Everything you need to know about the types of marketing. Marketing in, simple words may be defined as the process of determining the needs and wants of consumers and being able to deliver products that satisfy those needs and wants.
Marketing includes all of the activities necessary to move a product from the producer to the consumer. Think of marketing as a bridge from the producer to the consumer.
Marketing is often understood as a set of activities such as selling, physical distribution, retailing, advertising etc.
These activities just form a part of marketing. Marketing has attained a much wider meaning and scope in the present context.
One has to understand the present scenario to understand and appreciate the meaning and scope of marketing.
Some of the types of marketing are:-
1. Agricultural Marketing 2. Financial Marketing 3. Knowledge Marketing 4. Wholesale Marketing 5. Shopper Marketing 6. Organizational Marketing 7. Service Marketing 8. Person Marketing 9. Tourism Marketing.
Marketing Types: Agricultural Marketing, Financial Marketing, Knowledge Marketing, Wholesale Marketing and a Few Others
Types of Marketing – Top 5 Types: Consumer Marketing, Industrial Marketing, Service Marketing, International Marketing and Non-Business Marketing
1. Consumer Marketing:
The first serious development of marketing techniques was in the so-called fast-moving consumer goods (FMCG) markets of the USA. Companies such as Procter & Gamble became the ‘universities’ of marketing where people learnt the elements of the marketing mix and devised plans to win market share.
As these marketers moved to other companies and other industries they took with them the skills of product development, and the ability to create unique selling propositions and effective promotions. These skills have been modified in other industries, but the emphasis on the marketing mix still remains in fast-moving consumer goods (FMCG) markets.
The major objective in such markets is to build brand loyalty, as the products are typically low-value regular purchases such as food, drink, confectionery, household and health-care items, magazines, stationery and many others.
It was in one of these markets that Coca-Cola devised the tests of Acceptability, Affordability and Availability. For FMCG products the aim is to maximise all of the as with the widest group of potential consumers. Information is continuously sought on product performance.
This information comes in two basic forms, comparative data on market share and related issues from retailer and consumer panels, and acceptance/awareness data from tracking studies. It is feedback that discovers even small variations in performance and highlights trends which could require attention.
These markets value the long-term investment to build brand names such as Mars, Kit Kat, Persil, Coke and Marlboro. Typically, main media are used and quite large advertising budgets (advertising/sales ratios can reach 10 per cent). An interesting study by Grocer Magazine (28 March 1992) looked at the share of certain grocery markets taken by retailers’ own brands and found it was least in markets where manufacturers’ brands spent most on advertising (see Table 24.1).
Advertising is no guarantee of success and many years of investment are necessary to develop strong brands. However, FMCG marketing does involve large promotional budgets and a great deal of attention to communicating with the millions of customers for any product. Contact with these customers is, of necessity, non-personal and so sophisticated marketing research is used to obtain feedback.
Typically consumer goods companies will have large marketing departments covering all functional aspects of marketing such as advertising, marketing research and brand or market management. They will supplement this by use of agencies to provide specialist services including promotion and planning and new product development. The objectives of FMCG marketing is to keep interest in the brands so that they remain relevant to customers, achieve high levels of awareness and become regular purchase items.
Unlike FMCG, consumer durables are less frequently purchased. Consumers have to be able to identify available products when they are considering the purchase of a durable product. In order to reach such customers communication is again vital.
Durables could be washing machines or cars or video recorders or classic clothing. Most consumer durables would fall into one of two categories – shopping goods or speciality goods. If the former, then the marketing task is determined by the consumer and the need for useful comparative information.
The usefulness will come from providing facts about the benefits that are valued by the customers and are the ones used to make decisions. An example of durable marketing can be seen by considering how car companies communicate with their customers. At one level you will see evocative advertisements for Ford or Volvo creating a glamour and a general position for the manufacturers, using television and other mass media.
This is complemented by press advertisements giving other details and often the financial deals. Direct mail communication or sales promotion competitions are used to encourage customers to visit showrooms for the particular marque. Once in the showroom the actual cars are supported by technical information in brochures and from the direct sales staff.
This sequence shows a range of different techniques used to bring a potential customer ever closer to the point of purchase by integrated programmes of communication. Sometimes information is given in a direct way to compare one model with another and influence the comparisons of product suitability prior to actually seeing the product.
The emphasis on information can be seen with many ‘shopping’ products. There is also an emphasis on after-sales service. This is due to the period of time between the purchase and the need to replace the durable. When the time comes for replacement the experience with the product will be very important in a customer’s decision process.
It was once said – ‘The quality of a product is remembered long after the price is forgotten.’ With durables it is certainly true that their performance is remembered rather than the purchase details. Therefore a consumer who has enjoyed excellent service from a product will remember that when the time comes for a replacement. The issue is a very personal one as exemplified by the differing experiences of two of the authors regarding cars.
The importance of the channel of distribution is highlighted as it is the local distributor who gives the majority of after-sales service and can build a strong position for the future.
It must be remembered that durables are not only infrequent purchases, but they are also likely to involve substantial money. Issues of affordability are relevant, but perhaps value is a more important measure. Consumers do not necessarily buy the cheapest car or washing machine, but they buy the one that offers the features that they require.
The features offered with a durable product will vary enormously. There is likely to be much more variety than for a non-durable product. These features form what we have called the ‘total product’, or some authors call the ‘augmented product’. Some of these features are important only at the point of purchase, such as free road fund licence or a full tank of petrol for a car, or free fitting for a carpet or washing machine.
These are really promotional additions sometimes described as the ‘bells and whistles’. Other features are more substantive for the future, such as a sunroof in a car or special economy programme with a washing machine, or freeze-frame facility on a video recorder.
All features cost money to provide and not all features are valued by purchasers. Marketers responsible for consumer durables have to decide about such features in a diverse marketplace. The ability of Toyota Motors to produce customised cars, with personally chosen features, while producing volume cars, is one way marketing and production can combine to make a very attractive offering to customers.
Distinctions have been made between products which are purchased for use by individuals, such as a can of Coca-Cola, and products which are purchased by organisations. The point was further made that many of the products purchased by organisations are, like toilet tissue, the same as those purchased by consumers. Furthermore, most products purchased by consumers have in their turn been purchased by wholesale and retail organisations before reaching the final consumer.
Industrial marketing involves those products which are used by organisations in the course of their business. Accordingly it involves three different types of products. First, there is the capital equipment required in all types of organisation whether engaged in manufacturing or providing a service.
Second, there are products which either as raw materials or finished components are used as part of the manufacturing process, and third, there are those products which are used in the manufacturing process, but do not become part of the final product.
Thus the supply of the empty cans and bottles used by Coca-Cola to package their product, the sugar and other ingredients used to manufacture the syrup, the compressed carbon dioxide gas used to carbonate the drink and the material in which the cans and bottles are subsequently packed are all examples of industrial products.
Likewise, so are the filter equipment used to process the water used in the drink, the detergent used each day to clean the machinery, the machinery used to fill and print the cans and bottles, the conveyors used to transport the packed cans to the dispatch area and the lorries used to deliver the product.
Like consumer marketing, industrial marketing involves optimising what is being offered to a potential buyer in terms of the product itself, the price of the product, the availability of the product and the method by which the potential customer is made aware of the product. Industrial organisations differ from consumers in a number of important ways.
In particular there are fewer transactions and the value of each is generally much higher. There are also similarities, especially, as with consumer marketing, the importance of understanding the need that the potential customer wants the product to fulfil.
These needs depend upon a number of factors. In particular, the reason that an industrial product is being purchased. Many issues affect this. For instance, the expertise within an organisation develops as a result of experience. This means that the routine purchases, particularly those which affect the final product, will be monitored very carefully.
As a result, it is likely that there will be a very good understanding of the relative values of the products offered by different suppliers. As a result of this knowledge it is quite likely that the preferred choice will not be the cheapest. For less frequent purchases, or those not directly concerned with the product being manufactured, it is likely that there will be less understanding of value and as a result a tendency to consider price and specification as the main buying criteria.
It is the recognition that the buying criteria are likely to vary from organisation to organisation that is the key to successful industrial marketing. This is, of course, a form of market segmentation. Very often this segmentation involves not simply changing the product but changing the level of service provided by the organisation.
Even suppliers of raw materials have found that by applying this approach not only can they increase their share of the market but can at the same time improve their profitability. What is required is the recognition that different types of customers are willing to accept different levels of service, and then finding a method by which this knowledge can be applied.
This may involve setting up a separate division which specialises in supplying a specific segment of the market. Organisations adopting this approach usually have to overcome two problems. The first is that providing a different level of service often is against the culture of the organisation and strongly resisted by the staff.
This is best overcome by ensuring that the staff can see the advantages that the organisation will offer its customers. A second problem can be associated with this in that the old organisation is likely to compete with the new organisation, thereby putting at risk many of the potential advantages of the approach.
Where industrial products are ancillary to the production, such as might be the case with computers or delivery vehicles, it is quite likely that an organisation will buy on the reputation of the supplier rather than the suitability of the product. Hence the well- known adage, ‘No one ever got fired for buying IBM!’
It is for this reason that the creation of a brand within an industrial market can be so important. This involves, as it does in the consumer market, a single-minded approach to promotion. Also, like some sectors of the consumer market, it is necessary to create this brand awareness within a small specific market sector.
Generally it is possible by using the technical press, not only for advertising but also for promoting the brand through consistent editorial coverage. This requires, for most companies operating in industrial markets, senior management commitment to public relations.
In many circumstances there will be an emphasis on personal selling and building long-term relationships with customers. Routine reordering is often carried out without a sales call – in fact some organisations use on-line computer reordering to replenish stock levels.
Where strong relationships exist it becomes very difficult for a new supplier to get any business. A well-known UK Purchasing Director once said – ‘I have all the suppliers I need, and, unless one of them starts to let me down, I see no prospect of changing these arrangements.’
This may be going too far, as changes do take place, but rarely is price the overriding stimulus – rather it is service levels which are critical. This is especially true with customers operating a JIT (just in time) policy for supplies. The best relationships are developed by not letting customers down. It is this area which is critical to success in industrial marketing.
The difference between products and services is irrelevant from a general viewpoint but there are some aspects of services that must be understood when involved in service marketing. At one level a service is a total product without a core.
Services can be offered to consumer markets, industrial markets, international markets, or be given in non-business situations. First and foremost, it is important to decide if the service could be described as a service product or a product service.
Most business enterprises start life in the service of markets that are basically local or, at most, national in character. That this should be so is not difficult to understand. In all countries, whatever the state of economic development, there will be a ready ‘homegrown’ market for the community’s basic and everyday requirements.
With economic and technological advances, new opportunities will appear, to supply markets that are no longer confined to the potential of the home country. Indeed, strategically, it is nowadays a difficult if trite truism that ‘the world is becoming a smaller place’ as changes in technology, communications, economic alignments and political geography make for an internationalisation and convergence of markets.
Such a ‘globalisation’ process is affecting marketing no less than other functions such as manufacturing, logistics or finance, or business in general.
Companies involved in international business will tend to have different objectives, different orientations and different approaches to the market. While a gradation or scale of activity may not be clearly apparent, there will be a contrast to be seen in the roles and postures adopted by organisations in their dealings with overseas markets.
At the one end of the spectrum will be the firm that scrambles around for overseas sales as a temporary stop-gap measure, to keep its machinery running or to export surplus or redundant stock. Such blow-hot-blow-cold courtships are not untypical of the attentions shown in foreign markets by the periodic exporter.
In another category entirely will be the company that plans to cultivate and exploit international opportunities to the mutual benefit of itself and its stakeholders. With a clearer view of some long-term future and a proven record of flexible marketing, such a ‘global’ company will identify as readily with the international market as with its country of origin.
Just as marketing offers business organisations opportunities to be more successful, so it has been realised that these same techniques could be applied with as great a benefit in non-business activities. This includes government organisations, providers of services such as the National Health Service, charities, and special interest groups such as political parties.
While it is not unusual for many of these organisations to be referred to as non-profit making organisations, this has the disadvantage of denying them the expectation that through prudent management their income might exceed their costs, thereby yielding a surplus which can be invested in improved facilities or services?
It is not after all the pursuit of such a surplus which is the principal characteristic which separates business from other types of organisation. The real difference is that the fundamental objective of a business is to increase the asset value of the owners at a rate which is commensurate with the risk involved.
Even when businesses try to accommodate the interests of a wide range of stakeholders, this fundamental objective helps to focus the overall activity, since failure to meet this objective will ultimately lead to the organisation being disbanded or taken over.
One of the major benefits of applying marketing principles in the non-business context is that they provide effective alternatives to the financial surplus for measuring organisational performance. Examples of these can be seen in the various charters which have been implemented by the government in order to improve the accountability of organisations such as British Rail and the National Health Service.
Another benefit of applying marketing principles in the non-business context is that it allows the often complicated transactions involved to be properly analysed. An example of where the failure to do this prevented an organisation from responding quickly enough to changing circumstances can be seen with regard to the Blood Transfusion Service.
For many years this organisation depended to a significant extent upon the cooperation of the many manufacturing companies which regularly provided facilities for blood donor sessions. It provided the basis for ensuring both constancy of supply and the efficiency of the collection service.
During the 1980s many of the companies which provided these facilities reduced the size of their workforce to such an extent that they no longer justified having their own blood donor sessions. The Blood Transfusion Service responded by expanding the number of local sessions they ran, only to find it was increasingly difficult to attract sufficient donors.
What had not been appreciated was the actual cost incurred by the donor when giving blood. Time was a cost which had previously been ‘paid’ by the companies, who had not only provided the Blood Transfusion Service with the facilities it needed for the donor session, but had also allowed their employees to attend during working hours.
It was not until the real cost to the donor was appreciated, and steps taken to minimise this by providing appointments and better information, that it was possible for the Service to bring demand and supply back into balance.
Another common problem faced by non-business organisations is that of multiple publics. Just as business organisations have a number of stakeholders such as customers and employees, so non-business organisations often have, in addition to staff and clients, donors and volunteers.
The exchanges involved between each of these groups and the organisation is likely to differ both with the frequency and degree of the commitment. As a result, the organisation has to be especially careful to ensure that any changes made to improve the effectiveness of one of these groups is acceptable to the others as well as to the public in general.
This is one area where a lack of basic understanding of marketing has resulted in some very worthwhile charities losing support by applying marketing theory to improve the effectiveness of the staff, without taking proper account of the impact this can have on the other groups upon which the organisation has to depend.
Types of Marketing – 9 Important Types: Agricultural Marketing, Financial Marketing, Knowledge Marketing, Wholesale Marketing, Shopper Marketing and a Few Others
1. Agricultural marketing
2. Financial marketing
3. Knowledge marketing
4. Wholesale marketing
5. Shopper marketing
6. Organizational marketing
7. Service marketing
8. Person marketing
9. Tourism marketing
Let us discuss each type of marketing concept briefly:
1. Agricultural Marketing:
This relates to agricultural produce, which needs to be marketed well. Earlier it was mainly the Government which was responsible for the same; however the current situation has changed when the owners of the orchids of various produce, use the services of the research Agencies for linking the benefits of the produce with health and are able to sell it better.
Some examples can be drawn from our day-to-day examples where, in recent times, there has been a sudden growth in popularity of tender coconut water, broccoli, java plum [jamun fruit] etc.
2. Financial Marketing:
This type of marketing deals, mainly with the various type of financial instruments, which are marketed by the NBFC [non-banking financial companies] and the banking companies and both private and public sector companies as well. Some good examples would be IDR [Indian depository receipt], non- voting shares, ILB [inflation linked bonds], Junk bonds, MBS [mortgaged backed securities]
3. Knowledge Marketing:
In order to gain better marketing ROI and have a competitive advantage it is necessary to connect to knowledge marketing, which includes e-mail, surveys, content circulation through direct mail, it is possible to improve segmentation, and target audiences reach with insight and intelligence.
4. Whole Sale Marketing:
The consumption and production of marketed food are spatially separated. Production is primarily in rural areas while consumption is in urban areas. Agricultural marketing as discussed above is the process that overcomes this separation, allowing produce to be moved from an area of surplus to one of need.
Food reaches the consumer by a complex network, involving production, assembly, sorting, packing, reassembly, distribution, and retail stages. In developing countries like India, the linkage between the producer and the retailer is still usually provided by assembly and wholesale markets, where wholesale marketing takes place using a variety of transaction methods.
Recent years have seen an expansion of wholesale marketing in not only India but also in E. European and former CIS countries. On the other hand, the growth of supermarkets in many regions has seen the development of direct marketing and a reduced role for wholesale systems.
5. Shopper Marketing:
Shopper marketing is one of the newest emerging disciplines to grow within the marketing domain in India. While a few have been already active in the Indian marketplace, such as- Integer, SaatchiX, Ogilvy Action etc., several other companies are showing keen interest in this area.
Shopper marketing is a globally evolved practice, though it is developing in our country also. One of the factors contributing to its development is emergence of open format stores where shoppers take their own decisions without direct influence of the retailer/salesperson.
India is witnessing this change rapidly not only in large but also small cities. More and more outlets are allowing its customer to choose products on their own. The new found power by the customer is increasing the power of shopper marketing faster that one can imagine.
6. Organizational Marketing:
This basically involves “corporate campaign”. It is through this that the customer is attracted towards the corporate. In fact the company becomes bigger than all the products it offers to consumer. It is a management philosophy to believe in corporate or product campaign. Some examples are TATA, BIRLA, RELIANCE groups which can market and sell from a car to vegetables under the group/brand name.
7. Service Marketing:
It is the art of offering a benefit, utility, consultancy, or activity by one party to the other. It is intangible and therefore, more difficult to market. The best examples that can be picked from our everyday observations are, beauty parlours, hospitality industry, banking sector, insurance, and educational institutions etc.
8. Person Marketing:
It is interesting to note that a person’s image/persona may become bigger than the person himself. This becomes possible when a person markets himself/herself. Such people can endorse a product or a service and can influence the choice of the consumer. Mostly famous personalities, film stars, politicians not only market themselves but also the various products. Some examples could be-Delhi CM, popularising the police helpline 181, Amitabh Bacchan, the film star endorsing the Dabur product Chavanprash.
9. Tourism Marketing:
Every country stands to gain from the TOURISM INDUSTRY, by way of foreign exchange. Tourism is also a product which needs to be marketed very well. Both INBOUND and OUTBOUND tourism depend on good marketing strategies. The promotional campaign “incredible India” by the ministry of tourism can be cited as an example of tourism marketing. Countries such as Singapore, Dubai and Sri Lanka use excellent marketing strategies to promote tourism in their respective countries.
Types of Marketing – 7 Important Types: Rural Marketing, Social Marketing, Green Marketing, Sustainability Marketing, Online Marketing and a Few Others
Type # 1. Rural Marketing:
Rural Marketing is defined as “a marketing activity in which one dominant participant, which may be a producer or a consumer, is from a rural area. This implies that rural marketing consists of marketing of inputs such as products or services, to the rural as well as marketing of outputs from the rural markets to other geographical areas. It involves planning and implementation of marketing function specifically for the rural areas.”
Rural marketing is the process of marketing in rural areas. It includes the adoption of various marketing strategies and policies in rural market with a view to convert the needs and wants of rural people into demand.
The term ‘rural marketing’ used to be an umbrella term for people who dealt with rural people in one way or other. This term got a separate meaning and importance after the economic revaluation in India after 1990. Different meanings have been given to rural marketing in different eras.
Some have been discussed as under:
To expand the market by tapping the rural market, many MNC’s are foraying into India’s rural markets. Among those that have made headway are Hindustan Liver, Coca-Cola, LG electronics, Britannia, Colgate Palmolive and the foreign invested telecom companies. These companies’ foreseeing the vast size and demand in the rural market cannot afford to ignore.
i. P&G had come up with a new addition to its marketing strategy in the form of a character called Sangeeta Bhabhi, a dedicated housewife to indulge into ‘hard sell’ in rural markets through the stated character of a dedicated house wife.
ii. Maruti Suzuki India plans to invest Rs.4,000 crore in order to enhance its leadership position in the market. The company, which reported its highest ever annual profit and sales in the fiscal concluded March 31, 2015, said the amount would be utilised on enhancing marketing infrastructure, launching new products in the rural markets.
iii. Colgate-Palmolive and Hindustan Unilever have just about a third of their sales coming from the rural marketing.
iv. Coca-Cola India has identified rural markets for volume growth in India. The cola giant is slowly adopting a localised marketing strategy with local brand ambassadors and localised marketing campaigns to reach out to the rural consumers.
v. Whirlpool, is eyeing rural markets in India for its next phase of growth. The company, which has significant market share in the refrigerator, AC and washer segments in India, is set to tap markets with a population between one lakh and five lakh in the first phase.
vi. Hindustan Lever Ltd. has entered into rural market for more penetration through the operation ‘Bharat’. Since December 1999, HLL has reached out to 35,000 villages, 22 million.
It is often said that markets are made, not found. This is particularly true of the rural market of India. It is a market meant for the truly creative marketer.
Type # 2. Social Marketing:
Social marketing was “born” as a discipline in the 1970s, when Philip Kotler and Gerald Zaltman realized that the same marketing principles that were being used to sell products to consumers could be used to sell ideas, attitudes and behaviours.
Social marketing can be defined as “the systematic application of marketing, along with other concepts and techniques, to achieve specific behavioural goals for a social good”. Social marketing can be applied to promote merit goods, or to make a society avoid demerit goods and thus promote society’s well-being as a whole.
Social marketing applies a “customer oriented” approach and uses the concepts and tools used by commercial marketers in pursuit of social goals like anti-smoking campaigns or fund raising for NGOs. Social marketing aims to develop and integrate marketing concepts with other approaches to influence behaviours that benefit individuals and communities for the greater social good. Increasingly, social marketing is being described as having two sets of parents, namely a “social parent”, and a “marketing parent”.
Social marketers who are dealing with goals such as reducing cigarette smoking or encouraging condom use for addressing the increasing population issue, have more difficult goals as they target long-term behavioural change in target populations. Not all social marketing campaigns are effective everywhere.
For example, anti-smoking campaigns such as World No Tobacco Day, aimed at curbing the demand for tobacco products have been less effective in some parts of the world such as China, India and Russia.
“Green Marketing” refers to holistic marketing concept wherein the production, marketing consumption an disposal of products and services happen in a manner that is less detrimental to the environment with growing awareness about the implications of global warming, non-biodegradable solid waste, harmful impact of pollutants etc., both marketers and consumers are becoming increasingly sensitive to the need for switch in to green products and services.
Green Marketing Endeavours by Companies:
i. McDonald’s replaced its clam shell packaging with waxed paper because of increased consumer concern relating to polystyrene production and Ozone depletion.
ii. Tuna manufacturers modified their fishing techniques because of the increased concern over driftnet fishing, and the resulting death of dolphins.
iii. Xerox introduced a “high quality” recycled photocopier paper in an attempt to satisfy the demands of firms for less environmentally harmful products.
iv. Coca-Cola Company has invested large sums of money in various recycling activities, as well as having modified their packaging to minimize its environmental impact. Coke is a very environmentally committed organization.
v. Another firm who is very environmentally responsible but does not promote this fact, at least outside the organization, is Walt Disney which has an extensive waste management program and infrastructure in place, though the company does not advertise this fact.
Sustainable marketing refers to way of marketing which incorporates needs of the customer, the organization and the society in general over a long term.
It refers to designing and marketing of products that can be used universally by all the consumers, across the world over extended periods, without causing harm to either the consumers or the environment.
It is a marketing strategy that involves the promotion, sales, and distribution of goods and services that leave less of a footprint on the environment.
The idea behind this approach is to encourage consumers to make better use of goods produced using recycled materials or goods that are manufactured using less in the way of natural resources.
Typically, the process of sustainability marketing also includes an education component that helps consumers understand the benefits of buying environmentally-friendly products as opposed to purchasing similar products that have a more lasting negative impact on the ecology of the planet.
This form of environmental marketing may be focused on niche markets, or used as a means of reaching out to consumers in general. When used in a niche setting, the marketing process will often focus on the benefits that have to do with a specific type of product over a similar product.
For example, a company that sells solar energy panels and battery storage systems may focus on the fact that the panels are made from recycled materials and that the batteries have a longer than typical life of usage. This approach may appeal to consumers who consider recycling important, and who also want to receive the highest level of benefit from their purchases.
Many researchers equate sustainable marketing with concepts like social responsibility marketing, humanistic marketing and ecological marketing. These concepts are based on the idea that the organization’s task is to determine the needs, wants and interests of the target markets and to deliver the desired satisfaction more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and society’s well-being.
Online Marketing is the art and science of selling products and services over digital networks, such as the Internet and cellular phone networks. Online marketing involves finding the right online marketing mix of strategies that appeal to the target market and will actually translate into sales. The science of online marketing is the research and analysis that goes into both choosing the online marketing strategies and measuring their success
According to Philip Kotler service is an action or an activity which can be offered by a party to another party, which is basically intangible and cannot affect any ownership. Service may be related to tangible product or intangible product.
Marketing has been considered to be an integral business aspect for long. Service marketing is the endorsement of economic activities offered by a company to its consumers, it is considered to be a special sub set of marketing because it focuses on how rendering of services can affect both the customer attitude and the marketing strategy.
Service marketing includes following areas:
Relationship Marketing is a considered to be a core Corporate Philosophy on which the Business strategy is built upon. It is reflected in all of the Marketing disciplines including branding, advertisements, promotions, public relations as well as through all sales channels and networks through which the Company reaches out to the Markets and Customers.
Relationship Marketing has evolved not only as a marketing strategy but is also the foundation on which the Companies build their core values and ethics. Relationship marketing is not limited to Customers and Suppliers alone but has been extended in scope to cover he internal employees as well as an effective way of reaching out best talent too. The advertisements are designed to strike a chord amongst the readers so that they are tempted to apply for the job.
Types of Marketing – 6 Major Types: Green Marketing, Social Marketing, Internet Marketing, Services Marketing, Direct Marketing and Rural Marketing
Type # 1. Green Marketing:
Green marketing refers to meeting of consumer needs and wants in a manner that has no adverse impact on the natural environment. It is an approach wherein marketing decisions are taken within the ambit of environmental conservation and protection. It integrates environmentalism with the objectives and strategies of the organization.
Green marketing adopts a positive outlook towards the environment and contributes towards environmental promotion. It is a comprehensive concept whose scope extends from product development, product adaptation, suitable packaging, ethical advertising, to product consumption and disposal.
The elements of green marketing include green products, green consumers, green advertising, eco-labelling, and environmental reporting.
Type # 2. Social Marketing:
Marketing had been perceived as a discipline of and for commercial enterprises. Marketing philosophy orients enterprises to conduct their business in a particular manner that they are able to achieve their goals by customer creation and satisfaction. The superiority of marketing in comparison to other business concepts such as production or product has been responsible for its widespread adoption by business organizations.
Conducting business as per the fundamental tenets of marketing, yields marketplace success. Marketing urges organizations to act in subordination to markets or customers. Success in a competitive environment is a reward for those firms that satisfy their customers better than competition.
Accordingly, marketing was lapped up by firms engaged in businesses of all kinds from salt, soap, shoes, to snowmobile. The narrow focus of marketing on satisfaction of customer needs and wants later became a hotly debated issue why marketing cannot be applied to satisfying social needs.
If marketing helps a company like HUL to market its Lifebuoy and Lux effectively, it could be relevant for organizations engaged in correcting social problems by equal measure.
Society suffers from many malaises such as overpopulation, pollution, drug abuse, child labour, female foeticide, and AIDS. It is better for humanity that these problems are eradicated from society. Commercial organizations historically have kept themselves away as they believed these problems to be non-business activities.
Finding solutions to social problems have therefore been confined to either government or non-profit organizations. However, these attempts and campaigns generally suffered on account of unprofessional handling of the issues at hand. To ameliorate social ills the most dominant method has been mass communication campaigns aimed to discourage people from engaging in socially undesirable behaviours.
Some of these campaigns have been regarding anti-smoking, aids control, drunken driving, family planning, age gap between children, and vaccination. However, by and large these mass information and persuasion campaigns to tackle social problems were largely ineffectual.
These suffered on account of information incompatibility, subjective interpretation of messages, lack of people involvement, and high difficulty in reaching to the target prospects. Failure of mass communication in creating desired attitudinal and behavioural change led people to look at marketing.
The emerging pressures to find solutions to pressing social problems led the academicians to assess the usefulness of marketing in bringing desired changes in the society. The approach to bringing about social change has been fragmented and ad hoc till now.
It suffered on account of a holistic framework. Concepts of marketing such as objectives, goals, strategy, programme, and implementation can also be used in bringing about social change. Accordingly, social marketing was conceptualized as an approach to systematically overcome social problems by influencing social behaviour.
Unlike commercial marketing where a product or service is promoted by the used of marketing mix to satisfy customers who seek solutions to their needs and wants, social marketing differs in terms of what is marketed, to whom, and the type of demand.
The term social marketing is made up two components. The term ‘social’ separates it from ‘commercial’ or ‘for profit’. This suggests that the area or domain of social marketing is social, societal, or collective. It focuses on the need of the society or public rather than individual customer or consumer. The ‘marketing’ part reflects utilization of principles and theory from profit marketing to create social change.
Marketing that brings social change and yields social welfare is known as social marketing. Social marketing is the application of principles of marketing with respect to a social idea, cause, or practice. It is also known as ‘social cause marketing’, ‘social idea marketing’, or ‘public issue marketing’.
Social marketing is a form of non-profit marketing where the aim is to make people in society sensitive about critical social issues, thereby benefiting the whole society. The concept of marketing has evolved and broadened to ensure the well-being of society.
Type # 3. Internet Marketing:
The term internet marketing consists of two words. It is a combination of internet and marketing. Marketing is about identifying and responding to customer needs and wants. Marketing involves performance of several functions like researching consumer needs, product development, packaging, labelling, pricing, advertising, sales promotion and distribution.
Internet, on the other hand, is a complex network of computers spread worldwide which are connected with each other by standardized communication protocols. The interconnection between these networks is made possible of a variety of networking technologies like wireless and optical fiber.
The importance of Internet stems from the fact that it allows communication and information transfer among its users. Earlier, Internet could be accessed only on fixed devices but now people can freely access internet anywhere anytime from their smartphones.
Like any other country, the Internet usage in India has been on the rise. The Internet penetration is expected to touch 450 million users in 2017. The Internet growth is not limited to urban areas only. Internet is fast getting penetrated into rural India as well. The Digital India initiative of the Modi Government is aimed at empowering common man by creation of a digital eco-system by which they are able to get benefit of information, communication, and service delivery.
The developments in cellular wireless technologies from 2G to 4G have transformed voice and data communication to higher speeds. Now, Internet users are able to engage in two way voice and video communication. This has caused a major shift in the way people communicate and related with each other.
The social media platforms like Facebook, Twitter, WhatsApp, and Linkedln provide avenues to people to communicate with each other and share their status with their chosen groups. This web-based interlinking and communication has impact on the way consumers go through the process of satisfying their needs and wants on the one hand and the manner in which companies market their products and services on the other.
Type # 4. Services Marketing:
The importance of services can be understood by taking a pause and looking at the daily routine of a typical customer. Services enter a customer’s life in the form of electricity, transport, home cleaning, lawn mowing, laundry, education, entertainment, health care, insurance, repair work, food delivery, security, policing, news channels, cab booking, banking, and restaurants.
All these represent categories of services that enable customers to do what they want to do. Services continue to play even when the customer goes off to sleep. The utility company continues to supply electricity to keep appliances running, security services keep burglars away, and insurance providers spread the umbrella of security.
The irony is that services play a very significant role yet they do not dominate customer consciousness. On the other hand, people are surrounded by markets and various physical products. As economies are moving towards greater economic development, services are beginning to become dominant contributors to GDP of countries.
In the developed countries of the world such as the US and the UK the share of services is more than 80 per cent. Even India has become service dominant and its service sector has emerged as the most significant contributor to its GDP.
The need to discuss marketing separately in services’ context stems from their nature. Services as market entity are different from goods. The most crucial difference between goods and services is its intangibility. The intangible nature of services causes them to be impalpable and invisible.
Unlike a physical good such as a camera or refrigerator, a service cannot be touched and felt. It is easy see a bank but banking services are intangible. Similarly, it is not difficult to touch a doctor but the doctor’s service cannot be felt by fingers. This intangibility makes services difficult to grasp by people who produce them and customers who consume them.
When a physical good is bought a tangible product gets exchanged but in services the exchange does not involve transfer of something physical. Customers do not take anything home when they consult doctors or take a lesson in coaching class. Services are therefore ephemeral and experiential in nature.
American Marketing Association (AMA) defines services as ‘activities, benefits, or satisfactions that are offered for sale, or provided in connection with the sale of goods’. Two types of services can be identified according to this definition—pure service and service provided along with a good.
Berry defined service as ‘acts, deeds, and performances’. Services are offered by a teacher who teaches children, an actor in a theatre who performs on stage, or a car mechanic who fixes the car to satisfy customer needs. Kotler has given another definition to capture the essence of services ‘separately identifiable, essentially intangible activities which provide want satisfaction’.
Another definition that captures the most fundamental essence of service puts it as ‘…something which can be bought and sold but which you cannot drop on your foot’.
Type # 5. Direct Marketing:
In the old system of marketing, firms rarely spoke or interacted with customers directly. The marketing companies’ last contact used to be with some kind of intermediary like a retailer. On the other hand, customers’ first and last contact in the process of obtaining products they needed used to be some established intermediary like a retailer.
Therefore the relationship between customer and marketers used to be buffered by a powerful layer of third party intermediaries. These intermediaries acted like a no man’s land for the marketers as well as the customers. It was their turf and a direct crossing over was not possible for both marketers and customers.
The wall of intermediaries was not permeable. Therefore, intermediaries wielded considerable power in the marketing chain. Be it a consumable like a detergent or durable like a car, everything mostly moved through a chain of intermediaries.
The situation is however different now. Nowadays marketing firms of all kinds of products reach out to customers directly by jumping off the old barrier imposed by the chain of intermediaries. New gateways of contact have been opened by emergent media.
Consider the number of messages one receives through SMS, e-mail, flier, pop up, mail, radio, and television that are precisely targeted for products and services in accordance to the customer profile. These solicit a customer response directly for purchase of a credit card, insurance policy, loan product, demonstration, or product trial.
The term ‘direct marketing’ is opposite of something that may be called ‘indirect marketing’. Since direct marketing is a relatively recent phenomenon, a better way to understand its meaning is to place it against old or conventional marketing. In the old paradigm, marketers of large marketing organizations were not able to establish a direct contact with their customers.
They relied upon contacts mediated by intermediaries who dealt directly with customers. Typically this mediation came in the form of use of channels of distribution. Advances in information and communication technologies have made it possible for business organizations to achieve disintermediation in marketing relationship.
Further, the need for establishing direct contact with customers is accentuated by the ferocity of competition. A direct contact provides better control over customer relationships rather than when a third party is employed. It is difficult to align third party interests with that of the marketing organization.
Direct marketing in simple terms implies a model of serving the customer straight without involvement of a third party in between. It involves a direct contact between the marketer and the target customer for promoting goods and services and fostering relationships.
Direct marketers attempt to acquire and retain customers directly by eliminating the middlemen from the marketing chain. The conventional marketing employs mass media such as radio, television, and the Internet to promote products. The mass nature of this form of promotion reaches both target and non-target customers.
It also reaches those customers who are not in the market for the promoted product and are not prepared to buy the same now or in near future.
Direct marketing used media that reaches the existing and potential customers with more precision. It uses direct communication such as direct mail, catalogues, mailers, and fliers. Earlier direct marketing used mail ordering and catalogues but now companies can reach their customers through SMS and e-mails.
As a result, telemarketing, television marketing, mobile marketing, radio marketing, and Internet marketing have emerged in a big way. Direct media allows marketers to craft and deliver personalized messages. The interactive opportunities embedded in these media allow marketers to understand customer needs and wants better and respond to them in a better manner.
Direct Marketing Association of Canada defines direct marketing as ‘channel agnostic form of advertising’ that permits organizations for profit and non-profit to ‘communicate straight to customers’. Advertising may use a variety of techniques including e-mail, interactive websites, online display ads, fliers, catalogues, promotional letters, and outdoor communication.
Type # 6. Rural Marketing:
Consumer population in India can be broadly divided into two groups—rural market and urban market. About 70 per cent of Indian population lives in rural areas and has a 50 per cent contribution towards Indian GDP. Marketing firms are naturally attracted to urban markets but great opportunities also exist in rural markets.
There are several factors that contribute to the urban bias in marketing focus. One of the biggest obstacles in serving rural consumers is lack of infrastructure especially roads and logistics. Further the market is scattered in terms of a large number of households residing in geographically scattered villages.
There are 6,38,353 villages in India that house 850 million households. The per capita income of rural India is also much lower as compared to its urban counterparts but in aggregate it hides a huge market potential. The average monthly per capita expenditure in rural areas stood at Rs.1,053-63 in 2009-10 as compared to 984.46 in urban areas according to the National Sample Survey (NSS).
However for the marketers, the good news comes from the fact that per capita monthly consumption in rural India is growing faster than urban India. The NSS revealed that per capita monthly consumption in rural areas grew by 19 per cent as compared to 17 per cent in urban areas in 2009-10 and 2010-2011.
Notwithstanding the per capita consumption, total rural consumption has always been higher than total urban consumption. This makes rural markets a huge opportunity for the marketers. However, consumer, market, and infrastructural differences make it difficult for marketers to serve the rural markets using their current strategies, which are oriented towards urban markets.
Technically, marketing remains same in its intent and contents irrespective of the product or market in question. When it comes to rural marketing, the market served differs in its characteristics as compared to urban markets but essentially what is sought to be achieved remains the same; it may however involve different methods.
Marketing aims to satisfy customers by providing products that meet their needs and wants. The starting point in the context of rural marketing is the fact that consumers live in a non-urban market. This difference in location can contribute to differences in their buying and consumption practices.
Therefore, rural marketing must start with understanding these differences and adapting the marketing products accordingly. These differences may necessitate changes in all marketing mix elements including product quality, shape, and size; advertising message and media; and distribution channels and logistics.
The concept of rural marketing has evolved over time. Kashyap and Raut have divided the evolution of rural marketing in three distinct phases. The first period is the era of ‘agricultural marketing’ before 1960s, that is marketing of agricultural inputs and non-farm rural products such as sugar cane, cotton, and food grain.
Agriculture was done using primitive methods and marketing was limited to trading in localized areas. The second wave of change was ushered in by the green revolution and the period 1960-90 saw a drastic transformation of the rural scenario. The adoption of scientific approach to farming and use of fertilizers and pesticides gave rise to ‘marketing of agricultural inputs’.
Various companies such as Escorts, Mahindra & Mahindra, and Sriram Fertilizers and Chemicals started marketing products that were relevant to agriculture. The third phase began after liberalization policies were adopted in the 1990s. Unlike the earlier times when rural markets were seen only as an adjacent market with little serious interest, the post 90s phase saw firms taking considerable interest in rural markets.
This was prompted by increased competition and market saturation in urban markets as well as subtle structural transformation of rural markets due to government support policies, industrialization, and emergence of service sector. The socio-economic transition created by these turned rural areas into an attractive marketing opportunity.
Types of Marketing – New Trends and Types: E-Business, Tele-Marketing, M-Business, Green Marketing, Retailing, Relationship Marketing and CRM
The society, of which market is a small part, is dominated by a high degree of dynamism and rapid change. This change is brought by factors such as technological advancements, globalization, competition, exposure to foreign media, government regulations, fastidious nature of the consumers etc. Marketing itself is a conduit through which companies interact with the market. In a competitive situation marketing has to constantly evolve and adapt itself to the rapid changes in the market otherwise the market will reject the company.
Therefore, marketing should change as rapidly as does the market (society). Since marketing is also continuously evolving and responding to the changes in the society, marketing witnesses several new trends and developments constantly.
Some of the new trends and types of marketing are discussed below:
4. Green Marketing
6. Relationship Marketing
7. Customer Relationship Management
The term “e-business” (electronic business) was coined by IBM’s marketing and Internet teams in 1996. E-business means conducting business by using electronic media such as the internet, e-mail etc. It is the utilization of information and communication technologies in support of all the Activities of business.
The routine business activities such as marketing, receiving orders and their processing, receiving payments from the customers through debit/credit cards and attending to all the needs and requirements of the customers, are done through the electronic media.
E-Business allows companies to link their internal and external processes more efficiently and effectively, and work more closely with suppliers and partners to better satisfy the needs and expectations of their customers, leading to improvements in overall business performance.
While a website is one of the most common implementations, e-Business is much more than just a web presence. There is a vast array of internet technologies all designed to help businesses work smarter not harder.
Electronic business commonly referred to as “E-business” or “e-business”, is sometimes used interchangeably with E-commerce. E-commerce constitutes the narrower definition of buying, selling, transferring or exchange of products and services, between businesses, groups and/or individuals using the internet. E-business covers a broader spectrum of activities and includes e-commerce, customer relations management (CRM), and business partnerships, e-learning and conducting electronic transactions within an organization.
Tele-marketing also known as tele-selling is marketing conducted over the telephone. This is the act of selling, soliciting, or promoting a product or service to the established or potential customers, over the telephone. Tele-marketing also includes using of recorded sales pitches programmed to be played telephonically through automatic dialing.
Telephone, in this context is used as an interactive medium or a response vehicle for receiving orders, enquiries and requests to mail information, brochures, catalogues etc.
Tele-marketing can be used to generate leads, make sales, gather market information, handle enquiries, offer customer service, support existing field sales force etc. Prospective customers are identified by various means such as -previous call lists, another company’s data base, telephone directors/list, members of clubs etc.
Mobile Business denotes the ways in which mobile communication technologies and devices are applied to business. It is the utilization of mobile technologies to maintain, improve or extend existing business processes and relationships or to develop new business segments. Mobile business could include all activities, processes and applications which are supported by mobile technologies. Mobile business can also be described as all types of business applications with the use of mobile devices.
In addition has to be said that mobile business focuses on the procurement, processing and provision of any type of information. Incidentally, mobile business applications are not restricted to mobile phones alone; instead they include other mobile devices like smart phones and PDAs (Personal Digital Assistant). However, “mobile commerce” focuses on processing a transaction. Transactions in this context mean purchasing and receiving products and services.
Wireless Application Protocol (WAP) enables to bring the internet content to mobile devices.
M – Business is also called the next generation e-business.
Green Marketing is a concept according to which a company attempts to sell its products based on the products’ environment friendly nature.
The company may make the following claims:
i. The raw materials are eco-friendly and the sources are renewable in nature
ii. The production process is clean and green. It consumes minimum energy and does not emit any dangerous gases or chemically contaminated effluents.
iii. The product itself is environment friendly. It has consumed minimum amount of raw material and the product will consume minimum amount of energy or fuel.
iv. The packaging and packing of the product are eco-friendly. The material required for the same has been made from renewable sources.
v. The disposal of the product or the package after their life is environment friendly. They will not cause any problems such being non-bio-degradable. Some packages are claimed to be re-usable.
vi. Specific claims like phosphate free, recyclable, refutable, ozone friendly, environment friendly, fuel efficient, energy efficient, chemical free etc. are often found in green marketing.
vii. The company has installed sufficient equipment for an environment friendly operation such as energy efficient machinery, affluent treatment plant, water recycling plant etc.
viii. The company has been discharging its duty towards environment and ecology through the following-planting of saplings, protection of the existing trees etc.
Manufacturers have exhibited their concern towards the green concept to satisfy the environmentally aware consumers through the following:
i. Highlighting the environmental attributes of products
ii. Introducing new products from time to time with improvements in the areas of energy efficiency, waste reduction, sustainability, and climate control.
iii. Redesigning and redefining the existing products to make them more environment friendly.
Green Marketing encompasses consumer goods, industrial goods and even services.
This approach is very appropriately suited to the present scenario because people all over the World are realizing the ill-effects of environmental degradation and also an urgent need to protect the environment. There is a great realization that the resources of the earth are getting rapidly depleted and they should be conserved.
The supporters of this approach assume that enlightened buyers will realize the importance of eco-friendliness. They will appreciate the company’s intentions and efforts and buy such products, though at a higher price.
Green Marketing is also called environmental marketing, ecological marketing, sustainable marketing etc. This concept attempts to bridge the gap between a company’s marketing and the society’s needs regarding ecological and environmental factors.
The Green Marketing concept started in Europe in the early 1980’s. Since some products were found to be harmful to the earth’s atmosphere, new types of products were created and these were called green products. These would cause less damage to the environment. This movement later spread to the USA and from then it is spreading rapidly throughout the World.
“The marketing of products that are presumed to be environmentally safe” – American Marketing Association,
The word ‘retail’ is derived from the French work retailer, meaning ‘to cut a piece off’ or ‘to break bulk’. Therefore retail trade refers to buying the goods in bulk and selling them in small quantities to the final consumers, for their consumption. The journey of the goods begins at the place of the manufacturer. The goods go through the agent, wholesaler from whom the retailer purchases. The retailer in turn sells the goods to the final consumer and thereby terminates the journey of the goods.
The retailer always has to focus on the needs of the consumer. He buys such goods which are demanded by the consumer, sells them in such quantities which are convenient to the consumer and at such a time which is appropriate to the consumer. The retailer is also a part of the supply chain.
Retailing is a very important activity because if the goods manufactured by the industry have to be sold, it cannot be done without retailing. All the economically advanced countries have a strong retailing sector.
Retailing is not just selling goods to the final consumers. It also includes providing various services to the consumers.
Relationship marketing is a very popular technique used by sellers. This involves, basically understanding the customers, their needs, consuming habits etc. and marketing the goods to them accordingly. The sellers attempt to serve the customers well and also maintain a good relationship with them in the hope that such customers will develop trust and loyalty towards the sellers and become their permanent customers.
“Relationship marketing involves creating, maintaining and enhancing strong relationships with customers and other stake holders”. – Philip Kotler and Gary Armstrong
“Relationship marketing is the consistent application of up-to-date knowledge of individual customers to product and service design, which is communicated interactively in order to develop a continuous, mutually beneficial and long-term relationship”. – Anonymous
It has been the experience of the sellers that selling goods to established and known customers is much more profitable, easy, and pleasant and less time consuming than selling goods to new customers or first time customers. Thus the main aim of relationship marketing is to retain customers and convert them into permanent customers by maintaining good and long term relationship with them.
The sellers strive hard to establish a good relationship with the customers basically by providing satisfaction to the customers. This also involves providing the customers with all the information suited to their needs and establishing active two way communication channels with the customers.
Relationship marketing therefore requires the sellers to maintain an active data base of all the customers and be in touch with them constantly. This enables the sellers to receive feedback from the customers. The wide spread availability of the electronic media such as the internet and telecommunications has made maintaining relationship with customers much easier.
Relationship marketing is also called relationship management. This is called so because relationship marketing is cross functional, involving all the aspects of an organization in order to provide customer satisfaction.
Relationship marketing is actually a synthesis of quality management, customer service management and marketing. Marketing and customer service are inseparable.
Customer Relationship Management or CRM is a total of all activities that a company does in order to maintain good relationships with the customers. This involves profiling customers, understanding their needs, building relationships and providing them with suitable products and customer service. This requires back and front office systems to create a data base of customers and manage the same. This is basically a computerized system for identifying, targeting, acquiring and retaining the best mix of customers.
The aim of CRM is to collect business data which helps in providing services or products that the customers want, provide them with suitable products by understanding their needs and desires and ultimately enable the business to increase its sales and profit.
CRM enables a business to:
i. Data base – Create a data base of customers.
ii. Understanding – Understanding the customer, his needs, preferences and tastes.
iii. Retention – Retain the customers for a long term relationship.
iv. Increase in profitability – Increase the profit and profitability through enhanced sales.
v. Decrease customer management cost – Reduce the cost of managing the customers by developing well established customers.
CRM is not just confined to business processes and information technology system. It also includes customer centric attitudes reflected in adages such as service with a smile, customer is always right etc. CRM is a continuous activity. It is a continuous journey and never a final destination.
The following are the key factors for successful CRM:
i. Technology – Technology has provided several tools for successful CRM such as telephone, internet, computers, fax and electronic data interchange. Each of these technologies perform a distinct role. Together, they contribute to successful CRM.
ii. People – Technology by itself is not sufficient for successful CRM. The persons behind all the technology are also important. These persons should possess the skills to use the technology and also have the right attitude while interacting with the customers.
iii. Measuring CRM – Every organization has to measure how successful the concept of CRM has been. The outcome of CRM has to be measured in terms of actual sales. There are several methods of doing the same.