MARKETING

What exactly is marketing? What role does it play in our lives and of what importance is it to us? To me in the beginning it seemed like a complicated topic and to the others a dry one, but as I read on this topic I found that whether we like it or not, we are all a part of this big game. We cannot escape from it, and at present it is one of the most happening things in the business industry. We are usually ignorant about how a product comes to us; we don't give much thought to it. We merely go to a shop buy the product and use it. If we study closely we would realize that there's a long process before a product can be manufactured and after manufacturing how it finally reaches us. In this talk I would like to give everyone here a broad idea of how marketing works. So let's begin with the definition of marketing: Marketing can be defined as a system of integrated business activities designed to develop strategies and plans to the satisfaction of the customer wants. This can widely be understood as the activities that are required to get the product in the most efficient way to the customer. This could lead to the common misconception that marketing means to sell the product by clever ways or sell them anyhow or at the most the art of selling. But actually it is something more than that; it is the art of making the right thing and getting it to the right people in the right way or the most efficient way. By the end of this talk, once the areas it deals with are covered, the importance of marketing will become obvious. Before I move on to my 1st topic, let's go through a sub-definition of marketing. Marketing is a business function that identifies unfulfilled needs and wants, defines and measures their magnitude, it decides which target market its organization should serve and gear everyone in its organizations to serve the customer. MARKETING MANAGEMENT Marketing management is the process by which marketing works. They have certain core concepts to study and follow: 1. Needs and demands 2.Products 3.Value, cost and satisfaction 4.Exchange and relationship 5.Market 6.Marketers and marketing. Let's have a study of each of these concepts briefly. 1. NEEDS AND DEMANDS - this basically implies the consumer demands. Even before launching a product it is very important to do a market study and a consumer survey. In big cites where lots of products and goods are consumed, there are people who go a door to door inquiring about the products they use. They ask questions like what brand soap or toothpaste do they use and why. Supposing on being asked which brand toothpaste they use, the survey could also contain which color (white or blue) toothpaste they use. This is called market survey. According to the information they receive, the company makes appropriate decisions to change or improve a product. The needs and demands of products essentially depend on the place, nature and living style of the people. Like what can be required in India may not be required in America, and what is required in America cannot be afforded by Indians. So every market works differently according to the needs and demands of its people. The ways to find out customer demands are either through practical questioning or through the study of sales. Study of sales is done by plainly observing the volume of a certain product sold (white toothpaste or blue toothpaste) over the past weeks or months and accordingly increase or decrease the production of the certain product.

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The better a company understands its people, their psychology, their financial capacity, the better they can serve the customer to his satisfaction. Unlike earlier, it is now the buyer's market, therefore the demands of the customers are of ultimate importance. The attitude of the market is now not as relaxed as it used to be, now they want to serve the customer. 2. PRODUCT - product is itself the central unit of the entire marketing system. Without the product this whole chain of distribution would not have been necessary. For any product to last in the market its quality must be high and the price reasonable. If any product does not work in the market at all one of the reason could be that the market survey has been insufficient in which case it does not satisfy the needs of the customers. The other reason could be that the quality is low in order to make it a low cost product or if the quality drops with time. In such a case, due to its name the product will sell while but sooner or later its sales rate will drop. The third and most dangerous for the cessation of demand of a product is competition. If the competitive item is superior in quality and more affordable, it can result in the failure of a longstanding product. Therefore every manufacturer and the marketer have to always be alert, lest another product takes over the market. They need to always come up wit interesting schemes that can tempt the public. A product is not necessarily an object; it can also be a scheme, an exchange offer, a holiday trip or even an idea. All these things can be referred to as products. From the sales volume observed, the products sales go through a typical pattern in most cases. Every product moves through a life-cycle of 5 stages. Every stage and its duration may vary according to products. 1. Introduction: This is the period when the product is getting known, and introduced in the market through various methods. This first impact that is laid on the market and public are very important and play an essential role in the success of a product. When the companies promote it well through a lot of advertising and publicizing, then the product starts of well. But ultimately the product's performance designates its real success. 2. Growth: This s the phase when the product is accepted by the consumers and traders. If the traders and distributors feel convinced about its success they welcome the product. In this phase good and substantial advertising and marketing leads to more profit. 3. Maintaining: In this stage the product faces competitions. It has to fight with big and established companies, it becomes a tough up-hill path. Here their advertisements often depict modesty which attempts to touch the public and don't reveal about their product much but rather indicate about it subtly. The manufacturers have to spend extra time, energy and money to modify their product for improvement. 4. Saturation: This occurs when the product is settled in the market and is being consumed by people. There are only replacement sales; replacement sales would mean, I would buy a soap or a toothpaste only if I am on the verge of finishing one, it is not that I would like to go on stocking soaps or toothpastes in my house. Here the prices begin to fall to keep the people going and rejuvenate their interest in their product. Now the profit margin becomes inevitably very low. 5. Decline: Once the saturation point has reached its peak, the product inevitably enters the decline stage. The sales drop, the competition becomes strenuous; the value of the product slowly drops with time in the market. The companies often cannot afford to keep spending on advertising, thus the product declines and gradually disappears from the market.

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3. VALUE, COST AND SATISFACTION- These 3 share a rapport amongst themselves. When a customer chooses a certain product he has to take into consideration all the three. Let's take an example to illustrate this stage: X works in an office which is 5kms, from his home, he has to travel everyday from his house to reach his office. X has several options in front of him as choice of transport: bicycle, motorbike, car, taxi, bus. This is called the product choice set. Now he has to judge what is of maximum value, the transport facility which is most economical and which will satisfy his needs. Value is a subjective thing which every individual chooses for himself. If X wants something which is very economical then he would choose a bicycle, which is less safe, more effortful and as well as very slow. If X wants speed then he would choose a car. Now X has to see whether he can afford a car or no, because a car costs much more than any of the options available and also maintaining it after buying, so he has to consider the cost. So, now we can see the concept of value, cost and satisfaction. 4. EXCHANGE AND RELATIONSHIP- Marketing takes place when people decide to satisfy their need through exchange. When there are 2 parties and one has something which is of use to the other, then there is an exchange. In globalization most often there are tie-ups, this is a form of exchange and also securing a safe relationship. When the Honda Company which had become successful in Japan, it then wanted to expand and globalize, so it ventured into countries like United States, Singapore and also India. It tied up with the partner of then existent company: Hero, and formed Hero Honda. Their successful tie-up resulted in the benefit of both companies. Honda ventured into world market while hero got a better boost with its help. At present this company has sold over 14 million vehicles all over the world. The same thing can be said about the Maruthi Company which got tied up with the Suzuki Company forming Maruthi Suzuki, in India they are the largest selling automobile company. Thus exchange done with good partners can be of great help. If one party is seeking exchange more than the other party, we will call him marketer and the other party the party the prospect. 5. MARKET- Market is the place or lieu where exchange and business takes place. It is the ground for the selling and buying. The study of the market is essential for the launching and the success of any product. In this, statistics plays a great role. For keeping track of sales, profit during years, statistical comparisons can help the company to make faster and logical decisions quickly. The market is something very uncertain and inconsistent. Some product may do well today and may be very well of the market the very next. To be successful one has to keep track and move with the need of the market. 6. MARKETING AND MARKETERS- The skill of making the right things, making them rightly available to the right people. It is the human activity taking place in relation to market, getting the knowledge and information to people by various means. The people who are part of decision making are the managers and the marketers; they know how and where the product will be most consumed. Their prime worries are: quality, pricing, packaging, branding and publicizing. We'll go into the details a little later to see how important these can prove.

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Pricing: It is essentially the thing of interest since it generates revenue or income, it has to be done tactfully in order to not disappoint the crowd and yet make a profit. Economists define price as the exchange value of a product or service through the medium of money. Any change of price strikes the customer immediately and makes him curious for the reasons, whether less or more, he gets suspicious. He dislikes the idea of paying extra, and doubts the success of the product if the price falls. Pricing label expresses the value of a product. An exchange of goods can take place only if the buyer and seller agree on a price. The price of any product is likely to vary depending on the condition of the market and demands. Some label their products very high to show that they are of a higher class, and the other products of the same type are forced to quote as high as the others so that the customers value their products also and don't doubt their product. At the planning and decision making level, much thought has to be given to appropriate pricing. MARKETING MIX Marketing Mix is the method used for executing the important decisions that have been taken. Particular targets are set and the planning to work towards them to attain the target is called the marketing mix. This is comprised of 4 main elements: Product Mix, Price Mix, Distribution Mix and Promotion Mix. Each of these elements are an entire area by itself and comprise of smaller components. Product Mix: as we have seen earlier, the product is the central unit of our entire marketing process. In the product mix, the main decisions that determine the product are taken. One of the main components is service after sale; this is an important part of the sale of a product because it can determine your opinion about a particular company. As long as the guarantee period of a product lasts, it is the duty of the company to serve you until you are satisfied. At times, irrespective of the warrantee period, when the company gives you good service after your purchase, your opinion and esteem for the product is automatically raised, and you are likely to spread your good experience around you, which serves the company as an advertisement or a promoting system. Their good service proves that they actually care to give you the best, and not just sell their product in nay condition. The other thing that falls under the product mix is brand. This again has something to add to the success of a product the brand name identifies a product in the eye of the consumer. It also simultaneously makes itself unique by its name showing that it stands or can be recognized by a certain particular name. if the brand name is catchy and wee chosen it can help immensely in advertising and promoting the product. Once the brand name clicks and catches people's attention, it becomes part of their active vocabulary even without revealing it. The best example is: what we call Scotch tape is not the exact word for it, it is actually called cellophane but now the common word for it now has become scotch tape. The other examples are the use of the words: Band-Aid, Fiberglass, and Velcro. There is an interesting example of how a brand name becoming a part of the people's active vocabulary: in Indonesia the auto-rickshaws are made by the Bajaj Company like the Indian ones. So there instead of calling for an "auto" they call for a "bajaj", unlike in India we call them simply "autos".

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Often the brand of a certain product that breaks through the market is remembered and referred to later on, and it is does not have to be only a brand, it can be something which happens in day to day life also.: Like for example: Who stepped first on the moon? Everybody would know the answer…Neil Armstrong. But now if I were to ask you who was the second to step to step on the moon? Oops! Not many people would remember the answer to that! Packaging is another part handled by the product mix; packaging not only determines the look of the product but also protects its quality. Good appearance given to a product attracts the public's attention. As far as the practical part of packaging is concerned, we would have generally noticed that foreign or imported goods are always better packed than Indian ones, especially in food products, at least they seem to. This can affect the reputation of a company in a good or a bad way. So, these are the things handled by the product mix as under marketing mix. DISTRIBUTION MIX Distribution mix is the delivery and distribution of a product. Delivery must be done in the safest possible way in order to not damage the product and also not add to the cost of the product. The products need to be appropriately distributed in order to serve the places where it would be most in demand. The distributors who take charge of this activity, study and know how exactly spread the goods in order that they sell the best. In this transportation affects the price of a product in a big way. We would have noticed this when the moment the price of petrol or diesel increases, the price of certain product also increases. The main products which are immediately are the raw material products, especially the vegetable prices soar up immensely. On a normal day a kilo of tomatoes would cost around 7 rupees, and after the hike in the fuel the price goes up to as much as 20 rupees. And when the fuel prices increase too much, then there are immediately transport strikes, a very common site in India. Transport costs have to be always kept at the minimal. To avoid extra expenditure, trucks transporting goods avoid the express roads in order to avoid the toll. Efficient distribution of a product can play a big role in its success by getting the product at the right time to right people at the time of their need. PRICE MIX Price determines the value of a product as already seen earlier. So, deciding and fixing any price for a product is very important in order that the product gets the required profit as well as is affordable. Keeping attractive discounts often seems to help. When a stock clearance is needed, big posters are put up to announce the discounts. As soon as the word 'sale' strikes our eyes, we are attracted to at least 'see' what is offered and then the tactful salesman tries his best to make us purchase something. Another trick applied in discounts is 'up to 70% off'. So we go to the shop looking foe the thing which is 70% off, but we never find anything of that sort and finally end up buying something which has only 15% off. These days very often we hear 'bilkul muft', but before getting into the temptation one should wait and think that nobody is waiting to give free products, so it means that there is much more to it than we can actually see.

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PROMOTION MIX Promotion mix contains publicity, advertising, public relations and demonstrations. Advertising and publicity is a vast topic and can be itself treated as a subject, so I'll come to it a little later. Public relation with the customers has gained importance unlike earlier when the customers were hardly cared about. Live demonstrations in public places like shopping malls and public places tend to attract many people; in Pondicherry we see many of them in Grinde and Nilgiris. Some are entertained by these demonstrations and some are also convinced by them. Because these demonstrations are more convincing to the customers because they can virtually see what is happening instead of reading about it or being told about it. Here I would like to give an incident which happened to me. Once me and my friend went to Nilgris, there outside a man had put up a small demonstration. He was trying to sell packed sausages, which once bought had to be just fried and then could be eaten without any unnecessary ingredients. To convince the people he had fried some sausages and he even let us taste them. We liked it and bought a packet. You could say that this is a one time profit, but we bought this product several times after that. So, now having covered the 4 important mixes, namely Product Mix, Distribution Mix, Price Mix and Promotion Mix, make up the whole of Marketing Mix. This mix is expected to provide maximum customer satisfaction if used and executed well. TECHINQUES OF MARKETING This section covers advertising, media politics, public policies, market study and research. Advertising is the most powerful tool for promotion. It is generally carried through media: newspapers, radio, magazines, posters and the most television. Nowadays advertising is no more a tool but an industry but itself. We would have noticed that 10 years back we were surprised to see when ads were introduced 2 serials or just before the News. Then it gradually grew and we started having ads in the middle of the serials. And at present, the ads take up as much time as 50% of the serial time. In cricket, ads are shown between the overs which are as long as the overs themselves. Earlier when ads were shown in between serials, we could easily switch over to another channel, but in these days they are very cleverly put in order that we don't miss them. Often we see ads coming up in the middle of the scenes or just before the climax or just before a song in the movies. In cricket the replay of a fantastic shot or a good wicket is shown only after a few advertisements. Nowadays in cricket and in private cable channels we would see ads at the bottom of the screen and below that more ads scrolling to the left, we have no other option but to look at them. We at times wonder whether these companies really make a profit because the expenses of putting up these ads are very high. When you have special shows telecasted, every second of the ad costs a fabulous amount. During the Oscars this year, each 40 second was quoted as 1.6 million $. A few years back in 2001 in Doordarshan every 10 second as was quoted from 80,000 rupees to 1,40,000 rupees, depending on the time of the ad to be telecasted. And on special days like New Years or Christmas or a cricket match involving India, the rates could go up to 3,20,000 rupees.

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The fact that the companies are willing to spend so much implies that it must certainly be helping them. What in fact happens is that when the ad and its message keep on going in front of eyes, it enters into us subconsciously. The advertisers basically rub it into us, so that next time we go to the market we are reminded of this ad and we feel like trying out this product. Slogans play an important role, catchy slogans helps the public to capture and attract them towards their product. These are mainly targeted for the family oriented people and the teenagers. When you hear something like 'Yeh dil maange more' or 'Desh ki dhadkan' or 'Tomorrow is mine' or ' Believe in the best', you feel a king of surge in you. So you think by drinking a Pepsi, or riding a Hero Honda vehicle, or wearing a Reebok shoes or watching your favorite serial on BPL will satisfy this surge. So you go ahead and buy this product…these marketing techniques are subtle ways but are directly targeted towards us to buy this products. In the television advertisements another attraction is to bring in film stars and popular sports stars. Most of the public looks up to them in awe and treat them as demi-gods, so whatever products those stars use attracts the public's attention easily. Most of us know that these stars have no authority on the matters they are advertising; surely Sachin Tendulkar doesn’t know much about the substances that go in the MRF tires or does Shah Rukh Khan know much difference between the mileage of a Santro Xing or his own Mercedes, but yet each one of them speaks with full authority on these matters and we are tempted to believe them. Each of these celebrities are paid a huge amount for these ads…Sachin Tendulakar gets paid around 1.5 crores to 2 crores for these. The cost spent in popular stars works magic and costs formidable amounts. A good example to show this magic which used these stars is the Pepsi Company which profited by a huge amount. Coca-cola in the late 50's outsold Pepsi by 10 to 2, which means that for every 10 bottles Coke sold Pepsi sold only 2. Coke had got into the people's mind and had already built up a powerful position, so now what could Pepsi do against such a strong rival? Pepsi took a big risk, it started to target the teenagers as Coke as targeting the adults; so Pepsi brought in stars like: Michael Jackson, Lionel Richie (both famous singers). And in India it brought in Sachin Tendulakar, Vinod Kambli, and Mohammad Azzarudin. Even though Pepsi's target was the teenage market, the market was everybody's. A 50 year old guy who wanted to think that he was all young and a chill out guy like the people he sees on the screen would think that by drinking a Pepsi he would convince himself as well as the others that he is very young. After all everyone likes to be young and be a 'mast' guy!! Within one generation, Pepsi covered this gap by a huge margin. Now Pepsi is just behind Coke, every 10 bottles Coke sells now Pepsi sells 9 bottles. And in supermarkets and eateries Pepsi easily outsells Coke by a sufficiently big margin. These days some of the ads give just the minimal information, they just show one striking sentence or a small part of the ad, this makes the public wonder what it is about or wait for the rest of the advertisement. This technique is used in publicity of films, actors and songs are shown but no the name of the films, this keeps the public's interest constant. Some of the companies do crazy things just to make money and promote their gods. In the cricket World Cup held this year in South Africa, Castrol a non-Indian oil company started selling music albums in the praise of our Indian cricketers as well as our own Motherland, the result…this scheme obviously didn't work out. Hutch a mobile company started showing cricket matches on the mobile's screen and 5 star hotels named their menus and recipes after some the Indian cricketers.

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Statistic report says that the advertisements expenditures had gone up by 250% compared to last World Cup held in 2000 in England, it is amounted to something like 800 crores. We can quite clearly how some of the companies spend so much money on advertising, but does anyone stop to think and ask who is paying for all this expenditure and yet helping them to make a profit? The answer is plain and simple: it is us, the customers, and the public. It is we who are paying for this lavish campaign. A product costs up to 30% more to cover up this expenditure. It would be better from the customer's point of view if the ads provided only information and avoid the extra glamour. But then, it wouldn't attract our attention, therefore this whole drama is necessary so that we see these ads. This industry proves to be succeeding in its endeavors and throbbing with possibilities and innovation. There can be quite a bit of dirty corruption involved in media advertising like some companies and industries buy up a newspaper company for example. If a company buys an entire paper, that paper continuously prints positive comments and opinions on the company. This of course affects common man's understanding and he is really pulled towards that product. Around 4,050 crores are spent every year in print media, which includes newspapers, all magazines, posters, and any other kind of advertisements on printed paper. And these 4,050 crores are in India alone. A marketer as I have already said earlier needs to study the market and how to make the product. For this research and speculation he needs market information. Only with the information can he know the market conditions, requirements and his competitors. So, information technology plays a decisive role in market study. Various reporting systems and data processing units are used for this purpose. Mass communication has become very useful with the help of information by which problems are recognized, defined, and solved. These days through the help of computers it is easier to get a broad view of the market and one's own state of sales. They run different types of simulations to see how the market may vary. When Coke around 10 to 1 years back wanted to bring out another soft drink called New Coke_ it did a research over 2 years and did over 200 000 taste tests and totally spent over 4 million dollars. This surely is no joke, so we can see how much some companies are willing to spend in their researches. These days marketers are expected to anticipate the changes in the market, to understand their risks, opportunities and what strategies to use. They forecast what can happen in the market accordingly alter and modify their product. Separate organizations and departments are set up to collect and analyze and evaluate relevant information. WHAT CAN AFFECT THE MARKET As of now, we have seen how marketers work, what strategies they apply, what tricks they use. Outside of their field of action, there are several issues that can affect the market itself. When certain thins affect the market suddenly, no amount of research can help. Let us see broadly what can gradually or suddenly affect the market. POPULATION: The study of population structure and process is called demography, is an important factor, there are 4 main variables. In the study, namely size, age, sex, distribution need to be studied. A sudden growth in the population can shake the market foundation with overflowing demands. This does not happen all of a sudden,

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but if the physical distribution of population changed, it would certainly affect the market. The food and cloth industry rely heavily on this demography study. To take India's example, with a population of over a billion we are potentially the largest market. Increasing population would in itself mean a growth in the market. Another are that is covered in the population study is also the status. Since 40% of the Indians are below poverty line, the market has to move in such a way as to protect the interest of all the people. Large families usually spend on necessities whereas small ones can afford to spend on comforts and luxuries. So, demography study helps direct the market, and sudden changes can affect a lot in the market. WARS: Wars naturally can affect the market. There's no active promotion done and luxuries never sell. Not only is it a time of emotional trauma but also the loss of many lives and money. A sudden declaration of war brings all the speculation to a naught. The country is forced to spend on its defense and cannot afford imports. The cessation of imports and exports affects any market in a big way and the market research proves no good. So, this brings an upturn in the market and all industries are affected. NATRUAL CALAMITIES: These are not predictable and can up turn the market totally. Obviously in a flood stricken area no one's going to buy Coke or Pepsi. It's very unfortunate and these can do irreparable damage to human lives as well as the market. These are some of the main things that affect the market, and then obviously there can be political misbalance, corruption, revolutions that can have an important hand. MARKETING ETHICS In every king of business, there needs to be trust and fairness. In every exchange, give and take there must be fair transaction and no trickery and cheating. There fore. All are expected to follow marketing ethics to do just and fair business. But in the competition world around us, this does not happen. Marketers often go to extents of the whole truth. Not revealing the whole truth. Not revealing the whole truth, telling white lies, hiding certain conditions, are cheating itself. This is done to fool or to side track the customers, this is against the marketing ethics. So, to protect the consumers and maintain marketing ethics from these possible dangers, consumerism came about. CONSUMERISM Consumerism can be defined as a force that protects consumer rights. There are several organizations which strive to help the consumer from being cheated by the manufacturers and fooled by the marketing agents. There are different set of rules that apply and they have separate consumer forum court which deals with injustice done to the consumers. Consumerism helps the common man to save himself from the onslaught of cheap marketing, false promise and incorrect statements. Consumers become ware of wrong practices like deceptive packaging, hidden conditions and increased pricing. As a result of the aid got by the consumers from theses organizations, marketing practices are forced to become more informative, more sincere, more efficient and

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more cautious about their promises. Marketing thus delivers high standard and can improve the quality of the products. CONCLUSION I would like to conclude by saying that now it's the buyer's market unlike earlier, the attitude of manufacturers and marketers have changed immensely. Marketing for a product has become essential due to competition. in this fast moving world of exchange, where business has become the method of working, it's still up to each individual whether or not to get carried away into this rat race. But at this moment, whether we like it or not marketing is a part of our lives from which we have no practical escape.

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