Marketing may be defined as the collection of activities undertaken by the firm to relate profitability

to its market. Marketing in the modem context goes beyond its immediate role as a process through
which exchange of goods and services takes place and is viewed as an integral part of the total socio-
economic system which provides the framework within which activities take place.

Contents :

1. Meaning of Marketing

2. Role of Marketing

3. Current Concepts in Marketing

4. Growth of Marketing

5. Marketing Skills

6. Marketing Success

7. Market Failure

A market is a social arrangement that allow buyers and sellers to discover information and carry out
a voluntary exchange of goods or services. In economics, the term market is used to refer to the
aggregate demand for commodity and the conditions and forces which determine prices.

In management, on the other hand, market is described as the institution that performs the
marketing functions and acts as the intermediary between buyers and consumers. In everyday usage
the word ‘market’ may refer to the location where goods are traded, sometimes a market place.

Meaning of Marketing:

Marketing may be defined as the collection of activities undertaken by the firm to relate profitability
to its market. Marketing in the modem context goes beyond its immediate role as a process through
which exchange of goods and services takes place and is viewed as an integral part of the total socio-
economic system which provides the framework within which activities take place. It is, therefore,
imperative to understand the total structure of the society in order to gain an insight into the true
character of the marketing system.

Marketing involves the performance of operation in a business system. It includes those operations
that determine existing and obtained changes in the market. It also includes those operations that
influence existing and potential demand. It is concerned with all activities that are concerned with
the physical distribution of goods and their exchange in the market place, including channel of
selection, transportation, shipping, warehousing, storage, inventory control and so on and so forth.
Thus marketing covers a wide range of interrelated business activities that enlarge the role of a
marketer from one of selling, what has been produced, to one of influencing, what is to be produced.
The main concern of marketing is to identify and satisfy specific customer needs by means of specific
products or services; wherein lies the key to profit.

The term marketing can be broadly described as:

(i) Micro-marketing:

Micro-marketing may be described as the process of formulating and implementing certain strategies
by a firm that ensures flow of need satisfying goods and services at a profit, Micro-marketing is
responsible for effective performance of the strategies of product planning pricing, promoting and
distributing.

(ii) Macro-marketing:

Macro-marketing is concerned with how effectively a society uses its resources and how fairly it
allocates its output of goods and services. Macro-marketing is responsible for effective performance
of functions like information function, equalising and distribution function and centralised exchange
function.

Marketing environment refers to external factors and forces that affect the company’s ability to
develop and maintain successful transactions and relationships with its target consumers.

The marketing environment is also divided into two parts:

(i) Micro-environment:

Micro-environment begins with the company’s environment. It implies the factors and forces in the
immediate environment which affect the company’s ability to serve its market.

(ii) Macro-environment:

Macro-environment refers to those factors which are external forces in the company’s activities and
do not concern the immediate environment. Macro-environment are uncontrollable factors which
indirectly affect the firm’s ability to operate in the market effectively.

Role of Marketing:

Marketing innovations and technical changes now occur at an ever increasing rate in the field of
FMCGs and electronics. Industrial products, however, in the industrial field are often a case of
changing technology. The needs of consumers undergo a change.

New competition is coming from all directions—from global competitors eager to grow sales in new
markets; from online competitors seeking cost-efficient ways to expand distribution; from private
label and store-brands designed to low price alternatives, and brand extensions from strong
megabrands leveraging their strengths to move into new categories. The global market pattern is
made possible by the development of international transportation and communication system and
liberalisation policies adopted by different countries at present.
Modem marketing has much deviated from the past and undergone radical changes in recent years.
Marketing is a managerial function, primarily economic, consisting of activities like research into
markets, demand forecasting, product planning, pricing, distribution and advertising, organised into a
system of interdependencies and directed at yielding profits to the enterprises, providing satisfaction
to the consumers and indirectly benefiting society at large.

Marketing has to play an important role. It is the most important multiplier and an effective engine of
economic development. It mobilises latent economic energy and thus is the creator of small
business. Marketing is the developer of the standard of product and services.

Besides, economic integration is made possible through proper distribution of the product.
Distribution is the key area in modem marketing. The importance of distribution will become clearer
when it is realised that most of the marketing failures are in fact distribution failures.

Shortage of raw materials, escalating cost of energy, high level of pollution, changing role of
government in environmental protection are some of the dangers that the present world is facing on
environmental forces. Advances in technology are an important uncontrollable environment for
marketers. Technological progress creates new avenues of opportunity and also poses threat for
individual companies.

Certain types of technological developments by competitors may result in loss of markets.

Markets are efficient when the price of a good or service attracts exactly as much demand as the
market can currently supply. The chief function of the market is to adjust prices to accommodate
fluctuations in supply and demand in order to achieve allocative efficiency. An economic system in
which goods and services are exchanged by market functions is called a market economy.

Current Concepts in Marketing:

Social Marketing:

Philip Kotler has defined his social marketing concept as a management orientation aimed at
generating customer satisfaction and long-run consumer and public welfare and as the key to
satisfying organisational goals and responsibilities. Social marketing is the application of marketing
theories and techniques to social situations.

Over Marketing:

It constitutes the striving by a firm to generate increased sales while neglecting quality control,
production efficiency and cash flow management.

Meta Marketing:

It is the synthesis of all managerial, traditional, scientific, social and historical foundations of
marketing and includes specialization on the inter-relationships of mental and physical processes to
supplement the facts and empirical observations of marketing practice.

De-marketing:
It is a situation which may come about as a result of temporary shortages occasioned by short-term
excess demand for a company’s products. De-marketing is that aspect of marketing that deals with
discouraging customers in general or a certain class of customers in particular on either a temporary
or a permanent basis.

Remarketing:

It takes the form of finding or creating new uses of users for an existing product. Actually, marketing
is a method by which new type of satisfactions are created for old products. But de-marketing is the
opposite of the marketing concept, while at the same time remarketing creates new satisfaction for
the consumer.

Relationship Marketing:

It is the process of building long-term trusting win-win relationship with customers, distributors,
dealers and suppliers. It also promises and delivers high quality efficient services and fair prices to
the other party over time. It requires building mutual trust and rapport between the business and its
customers.

Controversial Marketing:

Negative demand is common to many products. Controversial marketing is that type of planned
marketing which aims at causing demand to rise from negative to positive, and eventually equals the
positive supply level. Here the marketer has to take necessary measures to counter it.

Stimulational Marketing:

Stimulational marketing is that type of marketing which transforms a no demand situation into one
of positive demand by connecting a product to some existing need through change of environment
or spread of knowledge about it.

Developmental Marketing:

Developmental marketing relates to innovation. The marketing has to bring out altogether new
useful products or improving existing products so as to have new uses.

Growth of Marketing:

In the growth of marketing, the marketing era began virtually after the Second World War. Producers
found that consumers in general, particularly in the advanced countries of the west, had their basic
needs more or less satisfied. They had become more selective about their purchases. It was a
challenging situation.

Marketing came to the rescue by helping to find out what goods were needed the most, who needed
them most, in what quantities they were needed and so on. Manufacturing organisations set up
separate departments of marketing which provided guidelines to the plants about the right kind of
products, right quantities and right prices.
During this period, special importance came to be attached to markets and consumers. At present,
marketing starts with assessing the needs of the consumers and then tries to meet them via product
planning, pricing and other ways.

The Modern Attitude:

The traditional attitude to marketing has long been that it is nothing more than always selling the
product in the factory, provided that price, delivery, and quality are satisfactory. Any supplies left
over from the home market are disposed off in export markets, perhaps at lower prices and with
diminished profits.

This attitude may well derive in part from our early lead in the industrial development, when home
demand was rising rapidly and the rest of the world was also eager of foreign goods. By a better
understanding of customer’s problems and opportunities, the supplier can see better, how to
reshape and develop his own business and sometimes reshape the market.

He can better judge not only what to make and sell today but what is likely to be in demand
tomorrow and what programme of retooling, process and plant changes and programmes of
research and development he must set on facts. In the past, price was the dominant factor. This is no
longer true. Other factors such as design, styling, performance, service etc. increasingly important
and personal contact being outstanding.

Marketing Skills:

With increase of competitors, industries in India have been experiencing decline in their operations
and their market share. Marketing skill is, therefore, a remedy to be learnt by the industry to face the
onslaught of competition.

Effective sales of products require the following skills on the part of the seller:

(i) Skill to Retain the Consumer:

Marketing process does not end with one time sale of the product. Repeat business is necessary for
continuance of the product. Consumers come from different strata of society. Their attitudes are
influenced by their cultural and social background. Collecting data on market environment is an
important feature of marketing.

Different consumers have different expectations and attitudes. Gap between expectations and their
fulfillment leads to frustration. Producers have been initiating a series of measures to narrow this
gap. To retain your existing consumer base, you must constantly make efforts to render personalized
service to your consumers.

(ii) Creative Selling:

Here the producer has to aggressively seek to satisfy the consumer needs. This requires a sound
knowledge of the company’s product as well as understanding of the consumer. Marketing starts
with assessing the needs of the consumers and then tries to meet them via product planning, pricing
and other ways.
It is preoccupied with the need to convert the product into cash. Creating selling requires both
persuasive and informative efforts on the part of the salesman. Creating selling often implies
educating and influencing the immediate behaviour of the prospect.

(iii) Skill to Overcome Consumer Resistance:

Successful marketing strategy should result in actual sale of the product to the consumer. Unless the
prospective consumer is convinced about the suitability of the product for his needs, he would not
buy it. The salesman has to use convincing arguments. He must be a good advocate for his company
and the product.

He has also to be aware of the competitive products and their weak points. Before deciding to
purchase, the consumer may raise many queries, doubts and even objections. The salesman should
respond persuasively and skillfully to stress the benefits of the product and how it will satisfy the
consumer’s need.

(iv) Interpersonal Skills:

The skill of the interpersonal communication is considered to be the most important of all the skills
which makes for healthy relationships with the people. It represents the type of communication that
involves two persons communicating directly. The people who are involved in actual delivery of the
product to the consumer have to acquire interpersonal skill of a very high order. They have to be
enthusiastic, full of energy and should have a liking for interacting.

(v) Convincing Skill:

The salesman not merely sells the product but in the course of the deal he also provides his customer
with much knowledge about the product, its features and uses as also about competitive products
available in the market. In the case of an industrial product, a salesman is virtually a technical expert.
So a salesman seldom makes a cut and dry proposal for exchange.

Marketing Success:

A business organisation has to decide its marketing objective on the basis of available marketing
opportunities and has to work-out a combination of various plans for achieving the marketing
objective viz. to maximise its market share and in the process earned targeted level of profits. In
marketing of products four basic strategies could be thought of. These are: (i) Market Penetration, (ii)
Market Development, (iii) Product Development, and (iv) Diversification.

Market penetration means entering new segments of the market. Market development implies
expanding network to cover larger geographical area. Product development means development of
innovative new products to meet new needs of the consumers.

Diversification implies development of altogether new products for selling them to new markets.
Finally, the success of marketing depends upon its ability to know and understand the environment
in which it operates and its ability to take advantage of the changes in market conditions.

Generally, the success of a business organisation is a product of several forces influencing the
organisation’s working. These forces constitute organisation’s environment in which it has to
function and market its products. Some of these forces may have a favourable effect and may offer
opportunities. On the other hand, some forces may have an unfavourable effect and may pose
threats. Some of the major forces are—economic forces, demographic forces, political forces,
technological forces and consumer movement forces.

The profits of a business are totally dependent on marketing. Marketing is doing what it takes to
convince enough customers to pay the necessary price for the products to produce the desired
profits for the business.

Let us discuss some important basics the business owners can use to greatly improve their marketing
success:

1. Effective Marketing:

The primary reason any customer chooses to buy the particular company’s products is because of
effective planning. The marketing process is the sequence of events and actions that coordinate the
flow of goods and the value adding activities in the marketing system. Marketing is a matching
process by which a producer provides a marketing mix that meets consumer demand of a target
market.

The marketing process brings together producers and consumers for exchange of the product. It is
influenced by competition, government laws and policies, media of communication and consumer
advocates. The marketing manager is a mixer of all marketing ingredients and creates a mix of all the
marketing elements and resources.

The marketing mix offers an optimum combination of all marketing ingredients to maximise
company’s objectives viz. profit, return on investment, sales volume and market share. Marketing is
culminated in sales, when the customer’s valuation of their benefits exceeds the price of the product.
The marketing manager can generate successful sales only when he completes positive product
development, price, positioning and promotion. To succeed in marketing business he must focus on
marketing at all times.

2. Capability to Relate Advertising with Marketing:

Advertising is a form of mass communication. It is essential for the success of any business in modem
market economy. Optimization of sales and maximisation of profits are the twin objectives of every
modem business firm. Advertising helps to introduce a new product. It avoids market glut. It assists
the manufacturers in facing competition. It increases sales.

It increases brand image. It increases and quickens the turnover. It assures more economic selling
and it helps the salesman to reach the prospects with least effort. To succeed in marketing,
businessmen do not confuse advertisement with marketing. Advertisement is only a part of the last
marketing step. A businessman will often think that advertising is all there is to marketing.

3. Avoid Imposing your Opinion on your Potential Customers:

It is the consumer who determines what a business is. What the customer thinks he is buying, he
considers what value is decisive. It determines what a business is, what it produces and whether it
will prosper. The manufacturer must keep a constant touch with the consumer/customer.
He must plan his production and distribution to suit the consumer’s convenience rather than his
own. A sound marketing programme should start with a careful quantitative and qualitative analysis
of market demand for the product. Every manufacturer is responsible for respecting the value
judgment of the customer. This will force a permanent bond between the manufacturer and the
customer. Focus on fulfilling the perceived wants and needs of his customers from their perspective
so that he will greatly increase the number of customers.

4. Learn all about your Potential Customers:

Different customers have different expectations, and different attitudes. They come from different
social, economic and cultural background. Market consists of the existing customers as well as
potential ones. In a highly competitive market economy; it is imperative to learn and analyse the
mindset of customers especially potential customers who have yet to be attracted to come to your
fold.

Changes are constant as far as the consumers are concerned. Changes are often witnessed according
to the consumer’s taste, behaviour, fashion and liking. A marketer must have details of facts and
figures relating to potential customers to get a desired result in the stage of competition.

5. Capability to Screen out Undesirable Customers:

There are different types of customers. Each customer has his own mind. Customers are not alike.
The marketer has the right and obligation to determine which potential customer you (salesman) will
agree to serve. The marketer should screen out undesirable customers early so you can focus more
attention on customers you want to serve.

A marketer may not know how to select desirable customers from the pool of potential customers.
As a result, the marketer often spends too much time, money and energy trying to deal with a
handful of hard-to-please customers who frequently demand low prices at the expense of better
customers, who go elsewhere because they were ignored. The marketer should know the main
criteria to help you to decide which potential customers are acceptable.

6. Know and Appreciate Repeat Customers:

The customer is the pivot around which the marketing operations revolve. To get success in the
market, the marketer has to supply not only the right type of goods at the right time and place but
also should not ignore the existing repeat customers. Repeat customers present a wealth of
opportunities to the business. The existing customers may know better about the product.

They propagate good impression about the product to others. They frequently provide excellent
feedback to the company. They also provide an excellent reference and referral service. They are the
least expensive and most likely source of additional business. The unnecessary departure of existing
customers may cause substantial damage. The upset and dissatisfied customers may complain to
others. Therefore, the marketer must stay close to the existing customers and try to learn as much as
possible from them.

7. Create a Positive Identity that is Distinct from Competitors:

Most of the customers need a good reason to choose product over others. When the marketer
understands his competitors extremely well and positions his products tor positive customer
comparison, he can maximise his sales. This can be achieved through a good system of distribution.

The product must be compatible with current environment and social standards and it must fit into
the existing product facility. The marketer should focus the qualities and merits of the product in a
better way than other similar products thereby the competitors can be defeated by capturing their
share of the market.

8. Knowhow to Deal with Customers’ Emotional Process:

In many cases the consumer is unconscious of the real reasons for his purchase. The marketer seeks
to determine subconscious reasons why consumers buy given products or atleast the reasons that
they are unwilling or unable to express clearly. Generally, a consumer is unwilling to disclose the real
reasons for buying a product even if he is fully aware of them.

Reasons behind some purchases are so many and so interwoven that it is almost impossible to isolate
and measure them. In reality, the entire buying process is governed by the emotional process. I he
marketer should know and feel the emotional connection his regular customers will attach to his
business. The marketer succeeds when he knows how to deal with this emotional process and
permits the customers to complete this process through final payment.

Market Failure:

Market failure is a term used by’ economists to describe the condition where the allocation of goods
and services by a market is not efficient. The concept has been traced back to the Victorian
philosopher Henry Sidgwick. The first known use of the term by economists was in 1958. Micro-
economists use many different models and theorems to analyse the causes for market failure.

In common parlance when price negotiations do not arrive at efficient outcomes for both sides,
market failure is experienced. This analysis plays an important role in many types of public policy
decisions and studies.

Market failure occurs whenever freely functioning markets operating without government
intervention, fail to deliver an efficient allocation of resources and the result is a loss of economic
and social welfare. From the point of view of society, market failure exists when the competitive
outcome of markets is not satisfactory.

Market failure may be complete or partial:

Complete market failure occurs when the market simply does not exist to supply products at all. On
the other hand, partial market failure occurs when the market does not actually function but it
produces the wrong quantity of a good or service at the wrong price.

Causes of Market Failure:

The market failure can occur due to the following reasons:

1. Market Dominance by Monopolies:

A monopolist in a market can gain market power, allowing them to block other mutually beneficial
gains from trade from occurring. This can lead to inefficiency due to imperfect competition, which
can take many different forms such as monopolies, monopsonies, cartels or monopolistic
competitions. Monopoly does not ensure optimum allocation of productive resources. Further under
monopoly, the MRTxy of the community is not equal to the MRSxy of every consumer.

Thus monopoly is an obstacle to the attainment of Pareto optimality. The monopolist does not
equate the price of his product with the marginal cost of production. In fact, he restricts output and
charges a price higher than marginal cost. Thus the monopolist is responsible for the misallocation of
productive resources and thereby a loss of satisfaction.

2. The Action of the Agent can have Side Effects:

The actions of the agent can have side effects known as externalities. Externalities refer to the
external economies and diseconomies in production and consumption. The presence of externalities
leads to mal-allocation of resources and cause production and consumption to fall short of Pareto
optimality. It leads to the divergence between private and social cost and private and social benefit.

In the real world, both production and consumption are riddled with externalities. Negative
externalities causing the social cost of production to exceed the private cost while positive
externalities causing the social benefit of consumption to exceed the private benefit. When
externalities are present, the market mechanism is likely to fail to achieve an efficient allocation of
societal resources.

3. Nature of Goods or Nature of Exchange:

Some markets can fail due to the nature of certain goods, or the nature of their exchange. For
instance, public goods may be consumed by more than one person at the same time and entail high
transaction costs, agency problems or informational asymmetry. Examples of public goods include
national defence and flood control.

If an antiballistic missile system or a flood control levy is constructed, those behind the shield cannot
be excluded from its protection even if they refuse to contribute to the cost. Even if one could charge
market prices, the indivisibility in consumption of public goods makes the incremental cost of
another participant quite low. In general, all these situations can produce inefficiency and result in
market failure.

4. Factor Immobility:

Regions differ in climate, language, customs, food habits and living conditions. A consumer cannot
overcome these difficulties. He therefore, prefers to stick to a particular place where he has not to
face these problems. Underdeveloped means of transport and communications obstruct the free
movement and similarly inadequate communication system.

The lack of technical education and general education restricts their mobility. Mobility is also
restricted by traditions and superstitions. If the consumer is poor, he cannot bear the expenses of
going from one place to another. Poverty badly shatters his confidence also.

5. Lack of Competition:
The absence of competitors means there is no automatic stimulus to technological advance in a
monopolized market. Because of its sheltered market position, the pure monopolist can afford to be
inefficient and lethargic. The keen rivalry of a competitive market penalizes the inefficient. An
inefficient monopolist does not face this penalty for the simple reason that he has no rivals.

The absence of rival firms and the monopolist’s desire to exploit fully his existing capital facilities
weaken the monopolist’s incentive to innovate. The marketers should always realise that it is
competition which forces businesses and resource suppliers to make appropriate responses to the
wishes of the society.

6. Information Failure:

With the increasing complexity of business, most of the managers are separated from their final
consumers and from the information they need. For ascertaining the future of the marketing
environment, the types of persons whose opinions are important include economists, politicians,
social workers, cultural leaders and the like.

For estimating the company’s market potential the opinions of existing customers and potential
buyers are the most vital. Other group of persons, whose views are also relevant are: the company’s
own sales force, the senior executives of its other departments, suppliers, distributors, dealers, and
particularly retailers of the product in question.

On the basis of information, the executives develop plans and programmes which anticipate, prevent
as well as solve problems related to marketing. In our country, the customer information, product
information and sales information are obsolete, erroneous or incomplete.

7. Poverty and Inequality in an Economy:

Poverty is the common lot of the developing world. Poverty or the state of being poor is a relative
term. The main economic factors responsible for acute poverty are fast rise in population, low
productivity in agriculture, unutilised natural resources and slow growth of employment
opportunities. The social structure in India is also responsible for poverty. The influences of various
social customs and taboos on our people are so pervasive that they have not been in a position to
break the business of growth.

Unequal distribution of means of production and money income are responsible for poverty to a
large extent. Wealth is concentrated in a few hands. The income inequality may be a desirable
feature of the modern capitalist society, but it is considered bad on the ground of social justice. In
India, 20 per cent of the population receives just 9.2 percent of India’s income, while the richest 20
percent receive 39.3 per cent of country’s income.

The existing inequality plays a discriminating role in respect of labour employment, productivity and
social justice. This aspect of inequality greatly hinders the development of industrial society and
wage earners. Inequality’ appears to be fast advancing in recent ye