PERSONAL SELLING

PREFACE

We are happy to bring in the book for you with title “PERSONAL
SELLING” this book has been written in accordance with the precisbed
syllabus for B.com honour’s BBA and Integrated M.com. An attempt has
been made through this book to explain the various concepts of Personal selling,
sales and marketing in easy, understandable, comprehensive and well-structured
language.it is our endeavor to make this book more student oriented and meet
their requirements. This edition emphasizes helping others through the application of
the Golden Rule of Personal Selling. The book will
create awareness and understanding of the notion that Personal selling is
more than a simple business transaction.

ACKNOWLEDGEMENT

The completion of this book has been a joint effort in the sense
that I have received abundant inspiration, encouragement and assistance from
several colleagues and friends. I express my heartfelt thanks to my friends and
relatives. The comfort they provide me during the writing of this book is
highly acknowledgeable. Finally, I am forever indebted to my beloved parents
who were very supportive in my endeavor and offered valuable emotional and
fiscal support during the time of my studies however they are not with me in
person now but they must be proud in heaven for my achievements. They suffered
all the inconveniences patiently. I have no words to describe their endless
patience and encouragement which they displayed when I was preoccupied with my
studies.

Prof M M ANJUM PARWEJ.

About
the author

Prof M MAnjum Parwej completed his graduation from university of Patna
Bihar and did PG (MBA) with marketing specialization. Beside this he has done
PG diploma in personal marketing and industrial relation. Currently pursuing P.
hd from APJ Abdul Kalam Azad University Indore and working as assistant
professor in chamali Devi group of intuitions Indore.

Dr Sajad Ahmad Mir Graduated from university of Kashmir powered and
backed by degrees’ like M. Com and M.Phil. from Vikram university and did P. hd
from Davv Indore. currently working as assistant professor at Govt degree
college Baramulla.

Dr Asif Amin Kuchey did his masters from LPU and P. hD from Delhi.
Currently working as assistant professor at Acharya institute of graduate
studies Bangalore.

Published by: NOTION PRESS PUBLISHERS

ISBN:978-93-5509-389-9

https://notionpress.com/read/personal-selling

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The views expressed and the material provided in
this book is solely those of the author and presented by the publisher in
good faith. All the names, places, events and incidents are either the
product of the author’s imagination or are used fictitiously. Any resemblance
is purely coincidental. The author and the publisher will not be responsible
for any action taken by a reader based on the content of this book. This work
does not aim to hurt sentiment of any religion, class, sect, region,
nationality or gender.

CONTENT

Personal
Selling, Nature, Needs, Importance, Scope Advantage and Disadvantages.
Process. Sales Management, Salesmanship, Personal Selling. Myths of Personal
Selling

Buying
Motives, Importance, Types, Buyer Motivation, Types of Buying Motives,
Selling Situations, Types of Selling Situations, Types of Selling, Theories of Personal Selling.

Consumer Behaviour, Applications Of
Consumer Behavior, Different Types Of Customers, Models Of Consumer
Involvement, Business Models Of E-Commerce

E-Marketing, Features of E-Marketing,
Advantages and Disadvantages of E-Marketing, Types of E-Marketing,
E-Procurement, Steps of E-Procurement, Necessary Standards, Different Types
of System. Sales Process.

E-Payment
System, Advantages and Disadvantages, Types, Considerations, Process. Green marketing, E-Commerce, Ethical
Marketing.

UNIT I

PERSONAL
SELLING

Personal
selling is an integral part of promotion mix. It involves face to face
interaction with prospective buyers for presenting goods and services and
convincing them to make a purchase. Personal selling efforts comprises
connecting, engaging and persuading buyers to satisfy their needs/problems in
most effective way. It is direct and personal communication to influence
prospective buyers to make a purchase decision.

According
to Cardiff and Still “Personal selling is basically the method of
communication. It involves not only individual but also social behavior each of
a person in face-to-face contrast salesman and prospect influence each other”.

According
to American Marketing Association, “Personal selling is the oral presentation
in a conversation with one or more prospective purchasers for the purpose of
making sale; it is the ability to persuade the people to buy goods and services
at a profit to the seller and benefit to the buyer”.

Philip Kotler defines “Personal selling is a
face-to-face interaction with one or more prospective purchasers for the
purpose of making presentations, answering questions and procuring orders.”

NATURE OF PERSONAL SELLING

Personal
Selling is a two-way communication, in which the salesperson educates the
customer about the features, benefits, price, delivery etc. of the product and
apply persuasive skills to sell the product while handling queries and
objections of buyers. The salesperson can customize the communication according
to the requirement of every buyer. Salespeople stimulate consumers to purchase
by matching product benefits with their needs, convincing them about product
benefits and reducing people's inherent reluctance to make purchase decision.

1.
Personal selling fulfils the objectives of

(i)
selling the product and

(ii) developing long term relationships with
customers.

2. B2B and B2C selling:
Personal selling is generally used as major element of promotion mix in B2B
selling situations. Whereas advertising is used as major element in B2C selling
situations. Personal selling may be used as minor element in B2C selling and
advertising may be used as minor element in B2B selling.

3. Art
and Science: Personal selling is both art and science. It is considered as
an art because salesperson applies the creative abilities in making final sales
presentation before each customer in a unique way. It is considered as a
science because salesperson applies the principles of consumer behavior and
stages of selling process as a basis of sales presentation to persuade buyers
for purchase.

4. Direct communication:
It is a face-to-face interaction between sellers and prospective buyer. The
buyer could be first time buyer or prospective buyer or regular buyer of the
same products or company. This interaction involves presenting, informing about
products and convincing him to enter into a sale.

5. Buyer:
seller interaction-With most of purchases going online today, the interaction
between the buyer and seller are also happening on virtual platforms as well.
The interactive and immediate relationship between buyer and seller is not just
limited to geographical boundaries. The technological advancements have allowed
the interaction to spread across the globe.

6. Customization and personalization:
The unique feature of personal selling is the flexibility in approaching the
prospective buyer as compared to advertisement. It is a personalized
communication designed considering distinct customer characteristics in perspective.
The salesperson has to adapt in light of customer requirements, distinct
characteristics, products, situations for communicating the solution.

7. Human element:
Personal selling is a two-way interaction between buyer and seller. In the
interaction the seller educates, discuss concerns with respect to product,
price or delivery and applies persuasive skills to go ahead with purchase. The
body language, confidence, tone and tenor play a vital role in interaction. The
real time presentation and demonstration allows more engaging and satisfying
experience for buyers.

8. Quick response and feedback:
In case of personal selling, the sellers get instant feedback about the
company’s offerings. The alive, immediate and interactive interaction allows
the salespersons to gauge the response of prospective buyers. It assists the
salespersons to keep a track of progress of response received from the
prospective buyers and existing customers. This information is helpful for the
company for improving the products and services for future use.

CHARACTERISTICS OF PERSONAL SELLING

Direct communication:
In advertising the message is conveyed in non-personal manner through mass
media like TV, newspaper, hoardings, radio, digital media etc. but in personal
selling, salespersons convey the messages personally to the consumers.

Human element:
Person engaging in personal selling serves as the personal connection between a
company and its customers. So, along with verbal communication, it also
includes use of non-verbal communication of body language, tone, appearance
etc. in conveying messages to the buyer.

Part of Promotional Mix:
Personal selling is a part of promotional mix, or the communication mix, in the
company's marketing program. The major elements in the promotional mix are the
company's advertising, sales promotion, and personal selling efforts

Long-run Relationship:
Personal selling permits all kinds of relationship to spring up. It establishes
a selling relationship and also a deep personal friendship. It keeps customer's
best interests at heart. It maintains long-run relationships.

Broader Concept:
Personal selling is a broader concept than salesmanship. Still and Cundiff
state, "Personal selling, along with other marketing elements, is a means
for implementing marketing program’s. Salesmanship is one aspect of personal
selling it is never all of it." Personal selling makes use of salesmanship
techniques.

OBJECTIVES OF
PERSONAL SELLING

Identifying prospective buyers:
The primary objective of personal selling is to identify and search the
prospective buyers for the products. The direct communication between the buyer
and seller helps to recognize the most suitable prospects for carrying out the
personal selling activities. Personal selling enables to connect and engage
with those persons who are interested in the offerings of company.

Stimulating
demand: Once the prospects have been identified, the next step is to push
the products by convincing efforts of salesperson. The interaction with the
potential buyer helps in determining the specific needs and requirements. The
salesperson has to present and demonstrate in such a manner that arouses the
interest and desire for acquisition of product.

Informing, educating and guiding:
The task of personal selling involves providing information and assistance,
promoting, educating and guiding the customers throughout their journey of
seeking the solution to their problem. The information about the new products
and services, educating the potential buyers with respect to handling and
disposal of products, and guiding them in finding the best solution to their
requirements are embedded as goal of personal selling exercise. It also
includes supplementary services like installation, repairs and maintenance that
can be made available to buyers.

Persuading and reinforcing prospects:
The persuasion and positive reinforcement is the key objective of personal
selling. The reinforcement with respect to finding or suggesting
products/services to the best interest of potential buyer helps to create a
satisfying experience. The features, advantages, benefits and competitive edge
of products must be communicated to the prospects and customers. the need-
benefit linkage must be established through personal selling.

Building
long term relationships: The personal selling efforts are undertaken to
cultivate relationships with buyers. Even if the salespersons may not be able
to close the sale successfully.it cannot be considered as failure of person
selling rather it should be seen as an opportunity to understand the needs
better and provide solution accordingly. The strength and conviction of
personal selling helps in building the trust and confidence in the minds of
customers.

PROCESS OF
PERSONAL SELLING

A
sales process is a set of steps that a sales team takes to convert a prospect
into a customer. Having a standardized sales process adds structure and
accountability to sales activities, leading to a higher rate of successful
sales.

It
consists of sequence of steps that a salesperson goes through to sell a product
or service. It is:

7-step sales process. These steps are
as follow.

1. Prospecting.

2. Preparation.

3. Approach.

4. Presentation.

5. Handling
objections.

6. Closing.

7. Follow-up.

1. Prospecting:
Prospect or a potential customer is a person or organization who has a need,
ability, desire to buy a product. Prospecting is the process of searching for
prospects. Objective of prospecting is to find sales leads for making sales
call and trying to convert them into customers. List of prospective customers
is generated through various sources like references, publicly available data,
company records etc. The Salespersons have to make sincere efforts to find out
the leads. They must interact with the leads and enquire about their
requirement of products or services. They must try to develop good impression
about himself/herself.

2. Preparing:
It involves customer research and planning for presentation. It is collecting
all the relevant information about the prospect like size and location of the
clients, their needs, financial resources, purchase policies etc. It helps
developing suitable presentation for each of the client by focusing on needs
important to the client and communicating relevant benefits to the client. The
presentation must be very impressive so that the prospects may get provoked to
think about the products or services.

3. Approach:
It is the first contact with the prospective client or opening lines at the
beginning of the meeting for about first two minutes. First impression is
important to get the customer interested in listening to the presentation.
Salesperson may start by showing the product or mentioning the most important
problem of the client that match the product. He may inform about special
schemes, discounts, offers, etc. for the customers.

4. Presentation:
A well prepared sales presentation can keep the client engaged in listening
carefully. It involves talking/showing about features and benefits of the
product, how it meets the need, demonstrating the product. Contents of
presentation should be clear and credible. The Presentation should focus on the
detailed features of the product for which customers may be interested to know.
He/she has to arouse the interest of the customers about the products.

5. Handling objections:
These are questions raised by the prospect which can indicate barriers to
purchase or an unwillingness to buy. It is listening to the concerns of the
customer and answering them and providing solutions wherever possible. The
objections of customers can include objections to prices, products, services
etc. For example, the concern can be competing product being offered at a
lesser price, which can be answered by showing the difference in quality or
features of the company’s product. Another objection can be inability to pay
for it, which can be solved by offering installment plan.

6. Closing the sale:
It refers to the stage of getting the order from the customer. Salesperson can
first go for trial close in different ways like: by asking for choice in
payment method, selection of model or size or after-sale service plan etc.
Answers to such questions can know the reasons for it and again try to close
the sale.

7. Follow-up:
After closing the sale, it is important to keep in touch with customers to know
about their satisfaction with the product or to solve the problem if there is
any. It also helps in building relationship with customers and get repeat sales
from them.

PERSONAL SELLING, SALES MANAGEMENT,
AND SALESMANSHIP

Personal
selling is a broader concept than salesmanship. Personal selling is an
important ingredient of promotional mix, which is a part of marketing mix that
includes four things: - product, price, distribution and promotion. Personal
selling is a means for implementing marketing program’s. Salesmanship is just
one aspect of personal selling. Still and Cardiff state that salesmanship is
one of the skills used in personal selling it is the art of successfully
persuading prospects or customers to buy products from which they can derive
suitable benefits, thereby increasing their total satisfactions. Sales
management, salesmanship and personal selling are interlinked and have lot of
commonalities. The interlinkages and interrelatedness help to provide value
added relationships to both company and customers. Customer is going to have
winning proposition in terms of best purchase solution for his need. The
company gains by selling satisfied product not just the revenue but also take
forward the long-term relationship, positive word of mouth, recommendation. The
differences among the terms can be understood in scope and functions of each
activity. Personal selling is the interaction between buyer and seller. The
techniques used in personal selling can be referred as salesmanship. The
recruitment, training, motivation, compensation or any other activity for
managing sales force is a part of sales management.

Sales management
can be defined as “the planning, direction and control of personal selling,
including recruiting, selecting, equipping, assigning, routing, supervising,
paying and motivating as these tasks apply to personal sales force”. Sales
management comprises of all the activities related to management of sales
force. The planning, directing and controlling the sales force involved human
resource functions such as recruitment, selection, training, compensating,
motivating in a particular sales territory. The objective of sales management
is to develop effective sales team. It is the process of attaining the sales
force goals in an effective manner through planning, staffing, training,
leading and controlling organizational resources. It is giving direction to
sales force to attain sales force. Sales management is a broader concept and
includes personal selling.

IMPORTANCE OF THE SALES
MANAGEMENT:

The following are the other factors
showing the importance of sales management:

v Introduction of new products in
the market.

v Increasing the production of existing
products.

v Reducing the cost of sales and distribution.

v Export market.

v Development in new means of communication and
transportation within and outside the country.

v An increase in demand and per
capita income for more goods by the consumers.

Improves Product Development

A sales management program helps
you keep track of all your customers and competitors and makes sure that your
product line is as relevant as possible. Doing so helps you to increase sales
and profits. Producing a new product or improving the existing one can help you
generate more sales and profits. Doing so can also help you avoid missing out
on opportunities to expand or improve your existing product line.

Optimises Distribution

Sales reports help you measure and
manage your sales effectively, and they also reveal the relationship between
your sales and distribution processes. Sales and distribution management is a
vital part of any business's operations, as it can help to boost sales by
providing customers with better information about their products and services.
To improve sales, you might want to improve the training and promotion of your
retail employees. You may also want to alter the packaging of your products.

Better Financial Decisions

Some of your best-selling products
may provide lower profit margins than those of your competitors. This could
affect your profitability and sales efforts.

A low-margin item with good sales
volumes might make a good business decision to keep in your line. However, if
you can't get rid of it, you might want to consider selling it to reduce your
expenses. Sales reports help you keep track of all of your company's expenses
and profit margins. They provide insight into the profitability of each product
and the impact of each operation.

Improves Staff Quality

A sales plan depends on the user
and is a key part of any sales management program is training, recruiting, and
managing sales staff; a good sales management program is only as good as its
users, and it can be as good as the people who use it, A good sales manager can
motivate his team and help them reach their goals. Developing their product
knowledge and coaching them on calls is just one part of this.

SALES MANAGEMENT – BASIC OBJECTIVES

The objective of
sales management is to increase sales volume and profitability. It is also
responsible for the management of various marketing activities. Sales
management activities encompass all aspects of marketing and sales.

1. Revenue Generation – This process involves generating
revenue for the company by selling products and services.

2. Increase Sales Volume – Through effective sales management,
the organisation will be able to increase its sales volume. This will help in
optimising the utilisation of the production facilities.

3. Sustained Profits – Sales management is focused on
increasing the profits of the organisation through effective planning and
control.

4. Organization Growth – continuous and sustained sales
management techniques help the organisation grow. The sales management task is
to guarantee or ensure that the sales force is
continuously motivated through proper incentives and reward systems.

5. Market Leadership – A successful sales management
program can help an organisation to gain market share and grow it. This process
increases an organisation's profits and sales.

6. Converting Prospects to Customers – Converting prospects to customers is
a process that requires a lot of effort and planning. This can be done through
sales management.

7. Motivate Salesforce – One of the core objectives of sales
management is to motivate the sales force. The sales management task is to
motivate the sales force by providing them with appropriate incentives and
rewards.

Salesmanship
It is an art and skill to influence the prospective buyer or the actual buyer
to enter into sale. Salesmanship is one aspect of personal selling. It is one
of the skills used in personal selling. Salesmanship is the art of persuading
people to buy the products. The skill is also used for developing long term
relationships with customers, creating goodwill for the organization in the
minds of customers. It includes efforts for motivating prospective buyers to
decide in favour of sellers’ products and services. Salesmanship skills
includes skills such as interpersonal skills, conceptual skills, listening
skills, to influence prospects to make a sale.

MYTHS OF PERSONAL
SELLING

These
are the certain myths associated with personal selling that affect the
perception of a salesperson during the entire process of personal selling.

Myth 1-Anyone can be a buyer:
The first myth about personal selling is related with the buyers. It is not
right to think that each consumer may buy everything. Many different factors
are considered by the consumers before making any purchase decision. However,
there are few exceptions to it. For example, a consumer may be induced for
impulse buying by offering him a steal deal or deep discounts. In order to make
efficient use of the efforts a salesman should carefully assess the attributes
of the product and accordingly target the market.

Myth
2-Price is the most important
criterion for buying a product: Sellers may be misguided if they believe
this myth. There is no denying fact that price plays an important role in
making any purchase decision but not always a primary factor. There are many
exceptions to this assumption. First in case of luxury goods, prices of the
product hardly matter. Rather people look for expensive items to show their
status. Second for quality conscious customers, quality or features of the
product matter than prices. Finally, in case of brans loyal customers, the
users of particular brand will rarely compare the prices of the substitutes and
shift just because of lower prices offered by the competitor.

Myth 3-Same sales techniques will
work for everyone: All customers are different individuals
hence they are driven by different needs, motivations, and goals. Hence, a
single sales strategy may not be helpful for everyone. The marketers have well
understood this and now they are focusing on Segment of One where each
individual is considered as a segment and customized products being offered to
every one based on their unique requirements.

Myth 4-Finish the selling process soon as
possible: This myth is guided by the selling concept where the
selling of unit is more important than customer satisfaction. However, in
today’s time the swiftness in closing the deal may not help much as in case of
any dissatisfaction consumers may use social media to spread the negative word
of mouth. Besides this, it’s going to cost goodwill in the long run.

Myth5-Explore everything to close the
sale: This myth may lead salespersons towards unethical
selling behavior too. It is unethical on the part of seller to misrepresent the
facts or misinform about the product quality or capabilities of the product to
the consumers just to increase the sales number or match the sales quota. Following
this myth salesman can adopt manipulative and aggressive sales approach. In
long run, a company may fail because of such salespersons who believe in this
myth.

Myth6- Extrovert salesman perform
better than introvert one: Few people think that salesmanship
is the cup of tea only for those who are outspoken. But it is not true. The
task of salesperson is to understand the needs of its potential customer and
present the solution of his/ her problem. Salesperson should try to overcome
this misconception by adopting professional approach that will be appreciated
by customers. Salesperson should try to refrain from being overly friendly.

Myth 7- “fake it, fill it and make
it”:
The long term goal of every salesman should be establishing relationship with
its customer rather than just seeing a buyer as an account. Therefore, sales
representative should not hide any information or fact from the customer just
for closing the deal. Rather, all the crucial points should be well
communicated to the customer.

Myth 8- A customer “no” is “never”:
A salesman should not be disheartened after hearing a “no” from the customer.
Rather he should try new ways to address the customer struck points and find
new ways to pursue them more. Salesman should be hopeful towards converting the
“no” of the customer into “yes”.

Myth 9 The customer is always right:
This is an old saying in business that “customer is always right”. This line
has largely been misinterpreted. It is not necessary that customer is always
correct in understanding his innate needs. Sometimes a customer gets confused
in identifying about his preferences. In that situation he needs guidance of
the salesman. Moreover, in the era of over exposure to information, consumer
may form some misconception about products. Here the role of salesperson is to
make him aware about the true facts related to products. Salesperson has to
figure out what information customer possesses and what he is missing out and
bridging the information gap for making rational decisions.

Myth 10- Sales is all about numbers:
Sales in the quantifiable number is the most important. Though numbers are
important but they are not the only thing. the quality of interaction is going
to determine is going to play important role in translating the prospect into
potential buyers

REQUISITES OF EFFECTIVE PERSONAL SELLING:

The qualities that make a good salesman are not linked
to any other factor. There has been no clear correlation between sales skills
and academic success or technical expertise.

There are also many instances where people have no
knowledge of selling, so they cannot sell effectively. This is a common trait
among technical champions. Becoming a salesman is not an easy task in today's
competitive market. In order to be effective, a business enterprise should
develop effective salesmanship.

In order to achieve effective personal selling, the
following requirements must be fulfilled:

1. Personal Qualities:

An effective salesman must have various
characteristics such as physical appearance, mental and social qualities. In
order to become a successful salesman, a person must develop these qualities.

2. Training and Motivation:

It is very important that the training programs for
the sales representatives are designed keeping in mind the requirements of the
company and the individual's goals. These should also aim to provide knowledge
about various selling techniques.

A good salesman must be able to acquire the necessary
knowledge and skills to effectively sell a product or service. He or she also has
to have the necessary personality to perform the job efficiently. It is also
important that the person hired for this job has the necessary skills and
knowledge to become a successful salesman. Aside from these, the ideal
candidate should also have the desire to improve his or her skills in sales.

3. Wider Knowledge or Awareness:

A salesman should have wide knowledge about the
following:

(a) Self:

The concerned salesman must have the necessary
personality traits in order to effectively sell the products he provides. He
should also know what his weaknesses are in order to eliminate them. He should
also perform a self-evaluation in order to measure his effectiveness.

(b) Employer:

The salesman must have the necessary knowledge and
skills to effectively present the employer's products and services. He should
also have the necessary resources and know the organisation's policies and
structure.

The salesman must have good knowledge about the
product he sells. He should also know the steps involved in making the product
and selling it. He should also be able to answer the customer's questions and
concerns without making them difficult to understand.

(d) Competitors' Products:

The salesman must have the necessary knowledge about
the competing products in order to convince the potential customers that they
are superior to the ones he or she has sold.

(e) Customers:

Before a salesman can sell a product, he or she must
first understand the customers he or she is going to target. This step is very
important to win their trust and loyalty. The product motives and the patronage
motives are two categories of considerations that a salesman should take into
account when selling to customers. He should also know the nature of the
customer and try to accommodate them according to their needs. He should also
try to find out what their motives are for buying.

UNIT II

BUYING MOTIVES

Behind every sale there is
always a buying motive, but that motive is never merely to own the article on
question. It is on the other hand, always the prospects believe that ownership
of the article will satisfy some specific desire on his part. A motive is the
inner state that moves, or prompts a person to action. Various authors
have made significant contribution to the literature of buying motives in
personal selling. Few of them have put forward the following definitions of
buying motives:

As defined by W. J. Stanton,“A
motive may be defined as a drive or an urge for which can individual seeks
satisfaction. It becomes a buying motive when the individual seeks satisfaction
through the purchase of something.”

As per D. J. Duncan,
“Buying motives are those influences or considerations which provide the
impulse to buy, induce action or determine choice in the purchase of goods and
services.”

Prof. S. Davar defined
it as “A motive is an inner urge that moves or prompts a person to some
action.”

In the words of Berelson and Steiner
“A
motive is the inner state that energizes, activates or moves and that directs
or channels behavior towards goals.”

Types of Buying
Motives

1. Physical, Psychological
and Sociological Buying Motives:

The
psychological buying motives are related to the satisfaction of basic human
needs for subsistence such as satisfaction of the needs for food, shelter and
clothes, and security. The psychological buying motives relates to the need for
prestige or self-preservation, etc. the sociological buying motives are related
to the motives that exist at present and is expected in all the social
situations.

2. Acquired and Inherent
Buying Motives:

The
acquired buying motives are learned motives and are influenced by the
environment factors. Such motives are related to socioeconomic conditions and
the level of education, such as economy, information, work efficiency, profit
facility, quality, beauty, fashion, social presage, acceptance, etc.

3. Primary and Selective
Buying Motives:

The
primary buying motives increase the general demands for products and not the
specific demands for a specified product/brand. The demands for radios, TVs,
cars, motorcycles, etc. fall under this category of primary motives. The
selective buying motives influence for the purchase of specific brands, for
instance, the demands for Bajaj’s Chetak Scooter, Onida TV, Philips Radios,
etc.

4. Product buying
motives:

Under product buying motives, a customer is
said to be motivated to buy a specific product. This motivation is induced by
various product specific factors like size, colour, package, quality, quantity,
and design etc. Product buying motives can be further classified into rational
buying motives and emotional product buying motives.

5. Durability
of the product: Durability means long lasting that is
something superior in quality which lasts longer in comparison to other
products. Durability is one such factor that influences a buyer’s purchase
behaviour. Buyers even pay premium price for durable products. For example,
buyer usually prefer teak or rosewood, though they are comparatively costlier
over any other inferior wood for the furniture.

6.Convenience/ comfort of the
product: Buyers prefer buying those products that are
convenient to use. For instance, a domestic gas stove. Here, the buyer prefers
the most convenient model so that he can easily use it.

7. Prestige or Pride:
Prestige is the one of the strongest emotional buying motives that buyers
possess. Buyers feel proud of possessing certain products and purchase those
products to ensure their social status in the society. For instance, preference
for diamond jewelry, buying a newly launched iPhone model, new luxurious
automobiles etc.

8.Emulation:
Some people buy certain products just because some other person owns that
product. In other words, some buyers try to imitate others and tend to buy what
others own. For instance, a boy is likely to buy a new bike just because his
friend has bought the latest model of that bike. Similarly, a housewife wishes
to buy a diamond ring just because some of her relatives has bought one.

BUYING MOTIVES –
IMPORTANCE OF KNOWING BUYING MOTIVES OF CUSTOMERS

1.
Success of salesmanship – A salesman
can achieve success by knowing more about the buying motives of customers. On
the basic knowledge of buying motives, the salesman will be able to make
available the goods and services to the customer’s choice in price, quality and
other specifications. This way, the customers are satisfied in a short period
of time.

2.
Facilitates product planning –
Knowledge about the buying motives of customers facilitates product planning,
by way of using appropriate colour, design, size, package, price, etc. to the
product in accordance with consumer preference.

3.
Facilitates pricing of product –
Knowledge about the buyer motives also is helpful in pricing the product.
Emotion oriented customer may be prepared to pay a higher price, whereas
knowledgeable customer will be prepared to pay a reasonable price, only.

4.
Facilitates to produce promotional
material – Every sales organization makes efforts through promotional
methods, such as advertising, sales promotion, personal selling and publicity
to increases its sales. By having the knowledge of buying motives of customers,
the marketing manager will be able to select appropriate promotional tools, so
as to induce his customers more effectively.

5.
Facilitates the selection of
distribution channels – Many customers are influenced by “self-protective”
buying motives and they like to purchase products from the wholesalers. This
may be due to the facilities extended by the middlemen to their customers. In
such a situation, the producer has to consider the buying motives of customers,
before deciding the appropriate channels of distribution.

6.
Creation of goodwill – Any seller or
a trader can satisfy the customers by learning their habits. The customers
create brand loyalty towards the products of certain producers. It is the
consumer behaviour that creates goodwill of the firm and its products.

7.
Efforts to make change in buying motives
– Efforts can be made by learning from the buying motives of a customer, to
bring changes in his motives. If the behavior of the seller is very good,
certain customers may like to purchase goods from that seller only.

MAIN TYPES OF MOTIVES FOR BUYING

1. Utility:
Every
person wants to acquire maximum utility from the limited income. A knowledge
pertaining to buying motives of utility is therefore, must for a seller. The
success of a seller depends on time taken is setting the element of utility in
the kinds of buyers. In ratio of the influence of the utility element, the item
is bought.

2. Fear: Fear is a negative motive
and it is powerful. Fear is of different forms. For example, fear of death, fear of loss etc. Fear assists
selling any of the items. A seller should adopt the strategies of sales
promotion, advertisement etc. after proper study on the motives related to the
fear. For example, a man
buys insurance policy as he fears from the death. The traders do insurance of
their store or factory owing to fear of theft or fire eruption. Sale of any
product is made through the motive of fear. It is clear from these examples
that self-protection and protection of others are the vehement motives of
purchase.

3. Desire for Money: Almost
all persons are motivated to earn money and do saving. It is the reason that
every producer intends earning maximum profit by reducing cost. It is sole
desire to earn money which has made busy to traders, producers, salaried class
etc., throughout the day and night. A
seller having this desire can only earn the profits. He can bring forth his
appeal to public with declaration that – “Buy the Bata shoe and save the money”
“Buy Tata washing powder and save money”, Khaitan fan means profit bargain etc.
He does efforts for the sale of his product by arousing the desire of people
through these advertisements.

4. Love or Affection: Every
person is influenced by the feeling of love and affection. Owing to the motive of love and
affection, the person buys several goods. For example – a man is motivated buying a beautiful saree for
his wife, the parent buys sweet, clothes and toys etc., for their children. A
seller can do sale of his goods through this motive.

5. Pride: Some
persons are found proudly. Feeling of envy is largely found in the women. Every
person prefers listening his false praise. On having satisfied the ego feeling,
the buyer concerned becomes ready to pay more price for the goods. A seller
therefore, should well know to the pride motive.

6. Fashion: Today’s age is the
age of fashion. Every buyer does efforts to buy the goods popular at a
particular period of time. Fashion is the desire that follows other people.
Every person wants to come forward in race of fashion being run now-a-days. An
efficient seller should therefore, conversant to this motive too. For example, DCM advertisement.

7. Health: Every person tries
to make himself healthy. This motive relating to the health inspires the man
for buying the items. For examples,
vitamin tablets, a good diet and tonic etc. In the context of children, this
motive is more important.

8. Comfort and Convenience: Every
person wants to live a life in comfort and convenience. Owing to this motive,
the people purchase the items relating to the comfort and luxuries. For example, fans, washing
machines, scooters, coolers and car etc.

9. Sex: A seller is required to
engage himself regarding the buying motives for the items related to the sex.
The motive of buying relating to the sex contributes to a large extent in the
sale of a number of items. The style of fashion may be ceased if there is lack
of buying motive for sex. The
man and women buy several items with an objective to attract one another. The
seller can take the benefit of the sex related motive and does bulk sale of
these items. It is notable that sex has been given priority in modern age of
advertisement.

10. Possession: Every
person has a usual tendency to keep the things under his possession. This
motive inspires him to buy several things like a building, automobile etc.

BUYER MOTIVATION

Buyer
motivation refers to a set of psychological factors that influences a buyer’s
purchase decision. In other words, these are the factors that drives a person
to buy a product or service. For instance, a hungry person is motivated to buy
food; people are motivated to buy new clothes during festivals etc. The concept
of ‘buyer motivation’ has originated from a process known as the “Buyer’s
Journey.”

There
are mainly three stages involved in a buyer’s journey:

1.
Awareness: This is the first stage
of the buyer’s journey. In this stage, the buyer becomes aware of the problem,
need or want. To rephrase it, the buyer tries to identify the problem for
instance, the buyer is feeling hungry or thirsty etc. In this, the buyer
recognizes the need, want or problem. The identified problem, need or want acts
as stimulus that motivates the buyer to involve in information search. However,
the stimulus can be internal or external. For example, a buyer was feeling
hungry and started searching for a restaurant is an internal stimulus on the
other hand the buyer searching for a restaurant on some friend’s recommendation
is an external stimulus.

2.
Information search: At this stage,
the buyer is well aware of the problem. The buyer has successfully identified
his want or need. Now, the buyer tries to explore the various options that can
satisfy his need or solve his problem. The buyer undertakes extensive research
and gathers information about each available option. For example, the buyer was
feeling hungry and started exploring the nearby restaurants.

3.
Decision: This is the final stage
where the buyer makes the decision and chooses the best suitable option among
all other available options. The buyer is determined that the chosen option
will solve his problem or satisfy his need or want to the fullest.

SELLING SITUATIONS

The
selling situation/environment is best described as the variety of
customer's needs and types encountered by the salesperson, and the nature and
importance of the customer's buying task. One of the main functions
of marketing is selling, so a marketer’s job is to get people to know about the
product, ensure its value, and, as a result, induce them to purchase. Among the
most powerful selling approaches, personal selling is known for its exceptional
efficiency. Selling is a specialized task and the salesman come
across many different selling situations while he is in field.

TYPES OF SELLING
SITUATIONS IN PERSONAL SELLING

1. Service Selling Situation: This
situation is related to obtaining sales from existing customers whose habits
and patterns of thoughts are already known to the seller. Comparatively less
effort is required to satisfy these type of customers. Inside order
takers, delivery salesperson, merchandisers, technical salesperson etc. helps
in service selling situations.

2. Developmental selling Situation: In
this type of situation a salesman tries to convert prospects into customers. It
requires creativity by the salesperson to persuade the customer. It
includes creative salesperson of tangibles and creative salesperson of
intangibles. Like a salesperson selling vacuums cleaner (tangible) to a new
customer and a salesperson selling insurance (intangible) to a new customer.

3. Retail selling situation: It
is a totally different scenario when goods are sold through retailers. An
individual retailer is the last person in the distribution channel to make
products available to the buyer. Advertisement and promotions attract people
but the ultimate sale depends on the salesman at the counter. The salesman
inside the retail store is the key person in a retail selling situation. They
do not negotiate with customer but they only make sales.

4. Wholesale selling situation: The
Wholesalers calls on retailers, dealers at regular interval on behalf of the
wholesaler and helps retailers and dealers in selection of goods and services
and advice them on various matters. These salespeople help a wholesaler in
dealing with many retailers and dealers in day to day business which would be
otherwise very difficult for wholesaler alone.

5. Product-oriented selling situation: Selling
situation also changes with the nature of the product. Products at different
stages of life cycle, with a different value and with different technical
nature require customized efforts in sales. a salesman according to product
situation could change the selling tactic.

6. Competition Oriented selling
situation: There is a cut-throat competition in the market.
Every company wants to grab more and more market share. Also, there is a
competition between the salespeople within the company’s sales force. The
salespeople tend to convince the customer at any cost in order to stay ahead of
another salesperson.

7. Consumer behavior Oriented selling
situation: Selling situation also differs according to the
type of buyer. Different buyers have different income level, social
status, occupation, personality, perception, belief, brand choice, payment
options etc. all these factors affect the buying behaviour of a person. A
salesman must understand consumer buying behaviour and must offer products
according to the buying behaviour of the person.

THE 4 MAIN TYPES
OF SELLING

At
its core, sales are the process of convincing a customer to purchase something
by using a series of planned and polished communication techniques. Good
selling involves helping customers understand what they need and want so that
they’re more likely to buy your products. There is no one-size-fits-all
solution for selling products—what works for one company or industry may not
work for another. And if sales stagnate, it’s time to ask
questions and explore new methods. The key is to find a distinctive sales
strategy that benefits your business. To help you do so, I’ve detailed the four
main types of selling along with the right time and situation to use them so
that you can determine which would be most beneficial for your company. There
are different sales methods that you can use to appeal to your customer.
Interestingly, many people who have been in sales for a long time are unaware
of these four main types of selling. They include:

1. Solution selling: In the solution
selling methodology, the salesperson takes a comprehensive approach to
understand a prospect’s needs and then recommends products based on the
client’s problem. The solution-selling method puts the customer’s needs and
wants at the center of the selling process, making it more personalized and
tailored to them.

In
this case, your prospects know they have a problem but are unsure how to fix
it, so the most important sign to look for in clients is that the client needs
a tailor-made support solution that meets their specific needs. You can use
this method for products or services with a slightly longer buying process,
where the ROI is high. This is an excellent option if your clients are looking
for long-term solutions.

2.
Transactional selling: Sales
representatives negotiate with customers to promote products or services in
transactional selling. The sales process typically involves identifying
potential customers, developing relationships with them, pitching them a
product or service, and closing the sale. Your ideal prospect knows what their
problems are and what possible solutions there are, but they want a custom-made
product. With this strategy, the representative usually gets in touch with the
customer and then attempts to negotiate a sale. This method works better when
the sales representative and customer have a pre-existing relationship. You can
use this method for short sale cycles—retail, real estate or automotive—and
one-time purchases.

3.
Consultative selling: The
consultative selling approach is about creating value and trust with potential
customers and exploring their needs. With consultative selling, the
salesperson’s primary goal is to establish a relationship with the customer;
their second objective is to identify and provide the customer with the product
they need. This is a complex sales approach to implement because it requires a
highly experienced sales force who are good communicators that ask the right
questions and engage with customers throughout their journey. The end goal of
consultative selling is to establish a consulting relationship with the client.
Consultative selling can be an effective sales strategy in any industry that
aims to generate long-term revenue and profit rather than simply making a quick
sale. For example, purchasing a car. In that case, the car salesperson takes
the time to ask the client several questions about their needs and purpose
before making a suggestion.

4.
Provocative selling:
Provocation-based selling targets a problem the customer is not aware of, but
that is critically important. Once the customer is informed about the issue,
they are willing to take care of it. The salesperson must create urgency and
show that the customer’s current chosen method is not a safe option. Sales
professionals see these challenges as opportunities to show that their products
are not just a nice addition but essential. You can use the provocative selling
method to help increase sales during normal situations and when business is
slow. You can use digital marketing services like digital PR, video marketing, influencer
marketing services, and many more. It gives your customers an insight into your
business and how you can assist them with their needs.

THEORIES OF PERSONAL SELLING

There have been various studies
have been conducted on the subject of selling, and various theories have been
formulated to explain the buying process. The process of influencing people to
buy can be viewed from four different angles. It is often viewed from different
theories.

1. AIDAS theory of personal
selling

2. "Right Set of
Circumstances" theory of selling

3. "Buying Formula"
theory of selling

4. "Behavioural
Equation" theory

The first two theories are
seller-oriented and buyer-oriented. The third one emphasises the
decision-making process of the buyer. The fourth one emphasises the buyer's
decision process but also takes the salesperson's influence process into
account.

AIDAS THEORY OF SELLING:

This theory, popularly known as
AIDAS theory (attention, interest, desire, action and satisfaction), is based
on experimental knowledge. This theory is very common.

According to this theory, a
potential buyer's mind passes through the following stages:

1. Attention-Getting:

The main aim is to induce the
customer to participate in the face-to-face interview. This step will help the salesperson
develop a compelling and effective sales presentation. The objective or goal is
to convince the prospect that the sales presentation is worth listening to.
This is done by applying his social and psychological skills.

2. Interest Creating:

The goal is to spark interest in
the customer so that he or she will want to buy the product. This can be
achieved by asking the prospect to handle the product or by hand-selling it to
the customer. The goal is to find an appeal that will compel a potential customer
to make a purchase. This process includes gathering enough information to make
an informed decision.

3. Desire Stimulating:

The prospect must develop a strong
desire to buy the product after getting attention and creating interest. This
is a ready-to-buy point. Objections are usually handled carefully before they
are raised, which saves time and helps in making a sale.

4. Action Inducing:

The prospect is ready to act if
the presentation has been perfect. If the deal is not closed, the salesperson
should try to close it effectively. The customer is also the seller's
responsibility to pack the product. It is the seller's responsibility to make
sure that the customer is satisfied with the product.

5. Satisfaction:

The salesperson should not only
help the customer to decide to choose but also ensure that the product is of
good quality. He should also explain the benefits of the product to the
customer. The salesperson should make the customer satisfied with the product.

RIGHT SET OF CIRCUMSTANCES" THEORY OF SELLING:

The concept of the
situation-response theory states that when a prospect makes a sale, it will
likely behave in a predictable manner. This theory explains how salespeople
must control their actions in order to make a sale. The set of circumstances
can be external to and internal to the prospect. This theory states that the
salesman must control these factors to produce a sale.

"Buying Formula" Theory of Selling:

The concept of the buyer's needs
being the main factor that influences a prospective buyer's decision to buy is
referred to as the buying formula. This theory states that the mind of a
prospective buyer is very likely to change as he comes to buying a product or
service.

The concept of need-based
purchasing is a theory that states that a customer has a need or a problem that
they need to find a solution to.

When an individual feel that he
has a need, he may choose a product or service that satisfies his needs. The
other person may buy the solution.

In purchasing, the
"solution" involves two parts:

1. Product or service or both,

2. The brand name, manufacturer,
or the salesperson of the particular brand name:

The product or service (Brand
name) must be considered adequate to satisfy the need, and the buyer must
experience a pleasant feeling or anticipated satisfaction. This ensures the
purchase.

UNIT.III

CONSUMER BEHAVIOUR

Consumer
behavior 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.

According
to Engel, Blackwell, and Mansard, ‘Consumer behaviour is
the actions and

decision processes of people who purchase
goods and services for personal consumption’.

According to Louden and Bitta,
‘Consumer behaviour is the decision process and physical activity, which
individuals engage in when evaluating, acquiring, using or disposing of goods
and services’.

APPLICATIONS OF CONSUMER BEHAVIOR:

1) Analyzing market opportunity:
Consumer behavior study help in identifying the unfulfilled needs and wants of
consumers. This requires examining the friends and conditions operating in the
Marketplace, consumer’s lifestyle, income levels and energy influences. This
may reveal unsatisfied needs and wants. Mosquito repellents have been marketed
in response to a genuine and unfulfilled consumer need.

2) Selecting target market:
Review of market opportunities often helps in identifying district consumer
segments with very distinct and unique wants and needs. Identifying these
groups, behave and how they make purchase decisions enable the marketer to
design and market products or services particularly suited to their wants and
needs. For example, please sleep revealed that many existing and potential
shampoo users did not want to buy shampoo fax price at rate 60 for more and
would rather prefer a low price package containing enough quantity for one or
two washers. This finding LED companies to introduce the shampoos sachet, which
become a good seller.

3) Marketing-mix decisions:
Once unsatisfied needs and wants are identified, the marketer has to determine
the right mix of product, price, distribution and promotion. Where too,
consumer behavior study is very helpful in finding answers too many perplexing
questions. The factors of marketing mix decisions are:

i)
product ii) price iii) promotion iv) distribution

4) Use in social and non-profits
marketing: Consumer behavior studies are useful to design
marketing strategies by social, governmental and not for profit organizations
to make their programs more effective such as family planning, awareness about
AIDS.

DIFFERENT TYPES OF
CUSTOMERS

Customers
play a significant role in any business. To understand customer
behavior and better allocate resources to different customers to generate
the highest profit, it is necessary to identify and segment different types of
customers. By better understanding the different types of customers, businesses
can be better equipped to develop successful strategies.

Five Main Types of Customers

In
the retail industry, customers can be segmented into five main types:

1) Loyal
customers: Customers that make up a minority of the customer base but generate
a large portion of sales.

2) Impulse
customers: Customers that do not have a specific product in mind and purchase
goods when it seems good at the time.

3) Discount
customers: Customers that shop frequently but base buying decisions primarily
on markdowns.

4) Need-based
customers: Customers with the intention of buying a specific product.

5) Wandering
customers: Customers that are not sure of what they want to buy.

1. Loyal Customers

Loyal
customers are the most important segment to appease and should be top-of-mind
for any company. This type of customers generally represents no more than 20%
of a company’s customer base but contributes the majority of sales
revenue. Loyal customers, as the name implies, are loyal and value a product
heavily. In addition, loyal customers are likely to recommend the company’s
products to other people. Therefore, it is important to solicit their input and
feedback and involve them in a company’s decision-making process. Heavy
emphasis should be placed on loyal customers if a company wants to grow.

2. Impulse Customers

Impulse
customers are the best customers to upsell to and are the second most
attractive segment (after loyal customers) to focus on. Impulse customers do
not have a specific shopping list in mind and purchase products spontaneously.
In addition, impulse customers are typically receptive to recommendations on
products. Impulse customers are second to loyal customers in the generation of
sales revenue. Keeping these customers in the loop on new product
offerings goes a long way in improving a company’s profitability.

3. Discount Customers

Discount
customers play an important role in turning over a company’s inventory.
Therefore, discount customers are a key contributor to a company’s cash
flow. This type of customer seldom purchases products at full price and shops
around for the best markdowns. Discount customers are resilient
to upselling, are usually the least loyal segment of customers, and
generally move on when better markdowns are available elsewhere.

4. Need-Based Customers

Need-based
customers are driven by a specific need. In other words, they enter the store
quickly, purchase what they need, and leave. These customers buy for a specific
need or occasion and are hard to upsell. It is important to note that
need-based customers can be easily drawn to other businesses. Therefore, it is
important to initiate positive personal interaction with this customer segment
in order to retain them. Converting need-based customers to loyal customers is
attainable with proper positive personal interactions.

5. Wandering Customers

Wandering
customers draw the largest amount of traffic to the company while making up the
smallest percentage of sales revenue. They have no specific need or desire in
mind and are attracted by the location of the business more than anything else.
These customers enjoy the social interaction of the shopping experience.
Therefore, spending too much time trying to appease this segment can draw away
from the more profitable segments. Although this segment generates the least
amount of sales revenue, providing insightful information about products to
these customers can stimulate interest and ultimately result in a purchase.

MODELS OF CONSUMER
INVOLVEMENT

There
are four prominent models of consumer behavior based on involvement which help
marketers in making strategic decision particularly in marketing communication
related strategies. The four models are as follows.

1.
Low Involvement Learning Model

2.
Learn-Feel-Do Hierarchy model

3.
Level of Message Processing Model

4.
Product versus Brand Involvement Model

1. Low Involvement Learning Model:
Low Involvement products are those which are at low risk, perhaps by virtue of
being inexpensive, and repeatedly used by consumers. Marketers try to sell the
products without changing the attitudes of consumers. New product beliefs
replace old brand perceptions. Marketers achieve low– involvement learning
through proper positioning. For example, writing pen with the ‘uninterrupted
flow’, and tooth paste with ‘mouth wash’ positioning attracts new consumers.

2. Learn-Feel-Do Hierarchy Model: Buying
decisions vary according to the way they are taken. Some decisions are taken with lot of thinking others are taken with
great feelings. Some are made
through force of habit and others are made consciously. The learn-feel-do hierarchy is simple matrix that attributes consumer
choice to information (learn),
attitude (feel), and behavior (do) issues. The matrix has four quadrants, each specifying a major marketing
communication goal to be
informative, to be effective, to be habit forming, or promote self-satisfaction. Thinking and
feeling are shown as a continuum – some decisions
involve one or the other and many involve elements of both. High and low importance is also represented as a continuum.

3. Level of Message Processing Model:
Consumer
attention to advertisements or any other marketing communication depends on four levels of consumer involvement:
Pretention, focal attention, comprehension and elaboration. Each calls for different level of message processing.
Pre-attention demands only limited
message processing - the consumer only identifies the product. Focal attention involves basic
information as product name or usefulness.In comprehension level, the message is analyzed and the content of the message is integrated with other
information, through elaboration, which helps
to build attitude towards the product. It is suggested that marketers make advertisements which can induce
elaboration.

4. Product versus Brand Involvement
Model: Sometimes consumer is involved with the product
category but may not be necessarily
involved with the particular brand or vice versa. For example, house wives know more about kitchen ware but may not know the details of various brands.
According to the consumer involvement ineither product or particular brand, consumer types can be divided into four categories as described below.

(i) Brand Loyal:
These consumers are highly involved with both the product category and with
particular brand. For example, cigarette smokers and paper readers fall in this
category.

(ii) Information Seekers:
These buyers are involved more with product category but may not have preferred
brand. They are likely to see information to decide a particular brand. For
examples, air conditioners and washing machine buyers fall under this category.

(iii) Routine Brand Buyers:
These consumers are not highly involved with the product category but may be
involved with the particular brand within that category. They have low
emotional attachment with the product category and tied mainly with their
brand. For example, users of particular brand of soap for years, regular
visitors to particular restaurant fall in this category.

(iv) Brand Switching:
Consumers in this category have no emotional attachment either with product
category or any brand within it. They typically respond to price. For example,
stationery items, fashion products come under this category.

BUSINESS MODELS of E-COMMERCE

There
are many e-commerce businesses models, and more are being invented every day.
The number of such models is limited only by the human imagination, and our
list of different business models is certainly not exhaustive. However, despite
the abundance of potential models, it is possible to identify the major generic
types (and subtle variations) of business models that have been developed for
the e- commerce arena and describe their key features. It is important to
realize, however, that there is no one correct way to categorize these business
models. The type of e-commerce technology involved can also affect the
classification of a business model. M-commerce (mobile commerce), for instance,
refers to e-commerce conducted over wireless networks. The e-tail business
model, for instance, can also be used in m-commerce, and while the basic
business model may remain fundamentally the same as that used in the B2C
sector, it will nonetheless have to be adapted to the special challenges posed
by the m-commerce environment. Finally, you will also note that some companies
use multiple business models. For instance, eBay.com can be considered as a B2C
market maker.

Business to Business [B2B]

B2B
(business – to-business) is the major and valuable model of e-commerce.B2B
(business – to-business) e-commerce is conducted between two separate businesses
and has been in effect for many years. E-commerce plays an important role in
enhancing and transforming relationships between and among business. B2B
(business – to- business) is also known as e-biz, is the exchange of products,
services, or information between businesses rather than between businesses and
consumers. Although early interest centered on the growth of retailing on the
Internet (sometimes called e-tailing), forecasts are that B2B revenue will far
exceed business to consumers [B2C] revenue in the near future.

B2B
(business – to- business ) is a kind of e- commerce, which refers to a company
selling or buying from other companies. One company communicates with other
companies through electronic Medias. Some of these transactions include sending
and receiving orders, invoice and shopping orders. It was an attractive
alternative to the current process of printing, mailing various business
documents.

Some B2B applications are the
following: -

1.
Supplier Management Electronic applications in this area helps to speed up
business partnerships through the reduction of purchase order processing costs
and cycle times, and by maximizing the number of purchase order processing with
fewer people.

2.
Inventory Management Electronic applications make the order-ship bill cycle
shorter. Businesses can easily keep track of their documents to make sure that
they were received. Such a system improves auditing capabilities, and helps
reduce inventory levels, improve inventory turns, and eliminate out- of- stock
occurrences.

3.
Distribution Management Electronic based applications make the transmission of
shipping documents much easier and faster. Shipping documents include bill of
lading, purchase orders, advance ship notices, and manifest claims. E-commerce
also enables more efficient resource management by certifying that documents
contain more accurate data.

4.
Channel Management E-commerce allows for speedier distribution of information
regarding changes in operational conditions to trading partners. Technical,
product and pricing information can be posted with much ease on electronic
bulletin boards.

5.
Payment Management an electronic payment system allows for a more efficient
payment management system by minimizing clerical errors, increasing the speed
of computing invoices, and reducing transaction fees and costs. Many
organizations are implementing electronic commerce in numerous ways and
receiving tangible benefits but as electronic commerce matures and develops,
these ways are likely to change based on the accelerating adoption rate.

THERE ARE THREE SPECIFIC
IMPLEMENTATION MODELS OF B2B E-COMMERCE

•
Transaction based: a single company
establishes a common transactional method for conducting business with its
major customers or key suppliers. This offering is common across all business
units within the company and includes common tools, techniques, and
infrastructure.

•
Process based: Two companies
establish a common business process to conduct business efficiently between the
two firms. The two firms establish and share this common practice jointly, both
within their firm and outside their organization with this predetermined
trading partner.

•
Strategic relationship based – Two
or more companies establishing a strategic relationship partnership based on
all major interactions between the organizations. This includes transactions,
processes, and any other collaboration between the organizations. From a
technology perspective this includes linking the CRM, ERP and SCM systems of
the two organizations. This way each organization can actually monitor sales
activity, production schedules, inventory management, and technical service
exchanges

Business – to-Consumer [B2C]

This
e-commerce consists of the sale of products or services from a business to the
general public. Products can be anything from clothing to flowers and the
products can also be intangible products such as online banking, stock trading,
and airline reservations. Sellers that use B2C business model can increase
their benefits by eliminating the middlemen. This is called disintermediation
because businesses sell products directly to consumers without using
traditional retail channels. It is basically a concept of online marketing and
distributing of products and services over the internet. It is a natural
progression for many retailers or marketer who sells directly to the consumer.
The general idea is, if you could reach more customers, service them better,
make more sales while spending less to do it that would the formula of success
for implementing a B2C e-commerce infrastructure. A business firm can also
establish relations with customers through electronic medias. For this, the
company has to design a web site and place it on the internet. On the web site,
the company can publish all details about the product and services and that
benefits customers to place orders for these goods from the web site. To
maintain customers always with company’s web site, the company must update the
information on the web regularly. Consumers always demand greater convenience
and lower prices. Electronic commerce provides consumers with convenient
shopping methods.

Business – to-Consumer

[B2C]
e-commerce provides many benefits to the business. Some of them are:

• Lower Marketing costs

• Lower order processing cost

• Better customer service

•
Lower customer support cost

•
Wider markets

Business – to –Government

[B2G]
e-commerce B2G refers to the supply of goods and services for online government
procurement. This is a huge market which mainly covers everything from office
supplies to military equipment.B2G websites offer lower costs and greater
choice to the administration, and make government tendered offers more
accessible to companies.B2G is a derivative of B2B marketing and often referred
to as a market definition of public sector marketing which encompasses
marketing products and services to various government levels including-federal,
state and local- through integrated marketing communications techniques using
as strategic public relations, branding, , advertising, and web based
communications.

A website offering Business – to –Government
services could provide businesses with the following.

• A single place to locate applications and
tax forms for one or more levels of government (city, state or local)

• To provide the ability to send in filled
out forms and payments

• To update corporate information

• To request answers to specific questions

Business
– to –Government decreases the cost of transactions with reference to licenses,
selling publication of government documents, tax returns and general dealings
with businesses and the public. It has increased information flow.

Business- to- Employee

B2E
uses an intra -business network which allows companies to provide products and/
or services to their employees. It is the use of intranet technologies to
handle activities that take place within a business. An intranet is an internal
network that used Internet technologies.

Business-
to- employee [B2E] is different from other type since it is not a revenue form
of business. Otherwise, it increases profits by reducing expenses within a
company. Instead of having to look everything up manually they can collaborate
with each other and exchange data and other information.

Many
companies have found that B2E technologies have dramatically reduced the
administrative burdens with the human resources department. Admittedly,
maintaining employee information has little to do with commerce, but this term
has grown to encapsulate this activity into the B2E definition. Examples of B2E
applications include

1.
Online insurance policy management

2.
Corporate announcement dissemination

3.
Online supply requests

4.
Special employee offers

UNIT IV

E-MARKETING

Web
marketing, digital marketing, internet marketing or online marketing; all of
these words are synonymously used for E-Marketing. What it means is the
marketing of products or services by using the internet. E-mails and wireless
marketing also fall into the category of e-marketing.

FEATURES OF E-MARKETING

Big
or small, many businesses are using e-marketing because of various features and
multiple advantages. Some of the important features are as follows;

E-marketing
is Cheaper than Traditional Marketing: If you compare its cost with traditional
marketing media such as newspaper ads and billboards, then it’s much cheaper
and efficient. You can reach a wide range of audience with very limited
resources.

Tangible
ROI: Small business owners can now check the turnover rate or ‘‘action taken’’
with the help of Infusion soft. It analyzes multiple things like views of
videos, number of emails opened, and per click on the link. Most importantly,
it tells us how much sales the business has been made as a result of
e-marketing.

24/7/365
Approach: It works 24 hours a day, 7 days a week and 365 days of the year. It
doesn’t matter whether you’re homesick, sleeping, or attending a casual
meeting; but e-marketing is always hard at work. Eliminate Follow-up Failure:
Elimination of follow-up-failure is the main secrete behind the success of small
business. It is done by entering your business figures into the Infusion soft,
and then its automated marketing system will provide you the custom-tailored
information about your business, which areas to improve and what product to
discontinue.

ADVANTAGES OF E-MARKETING

Some
of the important advantages of e-marketing are given below;

1.
Instant Response. The response rate of internet marketing is instantaneous; for
instance, you upload something and it goes viral. Then it’d reach millions of
people overnight.

2.
Cost-Efficient. Compared to the other media of advertising, it’s much cheaper.
If you’re using the unpaid methods, then there’s almost zero cost.

3.
Less Risky. When your cost is zero and the instant rate is high; then what one
has to loos. No risk at all.

4.
Greater Data Collection. In this way, you have a great ability to collect a
wide range of data about your customers. This customer data can be used later.

5.
Interactive. One of the important aspects of digital marketing is that it’s
very interactive. People can leave their comments, and you’ll get feedback from
your target market.

6.
Way to Personalized Marketing. Online marketing opens the door to personalized
marketing with the right planning and marketing strategy, customers can be made
to feel that this ad is directly talking to him/her.

7.
Greater Exposure of your Product. Going viral with one post can deliver greater
exposure to your product or service.

8.
Accessibility. The beauty of the online world and e-marketing is that it’s accessible
from everywhere across the globe.

DISADVANTAGES OF E-MARKETING

E-Marketing
is not without disadvantages, some of them are as follows;

1.
Technology Dependent. E-Marketing is completely dependent on technology and the
internet; a slight disconnection can jeopardize your whole business.

2.
Worldwide Competition. When you launch your product online, then you face a
global competition because it’s accessible from everywhere.

3.
Privacy & Security Issues. Privacy and security issues are very high
because your data is accessible to everyone; therefore, one has to be very
cautious about what goes online.

4.
Higher Transparency & Price Competition. When privacy and security issues
are high, then you have to spend a lot to be transparent. Price competition also
increases with higher transparency.

5.
Maintenance Cost. With the fast-changing technological environment, you have to
be consistently evolved with the pace of technology and the maintenance cost is
very high.

TYPES OF E-MARKETING

When
we talk about digital and email marketing, then there are different type and
methods of online marketing which are as follows;

Email Marketing:
Email marketing is considered very efficient and effective because you already
have a database of your targeting customer. Now, sending emails about your
product or service to your exact targeted market is not only cheap but also
very effective.

Social Media Marketing:
Social media is a great source of directly communicating with your customers to
increase your product awareness. It could be done by any or all of the social
media channels such as LinkedIn, Facebook, Instagram, Twitter, Google, and
YouTube. Some of the important advantages of social media are as follows;

· Increase product awareness and reputation
means more sales.

· Directly communicating with your customers
can increase brand loyalty.

· You can increase the number of visits to
your website and rank it up in the search engine.

· Targeting the exact audience will help you
to know more about your customers’ needs.

Video Marketing:
It is said that a picture is worth a thousand words, and a video is worth
thousands of pictures. You can catch the attention and emotions of your target
market by showing them a video clip about your product or service.it is very
effective if it conveys the right message to the right audience.

Article Marketing: Engaging quality content by providing
valuable information to your targeted market, what people are looking for over
the internet to solve a certain problem? It is a consistent and ongoing process
of delivering quality content to your readers. It is not always about selling;
you’re educating your audience and helping them by adding some value in their
lives.

Affiliate Marketing:
Affiliate marketing is the process of promoting some products of certain brands
and earning your commission out of every sale. It works for everyone; win, win
situation.

Wrapping Up E-Marketing:
It doesn’t matter whatever type of marketing methods you’re using; it has to be
well focused and researched about your target market. Customer’s needs and
demands should also be kept in mind; there should be consistency and coherency
between the market and your product. Anything out of ordinary will make your
customers suspicious. It has to be realistic.

E-PROCUREMENT

Electronic
procurement, usually simply referred to as “e-procurement”, is a term used in
professional purchasing and e-commerce for B2B transactions – that is to say
business to business. It isn’t about ordering goods from individual customers,
but rather communication between businesses. E-procurement isn’t targeted at
private customers shopping in a web shop, but instead at companies using a
digital solution to regulate purchases between one another. There are several
advantages to using this modern purchasing solution, with the automation of
several parts of the process saving a considerable amount of time for the
companies involved. In the course of digitization, many areas within companies
have changed. Back office processes in particular can be carried out more efficiently
with digital solutions. This also includes purchasing. The fact that
e-procurement plays an increasingly important role is also because some goods
and services, such as software or web services, can only be purchased digitally
anyway. In most cases, electronic procurement is based on so-called ERP
systems. Enterprise resource planning systems are software solutions specially
designed for companies, which support business processes and simplify
merchandise management.

E-procurement
is the shortened form for electronic procurement. It uses digital solutions to
make purchases within a company. Electronic procurement is a term from the
business-to-business (B2B) sector, as it refers exclusively to company
transactions

In
principle, e-procurement is the digital process of procurement. This means that
paper order forms, catalogs, and paper price lists aren’t needed, and
communication with the supplier is predominantly digital. When it comes to
e-procurement, companies rely on software designed to make their purchasing
processes more efficient.

It
is crucial for e-procurement that the purchasing process is perfectly
integrated. Ideally, the systems of both businesses would work together
seamlessly – the company can then immediately see whether the supplier has the
required item in stock, and whether the order has been received. Both parties
now mostly rely on the internet for communication purposes. Due to the need to
keep data secure, some companies also prefer networking via their own extranet.
Business partners can then access each other’s intranet via a VPN connection,
for example. The data is transmitted via a secure IP tunnel.

STEPS OF E-PROCUREMENT

E-procurement
systems should offer a digital equivalent for every steps of the purchasing
process. Purchasing processes often also require access to other areas of a
company, and so electronic procurement can also be linked to processes and
programs from other departments as well.

1. Supply management:
A large part of purchasing work consists of obtaining and comparing supplies.
E-procurement solutions can centralize this work, so you can maintain a clear
overview. However, this depends on how the system used is set up. Sometimes all
supplies get entered automatically into the software. On the most basic level,
however, online catalogs can be used to research supply levels and types,
whether this is internal or external.

2. Approval process:
In most companies, specific approval procedures are required before a
transaction can be executed. Because not every employee is allowed to make
certain orders, “parent authorities” must give their approval. This kind of
process can be simplified and sped up by electronic procurement systems. The
software can automatically forward the approval process to the next person. In addition,
purchasing rights can be assigned and revoked centrally via the software, which
can also save time.

3. Transaction:
Finally, the e-procurement system can also carry out the actual order. Data can
be transferred in various ways. In some systems, data can be forwarded directly
via the internet or via VPN to the supplier’s server. It is slightly more
complicated if information first has to be sent by e-mail to the supplier, but
even this process can be sped up if both sides use standardized formats through
which the data can be transferred easily. There is a difference between
automatic and manual procurement orders:

• Automated procurement: depending on the
product required, e-procurement systems can order goods automatically. This
procedure is suitable for articles that are necessary for production, for
example. The key factor here is that there are fixed supply contracts.

• Manual procurement: e-procurement can also
support individual procurements that are required at irregular intervals, and
are not tied to a particular supplier and sometimes require more complex
approval processes.

4. Tracking:
Even after successful order placement, electronic procurement software can
still be of use. If the procurement system is given real-time data from the
supplier, it is possible to monitor the delivery. This allows the order to be
tracked from the manufacturer or distributor to the ordering company.

5. Payment:
Financial processing can be handled via the electronic procurement system,
provided that there is a link to the accounting software. Both participants can
benefit from online processing. On the supplier’s side, it is possible to make
invoices via the system. The invoice can also be transmitted indirectly via the
system, and is sent to the person responsible. However, electronic invoices
must be signed with an approved electronic signature. This feature must be
integrated in the corresponding e-procurement system for payments to be valid.

6. Reporting:
Since the e-procurement system documents all processes, creating reports is
much easier than with traditional procurement, which relies primarily on paper
documents. Analyses can often fall back on the numerous data stored in the
electronic system. Reports on individual employees, different departments, or
the suppliers used are all possible. This makes it easy to report on the
effectiveness of a company’s own employees, as well as the performance of its
suppliers.

NECESSARY
STANDARDS

For
e-procurement to function at its best, certain standards should be adhered to –
at best, internationally. These go beyond the obvious technical
requirements. Product identification:
retailers have introduced standardized identification numbers. Just the number
tells you what the product is without having to look at and compare the other
product specifications. Standardized product identifications can also be
registered more easily by most databases, such as EAN, UPC.

1. Classification:
classification of products and services is not always easy, as it is sometimes
possible to assign them to several categories. However, uniform standards are
useful so that products can be organized into catalogs and correctly
categorized. In this way, the customer can also find the product faster.

2. Formats:
to ensure that both businesses receive the information they need, it is
necessary to use data formats that ideally can be handled by all parties
without the need for conversions, such as with CSV, PRICAT, PRODAT, cXML.

3. Transactions:
to complete transactions, purchase orders, and send out deliveries as quickly
as possible, it is a good idea to use a uniform format for any transaction
documents, which can then be easily processed by machines or software.

4. Business processes:
in addition to individual transactions, it is possible to standardize business
process mapping. This allows multiple actions within a process to be triggered
at once, such as with ebXML, Biztalk.

DIFFERENT TYPES OF SYSTEM

There are different types of systems that can
be distinguished according to technical aspects, or according to which one of the
commercial business partners involved determines the system defaults.

1. Technical
implementation: Technical implementation refers to the
communication between the companies, i.e. between buyers and suppliers, using
uniform standard forms. This allows different software solutions to exchange
information. The systems are distinguished primarily by how “open” they are:

2. Closed systems:
In a closed system, suppliers and purchasers are connected. To do this, both
sides must either use the same software or adapt their interfaces. The latter
can sometimes be very complex, which is why the installation is only worthwhile
if it can be assumed that both sides communicate with each other permanently
and frequently.

3. Semi-open systems:
these systems usually originate from the supplier. They have a self-contained
network and offer their customers access via an interface. Companies can either
access the system via a browser and place orders, or adapt their own software
to the supplier’s interface.

4. Open systems:
with an open system, there is no direct connection between the systems of both
parties. Instead, a kind of online catalog is regularly posted on the internet
by the supplier, through which customers can place orders. This system is
asynchronous because the software does not compare orders and stocks in real
time.

SALES PROCESS

A
sales process is defined as a sequential step that a salesperson performs over
a sales cycle to convert a prospect into a customer. Usually a tried-and-tested
process, it acts as a guide for salespeople to move a deal through the sales
pipeline and close it. It is a step-by-step process which begins long before
the contact of the customer and the salesman. A sales process is a set of
activities undertaken to successfully obtain an order and develop long term
customer relationship. A sales pipeline is a visual snapshot of opportunities
in different stages of sales process. It also enables salespeople to know which
deals to focus on, where do they need to put extra efforts, and how much are
they likely to make in the coming months.

Prospecting and Qualifying:
It is a process of identifying prospective buyers of the product. A lead is not
the same thing as prospect. A lead is one for which the salesperson has contact
information. Once the lead has been qualified it becomes a prospect. An
individual or an institution may be qualified to be a prospect if he has the
need, authority, ability and eligibility to buy. Improvement in prospecting is
one way to stretch productive selling time. Sales persons who are proficient in
prospecting apply their selling efforts productively and do not waste time on;
non-prospects. It is a wastage of time and effort and also unethical for
salespersons to sell their product to people who do not need it. Salespeople
should sell their product in such a manner that product do not come back but
the customer do. Individual and organizations that do not have the ability to
buy should not be pursued because they will try to postpone their purchase. Too
much of sales persons time is wasted talking to people who do not have the
formal authority to purchase a product. Majority of the time organizations have
a buying committee who are responsible for making purchase. Purchase decisions
may even be shared at consumer level between the family members. Before
approaching a prospect, a sales person should confirm that the prospect has
eligibility to purchase the required product.

Planning the Sales Call (The
Pre-approach)

This
is the second step in the selling process in which sales person gather
information about the needs, behavior, nature, likes, dislikes, preferences,
economic and social status so that sales person equip himself to give effective
sales presentation accordingly. This kind of preparation to meet the prospect
is called Pre-approach. The significance of pre approach lies in concentrating
only on prospects and not suspects, hence saving time. It also provides all the
required information about prospect so no loose talks or mistakes may happen
and sales person can give sales presentation more efficiently and effectively.
This builds up the confidence of the salesperson and demonstrates
professionalism on his part. It also helps in developing goodwill between the
salesperson and the prospect and enhances the probability of making a sale.
Planning the sales call requires obtaining strategic information about the
prospects like their name, position, personal background, educational
background, technical knowledge, normal buying behaviour, personality traits,
authority in the decision making etc. Sales person must understand total buying
situation and try to gather information from trade associations, chambers of
commerce etc. Salesperson may also obtain preliminary information by gathering
first-hand information by making a preliminary call. Such detailed information
is necessary to provide complete solution to the buyers. A number of steps can
be taken to ensure a positive response by the sales person. A senior official
in the company can be asked to set an appointment and salesperson can send a
sales promotion gift also known as ‘door openers’ like pen, key ring, calendar
or diary along with a personalized letter and brochure targeting buyer’s needs.
Once the appointment is finalized the salesperson should plan his sales call route
to minimize travel time and expense. Reconfirming the appointment on the
scheduled day is always better to avoid unexpected cancellation of appointment.

Approaching the Prospect

This
is when prospect and salesperson come in direct contact with each other. Since
this is the first opportunity for face-to face interaction, the salesperson
should put his best foot forward and try to gain attention of the prospect by
explaining the utility and true value of the product. He should create an
impression through his personality, product information, professionalism and
command of the situation. A salesperson should always be very well mannered
through-out his interaction with the prospect and show positive attitude to
criticisms. This provides salesperson an opportunity to judge if the prospect
has positive inclination towards his product. A salesperson should always avoid
paying surprise visits and should try to meet the prospects during the slack
hours rather than odd hours like too early in the morning or too late in the
evening or during financial closing. It is always advisable to meet during the
slack hours. A number of methods and strategies can be used by the salesperson
to approach the prospect depending upon the selling situation as explained.

Making the Sales Presentation
Making the sales presentation or demonstration is an exercise to showcase the
characteristics of the product and highlight its utilities, performance,
services and quality. If the salesperson is able to make the product appeal to
the customers half the battle is won. Prospects should be allowed to handle the
product. If the prospect can test the product successfully in front of
prospect, it will enhance the confidence of the prospect and buying decision is
reinforced. Salesperson should never compare their product with the
competitor’s product. Help can be taken from overhead projectors, video
players, tape recorders to demonstrate the product to the prospects so that it
appeals to all five senses via: sight, hearing, touch, smell, and taste. Sales
persons should make sincere efforts to influence the customers through all
senses so that the customer may generate their interest towards the product.

Dealing with Prospect Objections

Seldom will the prospects can be taken
straight from sales presentation to closing the sales. Once the product
characteristics have been demonstrated any rational prospect will have certain
questions, doubts, objections in his mind about the performance of the product.
So, objections should be taken as a positive sign of interest and involvement.
It may be an indirect way of asking for more information, more time, more
convincing or more assurance before they commit themselves. This is just to
safeguard themselves to avoid taking a wrong decision. It is the responsibility
of sales persons to remove such objections or barriers to the sale. Resistance
can be expressed verbally (e.g. ‘I am not clear how will this product help me’)
or in a non-verbal manner (e.g. Prospects facial expressions show that he is
confused or is in dilemma). Sales objections is an indication that the prospect
is paying attention to the sales presentation and may be interested if the
objections can be addressed effectively. Sometimes prospects objections may be
to get out of the selling situations or brush off the salesperson. Like they
may say, “we are just exploring our options right now” or “we are not ready to
take a decision today” or “we do not have money right now”. More often such
statements indicate purchase anxiety which can be handled by reducing their
risks by providing more information to them or link the product with their
needs. Salesperson can use a number of methods to handle prospects objections.

Closing the Sales

Once
the salesperson has demonstrated the product and handled sales objections then
finally the salesperson should close the sales at the right time. Closing time
provides an opportunity to register tangible proof of selling skills.
Inadequate preparation, poor impression, failure in meeting objections or wrong
approach on the part of the salesman may come in his way. For a salesperson
such rejections are painful especially if they are on continuous basis.
However, if the salesperson has been successful in maintaining good
relationship with the prospect closing the sale is a logical outcome.

There
can be many ways of effectively closing the sale:

· Taking for
granted

· Offer some
incentive to purchase e.g discount or a small gift

·
Telling success stories of people benefiting from it

·
Creating fear of loss

·
Stressing small relevant details

Requesting straight for an order every
salesperson reach closing with certain apprehension as he cannot be 100% sure
because sometimes even after smooth flow throughout the sales process it may
not end in sale. If it is a high-pressure sale the salesperson has to convince
the prospect that the product is good for him and need effective persuasion to
close the sale. Even after refusal of customer salesman should not give up and
aim for at least five ‘trial close’. A trial close is to see if the prospect is
ready to buy and salesperson can close the selling procedure.

The Follow Up or Feedback
Once the product is sold it is very important to take the feedback or follow up
with customers to ensure if they are satisfied with the product. This step is
very important to reduce post purchase dissonance of the buyers. The buyers may
suffer from anxiety regarding their purchase decision. This anxiety can be
reduced to a great extent by constant and continuous follow up and re-assuring the
buyers about their right decision. It is very important to listen to buyers’
feedback even if it is criticism because it provides an opportunity to improve
the product and encourage repeat purchase behaviour.

UNIT V

E-PAYMENT
SYSTEM

It’s
a payment mechanism which enables individuals, businesses, government and
nonprofit organizations to make cashless payments for goods and services
through cards, mobile phones over the internet. Examples: payment through debit
card, credit card, smart card, net banking etc. An electronic payment system is
a technologically-driven platform that enables the transfer of funds
electronically, allowing individuals and businesses to make online transactions
securely and conveniently. It leverages various digital channels, such as
credit/debit cards, mobile wallets, internet banking, electronic funds
transfers (EFTs), and crypto currency, to facilitate seamless money exchanges.

BENEFITS
OF USING ELECTRONIC PAYMENT METHODS?

Convenience: Electronic
payment methods offer users the ease of conducting transactions anytime
and anywhere, reducing the reliance on physical cash or checks.
Speed: Payments
    made through electronic systems are processed instantly, enabling swift
    and immediate fund transfers, enhancing business operations and customer
    satisfaction.
Security: Robust
    encryption and authentication mechanisms in electronic payment systems
    protect financial data, reducing the risk of fraud and unauthorized
    access.
Cost-Effectiveness: Electronic
payments often entail lower processing fees than traditional payment
methods, leading to cost savings for businesses and consumers.
Enhanced
    Record-Keeping: Digital payment systems
    maintain detailed transaction records, facilitating better financial
    tracking and reporting for businesses and individuals.
Global
    Accessibility: With electronic payment systems,
    cross-border transactions become seamless, promoting international trade
    and enabling businesses to reach a global customer base.
Eco-Friendly: By
reducing the need for paper-based transactions, electronic payment methods
contribute to environmental sustainability and reduce paper waste.
Contactless
    Options: The rise of contactless payment
    technologies offers hygienic and secure payment alternatives, especially
    in the context of public health concern.

DISADVANTAGES
AND RISKS OF ELECTRONIC PAYMENT

Security
    Risks: Despite strong security
    measures, electronic payment systems are vulnerable to hacking, data
    breaches, and identity theft, potentially exposing customers’ sensitive
    information.
Technical
    Glitches: System failures or technical glitches
    in electronic payment platforms can disrupt transactions and cause
    inconvenience to both businesses and customers.
Dependency
    on Technology: Electronic payment systems
    heavily rely on technology and the internet. Any disruption in network
    connectivity or power outage can disrupt payment services.
Fraud
    and Scams: Cybercriminals continuously develop
    new methods to exploit vulnerabilities in electronic payment systems,
    leading to fraudulent activities that can harm businesses and individuals.
Lack
    of Anonymity: Electronic transactions leave
    digital footprints, compromising user privacy and anonymity compared to
    cash transactions.
Potential
    Fees: While electronic payments are
    generally cost-effective, some transactions may incur additional fees,
    especially for cross-border transactions or currency conversions.
Limited
    Acceptance: In some regions or certain
    demographics, electronic payment methods may have limited acceptance,
    which can inconvenience users who prefer or rely on traditional payment
    methods.

1. Debit
Card:
A debit card is a card with unique credentials and is linked to the customer’s
bank account. A debit card deducts money from the user's bank account instantly
at the time of the transaction – which is the main distinction between a debit
card and a credit card.

2. Credit
Cards: Credit cards are the most popular form of payment
for e-commerce transactions. Enabling credit card payments on your website can
enable customers to shop without having to worry about paying upfront.

3. E-Wallet:
The E-Wallet can be thought of as a prepaid account that enables users to store
a variety of debit cards, credit cards, and other payment methods in a safe
environment without having to enter their credentials each time they wish to
make a purchase. The use of electronic wallets is expanding every day.
E-wallets enable customers to skip entering card information each time, thus
promoting a rapid checkout. PhonePe, PayTM, Mobikwik, Amazon Pay, etc are some
of the well-known digital or E-wallets in India.

4. Smart
Card:
In terms of appearance, debit/credit cards and smart cards are somewhat
comparable. Smart cards, however, contain an embedded microprocessor chip. It
has the ability to store money as well as a person's personal and professional
information. Faster processing is possible with smart cards at lower rates.

5. Online
banking: Customers can conveniently make purchases by paying
with a bank account directly. The user does not need a debit card to use
this e-commerce payment system, but they still need to register with
their bank for a net banking facility. The customer only needs to provide their
net banking ID and PIN in order to complete a purchase.

6. Mobile
Payment: Customers may easily and quickly use mobile payment
to make purchases using their smart phones. A user only needs to download a
mobile payment app from the applications store. They must then link their bank
account to that app in order to add money to their wallet and make purchases,
as well as to make payments directly from their bank account. When a consumer
chooses to use that app to pay on an e-commerce website, the app receives a
payment request, which it must approve before the payment can be processed.

CONSIDERATIONS
FOR BUSINESSES ADOPTING ELECTRONIC PAYMENTS:

1.
Cost and Fee Structures

Before
adopting electronic payment methods, businesses must assess the associated
costs and fee structures. Different payment providers may have varying
transaction fees, processing charges, and setup costs. It’s crucial to compare
options to ensure cost-effectiveness and alignment with the company’s budget.

2.
Integration with Accounting Systems

Seamless
integration with existing accounting systems is essential for efficient
financial management. Businesses should opt for electronic payment solutions
that integrate smoothly with their accounting software to automate
reconciliation, streamline bookkeeping, and enhance accuracy
in financial reporting.

3.
Customer Support and Dispute Resolution

Businesses
must consider the level of customer support the payment service provider
provides. Timely and effective customer support is critical for resolving any
issues that customers may encounter during the payment process. A clear dispute
resolution mechanism also helps address payment disputes efficiently,
minimizing customer dissatisfaction.

4.
Regulatory Compliance and Data Privacy

Adherence
to regulatory requirements and data privacy laws is non-negotiable. Businesses
must ensure that the chosen electronic payment system complies with relevant
regulations and safeguards sensitive customer data. Compliance helps build
trust with customers and avoids potential legal liabilities.

ELECTRONIC
PAYMENTS WORK – A STEP-BY-STEP GUIDE

How
Electronic Payments Work: A Step-by-Step Guide

1. Authorization
and Authentication Process

When
a customer initiates an electronic payment, the process begins with the
authorization and authentication step. The customer provides their payment
information, such as credit/debit card details, through a secure online
platform or a payment app. The payment system then verifies the authenticity of
the customer’s information by conducting various security checks, including
card verification; address verification, and sometimes multi-factor
authentication for added security.

2. Transaction
Settlement and Clearing

After
the payment is authorized, the transaction enters the settlement and clearing
phase. During this stage, the payment details are sent to the acquiring bank
(merchant’s bank) and the issuing bank (customer’s bank). The acquiring bank
forwards the payment request to the payment network (e.g., Visa, MasterCard, or
other payment processors). The payment network then communicates with the
issuing bank to verify the customer’s account details and available funds.

3. Encryption
and Secure Transmission

Throughout
the entire electronic payment process, data security is paramount. All
sensitive information, including card numbers and personal details, is
encrypted to protect it from unauthorized access during transmission. SSL
(Secure Sockets Layer) or TLS (Transport Layer Security) protocols are commonly
used to encrypt data, ensuring it remains secure as it travels between the
customer’s device, the merchant’s server, and the payment gateway.

4. Payment
Gateways and Processors

The
payment gateway is an intermediary between the merchant’s website/app and the
payment networks. It securely transmits the customer’s payment data to the
payment processor for further processing. The payment processor’s role is to
facilitate the actual fund transfer between the customer’s and merchant’s
banks. It validates the transaction and ensures that the funds are transferred
accurately and securely.

5. Transaction
Completion and Notification

Once
the payment processor confirms the successful completion of the transaction, a
confirmation message is sent to the payment gateway. The payment gateway then
communicates this information to the merchant’s system, confirming the
successful payment. The merchant can proceed to fulfill the customer’s order or
provide the desired service.

GREEN MARKETING

Contrary to popular belief, green marketing is not
limited to the promotion of products with environmental attributes. It also
encompasses the promotion of other goods and services that have the same environmental
characteristics. While green marketing claims are often limited to specific
products or services, they can also be applied to a wider variety of goods and
even services. For instance, eco-tourism is becoming more prevalent around the
world.

Green marketing involves a wide range of activities,
such as product modifications, packaging changes, and advertising. In addition,
it also refers to marketing campaigns that are geared toward the environment.
While green marketing became prominent during the 1980s and 1990s, it was
already talked about much earlier. In 1975, the American Marketing Association
held a workshop oncological marketing. The goal of the workshop was to examine
the impact of marketing on the environment. It also sought to identify the
various aspects of marketing that contribute to the depletion of resources.
Green marketing is a process of selling products or services that are made with
or produced in an environment-friendly manner. Green marketing refers to the
process of planning, developing, and promoting products or services that are
made with the environment in mind. The American Marketing Association defines
green marketing as the promotion of products that are believed to be safe to
the environment.

The concept of green marketing refers to the marketing
of products that are believed to be safe and green. This activity is done to
create and facilitate exchanges that are designed to satisfy the needs and
wants of the consumers. It is done with minimal impact on the environment.

IMPORTANCE

a) Environmental
Advantages: Going green
is an environmentally accountable choice. Energy efficiency is one of the most
important factors that businesses can implement to reduce their greenhouse gas
emissions. Energy conservation is also beneficial for the environment. As
businesses become more aware of their environmental impacts, they can help
conserve water and other resources.

b) Economic
Advantages: The reduction
in waste makes a business more profitable and helps lower operating costs. It
also generates instant cash flow. Further, going green shows a business's
commitment to being a better environmental steward. Cash flow is generated by
going green. It increases a business's visibility in the eyes of potential
customers and investors.

c) Sustainability:
Green markets are
those that are secure and sustainable. Future-safe markets are those that cater
to the needs of tomorrow's consumers. Future-safe markets are those that are
expected to have a high degree of environmental protection. They include smart
grids, smart buildings, and biomaterials.

d) Efficient
Use of Resources: Human
needs are unlimited, but resources are short. The markets need to be used
efficiently to meet these needs.

e) Innovation:
Green marketing is
a process utilized to promote the use of green products. It helps in developing
eco-friendly products that are economically and socially responsible.

E-COMMERCE

E-commerce is the process of buying and selling of
products and services online. It allows businesses to reach out to their
customers and engage in various online activities. Internet marketing is a
process of marketing strategies that involve the use of various media and
marketing techniques to create awareness of a product or service. E-marketing
is a process of marketing activities that are carried out through the Internet.
This is a mixture of various elements of marketing, which are responsible for
the creation and distribution of products and services.

e-Marketing is still a controversial topic to discuss,
since no one can agree on the exact concept of it. However, it is widely
believed that e-Marketing first appeared during the early 90s, when companies
started using various techniques to promote their products online.

The frenzy around the new marketing techniques that
were created by e-trailers quickly gave birth to a new dimension called
e-Marketing. There are many definitions of what e-Marketing is, but the
simplest one is that it's about marketing that uses the internet.

E-marketing is a process that involves planning and
implementing the conception, distribution, and promotion of products and
services online. It is a process that allows businesses to reduce their
operational costs while satisfying their customers' needs. E-marketing is a
type of marketing that provides businesses with lower costs and better customer
service. It has two main advantages: it's more convenient and it's competitive.
E-commerce allows customers to shop for goods and services without leaving
their homes. They can do it without leaving their office or home. E-commerce
allows customers to shop for products and services online, without having to go
to a physical store. It saves them time and money. It also helps minimize the
cost of doing business.

RURAL MARKETING
AND ITS IMPORTANCE

Marketing is a process utilized for the marketing of
rural products and services. This concept refers to the efforts aimed at
creating and satisfying the needs of the rural market. Rural marketing is
becoming more prevalent in today’s world, it contributes to overall social and
economic development. Rural marketing also creates job opportunities for rural
dwellers and business units. Urbanization in rural areas and the resultant
rural marketing boost the overall welfare and prosperity of the nation.

1. Reduced Burden on Urban Population:

Rural marketing can help improve the living conditions
of rural people. It can also contribute to the development of rural areas.
People can live comfortably in rural areas due to the availability of all the
goods and services in villages. Also, the growth of marketing activities can
help people earn their livelihood.

2. Rapid Economic Growth:

Marketing plays a vital role in rural economic growth.
It attracts more consumers and services to rural areas and generates additional
income for the rural population.

Agriculture is the main component of rural population.
It contributes to total national income and is also involved in export
business.

3. Employment Generation:

Rural marketing can help boost rural employment
opportunities by attracting potential customers. This can create various
professional and managerial positions in rural areas. At present, nearly 70% of
total Indian population feeds on agricultural activities in rural areas

4. Improved Living Standard:

Rural marketing system can help rural consumers obtain
the goods and services they need at a fair price. It can also improve their
living standard. Through rural marketing, they can improve the living standard
of their rural communities.

5. Development of Agro-based Industries:

Rural marketing can help boost the profitability of
farming by encouraging the establishment of agro-based processing industries.

6. Optimum Utilization of Rural Untapped Resources:

There are numerous opportunities in rural areas.
Untapped resources can be utilized at their optimum level to accelerate
economic growth. Untapped resources can be utilized at optimal level to
accelerate overall economic growth.

7. Easy Marketability of Agricultural Produces:

The growth of rural marketing improves the whole marketing
system. It enables farmers and producers to reach out to corporate houses and
industries through their local intermediaries. Rural producers can easily sell
their produce at a good price to attract industrial buyers. This can help boost
industrial demand.

8. Improved Rural Infrastructures:

Rural marketing and basic infrastructures go hand to
hand. The increasing number of rural marketing units leads to the development
of basic infrastructures such as transportation, communication, insurance, and
banking.

9. Price Stability:

Marketing strategies can be used to improve the
efficiency of agricultural products' transportation and storage facilities.
This method can help avoid a huge gap between the demand and supply, which can
result in prices of most commodities being stable.

10. Quality of Life and Reduced Crime:

Quality of life can be improved through marketing.
Quality of life increases when the prices are reasonable and the availability
of facilities and services are also good.

11. Balanced Industrial Growth:

Urbanization in rural areas can be gradually reduced.
It can improve the rural life and reduce the pressure on the urban life.

Ethical Marketing

Ethical marketing is a process that involves companies
focusing on how their products and services can benefit both their customers
and the environment. Marketing ethics is a philosophical framework that relates
to the ethical considerations involved in the marketing process. Marketing
ethics is a philosophical examination of ethical issues related to marketing.

Ethical marketing is a philosophy that focuses on
ethical considerations when it comes to business decisions. This philosophy
involves analysing a company’s goals and making ethical decisions. A company's
ethical marketing strategy is evaluated from various perspectives. These
include a business and moral perspective. Ethical marketing is a process that
involves companies working to create products and services that are ethical and
responsible.

Ethical marketing is a philosophy that focuses on ethical
considerations when it comes to business decisions. It involves everything from
ensuring that advertisements are ethical to cultivating strong relationships
with consumers. Consumer demand for ethically produced cleansing products has
intensified in recent years, and although there are literally hundreds of
brands of soap available on the market, few are as unique or memorable
as Dr. Bronner’s, the top-selling organic liquid soap brand in America.

If you’ve ever bought or seen a bottle of Dr. Bronner’s
soap, you’ll already know that the company is a little different to other soap
companies. For starters, the product’s unique packaging features the company’s
fascinating “Cosmic Principles,” a 30,000-word philosophical screed that
company founder and self-styled doctor Emanuel Bronner spoke of while touring
the United States’ lecture circuit in the late 1940s. Bronner offered his
now-famous peppermint liquid soap as a freebie for people who attended his
lectures, but it didn’t take long for him to realize most people would only
turn up at his speeches to grab their free sample of soap. It wasn’t just
Emanuel Bronner who demonstrated a commitment to social and environmental
activism. Bronner’s grandson, David, was arrested in 2012 for publicly
harvesting hemp from inside a locked cage outside the White House, a stunt
orchestrated to protest what David Bronner felt was the federal government’s
undue oversight of hemp production in the United States.

UNFAIR OR DECEPTIVE MARKETING PRACTICES

Deception is a common element of marketing practices.
It occurs when customers believe that a product or service will provide them
more value than they actually receive. This concept is often referred to as
deception. It occurs when working with multiple elements of a marketing mix.
Due to the volume of information that consumers are exposed to, it can easily
lead to deception. Price deception occurs when a consumer makes a purchase. It
can happen by making false price comparisons, offering misleading terms, or
making a low price offer that is only available when other items are purchased.
Promotion techniques are deceptive when they fail to disclose or misrepresent
the nature of their product or service. They can also be used to attract or
deceive customers. bait-and-switch selling is a technique used by businesses to
lure potential customers into buying a product or service at a lower price. It
is also deceptive. Mislabelled packages can also be considered deceptive. When
these are intentionally mislabelled, it is considered deception.