Factor of computer Processors. Factor Price Speed Company Name Technology After Sale Service 15) How Did You Came To Know About different brands of processors. A) Friends B) Family C) Advertisements D) Dealer 16) What is The First Word That Comes In Your Mind When You Hear About any processors brand. Excellent Good Poor Cant Say Price B) Speed C) Company image D) Name

__________________________________________________________ 17) Do You Remember Any processors Advertisement

A) Yes If Yes: A) Intel Also

B) No B) Celeron Specify C) Cyrix Media D) AMD Place

_____________________

_______________ 18) Do You remember The Punch Line of any processors brand A) Intel B) Celeron C) Cyrix D) AMD Specify ___________________________________________________. 19) Any Suggestions And Complaints Respondent Profile First Name _________________ Last Name ________________ Age _______ Address ______________________________________________________ City _________________ Pin _______________________________________ Phone No ______________ Mobile No _____________ E-Mail ID __________ Profession A) Student B) Business man

C) Service man D) Self Employed Annually Family Income ( More than) A) 100,000 B) 150,000 C) 200,000

D) 300,000

Signature

1) A) 2)

Are You Dealer B) Sub Dealer C) Retailer D) Sub Retailer Which Brand Of Processor Based Computer or Processor Do You Deal A) Intel B) Celeron C) Cyrix D) AMD

3) Which Brand Of Processor Based Computer or Processor is Popular, Most Demanded A) 4) Intel B) Celeron C) Cyrix D) AMD

Why It Is Popular Or Demanded Most? Please Specify _____________________________________________.

5)

Which Type of PC Do You Own? A) Assembled B) HCL C) HP D) Acer

6)

Are You Authorized Assembler Of any processor brand A) Yes B) No

If YES please specify A) 7) Intel B) Celeron C) Cyrix D) AMD

Are You Authorized Assembler Of any Assembled PC

(if Yes Then Specify ) A) 8) HCL B) HP C) Acer

Which Processor Have the Maximum Sale At To Your Shop? A) Intel B) Celeron C) Cyrix D) AMD

9) Your Opinion About The Performance Of Computer With computer Processors is A) D) Poor And Which A) 10) Intel Excellent E) B) Fair Very Good C) Good

B) Celeron

C) Cyrix

D) AMD

Rank The Following Brand Of Processor As To Your Perception (From A to D)

11)

Please Specify To Which fou Influence The Choice Of Customer A) Intel B) Celeron C) Cyrix D) AMD

12) A)

The Choice Of Customer Towards Branded System Always 13) B) Some Times C) Mostly D) Never

Which Factor You and Customer Consider Most While Purchasing A Processor

A) Price B) Speed C) Company Image D) Technology 14) Frequency Of Visit Of any brand Supervisor (In a Week) A) And Whom A) 15) A) Intel B) Celeron C) Cyrix D) AMD 12 B) 24 C) 45 D) 56

Which Provides You Necessary Marketing Material Intel B) Celeron C) Cyrix D) AMD

16) A)

If Yes Please Specify Board D) B) Hoarding Glow Sign Board C) News Paper ad Support E) Pamphlets F) Other

17)

Which Provides You Ever Any Promotional Schemes A) Intel B) Celeron C) Cyrix D) AMD

18) 19)

Please Specify Type _______________________________________. Would You Recommend Any Person To Purchase Which Processor? A) Intel B) Celeron C) Cyrix D) AMD

20)

Any Suggestions And Complaints _______________________________________________________ _______________________________________________________

INTRODUCTION TO CONSUMER BUYING BEHAVIOUR

The 1990s have borne witness to dramatic shifts in the marketplace triggered by sharp changes in the lifestyle patterns of the past and present and the radical revolution in the telecommunication technology. Time tested concepts on Brand loyalty and Mass Marketing, are being turned on their heads as they fail to gauge the Behaviour of new generation customers. The behaviour is characterized by the uniqueness of individual expectations, the preference for multiple options, propensity to abandon Brand loyalty and switch to competition Brands that give higher (perceived) value. The new breed is even willing to import to satisfy specific requirement. It is difficult to classify this generation by conventional Demographic factors and unless their thought process and buying behaviour are fully understood, decisions on product designs and packaging, Branding and Distribution channels are likely to be misplaced. With the inevitability of change looming large over the horizon, Indian companies must learn from their western counterparts; not only to identify the sources, timing and direction of the changes

likely to affect India, but also the new competencies and perspective that will enable them to respond to these changes, comprehensively and effectively. Companies offering Product or Services will need to understand this new face of the customers. The changing Demographic profile of the population in terms of education, income, size of family and so on, are important by what will be more substantive in days to come will be the Psychographics of customers that is how they feel, think or behave. Markers will have to constantly monitor and understand the underlying Psychographics to map their respective industries are moving and decide what needs to be done, by way of adding value that motivates customers to buy the company s products and influence the future industry structure.

LITERATURE REVIEW
AWARENESS : This means to know about the existence of the product in the market. It is the first stage of the adoption process. The consumers are exposed to the product innovation. The consumers at this stage are not interested in more information about the product. PERCEPTION : It is defined as the process by which an individual selects, organizes and interprets stimuli into a meaningful and coherent of the world. It is how we see the world around us . Two persons subject to the same stimulus under the same conditions will react differently. A stimulus is any unit of input to any of the senses. The study of perception is largely the study of what we subconsciously add to or subtract from raw sensory to produce our own private picture of the world. ATTITUDE : In simple dictionary meaning attitude; means a way of thinking is a learned predisposition to behave in a consistently favorable or unfavorable way with respect to a given object. Attitudes are learned may be because of a previous experience with the product, information acquired from others, and exposure to mass media. Attitudes are not permanent, they do change over a period of time.

Consumer Behavior The study of consumers helps firms and organizations improve their marketing strategies by understanding issues such as how consumers think, feel, reason, and select between different alternatives (e.g., brands, products); The psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, media); The behavior of consumers while shopping or making other marketing decisions; Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome;

How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and how marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer. Understanding these issues helps in adapting strategies by taking the consumer into consideration. For example, by understanding that a number of different messages compete for our potential customers attention, one learns that to be effective, advertisements must usually be repeated extensively. It is also learnt that consumers will sometimes be persuaded more by logical arguments, but at other times will be persuaded more by emotional or symbolic appeals. By understanding the consumer, the company will be able to make a more informed decision as to which strategy to employ. The "official" definition of consumer behavior given in the text is "The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society. Behavior occurs either for the individual, or in the context of a group (e.g., friends influence what kinds of clothes a person wears) or an organization (people on the job make decisions as to which products the firm should use). Consumer behavior involves the use and disposal of products as well as the study of how they are purchased. Product use is often of great interest to the marketer, because this may influence how a product is best positioned or how we can encourage increased consumption. Since many environmental problems result from product disposal (e.g., motor oil being sent into sewage systems to save the recycling fee, or garbage piling up at landfills) this is also an area of interest. Consumer behavior involves services and ideas as well as tangible products. The impact of consumer behavior on society is also of relevance. For example, aggressive marketing of high fat foods, or aggressive marketing of easy credit, may have serious repercussions for the national health and economy. There are four main applications of consumer behavior:

The most obvious is for marketing strategyi.e., for making better marketing campaigns. For example, by understanding that consumers are more receptive to food advertising when they are hungry, we learn to schedule snack advertisements late in the afternoon. By understanding that new products are usually initially adopted by a few consumers and only spread later, and then only gradually, to the rest of the population, we learn that (1) companies that introduce new products must be well financed so that they can stay afloat until their products become a commercial success and (2) it is important to please initial customers, since they will in turn influence many subsequent customers brand choices. As a final benefit, studying consumer behavior should make us better consumers. Common sense suggests, for example, that if you buy a 64 liquid ounce bottle of laundry detergent, you should pay less per ounce than if you bought two 32 ounce bottles. In practice, however, you often pay a size premium by buying the larger quantity. In other words, in this case, knowing this fact will sensitize you to the need to check the unit cost labels to determine if you are really getting a bargain. There are several units in the market that can be analyzed. Research Methods There are two main categories of research methods. Secondary research uses research that has already been done by someone else. For example, marketers often find information compiled by the U.S. Census very useful. However, in some cases, information specific enough to satisfy a firms needs is not publicly available. Original research that a firm does for itself is known as primary research. There is no one perfect primary research method. Each has strengths and weaknesses, and thus the appropriate method must be selected based on research needs. Surveys are useful for getting a great deal of specific information. Surveys can contain open-ended questions or closed-ended, where the respondent is asked to select answers from a brief list. Open ended questions have the advantage that the respondent is not limited to the options listed, and that the respondent is not being influenced by seeing a list of responses. However, open-ended questions are often skipped by respondents, and coding them can be quite a challenge. In general, for surveys to yield meaningful responses, sample sizes of over 100 are usually required because precision is essential.

Surveys come in several different forms. Mail surveys are relatively inexpensive, but response rates are typically quite lowtypically from 5-20%. Phone-surveys get somewhat higher response rates, but not many questions can be asked because many answer options have to be repeated and few people are willing to stay on the phone for more than five minutes. Mall intercepts are a convenient way to reach consumers, but respondents may be reluctant to discuss anything sensitive face-to-face with an interviewer. Focus groups involve getting a group of 6-12 consumers together to discuss product usage. Focus groups are especially useful if we do not have specific questions to ask yet, since we dont know what consumers concerns might be. Drawbacks of focus groups include high costs and the fact that generalization toward the entire population is difficult for such small sample sizes. The fact that focus groups involve social interaction also means that participants may say what they think will make themselves look good rather than what they really believe (the social desirability bias). Personal interviews involve in-depth questioning of an individual about his or her interest in or experiences with a product. The benefit here is that one can get really into depth . but this method of research is costly and can be extremely vulnerable to interviewer bias. Projective techniques are used when a consumer may feel embarrassed to admit to certain opinions, feelings, or preferences. The main problem with this method is that it is difficult to analyze responses. Observation of consumers is often a powerful tool. Looking at how consumers select products may yield insights into how they make decisions and what they look for. Observation may help in determining how much time consumers spend comparing prices, or whether nutritional labels are being consulted. Physiological measures are occasionally used to examine consumer response. For example, advertisers may want to measure a consumers level of arousal during various parts of an advertisement. Segmentation

Segmentation basically involves dividing consumers into groups such that members of a group (1) are as similar as possible to members of that same group but (2) differ as much as possible from members other segments. This enables us then to "treat" each segment differentlye.g., by: Providing different products (e.g., some consumers like cola taste, while others prefer lime) . Offering different prices (some consumers will take the cheapest product available, while others will pay for desired features). Distributing the products where they are likely to be bought by the targeted segment. In order for a segment structure to be useful:  Each segment must have an identityi.e., it must contain members that can be described in some way (e.g., price sensitive) that behave differently from another segment.  Each segment must engage in systematic behaviors (e.g., a price sensitive segment should consistently prefer the low price item rather than randomly switching between high and low priced brands).  Each segment must offer marketing mix efficiency potentiali.e., it must be profitable to serve. For example, A smaller segment may be profitable if, for example, it is price insensitive or can be targeted efficiently . Some segments are not cost effective. There are three "levels" of segmentation. Levels here refer to the tradeoff between the difficulty of implementing a segmentation scheme and the benefits that result.  The first level of segmentation involves personal characteristicse.g., demographics. The trouble with this method of segmentation, however, is that there is often not a good correlation between personal characteristics of consumers and what they want to buy. Psychographics includes a bit more information about the consumer than his or her mere descriptive characteristics.  The second level is benefit desiredthat is, segmenting on what someone wants rather than who he or she is. Implementing segmentation on benefit desired is more difficult. The benefit, however, is that one can now make

product that matches more closely a particular segments specific desires, and one can promote, price, and distribute it according to the desires of the segment. This method, then, lends itself extremely well to strong product positioningone make a product that offers specific benefits, and we aggressively promote this fact to interested consumers. A drawback, however, is some efficiency is lost in marketing communication.  The third level is segmentation based on behavior. Behavior here refers to a persons response (or lack of response) to a given treatment. The rewards are often great, because one can tailor the kind of deal we give a consumer to the minimum concession needed to get that consumer to buy our (as opposed to a competing) product. Direct marketing offers exceptional opportunities for segmentation because marketers can buy lists of consumer names, addresses, and phone-numbers that indicate their specific interests. Culture Culture is part of the external influences that impact the consumer. That is, culture represents influences that are imposed on the consumer by other individuals. The definition of culture offered in the text is "That complex whole which includes knowledge, belief, art, morals, custom, and any other capabilities and habits acquired by man person as a member of society." From this definition, one can make the following observations: Culture, as a "complex whole," is a system of interdependent components. Knowledge and beliefs are important parts. Other issues are relevant. Art, for example, may be reflected in the rather arbitrary practice of wearing ties in some countries and wearing turbans in others. Culture has several important characteristics: (1) Culture is comprehensive. This means that all parts must fit together in some logical fashion. (2) Culture is learned rather than being something we are born with. (3) Culture is manifested within boundaries of acceptable behavior.. (4) Conscious awareness of cultural

standards is limited. (5) Cultures fall somewhere on a continuum between static and dynamic depending on how quickly they accept change. Cultural rules can be categorized into three types. Formal rules carry relatively explicit standards as to how one should behave, and violations often carry severe sanctions. Informal rules, on the other hand, are less explicit and may not carry sanctions for violation. Finally, technical cultural rules involve implicit standards as to what constitutes a good product. Language is an important element of culture. It should be realized that regional differences may be subtle. Subculture is often categorized on the basis of demographics. While part of the overall culture, these groups often have distinguishing characteristics. An important consequence is that a person who is part of two subcultures may experience some conflict. Values are often greatly associated with age groups because people within an agegroup have shared experiences. Regional influence, both in the United States and other areas, is significant. Family Decision Making The Family Life Cycle. Individuals and families tend to go through a "life cycle." The simple life cycle goes from child/teenager ---> young single ---> young couple* ---> full nest ---> empty nest ---> widow(er). A "couple" may either be married or merely involve living together. The breakup of a non-marital relationship involving cohabitation is similarly considered equivalent to a divorce. full nest ---> single parent This situation can result either from divorce or from the death of one parent. Divorce usually entails a significant change in the relative wealth of spouses. In some cases,

the non-custodial parent (usually the father) will not pay the required child support, and even if he or she does, that still may not leave the custodial parent and children as well off as they were during the marriage. On the other hand, in some cases, some non-custodial parents will be called on to pay a large part of their income in child support. This is particularly a problem when the non-custodial parent remarries and has additional children in the second (or subsequent marriages). Divorced parents frequently remarry, or become involved in other non-marital relationships; thus, we may see full nest ---> single parent ---> blended family Another variation involves young single ---> single parent Generally, there are two main themes in the Family Life Cycle, subject to significant exceptions: As a person gets older, he or she tends to advance in his or her career and tends to get greater income (exceptions: maternity leave, divorce, retirement). Unfortunately, obligations also tend to increase with time (at least until ones mortgage has been paid off). Children and paying for ones house are two of the greatest expenses. Note that although a single person may have a lower income than a married couple, the single may be able to buy more discretionary items. Family Decision Making: Individual members of families often serve different roles in decisions that ultimately draw on shared family resources. Some individuals are information gatherers/holders, who seek out information about products of relevance. These individuals often have a great deal of power because they may selectively pass on information that favors their chosen alternatives. Influencers do not ultimately have the power decide between alternatives, but they may make their wishes known by asking for specific products or causing embarrassing situations if their demands are not met. The decision maker(s) have the power to determine issues such as:

y y y y y

whether to buy; which product to buy (pick-up or passenger car?); which brand to buy; where to buy it; and when to buy.

One is bargainingone member will give up something in return for someone else. strategy is reasoningtrying to get the other person(s) to accept ones view through logical argumentation. Group Influences Humans are inherently social animals, and individuals greatly influence each other. A useful framework of analysis of group influence on the individual is the so called reference groupthe term comes about because an individual uses a relevant group as a standard of reference against which oneself is compared. Reference groups come in several different forms. The aspirational reference group refers to those others against whom one would like to compare oneself. Associative reference groups include people who more realistically represent the individuals current equals or near-equalse.g., coworkers, neighbors, or members of churches, clubs, and organizations. Finally, the dissociativereference group includes people that the individual would not like to be like. Reference groups come with various degrees of influence. Primary reference groups come with a great deal of influencee.g., members of a fraternity/sorority. Secondary reference groups tend to have somewhat less influencee.g., members of a boating club that one encounters only during weekends are likely to have their influence limited to consumption during that time period. Another typology divides reference groups into the informational kind (influence is based almost entirely on members knowledge), normative(members influence what is perceived to be "right," "proper," "responsible," or "cool"), or identification. The difference between the latter two categories involves the individuals motivation for compliance. In case of the normative reference group, the individual tends to comply largely for utilitarian reasonsdressing according to company standards is likely to help your career, but there is no real motivation to dress that way outside the job. In contrast, people comply with identification groups standards for the sake of

belongingfor example, a member of a religious group may wear a symbol even outside the house of worship because the religion is a part of the persons identity. Diffusion of Innovation The diffusion of innovation refers to the tendency of new products, practices, or ideas to spread among people. Usually, when new products or ideas come about, they are only adopted by a small group of people initially; later, many innovations spread to other people. The saturation point is the maximum proportion of consumers likely to adopt . Several forces often work against innovation. One is risk, which can be either social or financial. Another risk is being perceived by others as being weird for trying a "fringe" product or idea. Other sources of resistance include the initial effort needed to learn to use new products (e.g., it takes time to learn to meditate or to learn how to use a computer) and concerns about compatibility with the existing culture or technology. Innovations come in different degrees. A continuous innovation includes slight improvements over time. A dynamically continuous innovation involves some change in technology, although the product is used much the same way that its predecessors were usede.g., jet vs. propeller aircraft. A discontinous innovation involves a product that fundamentally changes the way that things are donee.g., the fax and photocopiers. Some cultures tend to adopt new products more quickly than others, based on several factors:  Modernity: The extent to which the culture is receptive to new things. In some countries, such as Britain and Saudi Arabia, tradition is greatly valuedthus, new products often dont fare too well. The United States, in contrast, tends to value progress.  Homophily: The more similar to each other that members of a culture are, the more likely an innovation is to spreadpeople are more likely to imitate similar than different models. The two most rapidly adopting countries in the World are the U.S. and Japan. While the U.S. interestingly scores very low, Japan scores high.

 Physical distance: The greater the distance between people, the less likely innovation is to spread.  Opinion leadership: The more opinion leaders are valued and respected, the more likely an innovation is to spread. The style of opinion leaders moderates this influence, however. In less innovative countries, opinion leaders tend to be more conservative, i.e., to reflect the local norms of resistance. Perception Background. Our perception is an approximation of reality. Our brain attempts to make sense out of the stimuli to which we are exposed. sequential factors influence our Factors in percpetion. Several perception. Exposure involves the extent to which we encounter a stimulus. Most of this exposure is randomwe dont plan to seek it out. Exposure is not enough to significantly impact the individualat least not based on a single trial In order for stimuli to be consciously processed, attention is needed. Interpretation involves making sense out of the stimulus.Webers Law suggests that consumers ability to detect changes in stimulus intensity appear to be strongly related to the intensity of that stimulus to begin with. Several factors influence the extent to which stimuli will be noticed. One obvious issue is relevance. Consumers, when they have a choice, are also more likely to attend to pleasant stimuli (but when the consumer cant escape, very unpleasant stimuli are also likely to get attentionthus, many very irritating advertisements are remarkably effective). Surprising stimuli are likely to get more attentionsurvival instinct requires us to give more attention to something unknown that may require action. A greater contrast (difference between the stimulus and its surroundings) as well as greater prominence (e.g., greater size, center placement) also tend to increase likelihood of processing. Learning and Memory Background. Learning involves "a change in the content or organization of long term memory and/or behavior." The first part of the definition focuses on what we know (and can thus put to use) while the second focuses on concrete behavior.

Classical conditioning. Pavlovs early work on dogs was known as classical conditioning. Pavlov discovered that when dogs were fed meat powder they salivated. Pavlov then discovered that if a bell were rung before the dogs were fed, the dogs would begin salivating in anticipationof being fed (this was efficient, since they could then begin digesting the meat powder immediately). Pavlov then found that after the meat had been "paired" with the meat powder enough times, Pavlov could ring the bell without feeding the dogs and they would still salivate. In the jargon of classical conditioning, the meat powder was an unconditioned stimulus (US) and the By pairing the bell with the unconditioned stimulus, the bell became a conditioned stimulus (CS) and salivation in response to the bell (with no meat powder) became aconditioned response (CR). Operant conditioning. Instrumental, or operant, conditioning, involves a different series of events, and this what we usually think of as learning. The general pattern is: Behavior ---> consequences ---> behavior is more or less likely to be repeated There are three major forms of operant learning. In positive reinforcement, an individual does something and is rewarded. He or she is then more likely to repeat the behavior. Punishment is the opposite. It should be noted that negative reinforcement is very different from punishment. In general, marketers usually have relatively little power to use punishment or negative reinforcement. Several factors influence the effectiveness of operant learning. In general, the closer in time the consequences are to the behavior, the more effective the learning. However, it is not necessary to reward a behavior every time for learning to occur. Even if a behavior is only rewarded some of the time, the behavior may be learned. Memory. There are two kinds of memory. When you see an ad on TV for a mail order product you might like to buy, you only keep the phone number in memory until you have dialed it. This is known as short term memory. In order for something to enter into long term memory, which is more permanent, you must usually "rehearse" it

several times. A special issue in memory are so called "scripts," or procedures we remember for doing things. Scripts involve a series of steps for doing various things (e.g., how to send a package). Motivation, Personality, and Emotion Perspectives on Consumer Behavior and Motivation: People considered several perspectives on behavior as a way to understand what motivates the consumer. Each of these perspectives suggests different things as to what the marketer should do and what can (and cannot) be controlled. The Hard Core Behavioral perspective is based on learning theories such as operant and classical conditioning. These theories suggest that consumers must learn from their own experiences rather than merely observing other people who overeat and get sick. The Social Learning Perspective, in contrast, allows for vicarious learning--i.e., learning obtained by watching others getting good or bad consequences for behavior. The models that may be observed and imitated include peers and family members as well as relevant others that may be observed in advertising. Certain people are more likely to be imitated than othersGenerally, observations are made of overt behavior, but some room is made for individual reasoning in learning from others. This perspective is clearly more realistic than that of the "Hard Core" view. The Cognitive approach emphasizes consumer thinking rather than mere behavior.Here, the emphasis is on how people reason themselves to the consequences of their behavior. It is often somewhat more difficult to attempt to "get into" a consumers head than it is to merely observe his or her behavior, and what we "observe" is somewhat more subjective. The Biological approach suggests that most behavior is determined by genetics or other biological bases. By this perspective, it is suggested that consumers eat the foods they eat in large part because the body craves these foods. The main implication of biological determinism is that the marketer must adapt--for example, food advertisements are more likely to be effective when people are hungry, and thus they might better be run in the late afternoon rather than in the late morning.

The Rational Expectations perspective is based on an economic way of looking at the World. The Psychoanalytic perspective is based on the work of historical psychologists such as Sigmund Freud who suggest that (1) much behavior has a biological basis which is (2) often sexual in nature, and (3) that early experiences in childhood will have a profound, but unconscious effect on later life. Although modern psychologists certainly recognize that early experiences may influence later psychological well being, the psychoanalytic view has largely been discredited today as being much too centered on the issue of sex. Properties of motivation: Motivation is described through several properties:  Motivation is composed of energy and direction. A person may or may not have enough motivation to engage in a given activity.  Motives may be overt, hidden, and multiple. Some motivations are publicly expressed (e.g., the desire to buy an energy efficient house), while others (e.g., the desire to look wealthy by buying a fancy car) are not.  Many motivations are driven by the desire for tension reduction (e.g., eliminate thirst or hunger).  Motivations can be driven by both internal and external factors.  Motivations may have either a positive or negative valence--people may either be motivated to achieve something (e.g., get a promotion at work) or avoid something (e.g., being hospitalized without having adequate insurance).  Consumers are motivated to achieve goals. Achieving these goals may require sustained activity over time (e.g., exercising every day for months or years) as opposed to just taking some action once.  Consumers maintain a balance between the desires for stability and variety. M  Motivation reflects individual differences. Different consumers are motivated to achieve different things, and it may be difficult to infer motivations from looking at actual behavior without understanding these differences in desired outcomes.

Personality and consumer behavior: Traditional research in marketing has not been particularly successful in finding a link between personality and consumer behavior. Emotion. Emotion impacts marketing efforts in several ways. One purpose is to get attention to a stimulus (since emotionally charged individuals tend to be less predictable than calmer ones, there has been an evolutionary advantage in paying attention to emotion). Secondly, emotion influences information processing. Attitudes Definition. Consumer attitudes are a composite of a consumers (1) beliefs about, (2) feelings about, (3) and behavioral intentions toward some object within the context of marketing, usually a brand or retail store. These components are viewed together since they are highly interdependent and together represent forces that influence how the consumer will react to the object. Beliefs. The first component is beliefs. A consumer may hold both positive beliefs toward an object (e.g., coffee tastes good) as well as negative beliefs (e.g., coffee is easily spilled and stains papers). In addition, some beliefs may be neutral. Affect. Consumers also hold certain feelings toward brands or other objects. Sometimes these feelings are based on the beliefs (e.g., a person feels nauseated when thinking about a hamburger because of the tremendous amount of fat it contains), but there may also be feelings which are relatively independent of beliefs. Behavioral intention. The behavioral intention is what the consumer plans to do with respect to the object (e.g., buy or not buy the brand). As with affect, this is sometimes a logical consequence of beliefs (or affect), but may sometimes reflect other circumstances. Attitude-Behavior Consistency. Consumers often do not behave consistently with their attitudes for several reasons:  Ability. He or she may be unable to do so.  Competing demands for resources.  Social influence.

 Measurement problems. Measuring attitudes is difficult. In many situations, consumers do not consciously set out to enumerate how positively or negatively they feel about mopeds. Attitude Change Strategies. Changing attitudes is generally very difficult, particularly when consumers suspect that the marketer has a self-serving agenda in bringing about this change (e.g., to get the consumer to buy more or to switch brands). Changing affect. One approach is to try to change affect, which may or may not involve getting consumers to change their beliefs. One strategy uses the approach of classical conditioning try to "pair" the product with a liked stimulus. Finally, products which are better known, through the mere exposure effect, tend to be better liked--that is, the more a product is advertised and seen in stores, the more it will generally be liked,even if consumers to do not develop any specific beliefs about the product. Changing behavior. People like to believe that their behavior is rational; thus, once they use our products, chances are that they will continue unless someone is able to get them to switch. ----One way to get people to switch to one brand is to use temporary price discounts and coupons; however, when consumers buy a product on deal, they may justify the purchase based on that deal (i.e., the low price) and may then switch to other brands on deal later. A better way to get people to switch to our brand is to at least temporarily obtain better shelf space so that the product is more convenient. Consumers are less likely to use this availability as a rationale for their purchase and may continue to buy the product even when the product is less conveniently located. (Notice, by the way, that this represents a case of shaping). Changing beliefs. Although attempting to change beliefs is the obvious way to attempt attitude change, particularly when consumers hold unfavorable or inaccurate ones, this is often difficult to achieve because consumers tend to resist. Several approaches to belief change exist:  Change currently held beliefs. It is generally very difficult to attempt to change beliefs that people hold, particularly those that are strongly held, even if they are inaccurate.  Change the importance of beliefs.

 Add beliefs. Consumers are less likely to resist the addition of beliefs so long as they do not conflict with existing beliefs.  Change ideal. It usually difficult, and very risky, to attempt to change ideals, and only few firms succeed. One-sided vs. two-sided appeals. Attitude research has shown that consumers often tend to react more favorably to advertisements which either (1) admit something negative about the sponsoring brand or (2) admits something positive about a competing brand Two-sided appeals must, contain overriding arguments why the sponsoring brand is ultimately superior. The Elaboration Likelihood Model (ELM) and Celebrity Endorsements. The ELM suggests that consumers will scrutinize claims more in important situations than in unimportant ones. The ELM suggests that for "unimportant" products, elaboration will be low. However, for products which are either expensive or important for some other reason elaboration is likely to be more extensive, and the endorser is expected to be "congruent," or compatible, with the product. Appeal approaches. Several approaches to appeal may be used. The use of affect to induce empathy with advertising characters may increase attraction to a product, but may backfire if consumers believe that peoples feelings are being exploited. Fear appeals appear to work only if (1) an optimal level of fear is evoked--not so much that people tune it out, but enough to scare people into action and (2) a way to avoid the feared stimulus is explicitly indicated. Humor appears to be effective in gaining attention, but does not appear to increase persuasion in practice. In addition, a more favorable attitude toward the advertisement may be created by humorous advertising, which may in turn result in increased sales. Comparative advertising, which is illegal in many countries, often increases sales for the sponsoring brand, but may backfire in certain cultures. Self-Concept, Situational Influences, and Lifestyle The self-concept. The consumer faces several possible selves. The actual self reflects how the individual actually is, although the consumer may not be aware of that reality

In contrast, the ideal self reflects a self that a person would like to have, but does not in fact have. The private self is one that is not intentionally exposed to others. The key here is to keep in mind which kind of self one is trying to reach in promotional messages. Individuals will often seek to augment and enhance their self concepts, and it may be possible to market products that help achieve this goal. Lifestyles. Self-concept often translates into a persons lifestyle, or the way that he or she lives his or her life. Attempts have been made to classify consumers into various segments based on their lifestyles. For example, both "Achievers" and "Strivers" want public recognition, but only the Achievers have the resources to bring this about. A global analogue is the Global Scan. Situational influences. Specific circumstances often influence consumer behavior. Consumers whose attention is demanded elsewhere are likely to disregard commercial messages. Consumer Decision Making Definitions. Consumer decision making comes about as an attempt to solve consumer problems. A problem refers to "a discrepancy between a desired state and an ideal state which is sufficient to arouse and activate a decision process." Consumer Problem Recognition. Consumers often note problems by comparing their current, or actual, situation, explicitly or implicitly, to some desired situation. In terms of the "big picture," what is compared may be the totality of ones lifestyle. Problems come in several different types. A problem may be an active one (e.g., you have a headache and would like as quick a solution as possible) or inactive-- you are not aware that your situation is a problem (e.g., a consumer is not aware that he or she could have more energy with a new vitamin). Problems may be acknowledged (e.g., a consumer is aware that his or her car does not accelerate well enough orunacknowledged (e.g., a consumer will not acknowledge that he or she consumes too much alcohol). Finally, needs can be relatively specific (generic), as in the need for enjoyment (which can be satisfied many different ways), or specific, as in the need for professional attire to wear at a new job.

Creating problems for consumers is a way to increase sales, albeit a questionably ethical one. One way to create new problems, and resultant needs, is to create a new ideal state. There are two main approaches to search. Internal searches are based on what consumers already know. Thus, it may be important for certain firms to advertise to consumers before they actually need the product. A problem is that some excellent ones which are not remembered, or have never been heard of, are not considered. External searches get people to either speak to others (getting information by word of mouth) or use other sources (such as advertisements now sought out or yellow page listings). Consumers often do not consider all alternatives. Some are not known (the "unawareness" set), some were once known but are not readily accessible in memory (the "inert" set), others are ruled out as unsatisfactory (the "inept" set--e.g., Glad bags attempts to get "bargain bags" into that set), and those that are considered represent the "evoked" set, from which one alternative is likely to be purchased. The amount of effort a consumer puts into searching depends on a number of factors such as the market (how many competitors are there, and how great are differences between brands expected to be?), product characteristics (how important is this product? How complex is the product? How obvious are indications of quality?), consumer characteristics (how interested is a consumer, generally, in analyzing product characteristics and making the best possible deal?), and situational characteristics (as previously discussed). Two interesting issues in decisions are variety seeking (where consumers seek to try new brands not because these brands are expected to be "better" in any way, but rather because the consumer wants a "change of pace," and "impulse" purchases. Impulse purchases are, generally speaking, unplanned, but represent a somewhat fuzzy group. Public Policy Issues There are certain marketing practices which may harm consumers. Two main issues are (1) deceptive marketing practices (such as misleading advertising) and (2) the marketing of dangerous or otherwise harmful products (e.g., tobacco). The following are some ethical problems that occur in marketing, and the question arises as to which, if any, kind of government intervention is appropriate.

 Marketing efforts may encourage excess consumption (e.g., products that consumers cannot afford and do not really need). However there are many gray areas--e.g., cosmetics, video games, and even something as politically correct as a gourmet coffee houses. A special case involves marketing to children, whose parents may be coerced, often out of guilt, to buy questionable items aimed at children.  Resource depletion and waste disposal issues associated with the above consumption. Some European countries have mandated that manufacturers be required to take back packaging materials for their products.  Deceptive marketing practices: Products claim benefits which really do not result from use of the product (as is done by numerous manufacturers of nutritional supplements); advertising may be misleading (may not indicate the true cost of a product up front or may contain "fine print" that the consumer is unlikely to see or understand)  Products are unhealthy (e.g., many childrens foods contain excessive fat). Government action is often considered, although it may not always be effective. For example, although the government requires the use of warning labels on some products, manufacturers will often try to "water down" the warnings as much as possible. Further, the prevalence of warning labels today may desensitize consumers since reading all of them carefully would provide the consumer with information overload. Another issue is anti-competitive behavior. Antitrust laws are generally aimed at prohibiting firms from conspiring to "fix" prices or collectively drop service levels. Antitrust law is, however, a "thorny" area. Consumers may benefit, for example, as some less efficient firms are driven out of business, and may benefit from the efficiencies which may or may not materialize when large firms "gobble up" smaller ones--a defense used in the Microsoft trial.

TOOTHPASTE INDUSTRY: AN OVERVIEW

The toothpaste history in India can be tracked back from 1975 with 1200 tonnes of toothpaste produced by the toothpaste industry. Prior to the toothpastes Oral Hygiene was the domain of local home made powders and ayurvedh practitioners. With the entry of Colgate in Indian marketplace the awareness about Oral care and the importance of oral care. In recent years the Industry has shown impressive growth rate of 18.6% (this growth is calculated in terms of value growth in Rs. ). The growth in the Urban market has been largely by the Gel Segment. Presently, a large chunk of the Market is still held by Colgate. The major players in the toothpaste Industry being Colgate Palmolive and Hindustan Lever Limited and several minor players like Balsara hygiene, Dabur etc. Presently Colgate Dental Cream holds 52% of market share. HLLs Close up lies far behind with 23% of the existing market share. The third player in the marketplace in terms of market share is Colgate Gel with 10.5% of the market share. That leaves 14.5% market share for other Brands like Pepsodent, Pepsodent G, Promise, Babool, Sensofoam, Forhans, Cibaca, Neem,Vicco etc. The toothpaste market is presently valued at Rs. 750 crores out of which the Gel segment has already bagged 1/3rd portion of it. The Gel segment presently stands at Rs. 248 crores and is growing at a rate much faster than Cream. In India toothpaste usage as compared to other countries is very low which signifies about the potential of the market. In Urban India the usage of toothpaste per person per year is just 190gms. Where as it is 200gms of toothpaste per person per year in developing countries as Indonesia and Thailand. In developed countries as USA and other European countries the toothpaste usage is 375 gms per person year. In India the toothpastes companies are going in for advertising on a heavy note, on an average the companies managing this FMCG category are spending 6.15% of their sales on development. Colgate Palmolive had shelled out 15% of their sales on ads in the year 1994. Dabur had an ad expenditure of 5.07% for the year 1993. whereas balsara Hygiene spend a huge 10.17% of their sales.

TOOTHPASTE COMPANIES AND TOOTHPASTE BRANDS (1) Company : Shri Niranjan Aurvedh Bhawan, Tumsur (Mah) Niranjan

Product Range

(a) 200 gm Tube (b) 100 gm Tube (c) 50 gm Tube Segmenting Factor Target : :

Rs Rs Rs Veg. / Non-veg. Population 20% educate customers that all toothpastes have di-calcium phosphate or bone ash which is animal based. Whereas they use calcium rich PIPAL insted. Maharastra 107 (newly appointed) Yoga For Teeth. Vicco Vajradanti, but they feel that will beat them in the price game as VICCOs 200 gm tube for Rs 44.

Availability Distributors Positioning Stance Direct Competitor

: : : :

(2) Company Brand Name Marketed By Product Range

: : : :

Hindustan Lever Limited Close Up Hindustan Lever limited (HLL) Close Up (Red, Green, Blue) 50 gm Rs 100 gm Rs 150 gm Rs

Pepsodent

50 GM Rs 100 GM Rs

200 GM Rs Pepsodent G : 50 gm Rs 150 gm Rs Segmenting Factor Targeted At : : Age Young people. The target market being Multi Brand Households where young does not use what their parents. This particular targeting was significant when Close Up was launched because Colgate positioning was a sort of Flip flop between Tooth decay and Bad Breath and Colgate was going for a Broad market constituting of all the age groups.

Sought to be perceived by the customers was Fresh Breath. The physical appearance by the users, the Bright Red Gel synerized well with the Fresh breath Benefit. The advertising account was handled by LINTAS which focused on Fresh Breath that brought teenagers closer. By 1980 Close Up had 3% of the 16,000 tonnes toothpaste market. The production capacity was doubled through a deal with third party manufacturer and the Brand was taken National over the next year and a half, the Premium slashed by 30%. In 1983Colgate started fearing after witnessing a downfall in market share and started airing its campaign by inviting customers into its Dental ring of confidence, by stressing more on breath and posing as a complete toothpaste. Close Up countered this move by sharpening product benefits, while urging the customers to do the HA test by blowing air on the palm, the message was that Close Up feels a lot cooler which reiterated the basic benefit of a fresh breath. 1987 was a Probe into Problem year for HALL as Close Up was much below expectations with only 4.5% of the 32,000 tonnes toothpaste market. They identified two basic problems:

(1) Appearance of Toothpastes detracts prospects from its serious buyers. (2) Commercials displayed too much of proximity between couples which was too much for a mother, who actually purchased the Toiletries. 1998 Lever reworked 3 Ps in its Marketing mix in Tamil Nadu where people have a strong sense of Oral Hygiene and the area has a cost effective media Reach. The three reworked Ps are as follows: (1) Product : Blue mint flavour introduced. Tangerines of Read reduced. (for serious buyers.) Soft Squeeze lamitubes for toothpastes introduced for the first time in the country.

(2) Communication Advertisement focus moved from spotlight to Gregarious couples. This group orientation was more acceptable to the Mother.

(3) Distribution Took Brand to Sub Urban and Rural areas. Posters and Mobile Vans arrived in areas where Urban lifestyle was a matter of aspiration. This was a purposeful move as the company did not want the Brand to be saddled with a restrictive.

Up market image In the year 1990, Colgate followed Close Up by launch of its Blue Colgate Gel. It was targeted at the youngsters within its Brand fold who were seeking Freshness. It was priced at par with Close Up gel. The Colgate ad showed a fluorescent Blue spiral round the users body and it talked of Fresh Breath Energy. By this time Gel became the Battleground in order to become the leader because: * * There is rapid expansion in gel segment. Youngsters thought white paste to be outdated.

In 1991, Close Up launched Zing Green and simultaneously Lever sponsored Close Up Sangeet Muquabala targeted at the rural youth. In 1991 Close Ups market share increased to 16% of Rs 377 crores per year market. 1991 witnessed a few problems for Close Up Blue, which was faltering on repeat purchases as customers did not perceive

much freshness value in it. In 1992, HLL launched AQUA BLUE with added attributes like increased Mouthwash contents and a more Minter flavour, so that customers perceived benefit is Freshness which is Levers Positioning stance. In response Colgate introduced Red Actirinse and then Colgate Blue. People at HLL thought to counter Colgates growth by cashing in on Medicinal appeal and came out with Pepsodent with Germicheck snf Mentadent G now renamed as Pepsodent G for Gum problems. Colgate countered this move by launching Colgate Total as an advanced paste to fight. Tartar, Gingivitis, and other Dental ailments. 1993 was the year when HLL tried to woo the customers by innovative packaging. Firstly it introduced Stand Up Pump dispensers for metros but it bombed in the market because of High price perception as compared to benefits. Sachets formula was used by lever to break into Colgates fort. The Close Up sachets was priced at Rs. 3 per unit and it offered 20 uses, which means that a family of five could use it four times each. The year it sponsored zee Close Up Antaksharee. HLL also went in for Close Up Toothbrushes under the Brand name Confident and launched it in Tamil Nadu. The confident toothbrushes were taken National and most importantly HLL advertisement account shifted from LINTAS to FTA due to Global alignment move by Levers parent Unilever. The brief given to the new agency was to Strengthen the Audiences perception of Brands functional values. Close Ups formulation was reworked and the new Close Up was enriched with Microwhiteners so that the perceived benefit by the customer be that he will have Shining Teeth. As the ad account was handed over to HTA, the ad moved closer to the Indian Culture, they also took note of the cultural changes which showed in their ads like Females were now more than equal participants in Boy Girl activity as in Salim Anarkali ad which showed her confidence by joining the Boy on the stage and saving the day. 1996 witnessed introduction of Close Up Liquifresh a liquid in a carry along squeeze can in two sizes :
y y

30 gm Rs. 100 gms Rs.

HLL gave it a dual positioning platform of a Mouthrinse and a toothpaste, like squeeze the Gel directly into Mouth. Close Up is pushing hard for semi Urban and Rural areas were disposable incomes are rising rapidly and in order to tap these markets it is going for Vernacular Advertising in Eight languages. In Bengal as the communication did not

work all that work initially, HTA has contracted Anjan Dutta a signer popular with both Young and old alike in Bengal. 3) Company : Colgate Palmolive (India) Limited Brand : Colgate Product Range : 1. Colgate dental Cream * * * * * 50 gm 100 gm 150 gm 200 gm 250 gm Rs. Rs. Rs. Rs.

2. Colgate Gel (Blue and Red) 50 gm 100 gm 150 gm 200 gm 250 gm Rs. Rs. Rs. Rs. Rs. -

3. Colgate Total 50 gm 100 gm 150 gm 200 gm Rs. Rs. Rs. Rs. -

4. Colgate Calciguard 50 gm 100 gm 150 gm 200 gm Rs. Rs. Rs. Rs. -

5. Colgate Sensitive Segmenting Factor : Family Target Audience : The Brand Colgate and its extensions are targeted at Indian families taking booth economical and premium stances. Availability : All over India. Positioning Stance : on Health care through Duality of benefits, talks about Stops bad breath and fights tooth decay. This positioning stance has worked well in Indian probably because Oral. Now also the company is constantly following the fresh breath route which proved successful for the company.

Care is not taken in a sensitized manner and hence the custom looks for multibenefits.
History of Colgate : For people in Colgate volume is the key. This is the Mantra for India a. Today the Indian arm is one of the top 10 subsidiaries of the global giant ; one of the top three volume drivers in toothpastes. In India, the Multinational is first and foremost identified with Toothpaste (Dental care) are currently there is a lot of curiosity on how C-P is responding to the challenges that HLL is throwing its way. On toothpastes, where C-P claims an overall 62.3 percent market share a clear cut strategy is evident i.e. maintaining leadership in Oral care and expand the oral care market size. Consistency of communication is of strategic importance. More so in an increasingly cluttered environment. Vice President of C-P (India) limited dually complies We have not changed the platform - Duality of Benefits - for the last 15 years. The main growth in the Urban toothpaste market for C-P has for sometime been coming from the Gel segment. Colgate gel has been performing well with its market share standing at 11 percent and a growth faster than Close Ups market share, which has declined by the end of 96. In an effort to capitalize in the growth, C-P recently introduced its latest extensions, Fresh Stripes, with Stripes of Benefit. this latest launch brings C-Ps toothpastes to a total of six, with mega Brand Colgate Dental Cream (CDC), the category volume driver; Colgate Gel-Positioned as giving long lasting fresh breath; Calciguard with an anti cavity therapeutic positioning marketed in the Metros; Colgate Total with its therapeutic positioning and multi benefits and Colgate Sensitive being Marketed through Dental Profession.

To expand the category, C-P has an on going Rural Van programme, rather similar to the HLL idea of expanding the market and also not being confused as a premium consumers. An intensive investment this Video van develops the market by teaching people to use a brush or seen a finger properly to clean their teeth with the Big Red CDC. In addition there is also a school programme which covered 1.5 million children last year. According to Rechard Usuquen VP C-P (India) Ltd. C-Ps action will center around finely balancing the Urban market - where it claims a 59.5 percent market share - with the Rural where it claims a 68 per cent share. So while the company has introduced such premium packaging as stand-up toothpaste tubes with Flip up caps in the Urban market, it is also selling sachets of CDC at low prices. In 2001, the company has come up with a lot of schemes such as 25% extra in 100gm pack. In 50% gm pack there is an off of Rs 5.5. In 200gm pack the company is providing 2 toy planes for kids. They are also providing a lot of discount and incentives to its stockiest and retailers. They have also come up with transparent packaging in gel segment to attract the customers. DATA FOR THE TOOTHPASTE INDUSTRY : (A) ZONE WISE SEGMENTATION : ZONE EAST NORTH WEST SOUTH PERCENTAGE 21% 25% 21% 33%

(B) SEGMENTATION AS RURAL AND URBAN MARKETS : RURAL MARKET 40% URBAN MARKET 60% The above segmentation details gives us an overall scenario of the toothpaste industry. As seen from the zone wise segmentation table, the distribution is fairly even in all the zones. Also the rural to urban markets ratio is 40:60 which is expected and thus no surprises are seen from this data or rather no unusual variation is observed. (C) MARKET SHARE OF MAJOR PLAYERS OF THE INDUSTRY : NAME % SHARE COLGATE DENTAL 46 COLGATE GEL 10 CIBACA 3

CLOSE UP PEPSODENT PROMISE BABOOL

18 09 9.5 0.5

The data tabulated above clearly supports the fact that Colgate and HLL products are way ahead as far as market share goes. These brands have earned a place in customers minds or speaking in a technical term they have been positioned in the customer's minds. Secondly, the brands like Promise and Babool are catering to a very specific segment of customers which is the Herbal toothpaste user segment. Thus, they also have positioned themselves as Herbal toothpastes and hence they always target the same segment. This can be termed as a 'niche market' which they are catering to these segments.