Tag: Consumer Behavior

An organization is generally defined as a group, in number from two people to tens of thousands of people, who intentionally aims to accomplish a shared common goal or a set of goals. In order to achieve shared goals, the organization acts as a system composed of:

(i) Inputs such as resources both human and monetary

(ii) Processes such as strategies to accomplish goals

(iii) Outputs such as products and services.

(iv) Outcomes such as end results or benefits to consumers.

The ethics of the organization refers to the active attempt of the organization to define its mission and core principles, to identify values which can cause tension, to seek best solutions to these tensions, and to manage the operations which maintain its values.

Organizational ethics includes all those actions which are embedded into several issues such as informed consent, research, marketing, access, conflict of interest, financial management, and public policy etc. They provide a means for them to be addressed by individuals within the organization. There are guiding principles which are to be used to guide ethical organizational behaviour which are to be considered, implicitly or explicitly, in every decision made by the organization and its representatives. The guiding principles include:

(i) Carrying out of the duties in a faithful and disciplined manner.

(ii) Honesty in financial dealings.

(iii) Giving work output which is of high quality.

(iv) Fulfilling of duties towards fellow employees.

(v) Respecting the organizational codes of conduct.

(vi) Respecting the disciplines connected with various organizational and technological processes.

(vii) Fairness in dealings with people both inside and outside the organization,

(viii) Fair distribution of scarce resources.

(ix) Complying regulatory norms without any violations.

(x) Fulfilling duties towards community and preservation of environment.

Reduces Financial Liabilities

Organizations that don’t develop policies on ethical standards risk financial liabilities. The first liability is a reduction in sales. For example, a real estate development company can lose customer interest and sales if its development reduces the size of an animal sanctuary. This doesn’t mean a company must abandon growth. Finding an ethically responsible middle ground is imperative to sway public opinion away from corporate greed and toward environmental responsibility.

Builds a Positive Corporate Culture

An organization devoting resources to developing policies and procedures that encourage ethical actions builds a positive corporate culture. Team member morale improves when employees feel protected against retaliation for personal beliefs. These policies include anti-discriminatory rules, open door policies and equal opportunities for growth. When employees feel good about being at work, the overall feeling in the organization is more positive. This breeds organizational loyalty and productivity, because employees feel good about showing up for work.

Minimizes Potential Lawsuits

The second area of financial liability exists with potential lawsuits. No organization is exempt from a disgruntled employee or customer who claims discrimination. Sexual discrimination in the workplace is costing CEOs, politicians and celebrities their livelihood because they are not appropriately dealing with accusations and harassment claims. Organizations must maintain policies and procedures addressing various types of harassment and discrimination. Moreover, organizations must remain consistent in the execution of policies dealing with accusations. This helps reduce frivolous lawsuits that could bankrupt smaller organizations.

Factors Influencing Ethical Judgement

Three of the important components of ethical decision making are individual factors, organizational relationships, and opportunity.

The eight steps are as follows:

1) Identify the problem or dilemma

2) Identify the potential issues involved

3) Review the relevant ethical codes

4) Know the applicable laws and regulations

5) Obtain consultation

6) Consider possible and probable course of action

7) Enumerate the consequences of various decisions

• Ethical intensity is the degree of importance of an issue for an individual or group. The factors that determine ethical intensity include the following:
• Concentration of effect, or the number of people affected.
• Magnitude, or significance of the consequences.
• Proximity of the decision maker to the victim or beneficiary of the decision.
• Social consensus that a proposed decision is negative or positive.
• Probability that the decision implemented will lead to the predicted consequence.
• Temporal immediacy, or the elapsed length of time between when a decision is made and when the resulting consequences occur.

Principles of Ethical Decision Making

After ethical intensity, a thoughtful manager will consider the principles that might apply to an issue. There is no one set of principles to check off, but the seven listed here are common to most people.

• Long-term self-interest means the pursuit of outcomes that will benefit the self in the long run. For example, a company must make choices to ensure its continued existence. The costs and harm from failure are substantial.
• Legal and regulatory requirements set the minimum standard for behavior. Any company or individual can disagree with the law, but given the consequences, it must be done carefully.
• Personal virtue refers to conformity to a standard of righteousness. You should make choices that are honest and truthful individually. The good of the company does not justify lying.
• Individual rights are related to the freedom to act and think without punishment through regulatory, legal, or societal means. For example, we make individual health decisions to smoke or drink beverages loaded with sugar even though the health costs are borne by many through private and government insurance programs.
• Utilitarianism seeks the greatest benefit for the maximum number of people. This is often difficult to judge over large groups of people.
• Religious injunction is the main moral and ethical guide for many people.
• Distributive justice is the fairness of the outcomes. That is, how are the benefits shared or distributed among the individuals in a group? The US market system can have winner-take-all outcomes. Our welfare system redistributes a little to the losers in the market game who are also part of our society.

Market Segmentation is the process of dividing a broad market into smaller, distinct groups of consumers with similar needs, characteristics, or behaviors. This allows businesses to tailor their products, marketing strategies, and services to meet the specific needs of each segment effectively, improving customer satisfaction, targeting accuracy, and overall marketing efficiency.

• Measurability

Measurability refers to the ability to quantify the size, purchasing power, and characteristics of a segment. It is crucial because effective marketing strategies rely on accurate data to allocate resources and forecast sales. Without measurable data, marketers cannot determine whether a segment is worth targeting or assess its profitability. Measurability enables businesses to evaluate the potential return on investment (ROI) for each segment.

• Accessibility

Accessibility indicates whether a company can effectively reach and serve a segment. Even if a segment is attractive, it is useless if it cannot be accessed through appropriate distribution channels, communication, or promotional efforts. Successful segmentation requires that businesses can engage segments using tailored marketing strategies, ensuring that messages and products reach the intended audience without excessive costs.

• Substantiality

Substantiality ensures that the target segment is large and profitable enough to justify specialized marketing efforts. Small or insignificant segments may not offer enough revenue potential to warrant the cost of customized strategies. A substantial segment provides the necessary scale for the company to achieve sustainable profits while minimizing per-unit marketing expenses.

• Differentiability

Differentiability refers to how distinct and unique a segment is from others. Each segment should exhibit clear differences in response to marketing efforts, making it possible to design separate strategies for each. Overlapping segments can lead to confusion and ineffective campaigns, while clearly differentiated segments enable precise targeting with appropriate products and promotions.

• Actionability

Actionability means that the company must be able to develop and implement marketing programs to target specific segments effectively. This involves having the right resources, skills, and capabilities to create and deliver value to each segment. If a segment cannot be acted upon due to limitations in product development or marketing, it is not viable for targeting.

• Stability

Stability refers to the consistency of a segment over time. If segments frequently change due to shifting consumer preferences, external factors, or other influences, marketing efforts may become inefficient. Stable segments allow for long-term strategic planning, ensuring that businesses can build lasting customer relationships and reduce marketing costs.

• Homogeneity within Segments

Homogeneity within a segment ensures that all members share similar characteristics, preferences, and needs. This similarity allows companies to design products, messages, and promotions that resonate with all members of the segment, leading to better customer satisfaction and higher sales conversion rates.

• Heterogeneity across Segments

Heterogeneity across segments highlights the importance of differences between segments. Distinct segments with varying needs and preferences justify the need for different marketing approaches. Clear heterogeneity ensures that segmentation efforts are meaningful, helping marketers create targeted campaigns that address specific customer demands.

• Feasibility

Feasibility ensures that the company has the capability to serve the segment effectively. This includes having the financial resources, technology, and expertise required to develop products and marketing campaigns. If a segment cannot be feasibly targeted due to resource constraints, it should not be pursued despite its attractiveness.

• Compatibility

Compatibility refers to how well a segment aligns with the company’s overall objectives, mission, and values. A segment that does not fit the company’s core competencies or brand identity may lead to long-term challenges. Ensuring compatibility helps maintain a cohesive brand image and ensures efficient use of resources.

In any purchase decision, multiple roles are played by individuals, even if the final purchase involves only one person. These roles help marketers understand who to target during different stages of the buying process. The five key roles are: Initiator, Influencer, Decider, Buyer, and User.

1. Initiator

The initiator is the person who first recognizes a need or problem and starts the buying process by suggesting a purchase. This individual plays a critical role in triggering the entire decision-making process. For instance, in a family setting, a child may act as the initiator by expressing a desire for a new video game console. In a business scenario, an employee may suggest purchasing new software to improve productivity.

Marketers need to identify initiators because they are key in creating demand. Advertising that highlights common problems or needs can effectively target initiators by making them aware of potential solutions.

2. Influencer

The influencer is the person who provides information or opinions that affect the buying decision. Influencers may have expertise or credibility that others rely on during the decision-making process. In a family, parents often act as influencers by advising on the quality, price, and brand of a product. In a corporate environment, technical experts or consultants may influence the choice of products or services.

Influencers play a crucial role in shaping perceptions and preferences. Marketers often target influencers by using strategies such as influencer marketing, testimonials, expert endorsements, and word-of-mouth promotion. Ensuring that influencers have positive experiences with a product can significantly increase its acceptance.

3. Decider

The decider is the individual who has the final authority to choose whether to buy a product or not. In many cases, the decider is the head of the family or the manager in an organization. For example, even if a child initiates the need for a toy and influences the parents, the decision to buy it may ultimately lie with the parent who controls the finances.

In business markets, the decider might be a senior executive who approves significant purchases after evaluating the recommendations made by subordinates. Marketers need to understand who the decider is and develop strategies aimed at convincing them, such as providing clear information about the product’s benefits, cost-effectiveness, and return on investment.

4. Buyer

The buyer is the person who physically purchases the product. This role involves activities like visiting the store, negotiating with vendors, and making payments. In many cases, the buyer may also be the decider, but not always. For instance, a parent might be the buyer purchasing groceries for the household, although other family members may have influenced or decided what should be bought.

Marketers should focus on making the buying experience as smooth as possible for buyers by ensuring product availability, offering promotions, and simplifying the payment process. Loyalty programs and incentives can also encourage repeat purchases.

5. User

The user is the individual who consumes or uses the product or service. Users may or may not be involved in the decision-making or buying process. For example, in a family, children might be the primary users of snacks or toys, while parents are the ones who buy and decide on the product. Similarly, in a company, employees use office supplies or equipment, although a procurement team handles the buying.

Since the user’s satisfaction ultimately determines the success of a product, marketers must focus on user experience and gather feedback to improve offerings. Ensuring that users have a positive experience leads to repeat purchases, customer loyalty, and positive word-of-mouth.

Interrelation of Roles in Buying Decisions:

In real-world scenarios, the roles of initiator, influencer, decider, buyer, and user often overlap. A single person may play multiple roles, or different individuals may assume each role. For instance, in a family:

• The child may be the initiator and influencer.
• The parent may act as the decider and buyer.
• The child is the ultimate user.

In a business-to-business (B2B) context:

• An employee may initiate the need for a new tool.
• A manager might influence the decision by recommending brands.
• The procurement officer handles the actual purchase.
• The employee uses the product.

Marketers need to understand the interplay of these roles to design targeted campaigns at various stages of the buying process.

Marketing mix (programme) comprises of various controllable forces (often referred as elements) like product, price, promotion and place. Success of any business enterprise depends on marketing mix. These four elements are like powerful weapons in the hand of manager to defend his market and/or attack on rivals. A manager needs to understand his rural market carefully, considering all important characteristics of rural customers.

Since behaviour of rural consumers is different and less predictable, the marketing manager has a challenging task to design marketing mix strategies for the rural segments. Due to considerable level of heterogeneity, a manager needs to design tailor-made programme to cater needs and wants of specific groups.

Dynamics of rural markets differ from urban market types, and similarly rural marketing strategies are also significantly different from the marketing strategies aimed at urban or industrial buyers. This, along with several other related issues, has been subject matter of intense discussion and debate in countries like India and China, and even the focus of international symposia organized in these countries.

Product Mix:

Product is a powerful determinant of firm’s success. The products must be suitable to rural customers in all significant aspects. The company must produce product according to the present and the expected state of rural buyers. Product features (size, shape, colour, weight, etc.), qualities, brand name, packaging, labeling, services, and other relevant aspect must be fit with needs, wants and capacity of buyers. Product must undergo necessary changes and improvements to sustain its suitability over time. Note that effectiveness of other decisions like pricing, promotion and place also depends on the product.

Place Mix

Rural market faces critical issues of distribution. A marketer has to strengthen the distribution strategies. Distributing small and medium sized packets through poor roads, over long distances, into the remote areas of rural market and getting the stockiest to do it accordingly.

Both physical distribution and distribution channel should be decided carefully to ensure easy accessibility of products for rural consumers. Choosing the right mode of transportation, locating warehouses at strategic points, maintaining adequate inventory, sufficient number of retail outlets at different regions, and deploying specially trained sales force are some of the critical decisions in rural distribution.

Normally, indirect channels are more suitable to serve scattered rural customers. Usually, wholesalers are located at urban and semi urban to serve rural retailers. Not only in backward states, but also in progressive states, local rural producers distribute directly to consumers.

For service marketing, employees of rural branches can do better jobs. Various sectors like banking, insurance, investment, satellite and cable connection, cell phone, auto sales and services etc. the market for these sectors is booming in villages of some states in a rapid speed. Service industries are trying to penetrate into rural areas by deploying specially trained employees and local rural area agents.

Nowadays, online marketing is also making its place gradually in rural areas of the progressive states. Marketers must design and modify their distribution strategies time to time taking into consideration the nature and characteristics prevailing in rural areas, may be quite differently than that of urban markets.

Price Mix:

Price is the unique element of marketing mix, particularly, for rural markets. Rural customers are most price sensitive and, hence, price plays more decisive role in buying decisions. Pricing policies and strategies must be formulated with care and caution. Price level, discounts and rebates, credit and installment faculties, and so on are important considerations while setting and altering prices. Normally, the low-priced products attract rural buyers. However, some rural customers are quality and status conscious.

Promotion Mix

Rural markets are delicately powerful to cater to the rural masses. The promotion strategies and distribution strategies and Ad makers have learned to leverage the benefits of improved infrastructure and media reach.

Most of the companies advertise their products and services on television and they are sure it reaches the target audience, because a large section of the rural India is now glued to TV sets. Marketers have to decide on promotional tools such as advertisement, sales promotion, personal selling and publicity and public relations.

The method of promotion needs to meet the expectations of the market. Vehicle campaigns, edutainment films, generating word of mouth publicity through opinion leaders, colorful wall posters, etc. all these techniques have proved effective in reaching out to the rural masses.

Village fairs and festivals are ideal venues for projecting these programs. In certain cases, public meetings with Sarpanch and Mukhiya too are used for rural promotion. Music cassettes are another effective medium for rural communication and a comparatively less expensive medium.

Different language groups can be a low budget technique and they can be played in cinema houses or in places where rural people assemble. It is also important that in all type of rural communication, the rural peoples must also be in the loop. The theme, the message, the copy, the language and the communication delivery must match the rural context.

Eventually, the rural communication needs creativity and innovation. In rural marketing, a greater time lag is involved between the introduction of a product and its economic size sale, because the rural buyer’s adoption process is more time consuming.

Nowadays, educated youth of rural area can also influence decision-making of the rural consumers. Rural consumers are also influenced by the western lifestyle they watch on television. The less exposure to outside world makes them innocent and the reach of mass media, especially, television has influenced the buying behavior greatly.

Consumer behaviour is the study of how individual customers, groups or organizations select, buy, use, and dispose ideas, goods, and services to satisfy their needs and wants. It refers to the actions of the consumers in the marketplace and the underlying motives for those actions.

Marketers expect that by understanding what causes the consumers to buy particular goods and services, they will be able to determine which products are needed in the marketplace, which are obsolete, and how best to present the goods to the consumers.

Consumer behaviour is the study of individuals, groups, or organizations and all the activities associated with the purchase, use and disposal of goods and services, and how the consumer’s emotions, attitudes and preferences affect buying behaviour. Consumer behaviour emerged in the 1940-50s as a distinct sub-discipline of marketing, but has become an interdisciplinary social science that blends elements from psychology, sociology, social anthropology, anthropology, ethnography, marketing and economics (especially behavioural economics).

The study of consumer behaviour formally investigates individual qualities such as demographics, personality lifestyles, and behavioural variables (such as usage rates, usage occasion, loyalty, brand advocacy, and willingness to provide referrals), in an attempt to understand people’s wants and consumption patterns. Also investigated are the influences on the consumer, from social groups such as family, friends, sports, and reference groups, to society in general (brand-influencers, opinion leaders).

Rural consumers go to their nearest cities when they have to buy products like tractors, televisions, motorcycles, etc. For most villages, the nearest cities can be as far as 50 kms away. Most of these cities are district towns. Rural consumers go to the ‘local market’ which is normally around 5-10 km. from their villages to buy the daily household requirements like sugar, tea, vegetable oil, etc.

There is an alternative to rural retailing. Door-to-door selling or some version of it can be employed. Retailers at the local market can employ door-to-door salespeople. These salespeople can move on bicycles and should agree to accept payment in grains. Door-to-door selling is very effective in overcoming consumers’ reluctance to buy. Consumers keep postponing going to a retail store because they do not want to spend money but when a door-to-door salesperson arrives, they are likely to succumb to his offerings.

Consumers of rural markets are spread throughout the country side with low-income levels, lack of education where income comes in seasonal basis during harvesting time. They are also scared to try out new or innovative products.

• For high tech products village buyer finds in difficult to understand its usage, and buys only after peers who have seen the product in action buy the same
• Because of low income, price becomes extremely important and rural demand is highly price sensitive
• The consumer market in this case is Rural India. About 70% of India’s population lives in rural areas.
• There are more than 600,000 villages in the country as against about 300 cities and 4600 towns.
• Consumers in this huge segment have displayed vast differences in their purchase decisions and the product use.
• Villagers react differently to different products, colours, sizes, etc. in different parts of India.

Thus, utmost care in terms of understanding consumer psyche needs to be taken while marketing products to rural India. Thus, it is important to study the thought process that goes into making a purchase decision, so that marketers can reach this huge untapped segment.

Factors

1. Socio-economic environment of the consumer
2. Cultural environment
3. Geographic location
4. Education/literacy level
5. Occupation
6. Exposure to urban lifestyles
7. Exposure to media and enlarged media reach.
8. The points of purchase of products.
9. The way the consumer uses the products
10. Involvement of others in the purchase.
11. Marketers effort to reach out the rural markets

Stereotype marketing ideologies might focus too much on one group and ignore another equally, or even more important. For example, target only kids for (non-PC) video games and lose access to millions of customers. Nearly a quarter of all video games are purchased by consumers aged 40 and older, and women make 38 percent of all video game sales.

The advertising world is inundated with with different types of stereotypes, ranging from gender and race to socioeconomic roles. Gender roles in commercials are especially prominent. Advertising often shapes cultural views and creates norms by introducing a product or service alongside an idea that makes that product desirable. In many cases, stereotypes are used simply because they are known to drive results for the company behind the advertisement. In other cases, stereotypes are used for legal reasons or to create an advertisement that is neutral and least likely to offend. Stereotypes can offer a safe solution for the advertiser in some cases, but increasing scrutiny can also lead to gender and cultural groups delivering negative feedback based on some common stereotypes in ads. Stereotypes in advertising are a sensitive subject, and they can deliver positive or negative results for the advertiser. Ultimately, stereotypes are judged on context; advertisers must proceed with caution when exploring messaging.

Stereotyping, by definition, is the oversimplification of something that is more complex than it’s portrayed. In most cases, stereotypes apply to things or people, and they are excessively common in advertising. In reality, people are complex and cannot be defined by single role. In advertising, labels are commonly used to portray an individual or group of people in a very specific light. Gender stereotypes are among the most common in advertising. Pay attention to advertisements for cleaning supplies and you are likely to see a female playing the lead role. The “housewife” gender role that was common in the 1950s is still being displayed in many modern advertisements.

Common examples of stereotyping in marketing include gender roles, racial stereotypes and stereotypes involving children. The way groups of people are portrayed in an advertisement does not always fully represent reality. Cause-based advertising does exist, but there is also a gap in this market. Some companies approach cause-based advertising with genuine intent to breakdown stereotypes while supporting a cause, while others capitalize on a movement simply to capture the audience. This disingenuous approach often draws heavy criticism and takes advantage of the grassroots work within the movement.

A lighthearted ad can often get away with common stereotypes without much in the way of negative consequences, but advertisements tackling socially sensitive subject matter in their campaigns can easily offend different genders and cultural groups through stereotypes. Common stereotypes include the housewife, the single African American friend in a group of Caucasians, the white businessman, blonde hair and blue-eyed girl, the suburban white family, etc. There are no shortages of stereotypes in society and they are present in the world of advertising.

Use

Brands approach each advertising campaign with a specific goal in mind. They have a budget and expect to see a return on that investment through an increase in sales. If it’s not profitable, the brand has no reason to advertise. Stereotypes play into the equation because the brand or advertising agency responsible for the campaign is speaking to a specific demographic. The brand for a cleaning product like a vacuum may have a historic profile of their previous customers. They can generate an audience profile and target demographic based on historic appeal. When the brand knows the primary audience and decision maker for a new vacuum purchase is a female between the ages of 25 and 50, it will cater to that audience. The stereotype becomes appealing at that point because it represents the customer base, despite the fact that a percentage of that customer base is also males in their early 30s or retired couples in their 60s. Ultimately, the stereotype for the audience with the most buying power will win out. In the specific housewife scenario for a vacuum cleaner, the stereotype risks alienating a large portion of a modern audience because it implies that the role for women is in the house with the responsibilities of cleaning and cooking. That gender role is ever-evolving, and many modern campaigns still misrepresent a large portion of the population.

Stereotypes aside, brands remain focused on advertising campaigns that sell products or services. It ultimately comes down to a message they are delivering to their audience to drive sales. If the group of people represented in the stereotype wants to see a change in the messaging, the brand is most likely to change when the buying power shifts away from that brand. Shopping strategically and buying from brands that represent a diverse population of people in a positive manner is the only way to effectively change the way stereotypes are used in advertising.

The role of digital advertising and the ability for new brands to launch quickly is also changing the use of stereotypes in advertising. A micro-climate exists in which brands can focus on a really tight niche and audience. With an ultra-focused niche, stereotypes are avoidable, because the audience is really well defined and the brand is selling a very specific product or small group of products.

Children are often portrayed as cute and happy in advertising. Unlike gender and racial stereotypes, kids are often portrayed in a way that appeals to their parents, the decision makers. Products and services are positioned to solve a problem for the parents. For example, a diaper that changes colors when wet does not necessarily appeal to the child but it does solve a problem for the parent. The child in the advertisement will often have a smile and broad appeal. The perfect family with a happy child and dog in a suburban house is a common stereotype used to target the middle class in general.

More important than how children are portrayed in advertising is the effect of stereotypes in advertising as seen through the lens of a child. Children see advertising on billboards, television, online and in print, and they hear radio advertisements. They are learning stereotypes through these mediums and have no way to really avoid viewing advertising with bias and stereotypes. Advertising crosses their paths intentionally in some scenarios like commercial breaks on a cartoon network, and unintentionally when family members are watching television and adult-targeted ads are displayed.

Word of Mouth

Customers can be your best or worst source of advertising. Word of mouth referrals, especially in the age of the Internet, should not be undervalued. And, since consumers are more likely to complain than to compliment, it pays to have customer-friendly and trustworthy complaint resolution practices in place.

Targeting Vulnerable customer

The vulnerable customer groups include children, elderly, certain minorities, and religious groups. These customers may be influenced comparatively more easily as they have either less knowledge about these practices or they are vulnerable in terms of their minority or religion. Children have always been important marketing target for certain kind of products. However, in recent times more and more marketing efforts are being focused on children. Children have great influencing power while making any purchase decision. But, generally, their knowledge is less developed and limited about the products, media, advertisements, and the selling strategies adopted by the firms. Due to these reasons, they are more likely to be attracted to the strong images projected towards them and the psychological appeals directed towards them.

Ethical questions arise in such environment when children are exposed to questionable practices e.g. advertisements attracting them towards products which are potentially harmful like alcohol and tobacco. The advent of Internet and direct marketing practices to market the products to children has become a major ethical issue in today’s environment. There are very less, almost negligible, controls which can supervise the content which goes over the web sites. The marketers can present objectionable and misleading material to the minors without any regulation. Due to all these issues, there is increasing need to control the content being presented to children. It requires higher levels of regulations for marketing to children.

Major ethical problems in international marketing are as follows:

Small- or large-scale bribery: Bribery is mostly considered to be an unethical practice. However, in some countries it may be acceptable to get some work done or speed up the process.

Gifts/Favors/Entertainment: These include items like gifts, personal travels etc. which may be intended to get some job done. However, it may be considered just as a gift in some cultures, it may also be considered as being a source of influence in other cultures.

Pricing: The ethical issues regarding this include unfair price differentials, pricing to eliminate local competition by selling products at prices which are well below those in-home country, or adopting pricing practices which are illegal in-home country but are legal in host country like price fixing arrangements and forming cartels.

Products/Technology: This may involve ethical issue of selling the product/service which is banned in home country but not in the host country or which is inappropriate or unsuitable for people in host country to use.

Questionable commissions to Channel partners: This may include unethical practices like paying unreasonably high commissions to channel partners like dealers, distributors, sales personnel etc. to carry the products of this firm and restricting the products of competing firms.

Involvement in political affairs: This includes the issues of exertion of political influence by multinationals, or indulging in marketing practices in countries which are at war with the home country.

Cultural differences: There may be potential misunderstandings as some practices may be considered as right in one culture and immoral or even illegal in another.

Reason

Consumer Choice vs. Consumer Protection: Consumers should be given alternatives to choose from as per the consumer choice concept. Consumer protection says that the consumer should be protected from abuse. Consumers may not always choose the product which is good for them. This is especially true for consumers like children, elderly or poverty-stricken. Target marketing to such vulnerable consumers is an example where these two goals diverge. Target marketing is a core concept of marketing. However, when it involves vulnerable consumer segment, it may attract criticism. This raises a question that the product is serving the distinct needs of the segment or taking advantage of their vulnerability.

Consumer Satisfaction vs. Revenue Growth: Firms should increase their profits and they should also focus on delivering satisfaction to their customers. Most of the times these two objectives can go hand-in-hand. However, sometimes these objectives diverge because fulfilling the requirements and obligations of current customers may come in way of incremental revenue generation. E.g. If a firm discovers a fault in its product, should it recall it, offer free or discounted replacement or use the same resources for further revenue generation. If a recall is not done it may cause reduction in customer satisfaction. There have been several instances in which companies have forsaken their revenues for customer satisfaction. The latest example in this can be taken from Honda recalling almost 7 lakh Jazz and City cars globally due to a defect. However, there have also been the cases where companies chose not to act even after detecting the defect and the customers have suffered due to this.

Customer Participation vs. Total System Efficiency: As per the marketing theory, entire marketing process from product development to communication and distribution should be made as efficient as possible. It also says that the consumers should participate in the process. However, to gain more efficiency, the processes require standardization which may not be quite engaging for the customers.

Customer Welfare vs. Price Discrimination: In industries having high fixed costs and expiring capacities, like airlines, hotels etc., price discrimination is very important to maintain profitability. In such cases, the firms should try to capture the consumer surplus by exercising price discrimination. On the other hand, the firm should also contribute to consumer welfare and price discrimination is believed to reduce this consumer welfare as it results in increased price dispersion for the products/services.

Ethical issues such as predatory pricing occur due to this reason. Predatory pricing initially offers lower prices to the customers, but subsequently it leads to reduced innovation, variety and increased prices. Selling branded goods at price premium is also considered as being an ethical issue due to this particular reason.

Employee Satisfaction vs. Short-Term Profit: Employee satisfaction has often been related to customer satisfaction which in turn leads to the success of an organization. If the organization maintains conditions such as ethical climate in the organization, then it may lead to improved employee satisfaction and service quality. However, this may come in conflict with the profit goal of the organization to maintain its competitive advantage. This may lead to situations where companies take advantage of their employees, avoid safety and health standards and go against labor unionization. There have been cases when companies have put the health and safety of their employees just in order to maintain their profits and earnings.

Collaborative Supplier Relationships vs. Short-Term Cost Control: Longer term relationships with suppliers enhance the firm’s results. The smaller the number of suppliers, i.e. the more collaboration a company has with its suppliers, the better the results of a firm are. However, the mass merchandisers take so much margin out of small suppliers that the small suppliers are forced to leave the business.

Personal selling is oral communication with potential buyers of a product with the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to “close the sale”

Personal selling is the interpersonal tool of the promotion mix. Unlike advertising, personal selling is two-way personal communication between salespeople and individual customers.

This communication may take place face-to-face, by telephone, through video conferences, or by other means. This implies that personal selling may be more trustworthy than advertising in more complicated selling situations.

Salespeople can be very effective in exploring the problems of the customers. They can compose the marketing offer to suit each customer’s special needs and negotiate terms of sale.

The role of the sales force varies from company to company. Companies that sell through mail-order catalogs, brokers, and agents do not maintain salespeople.

However, the sales force plays a critical role in companies selling business products. They work directly with customers and represent the company.

Salespeople employed in consumer goods-producing companies do not come into direct contact with the customers.

Nonetheless, their role is valuable because they work with wholesalers and retailers and help them be more effective in selling the company’s products.

Very often, salesforce works for both the seller and the buyer. They locate and develop new customers and communicate information about the company, its products, and services.

They perform selling task by approaching customers, presenting their products, answering objections, negotiating prices and terms, and closing sales.

Furthermore, salespeople provide services to customers, conduct market research, gather market information, and fill out sales call reports.

Simultaneously, salespeople represent customers to the company.

Personal Selling in the IMC

• Surveying: Educating themselves more about their customers’ businesses and regularly assessing these businesses and their customers to achieve a position of knowledgeable authority.
• Communicating: With existing and potential customers about the product range
• Mapmaking: Outlining both an account strategy and a solutions strategy (for the customer). This means laying out a plan, discussing it with a customer, and revising it as changes require.
• Selling: Contact with the customer, answering questions and trying to close the sale
• Guiding: Bringing incremental value to the customer by identifying problems and opportunities, offering alternative options and solutions, and providing solution with tangible value
• Fire starting: Engaging customers and driving them to commit to a solution
• Servicing: Providing support and service to the customer in the period up to delivery and also post-sale
• Information gathering: Obtaining information about the market to feedback into the marketing planning process

Conditions that favor personal selling:

• Product situation: Personal selling is relatively more effective and economical when a product is of a high unit value, when it is in the introductory stage of its life cycle, when it requires personal attention to match consumer needs, or when it requires product demonstration or after-sales services.
• Market situation: Personal selling is effective when a firm serves a small number of large-size buyers or a small/local market. Also, it can be used effectively when an indirect channel of distribution is used for selling to agents or middlemen.
• Company situation: Personal selling is best utilized when a firm is not in a good position to use impersonal communication media, or it cannot afford to have a large and regular advertising outlay.
• Consumer behavior situation: Personal selling should be adopted by a company when purchases are valuable but infrequent, or when competition is at such a level that consumers require persuasion and follow-up.