Introduction
Marketing is about identifying and meeting human and social needs. It is the process of communicating the value of a product or service to customers, for selling that product or service. Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering and freely exchanging products and services of value with others.
Nature of Marketing
Marketing is a human activity.
Marketing is a social-economic activity.
Marketing is consumer-oriented process.
The core of marketing is product or service.
Marketing is based on exchange.
Marketing is both art and science.
Marketing is an universal activity.
Characteristics of Marketing
Marketing is a socially pervasive process
Organisation-wide function
Marketing is both a science and art
Voluntary exchange of values
Achievement of organizational objectives and customer needs
Selection of target markets
Beneficial to all the stakeholders
Scope of Marketing
All the decisions related to product like size, colour, design, packaging, etc. are taken with active participation of marketing department of the company.
All the decisions related to the consumers are taken after having studied the consumers responses with respect to different products, different prices and brands.
All promotional decisions, like choosing type of marketing media, are also being taken under marketing activity.
An effective after sales services is formulated by the marketing manager in order to satisfy the consumer.
Objectives of Marketing
Provide satisfaction to customers
Increase the demand
Provide better quality product to the customers
Create goodwill for the organisation
Generate profitable sales volume
Difference between Marketing and Selling
Marketing
Selling
(1) Marketing includes selling and other activities like various promotional measures, marketing research, after sales services. Etc.
Selling is confined to persuasion of consumers to buy firm?s goods and services.
(2) It starts with research on consumer needs, wants, preference, like, dislikes, etc. and continues even after the more...
Introduction
Marketing environment refers to the factors and forces that affect a firm's ability to build and maintain successful relationship with customers. Some of the factors are controllable, while some others are uncontrollable. It is the responsibility of the marketing manager to change the company's Policies along with the changing environment.
Nature of Marketing Environment
Changes as per environment
Communication
Challenges
Wide market
Characteristics of Marketing Environment
Marketing environment plays a vital role while taking decisions related to marketing.
Its limit is decided on the basis of geographical factors.
There are some non-controllable variables included in marketing environment which effect the potentiality of a company and provide new direction to the market.
New opportunities and risks always rise in the marketing environment which reinforces marketing experiments and research.
Consumers are divided in homogeneous sections for marketing of a product on the basis of marketing environment.
Components of Marketing Environment
There are following components of marketing environment
Internal Environment
Forces and actions inside the firm that affect the marketing operation composed of internal stakeholders and the other functional areas within the business organisation are known as internal environment of marketing.
The internal environment includes
The human resource department
The operations department
The accounting and finance department
The research and development department
External Environment
The external environment is composed of
Micro environment
Macro environment
Both these types of marketing environment affect each other to some extent.
Micro Environment
The micro environment refers to the forces that close to the company and affect its ability to serve its customers. It includes die-company itself, its suppliers, marketing intermediaries, customer markets and public.
Factors affecting micro environment are
(i) Company The company aspect of micro environment refers to the internal environment of the company this includes all departments like management, finance, research and development, purchasing operations and accounting. Each of these departments has an impact on marketing decisions.
(ii) Marketing intermediaries marketing intermediaries refers to resellers, wholesaler physical distribution firms, marketing services agencies and financial intermediaries.
(iii) Customers There are different type of customer markets like consumer markets, business markets, government markets, international markets and reseller markets. It is different from the reseller market. The reseller market includes business that purchases goods for resell which gives profit.
(iv) Public the final aspect of the micro environment is public. They may be financial citizen action public, local public, general public.
Macro Environment
The macro environment refers to all forces that are part of the larger society and affect the micro environment. It includes concepts like demography, economy, natural forces, technology, politics and culture.
Factors affecting macro environment are
(i) Demographic Environment Demographic data help in preparing geographical marketing plans; household marketing plans, age and sexwise plans. It influences behaviour of consumers which, in turn, will have direct more...
Introduction
Marketing mix is an important concept in modern marketing. It is the crux of marketing process. It refers to the set of actions or tactics, that a company uses to promote its brand or product in the market. It includes almost everything that a firm uses to affect consumers perceptions favourably towards its products or services, so that the consumer and organisational objectives can be achieved. However, the 4Ps remain the most popular classification in terms of marketing mix. In 1990, Robert F Lauterborn proposed a 4Cs classification, which is a more consumer-oriented version of the 4Ps.
Elements of Marketing Mix
The elements or components of marketing mix may be grouped broadly under the following four heads
Product
Price
Place
Promotion
Product
Product refers to the goods and services offered by the organisation for sale to the consumer for a price. In other words, a product is a bundle of utilities consisting of various features and accompanying services.
Product can be broadly classified as follows
Based on Use
Based on use, the product can be classified as
Consumer Goods
Products that are purchased for personal consumption by the households or ultimate consumers are known as 'consumer goods5. Clothing, food, automobiles and jewellery are all examples of consumer goods.
Based on consumer's buying behaviour, the consumer goods can be further classified as
(i) Convenience Goods Goods which are brought frequently without much planning or shopping effort and are also consumed quick, are called convenience goods.
(ii) Shopping Goods these are the goods which are purchased less frequently and are used very slowly and choice for these products are made considering its suitability, price, style, quality and products of competitors and substitutes, if any like clothes, shoes, household appliances.
(iii) Speciality Goods Speciality goods have particularly unique characteristic and brand identification for which a significant group of buyers are willing to put generally special efforts to buy them.
Industrial Goods
These goods are meant for use as inputs in production of other products or provision of some service and include raw materials, machinery, components and operating supplies. These are meant for non-personal and commercial use.
Based on durability
Based on durability the products can be classified
Durable Goods
Durable goods are products which are used for a long period. Examples of such goods are capital goods such as refrigerator, car, washing machine, etc.
Non-Durable Goods
Non-durable goods are products that are normally consumed in one go or last for a few uses. Examples of such products are soap, salt, pickles, sauce; etc.
Based on Tangibility
Based on tangibility, the product can be classified as
Tangible Goods
Tangible goods have a physical form, that can be touched and seen e.g., groceries, cars, raw materials, machinery, etc.
Intangible Goods
Intangible goods refer to services provided to the individual more...
Consumer
A consumer is an individual, who buys products or services for personal use and not for manufacture or resale. A consumer may be a person or group of people such as a household who are the final users of products or services.
Classification of Consumer
Consumers are mainly classified into two groups
Individual consumer
Commercial Consumer
Individual consumer buys the products and services for his own and his family or friends whereas commercial consumer buys products or services for manufacturing or reselling.
Nature of India Consumer
Tendency of bargaining.
More focus on price than its quality.
Lack of awareness in the consumer for brand or trademark.
Attraction for changed consumption structures like car, scooter, coloured television, refrigerator, washing machine etc.
Consumer Behaviour
Consumer behaviour is a complex, dynamic, multidimensional process and all marketing decisions are based on the assumption about consumer behaviour. Consumer behaviour is the study of individuals, groups or organisation and the process they use to select, secure and dispose of products, services, experiences as well as ideas to satisfy needs and we find the overall impact of these processes on the consumer as well as on society.
Elements of Consumer Behaviour
Want of consumer
Attitude of consumer
Decision-making in purchase process
Finding out the problems relating to purchase
Factors Influencing Consumer Behaviour
The factors influencing consumer behaviour are as follows
Cultural
Traditions
Nationalities
Religions
Racial groups
Social
Reference groups
Family
Social class
Caste
Personal
Age
Life style
Personality
Life cycle stage
Occupation
Self-concept
Economic circumstances
Psychological
Motivation
Perception
Attitude
Learning
Some Terms Related to Consumer Behaviour
Negative Demand
When consumers dislike a product and may even pay to avoid it, it is called negative demand.
Impulse Buying
A situation in which consumer purchases are unplanned, is called impulse buying.
Buyer Resistance
It means buyer s hesitation in buying the product. Buyer resistance can be overcome by cordial relation between buyer and seller, good negation, persuasive communication and good after sales service.
Reference Group
It means a group of satisfied customers.
Target Group
It means a group of people likely to buy the identified product.
Various Stage in Consumer Decision-Making
Generally, a buyer passes through five distinct stages, while taking a decision for purchasing a more...
Introduction
The market for any product is normally made up of several segments. A market segment consists of a group of customers who share a similar set of needs and wants. Market segmentation is a marketing strategy when the marketer divided a broad target market into subsets of consumers who have common needs and priorities and then designing and implementing strategies to target them.
Objectives of Market Segmentation
To identify the needs, tastes, priorities, buying motives of the target consumers.
To make grouping of customers on the basis of their homogeneous characteristics such as nature, habit, behaviour, income, age, education, profession, religion, etc.
To make the activities of the firm consumer oriented.
To determine marketing strategies, targets and goals of the firm.
To identify the areas where the customers may be created and market area can be expanded.
Importance of Market Segmentation
There are the following importance of market segmentation
Understand Customers
To sell to your customers, you first must understand why they would want to buy your product. Market segmentation allows for the development of profiles of the many different kinds of customer groups who buy your products. It also can be used to develop products for your target audience.
Maximize Product Potential
During the course of your market segmentation, you may come across an alternate use for your product that had not been previously discussed. You may discover a new market for your product.
Improve Distribution Network
By studying the buying behaviors of various target customer groups, you can determine the way that customers prefer to buy your product. Market segmentation also helps you to identify geographic areas where your products are popular.
Gain New Clients
A comprehensive market segmentation analysis includes reasons why consumers are not buying your products. By understanding the reason, you can alter your marketing or change your product development to try to gain new customers.
Characteristics of Market Segmentation
The market segments must be measurable so that they can be identified.
It must be reachable through communication and distribution channels.
It should be sufficiently large to justify the resources required to target them.
It must respond differently to the different marketing mixes.
It should be relatively stable to minimise the cost of frequent charges.
Requirement for Successful Market Segmentation
There are four criteria which must be met for successful market segmentation. By segmenting your market, you should be able to consider your customers buying behavior and specific traits.
Substantiality Your targeted segment needs to be sufficient in size to justify creating and sustaining a customized marketing mix.
Identifiability and Measurability You must be able to identify and measure the specific segment.
Accessibility You must have access to your targeted segment with your specific marketing mix.
Introduction
Marketing management is a business discipline which focuses on the practical application of marketing techniques and the management of a firms marketing resources and activities. Marketing management employs various tools from economies and competitive strategy to analyse the industry, context in which the firm operates.
Characteristics of Marketing Management
Marketing management is consumer oriented.
Marketing management is a specialised branch of general management.
It considers consumer satisfaction as a marketing activity.
It is based on the principle of socio-economic satisfaction.
It lays emphasis on beneficial results of sale instead of quantity of sale.
It lays emphasis on integrated marketing.
Objectives of Marketing Management
To determine the marketing objectives for which all the functions will be performed.
Forecasting sales for future, preparation of marketing programmes, formulation of marketing policies and strategies regarding production, etc.
Organization, for the purpose of marketing management, means the determination of organizational structure of marketing department.
Helps in taking decisions regarding prices of the product.
Helps in the production activities of an organization.
Concepts of Marketing Management
There are four main stages of the marketing concepts which are as follows
Consumer Oriented Concept
Orientation to consumer needs is the main target for the success of marketing activities. More customers know what they need. This is the main reason that while deciding the production targets in industrial business, consumer's desires present itself as a paramount.
Marketing Oriented Concept
Marketing orientation has three common alternatives such as sales orientation, product orientation and production orientation which can be adopted by a company. With marketing orientation, a business revolves its strategic decisions around the wants and needs of the target market, including potential customers.
Consumer Satisfaction Concept
According to this concept, the position of consumer is the foremost position in all the business activities. Business can achieve the long-term prosperity by satisfying its customers which induce the customers to repurchase.
Businessmen should keep the following points in mind
(i) Consumer is always correct.
(ii) Consumer is the king of the market.
(iii) Consumer s position is at the top.
(iv) Consumer is a boss.
Consumer Welfare Concept
It seems to be the best marketing concept. It focuses on consumer needs and wants, profits and also the social welfare. This helps in improving the image of the company.
Importance of Marketing Management
In Indian economy, the significance of the marketing management could be described in the following way
Procuring Maximum Results with Minimum Efforts In our country, the resources are quite limited. By the minimum efforts, we have to achieve the maximum results. It could be possible only when we understand the significance of marketing.
Importance for Consumers Consumer can select the more...
Product
A product may be defined as a bundle of utilities consisting of various features and accompanying services. The bundle of utilities or the physical and psychological satisfactions that the buyer receives is provided by the seller when he sells a particular combination of product features and associated services.
Importance of Product
Product is the central point of all kinds of marketing activities.
Any marketing activity is not possible without any product.
Sales, advertisement, sales promotion, etc depend only on product.
Price of a product, its distribution and policies related to it, are based on it.
Product planning and its development affects the life of a product.
Many persons get employment due to the product.
Decisions related to any product are the main causes of the prosperity or failure of any business.
Classification of Product
Products or goods can be classified into two broad categories depending upon the use for which they are meant. These categories are
Consumer Goods
Consumer goods can be classified as follows
(i) Convenient Goods e.g., cold drinks, cigarettes, magazines and newspapers, etc.
(ii) Shopping Goods e.g., furniture items, dress materials, shoes, etc.
(iii) Speciality Goods e.g., fancy goods, stamps, coins, etc.
Industrial Goods
Industrial goods can be classified as follows
(i) Fabricating Goods e.g., pig iron going into steel, yarn being woven into cloth, etc.
(ii) Equipment Goods e.g., portable drills, hand tools, etc.
(iii) Supplies Goods e.g., floor wax, pins, pens, etc. Electrical goods such as TVs, video, stereo systems, etc. used for home entertainment are known as Brown goods.
The goods which are used for their production, are called capital goods.
Difference between Consumer Goods and Industrial Goods
Basis
Consumer Goods
Industrial Goods
Nature of customer
Consumers of consumer goods are the ultimate consumer
Its consumers are the manufacturing and industrial units.
Market extension
The market of such goods is very large and extensive.
The market of such goods is not so large and extensive.
Number of costumers
Number of customers for consumer goods is very large.
Number of costumers for industrial goods is generally limited.
Number of demand
The demand of consumer goods is called autonomous demand or direct demand.
The demand of industrial goods is called derived demand or indirect demand.
Introduction
Most producers do not sell their goods directly to the final users, between them stands a set of intermediaries performing a variety of functions. These intermediaries constitute a marketing channel. So, marketing channels are a set of interdependent organizations (intermediaries) involved in the process of making a product or service available for use or consumption by the consumer or business user. A channel of distribution is the path a product takes from the producer or manufacturer to the final user.
Importance of Distribution Channels
Distribution channel reduces the cost of any transaction by routinisation of purchasing decisions.
They act as communication agent which often guide the consumers in right direction to fulfill their wants.
A distribution channel is important for understanding the logistics of the business.
It helps in managing, planning, producement, transporting and storage of products.
They help to reduce the storage cost.
Functions of Distribution Channel
The main functions of distribution channel are
Contact between Producer and Consumers
Through distribution channel producer comes into the contact with the consumer, which is useful to collect some important information regarding product and behaviour of the consumer.
Satisfaction to the Consumer
Distribution channels provide satisfaction to the consumer by providing services and by supplying products in different varieties, colours, sizes and according to fashion.
Transferring the Title
Distribution channel materialises the transfer to product's title. Title is transferred through sales and purchase. It delivers right product, at right place, at right time and at right price to the consumer.
Fixing Prices
The institutions functioning as distribution channel assist the manufacturer and buyers in determination of price.
Types of Channels of Distribution
The various channels used for distribution can be described as follows
Conventional Distribution Channels
These distribution channels assume that each enterprise working in the channel is separately owned and operated concern.
They are as follows
(i) Direct Channel or Zero Level Channels When the manufacturer instead of selling the goods to the intermediary sells it directly to the consumer, then this is known as zero level channel, e.g., retail outlets, mail order selling, internet selling.
Manufacturer \[\xrightarrow[{}]{{}}\] Consumer
(ii) Indirect Channels when a manufacturer gets the help of one or more middlemen to move goods from the production place to the place of consumption, the distribution channel is called indirect channel.
Following are the more types of it.
(a) One Stage Channel of Distribution In
This case, there is one middleman, i.e., the retailer. The manufacturers sell their goods like refrigerator, air conditioner, washing machine, etc. to retailers who in turn sell it to the consumers.
Manufacturer \[\xrightarrow[{}]{{}}\] Retailer \[\xrightarrow[{}]{{}}\] Consumer
(b) Two Stage Channel of Distribution In this case, there are two middlemen namely, wholesaler and retailer. This is applicable to products where market is spread over a large area, value of individual purchase is small and the frequency of purchase is more...
Introduction
Pricing is the most crucial aspect of marketing management since it has significant economic and social implications. Price is the amount of money and/or other item with utility needed to acquire a product. The businessmen want to get the highest possible price for the products, he sells whereas the consumer wishes to pay the least possible price for his purchases.
Importance of Pricing in Business
Price determines the demand of a product.
Prices also help the business system in allocating its scarce resources economically.
In a free market system, price mechanisms consider able impact upon the competitive strength of different firms.
Price is very important element in determining both the revenue and profit of the enterprise.
Pricing can regulate the competition in the market.
Price affects the total sales, total revenue and the total profit of the organisation.
Factors Affecting Pricing Decisions
Pricing decisions can be affected by two factors which are as follows
Primary Factors
Demand of a product
Cost of a product
Secondary Factors
Characteristics of a product
Aims of the producer
Benefit perception
Marketing method
Characteristics of consumers
Business traditions
Economic and political environment
Governmental laws or regulations
Delivery route of the product
Market competition
Discount
Sometimes companies offer different types of discount to boost the sales.
They are
(1) Cash discount
(2) Seasonal discount
(3) Trade discount
(4) Quantity discount
Most companies will adjust their list price and give discounts and allowances for early payment, volume purchases and off-season buying.
Types of Pricing Policies
Pricing policies can be categorised as
Variable Policy
It is a marketing approach that permits different rates to be extended to different customers for the same goods or services. This pricing policy is applicable in retail trade.
One Price Policy
It is the pricing strategy in which the same price is offered to every customer who purchases the product under the same conditions. A one price policy may also mean that prices are set and cannot be negotiated by customers.
Different Ways of Price Policy
Different ways of price policy are as follows
Based on Flexibility
One price policy flexibility
Price policy
Based on Characteristics
Predictory pricing policy
Value line price policy
Complete line pricing policy
Leader price policy
Market penetration pricing policy
Psychological price policy
Unit price policy
Loss leader pricing policy
Based on Price Level
Union competition pricing policy
Below the market price policy
Above the market price policy
Based on Geographical Ground
Some delivery pricing policy
Regional delivery pricing policy
Center-based pricing policy
Production center pricing policy
Process of Pricing
Steps in setting a pricing policy are
Step 1 Selecting the pricing objective. more...
