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Definition of Marketing

According to American Marketing Association, "Marketing is an organisational function and a set


of processes for creating, communicating and delivering value to customers and for managing
customer relationships in ways that benefit the organisation and its stakeholders."
Definition of Management
According to Harold Koontz, "Management is the art of getting things done through and with
people
in
formally
organised
groups."
Management consists of the interlocking functions of creating corporate policy and organising,
planning, controlling, directing an organisation's resources in order to achieve the objectives of the
policy.
Definition of Marketing Management
According to Philip Kotler, "Marketing Management is the analysis, planning, implementation and
control of programmes designed to bring about desired exchanges with target audiences for the
purpose of personal and of mutual gain. It relies heavily on the adoption and coordination of product,
price, promotion and place for achieving responses.".
Marketing management is a business process, to manage marketing activities in profit seeking and
non profit organisations at different levels of management. Marketing management decisions are
based on strong knowledge of marketing functions and clear understanding and application of
supervisory and managerial techniques.
Definition and Meaning of Marketing
According to American Marketing Association (1948) - "Marketing is the performance of business
activities directed toward, and incident to, the flow of goods and services from producer to consumer
or user."
AMA (1960) - "Marketing is the performance of business activities that direct the flow of goods and
services from producer to consumer or user.

According to Kotler (2000) - "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
1. Marketing is an Economic Function
Marketing embraces all the business activities involved in getting goods and services , from the hands
of producers into the hands of final consumers. The business steps through which goods progress on
their way to final consumers is the concern of marketing.
2. Marketing is a Legal Process by which Ownership Transfers
In the process of marketing the ownership of goods transfers from seller to the purchaser or from
producer to the end user.
3. Marketing is a System of Interacting Business Activities
Marketing is that process through which a business enterprise, institution, or organisation interacts
with the customers and stakeholders with the objective to earn profit, satisfy customers, and manage
relationship. It is the performance of business activities that direct the flow of goods and services
from
producer
to
consumer
or
user.

4. Marketing is a Managerial function


According to managerial or systems approach - "Marketing is the combination of activities designed
to produce profit through ascertaining, creating, stimulating, and satisfying the needs and/or wants of
a selected segment of the market."
According to this approach the emphasis is on how the individual organisation processes marketing
and develops the strategic dimensions of marketing activities.
5. Marketing is a social process
Marketing is the delivery of a standard of living to society. According to Cunningham and
Cunningham (1981) societal marketing performs three essential functions:6. Marketing is a philosophy based on consumer orientation and satisfaction
7. Marketing had dual objectives - profit making and consumer satisfaction
Scope of Marketing
1. Study of Consumer Wants and Needs
Goods are produced to satisfy consumer wants. Therefore study is done to identify consumer needs
and wants. These needs and wants motivates consumer to purchase.
2. Study of Consumer behaviour
Marketers performs study of consumer behaviour. Analysis of buyer behaviour helps marketer in
market segmentation and targeting.
3. Production planning and development
Product planning and development starts with the generation of product idea and ends with the
product development and commercialisation. Product planning includes everything from branding and
packaging to product line expansion and contraction.
4. Pricing Policies
Marketer has to determine pricing policies for their products. Pricing policies differs form product to
product. It depends on the level of competition, product life cycle, marketing goals and objectives,
etc.
5. Distribution
Study of distribution channel is important in marketing. For maximum sales and profit goods are
required to be distributed to the maximum consumers at minimum cost.
6. Promotion
Promotion includes personal selling, sales promotion, and advertising. Right promotion mix is crucial
in accomplishment of marketing goals.
7. Consumer Satisfaction
The product or service offered must satisfy consumer. Consumer satisfaction is the major objective of
marketing.
8. Marketing Control
Marketing audit is done to control the marketing activities.
Meaning of Marketing Process
The Marketing Process of a company typically involves identifying the viable and potential marketing
opportunities in the environment, developing strategies to effective utilise the opportunities, evolving
suitable marketing strategies, and supervising the implementation of these marketing efforts.
Marketing process involves ways that value can be created for the customers to satisfy their needs.
Marketing process is a continual series of actions and reactions between the customers and the

organisations which are making attempt to create value for and satisfy needs of customers. In
marketing process the situation is analysed to identify opportunities, the strategy is formulated for a
value proposition, tactical decisions are taken, plan is implemented, and results are monitored.

Steps in Marketing Process


Following are the steps involved in the Marketing Process :Situation Analysis
Marketing Strategy
Marketing Mix Decision
Implementation and Control
1. Situation Analysis
Analysis of situation in which the the organisation finds itself serves as the basis for identifying
opportunities to satisfy unfulfilled customer needs. Situational and environmental analysis is done to
identify the marketing opportunities, to understand firms own capabilities, and to understand the
environment in which the firm is operating.
2. Marketing Strategy
After identifying the marketing opportunities a strategic plan is developed to pursue the identified
opportunities.
3. Marketing Mix Decisions
At this step detailed tactical decisions are made for the controllable parameters of the marketing mix.
It includes - product development decisions, product pricing decisions, product distribution decisions,
and product promotional decisions.

4. Implementation and Control


Finally, the marketing plan is implemented and the results of marketing efforts are monitored to adjust
the marketing mix according to the market changes.

The marketing environment is made up of:


1. Micro-environment and
2. Macro-environment.
We discuss them in detail:
1. Micro-environment:
The micro-environment of the company consists of various forces in its immediate environment that
affect its ability to operate effectively in its chosen markets.

This includes the following:


(a) The company
(b) Companys Suppliers
(c) Marketing Intermediaries
(d) Customers
(e) Competitors
(f) Public

The Company
1. Top Management
2. Finance

3. R&D
4. Manufacturing
5. Purchasing
6. Sales Promotion
7. Advertisement etc

Macro Environment

Demographic Environment:

Demography is the study of population characteristics that are used to describe


consumers. Demographics tell marketers who are the current and potential customers,
where are they, how many are likely to buy and what the market is selling. Demography
is the study of human populations in terms of size, density, location, age, sex, race,
occupation and other statistics.
Income:
Income determines purchasing power and status. Higher the income, higher is the
purchasing power. Though education and occupation shapes ones tastes and preferences,
income provides the means to acquire that.
Life-style:
It is the pattern of living expressed through their activities, interests and opinion. Lifestyle is affected by other factors of demography as well. Life-style affects a lot on the
purchase decision and brand preferences.
Sex:
Gender has always remained a very important factor for distinction. There are many
companies which produce products and services separately for male and female.
Education:
Education implies the status. Education also determines the income and occupation. With
increase in education, the information is wider with the customers and hence their
purchase decision process is also different. So the marketers group people on the basis of
education.
Social Class:
It is defined as the hierarchical division of the society into relatively distinct and
homogeneous groups whose members have similar attitudes, values and lifestyle.
Occupation:

This is very strongly associated with income and education. The type of work one does
and the tastes of individuals influence ones values, life-style etc. Media preferences,
hobbies and shopping patterns are also influenced by occupational class.
Age:
Demographic variables help in distinguishing buyers, that is, people having homogenous
needs according to their specific wants, preferences and usages. For instance, teenagers
usually have similar needs. Therefore, marketers develop products to target specific age
groups.
The youth are being targeted through advertisements and promotional campaigns, stores
are being designed with youthful features, youth events are being sponsored, and even
new technology is developed with their tastes in mind.

The Political and Regulatory Environment


Federal, state, and local bodies can set rules or restrictions on the conduct of businesses. The purpose
of regulation is to protect both consumers and businesses. Businesses favor some regulations (such as
patent laws) while chafing under others (such as restrictions on advertising). The tobacco industry, for
example, has had to learn to live with a federal ban on TV and radio advertising. More recently, many
companies in the food industry have expressed unhappiness over regulations requiring the labeling of
trans-fat content.

The following laws affected business in India:


1. Indian Contract Act 1872
2. Factories Act 1948
3. Minimum Wages Act 1948
4. Essential Commodities Act 1955

5. Securities Contracts Regulation Act 1956 (SEBI Act)


6. The Companies Act 1956
7. Trade and Merchandise Act 1958
Economic Environment
Every day, marketing managers face a barrage of economic news. They must digest it, assess its
impact, and alter marketing plans accordingly. Sometimes (but not recently), the news is cause for
optimismthe economys improving, unemployments declining, consumer confidence is up. At
other times (like today), the news makes them nervouswere in a recession, industrial production is
down, jobless claims are rising,consumer confidence has plummeted, credit is hard to get. Naturally,
business thrives when the economy is growing, employment is full, and prices are stable. Marketing
products is easier because consumers are willing to buy. On the other hand, when the economy is
slowing (or stalled) and unemployment is rising, people have less money to spend, and the marketers
job is harder.
Then theres inflation, which pushes interest rates upward. If youre trying to sell cars, you know that
people facing higher interest rates arent so anxious to take out car loans. Sales will slip, and to
counteract the anticipated slowdown, you might have to add generous rebates to your promotional
plans.
The Competitive Environment
Imagine playing tennis without watching what your opponent was doing. Marketers who dont pay
attention to their competitors are playing a losing game. In particular, they need to monitor the
activities of two groups of competitors: the makers of competing brands and the makers of substitute
products. Coke and Pepsi, for instance, are brand competitors who have engaged in the so-called cola
wars for decades. Each tries to capture market share by convincing people that its soft drinks are
better. Because neither wants to lose share to the other, they tend to resort to similar tactics

The Technological Environment


New technologies also transform the marketing mix in another important way: they alter the way
companies market their products. Consider the revolutionary changes brought about by the Internet,
which offers marketers a new medium for promoting and selling a vast range of goods and services.
Marketers must keep abreast of technological advances and adapt their strategies, both to take
advantage of the opportunities and to ward off threats.
The Social and Cultural Environment
Marketers also have to stay tuned to social and cultural factors that can affect sales. The values and
attitudes of American consumers are in a state of almost constant flux; whats cool one year is out of
style the next. Think about the clothes you wore five years ago: would you wear them today? A lot of
people wouldnttheyre the wrong style, the wrong fit, the wrong material, the wrong color, or just
plain wrong. Now put yourself in the place of a marketer for a clothing company that targets teenagers
and young adults. You wouldnt survive if you tried to sell the same styles every year. As we said at
the outset of this chapter, the key to successful marketing is meeting the needs of customers. This
means knowing what they want right now, not last year.