UNIT

Basics
1
LEARNING OBJECTIVES
After studying this unit, one would be able to understand,
Concept of marketing, market and marketing management.
Significance of marketing.
Different types of markets
Tasks and philosophies of marketing management.
Elements of marketing mix and elements of expanded marketing mix.
Marketing program and marketing strategy
Marketing management functions involved in managing marketing effort.
Global marketing.
Company's Micro and Macro environment.
Marketing interface with other functional areas.

INTRODUCTION
Marketing is the process of transferring goods and services from manufacturer to consumer. Marketing
involves satisfying the needs and wants of the consumer. Market is a place where buyers and sellers come
together for buying or selling goods and services. Marketing management is the management of marketing
activities. The various tasks and philosophies of marketing management are discussed in detail in the next
pages of this únit.

Marketing mix is the mix of four marketing elements. They are product, price, place and promotion. The
extended marketing mix includes people, physical evidence and process.

Marketing program is a mixfure of various marketing plans of the company and marketing strategy is a set
of objectives, policies and rules that guide overtime firms marketing efforts.
The marketing environment of the company can be divided into micro and macro environment. The various
macro environmental factors are - Demographic, political, social, economical and technological factors. Micro

environment comprises offactors such as-suppliers, channel members, competitors, public, customers, etc,.

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 MARKETING MANAGEMENTT

1.2

1.1 MARKETING CONCEPTS AND SIGNIFIGANGE

Q1. (a) Define marketing concept and describe its features.

(6) Define marketing? What are the various functions of marketing'
Answer:
(a) Marketing Concept
as which custo
ne marketing concept is a the operation of a business
philosophy applied to of the business, as
of each function
importance. These needs will govern the separate planning
well overall
P most in
as plan aimed at achieving its predetermined profit objectives". - Arther P Felton

Custoer
by integrated marketing aimed at generating
narketing concept is customer orientation backed
satisfaction as the key to satisfy organizational goals". - Philip Kotler

Features
The four main distinguishing features of marketing concept are,
Customer Orientation
business process begins with
identitying
concept focuses on customer marketing concept states that
Marketing in
the needs and wants of the customers and ends with satisfying them. Business is seen from the customers perspective
at
customer. Customers are placed
marketing concept. All business activities are designed as per the needs and wants of the
the center point and the entire business is constructed around it. The customer-orientation of marketing
concept differentiate
it from selling concept.
2. Integrated Management
In order to ensure customer orientations and customer satisfaction every activity of the business should be integrated
with one another and should be linked with marketing activities.
3. Satisfaction of Customer
of the If company is successful
Integrated management only helps the company in satisfying the needs
customers.
in satisfying customers needs, the company efforts will result in customer satisfaction. The company following marketing
results in customer satisfaction. Achieving customer satisfaction is
concept must make sure that customer-orientation
considered as very essential in marketing concept.
4. Achievement of Organizational Objectives, Comprising Profits
Eventhough, marketing concept focuses on achieving customer satisfaction, it never ignored the significance of
generating profits. Actually, customers satisfaction will automatically increase the profit levels of the organization. Thus,
the above are the four distinguishing features of marketing concept.

(b) Product-oriented Marketing Definitions

According to Pyle'- "Marketing comprises both buying and selling activities".
According Americanmarketing Association'"Marketing is the performance ofbusiness activities that direct the
consumer".
flow of goods and services from producer to
Customer-Oriented Marketing Definition
According to "William J. Stanton'-"Marketing is a total system of interacting business activities designed to plan,
want satistying products and Services to present and potential customer'
price, promote and distribute
Functions of Marketing
The various activities involved in marketing are known as markeng runctions. The functions of marketing can be

broadly classified into,

Merchandising functions
1.
2. DistributionfunctiRps and b
3. Supporting functionsi
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UNIT-1BASICS 1.3
1. Merchandising Functions a2. What are the core concepts in marketing
and what major shifts are smart companies
The various activities which into the
come category making?
of merchandising functions are,
Answer: Feb-10, 02(b)
) Purchasing Activity
Core Concepts in Marketing
The marketing process starts with activity. A The core concepts constitutes the essence of
manufacturer purchase inputs to manufacture
A wholesaler
goods. marketing. These concepts are vital for the success of
purchase goods from manufacturer any organization. The following are the core concepts in
and sell to retailer. A retailer
purchase goods from marketing.
wholeseller and sell to final consumer.
1. Needs, Wants and Demands
(i) ssembling Activity A human need is a state of felt deprivation of some
Assembling is nothing but gathering goods and basic satisfaction. Basic needs include the need for food,
maintaining stock of goods. Usually, marketing clothing and shelter. The needs are not created by a marketer
intermediaries buy goods from two or more sellers as they are the unspeakable part of human biology. During
and in this situations they need to gather and stock the course oftime,a person may develop need for recreation,
all the bought good at one education etc.
particular place.
Wants are desires which specifically satisfies deeper
(ii) Selling Activity needs.
Selling involves transfer of title of goods from seller
Example
to buyer. Sales generate profits to the company.
Demands are wants for any product or a service that
Selling activity includes various other activities like
are supported by an ability and willingness to purchase
-

creating demand, marketing research, choosing the

distribution channel and so on. it. While estimating the demand for product, firms (or a
marketer) need to consider both the preferences as well as
2. Distribution Functions the willingness/ability ofa buyerto purchase it. The marketer
must not only be interested in knowing how many people
Transportation, storage and warehousing activities want their product but also how many actually have the
come into the category of distribution functions.
purchasing power to purchase.
) Transportation 2. Target Markets, Positioning and Segmentation
Transportation facilities add value to the product Target Market
and create place utility. Introduction of new markets, A target market refers to a market segment for which
extension of existing markets, on-going Supply or |a firm formulates its marketing program. It deals with a
products at reasonable prices, providing enhanced homogeneous group of customers. Usually several firms
services to customers are only possible through good are considering the same market segment as their target
transportation and communication facilities. market but each differs from one another in their attempts
that makes them to be viewed in a distinct and attractive
(i) Storage way by prospective customers i.e., each firm uses strategies
The raw materials purchased by the manufacturer and tactics in an efficient manner so as to establish a unique
are stored in one particular place till the time of position in the minds of its prospects (or customers).
production. Positioning
(i) Warehousing A position is the way a firm's product, brand or
organization is viewed relative to their competitors by current
Warehouse are usually located at places from where
and prospective customers.
goods can be distributed to the customers easily as

per their needs and requirements. Segmentation

3. Supporting Functions Market segmentation is a process of dividing the total
market for goods or a service into several small homogenous
Supporting functions support the marketing activities groups. The essence of segmentation is that the members
of the company. Standardization, pricing, financing, sales of each group are similar with respect to the factors that
promotion, market information, advertising, risk bearing and influence demand. Segmentation of marketing should be
SO on come under
supporting functions of marketing. done effectively to gain profitability and to retain customers.
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 MARKETING MANAGEMENT

1.4 9. Marketing Planning

selecting target
3. Offerings and Brands marketing
opportunities,
the
Analyzing strategies,
managing
Offerings market, designing
marketing
factors
which cosurutes
i m s fulill the needs ofthe customers by offering
benefits. The intangible offerings provided by the firms marketimg
marketing planning process.
Management
include sernices, infomation and experiences. in Marketing
Major Shifts shifts in marketing
Brands fourteen (14) major
There are followed by the Smart
A brand is a name intended to identify the product which is usually
management
offerod by a known seller or by a group of known sellers 1 n yare,
as

to difterentiate them from a wide range of competine companies in 21" century.

Marketing for Everyone
Sa 1. activities
products. of
interrelated

system
Marketing is
a distribute good
4. Value and Satisfaction and
promotes
designed to develop
price, Marketing is
not only
The people select the product, which gives them customers.
and services to a group of focuses mainly
on core
relatively more satisfaction than e competitor's product. customer value
but also
emphasizes
Thus. a marketer sells product's benefits instead of selling realization, customeracquisiton
processes like new-product
aproduct. loday. cost is not the only consideration in fulfiliment.
Just and retention, and order Units to
but even customer value
selecting and purchasing the product
and want satisfaction tends to be important. Each and every 2. From Organizing by
Product

Customer Segments
Organizing by
product is valued in terms of its customer value. centered
Companies are now shifting from product
5. Marketing Channels position in
To maintain competitive
to customer centered.
Usually. three common types of marketing channels are giving more importance to
market. the market, organizations
are used by a marketer for the determination of target
customer satisfaction and valuing customers preference.
distribution channels
They are communication channels, to Buying more
and service channels. Communication channels receive and 3. From Making Everything
Outside
delivers nessages from target customers. Communication Goods and Services from
the strategy like
can be done through various means such as magazines, The companies are following
internet etc. Distribution activities whereas outsourcing
newspapers, radio, mail, telephone, retaining own brands and core
channels are wholesalers, retailers and agents. Service those activities which can be performed at a less cost by a
channel includes warehouse, transportation, companies, third party.
Using Many Suppliers to Working with
Banks, Insurance companies etc.
4. From
. Supply Chain Fewer Suppliers in a "Partnership"
chain approach involves various activities The relationship between suppliers and distributors
Supply
from the procurement of raw materials, component parts are becoming stronger. Some of the companies consider
till the delivery of finished goods. Supply chain consists
of customers as "partners" in delivering value to the ultimate
determine
suppliers, producers, distributors and end
users to
customers.
the final
how each party adds value to and benefits from 5. From Relying on Old Market Positions to
product. Uncovering New Ones
7. Competition The trend have been shifted, now the companies
constant factor ofa market. The new
Competition is a are focusing on fulfilling customer needs, formulating
entrant must have a differential advantage sufficiently strong new marketing strategies, innovative ideas etc., rather than
that
to overcome loyalty built up by established brands
the following old market trend.
their products.
motivate buyers to purchase only From Emphasizing Tangible Assets to
6.
Marketing Environment
3.
task
Emphasizing Intangible Assets
environment can be classified as
Marketing Intangible assets are the sources through which the
environment and broad environment. companies can maximize their market share specially their
Tack environment includes all the parties mvOv brands, employees, customer base, intellectual capital etc.
distribution
in marketing activities such as production, 7. From Building Brands through Advertizing
and channels
promotion the offerings suppliers groups to Building Brands through Performance and
is a mixture of about
of distribution. Broad environment Integrated Communications
environment,
six components. They are, Demographic Companies are forcihg marketers to use a blend of
economic environment, physical
environment, technological
several tools for building and
environment, political-legal
environment and socio-cultural delivering consistent brand
environment.
image instead of using a single communication tool.
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UNIT-1 BASICS
1.5
8. From Attracting Customers through Stores
and Salespeople to
| Q3. Explain the company orientation towards
Making Products Avalilable marketing concept. May-13, 02(a)
Online
OR
Customer can do online
alot of their time. Nowadays,
shopping so that they can save Explain the significance of marketing.
companies are displaying their
offerings or
products along with their price
specifications,
services and order processing time on their official
Answer
websites Marketing play a significant role in generating profits
which can be easily accessed
by customers. Electronic to the company. An economy will not grow until and unless
personal selling is a process wherein both buyer and seller some selling activities are undertaken in that economy.
interacts with each other through their
computers. Business
to-business (B2B) purchasing is the most common method The significance of marketing can be studied under
of e-commerce. two headings,

9. From Selling to 1. Significance of marketing to society and

The Best Firm
Everyone to Trying to be
Serving Well Defined Target 2. Significance of marketing to the company.
Markets
1. Significance of Marketing to Society
Companies are now focusing on cost effectiveness and
to sustain competitive position by considering customer's Marketing activities are considered as significant in
taste and preference, profitability etc. society due to the following reasons,

10. From Focusing on Profitable Transaction to (a) Generate Employment Opportunities

Focusing on Customer Lifetime Value
The basic idea behind this strategy is to retain old
customers by emphasizing on their individual values so that
profit margins can be substantially improved.
11. From a Focus on Gaining Market Share to a
Focus on Building Customer Share
The major focus of companies is to build customer
share by providing a wide range of goods and services to
the end customer.
12.
From Being Local to Being Global
Nowadays, firms are adopting centralized and
decentralized approaches for maintaining proper equilibrium
between local and global standardizations. The marketer tries
to improve at local level by following the standards set at
global level
13. From Focusing on the Financial Scorecard
Focusing on the Marketing Scorecard
In developed countries like -U.S.A, Germany, Japan
and many more, nearly 40% of the population are
employed in marketing activities like - Retailing,
wholesale activities, transportation, warehousing,
promotion activities, market research activities
etc. Even developing countries can minimize the
unemployment rate by developing marketing
activities in their countries.
(b) Increases the Country's National Income
An effective marketing system will succeed in
increasing the product/service in the market. The
production levels of the country have to be increased
to match with the increasing demand. Higher the
productivity levels, higher will be the national income
of the country.
Increases Standard of
(c) Living of the Society
Marketing involves identifying needs and wants of
the customers and offering goods and services as
per the needs of the customers. This process will

Management is focusing on improving marketing

scorecard by analyzing market share, customer satisfaction,
customer loss rate product quality etc., which in turn is
helpful in predicting the financial resuts.
14. From Focusing on Shareholders to Focusing
on Stakeholders
Managers are implementing policies and strategies
to balance the return not only to,shareholders but also to all
the stakeholders.
SIA
automatically increase the standard of living of the
society.
(d) Reduction in Distribution Cost
Minimizing the distribution cost is one of the
objectives of marketing. When distribution cost is
reduced, the price of the product will automatically
get reduced. The customers who cannot purchase
products offered at high prices can now purchase
the products, as prigeis reduced due to reduction in
distribution cost.
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 MARKETIG MANAGEMENT
1.6 Domestic
Product (GDP
real
Gross
Product (GDP) wih
(e Protect Society from Unfavourable Effects of () India's
in Gross
Domestic

and servi
industry
Business Cycle The growth effect on

have a
significant
for the
growth of GDP i
A business has to face boom and reason

depression stage sectors.

The main The m a i n manufacturino
in its business life cycle. In the
depression stage, stability of prices. are textiles
due to the
infiation
rise in
the production level goes down, due to which to the metal
which led steel, basic
sectors iron and
unemployment level increases. An effectively edible oil,
alloys, other factors which
sugar The
designed marketing system protect the society in
the depression stage by introducing new markets,
leather and
leather products.
besides
GDP
i n c l u d e exports and
China occupies
are also rising reserve.
expanding the existing markets, minimizing the foreign exchange
and India
distribution cost, enhancing the product quality level, imports and the
economy
world
in
growing
first place in
ensuring customer orientation etc. Occupies second place. 4" place with
2. Significance of Marketing to the Company "India occupies
World Bank,
Asper the
power parity.
An effectively designed marketing system offers the
following benefits to the company. respect to
purchasing
Housing in India
(i) of India population
249
(a) Enhances Company's Profits
According to
the estimates
179
Generating profits is the main objective of each and are present
in India, out of which
million buildings the purpose of
for
every business. An effectively designed marketing million buildings
are being utilized
families wherein an
system assist the company in achieving such of 192 million
residents with a sum

objectives. Marketing focuses minimizing selling number of six persons

residing in one house.
average room and
cost and creating demand for the product through do not have even a
About 6 million families
rural
of6 million reside in
various promotional activities. And this focus will areas
4.7 million people out
room houses.
lead to profit generation. in single
and 38.5% people resides
(b) Assist in Planning and Decision Making classified into urban area,
A few part of millions are

The marketing system assist the company in planning houses with tiled roofs,
rural area, permanent structures,
hospitals and so on.
business activities and in taking various decisions places ofworship, colleges, schools,
pertaining to business. How much quantity ofproducts Household Information of India
have to be produced by the company is decided on the
(ii) distribution
One of the crucial aspects of household
basis on customers demand for the product and sales Rural
is analyzing the size ofthe Indian market.
areas

forecasts. Sales forecasting is a marketing activity. to urban area.

possess huge household comparison
in
Marketing decisions are surrounded by decisions of The data for household distribution usually differs
other functional areas such as -production, finance, observed that the
from one year to another. It is being
purchasing etc. household distribution would be higher from that of
Ensures Free Flow of Communication the previous year in the current year for both rural as
(c)
Marketing ensures free flow of communication well as urban areas.
between company and the society. The information Demographic Statistics of India
(iv)
related to consumers tastes, preferences, their Demographic factors include age, income, education,
behaviour, attitude and changes in them can be human population and its distribution etc. The
from this
gathered through marketing. Apart demographic statistics for both rural and urban area
information, information about competitors can also are not constant in nature. They vary from one year
used
be gather through marketing. Marketing is also to another on the basis of various influencing factors
awareness in the customers regarding
the
to create of the economy associated with the demography.
introduction of new products. (v) Income Distribution in India
dimensions of marketing
Q4. Explain the emerging Increase in purchasing power highlights the
growth
in the Indian context. of the economy. The success of
any marketing
May-13, 02() program completely to a greater extent relies upon
Answer
dimensions of marketing in the Indian the purchasing power of customers.
The emerging
elements. They are, Usually, the population is divided into classes such as
context includes the following
Product (GDP). "the rich' "the consuming class' and 'the climbers' "the
) India's real Gross Domestic
aspirants' and 'the destitute'which are totally based on
(i) Housing in India level of income and
information of India household possession of people
Based on these classes, survey will be conducted
Ciii) Household and
of India and the marketers would be able to understand the
(iv) Demographic statistics demand
for particular product of urban and rural areas.
Income distribution in India.
a

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 UNIT-1 BASICS
Q5. What are the emerging challenges in | 5.
marketing ?
Answer: Jan-14. Q2a)
The
Emerging Challenges of Marketing in Present
Era are
1. Seamless Global Society
with the emergence of internet, the gap existing
between the different state society can be reduced to a
great
extent. This gap may be with reference to
physical proximity,
information and knowledge. The competitiveness of any firm
is mainly dependent upon its ability to respond cautiously
within a specified period of time and also on the market forces,
but is not infiuenced by its own competencies and skills. In this
global world, mere offering of quality products and services
aren't enough to create the buying behaviour of customers.
Indeed they need to be backed up by the low cost structures.
2. Basis for Gaining Competitive Advantage
The modern boom of the internet has changed the
role of states. However, even the scope of government's
operations has expanded which not only plays an active role
in maintaining the cultural diversity and sovereigty ofthese
states but also provides an assistance to various societies.
Some of the services provided by such governments
include the provision for security, taxation, censorship and
ownership.
With the occurrence of technological advancements,
major shifts have been encountered in competitive leadership.
Under such circumstances, knowledge management is found
to be the best weapon to cope up with the existing challenges.
3. Business at the Speed of Human Thought
3.
In today's competitive world, the business operations
need to be performed quickly and efficiently as internet
provides very little time to both marketers and organisations
to react and respond towards the existing opportunities.
Firms are producing standardised products which can't be
differentiated further. The development of such products do
not require the use of conventional marketing management
and the conventional salesman. Recently, most of the
organisations have incorporated the service portal options
on their official websites. By clicking on such options
online
assistance can be provided by their service engineers in case
ofthe failure of a product. Such online assistance eliminates
the role of conventional servicemen. The major challenge
lies in the ability of the firms to produce customised products
based on their requirements.
4. Virtual Enterprise
The changes that took place globally have led to
the emergence of virtual enterprise. Some of the vitual
Redif.
enterprise include, Amazon.com, Yahoo, Hotmail and
com. In the modern era of virtual reality, size and location
of an enterprise does not have, much importance or any
significant role to play.
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1.7
Customer as a Co-producer of Products and
Services
The other significant fact of the new era is the
changing role of the customer, wherein he behaves as a
co-producer of products and services. The manufacturer is
no longer held responsible for the production of the final
product when it is demanded by the customer. The product
is generated by the producer upto a certain level in the value
chain and then he leaves it for the final user to customize it
based on his/her requirement.
This concept can be more clearly understood by
considering the example of the Asian Paints where it will
provide only primary shades however complementary and
customised shades can be generated by the customers. Such
customization is possible only through the application of
interactive technologies. This role enables the marketer to
focus more on the core marketing activities.
6. Customer has a Large Quantity of Information
A customer can have access to a volumnious
information generated by both national and global sources
through internet. The problem for the marketer is to
develop an effective marketing mix by optimally using such
information. The mass customization is included in today's era.
Less Differentiation between Business and
7.
Consumer Marketing
Due to the technological advancements and
standardisations, physical differentiations between the
products and services are getting blurred. If there exists no
such differentiation, then it would be very much difficult
for a marketer to set up boundaries between the business
and consumer markets, urban and rural markets and also
the domestic and global markets. Under such circumstances,
organisations need to adopt the marketing practices ofsuccessfiul
organisations, irrespective of the nature of their offerings.
8. Significance of Distribution Channels
In the modern era, the distribution channels or
intermediaries are not only responsible for the physical
movement of goods, risk sharing and investment in the
movement of stocks (of either raw materials or finished goods)
but also for providing efficient and customised services goods
to the customers depending on their requirements.
9. Making Weak Sections as a Market Segment
The biggest challenge, faced by a marketer is to
identify and select those segments as "target markets"
that can provide growth opportunities far more better
than the other markets. However, due to the emerger * of
globalization, widegap had been witnessed betwer the
developed and underdeveloped nations. Eventhough, : ral
due to
attempts were made to bridge such gap, it still exists
several reasons. As the weak sections constitute the large
marketer
segment of market throughout the world, a can
become successful by optimally exploiting the opportunities
provided bysuch sections. The organisations can do so by
providing customised products/services by reducing prices
and also by enhancing the firm's accessibility.
 MARKETING MANAGEMENT
into the categoryof
1.8 which
come

markets Labour marke.

10. To Create The various material,
markets, ts
Eco-friendly Environment resource
markets a r e
Raw
M a n u f a c t u r e r s
purchase resourca:
es

of
Amarketer needs to be responsible for the betterment
money
markets
etc.
and use
them in
manufacturin.

soldtto
ing
society and the environment in which he is operates.
from the
resource
markets
manufactured
products are
Hence, he has to be cautious about the development of a new services.
The who inturn
or retailers),
goods and wholesalers

product, its disposal, so that the marketing environment can intermediaries (i.e., In order
to earn monev
be protected. ultimate
consumers.

involve
offer them to
consumers

services,
and
Thus, the above mentioned challenges need to be
for purchase
of goods of money source

efficiently handled by a marketer so as to retain and expand themselves in

some
work. One ofthe major taxX on public and
Government
imposes
his market shares. Government is tax. services from resource
to and
goods
1.2 MARKET earn income to purchase Intermediary markets
markets (or)
markets,
manufacturer
services are by
again used
Q6. Define a market? What are the different types goods and
of markets? All there purchased services to the
public.
to offer
the g o v e r n m e n t term market to describe
the
Answer July-10, 02() Marketers usually apply
customers. According to marketers
The term market may be defined as a place where of
the different groups market comprises of
buyers and sellers come together for buying or selling goods of sellers and
industry comprises between the industry and
and services. Traditionally, buyers and sellers used to gather
buyers. There exists a relationship s e r v i c e s and send
at particular place during specified dates in order to purchase offers goods and
the market. An industry as a return
and sell goods and services. The buying and selling takes communication to the
market and get money
information as a feedback to
place for a limited period of time just like periodical fares. and services and
to goods
The term market was originated from the Latin communication.
Word "Mercatus" which means " to trade". Apart from this
Key Customer Markets
meaning the word "Mercatus" has different meanings and
The key customer markets are,
due to this reason, the term marketing is described in different (a) Business markets
ways. Like, (b) Consumer markets
A group off people i.e., buyers and sellers. c) Global markets
A place where buying and selling takes place. (d) Non-profit/Governmental markets.
A place of business activity. Business Markets
(a)
A geographical area of operation etc. Business goods and services are sold and purchased
markets
Types of Markets in business markets. The buyers in the business
There are five basic markets. They are, are usually found to be excellently trained and possesses

(a) Resource markets required skills and knowledge to assess the competitive
b) Consumer markets prices prevailing in the market business buyers sell the
bought goods to others at some profit margins.
(c) Intermediary markets, The marketers in the business markets should
(d) Manufacturer markets and be capable of convenience the buyers that whatever the
(e) Governmental markets. products which they are offering will generate huge profits
or minimizes costs to the buyers. Company's image and
The following figure depicts the five basic markets
and structure of flows among them. products qualityplay a significant role in attracting business
buyers.
Resource On the basis of business markets can be divided into
Markets
KesourcES ReMoneysourcwoes two types. They are,
Money ) Wholesale markets and
Taxes,AServices,
Goods Money
(i) Retail markets
es,Money Government Taxes ConsumerT
() Wholesale Market
d turer
IMa markets Services Markets
Markets The products are sold in
Taxes, Goods huge quantities in wholesale
Services Taxes, market. In wholesale market, wholesalers are the
Money Money Goods
GoodsandServices
Money sellers and retailers are the
buyers.
Goods and Services (i) Retail Market
Intermediary
Markets
Products/goods are purchased in small quantities in
"Retail market". In 'retail
the Structural Flow market, retailers
sellers and consurmers are the
are the
Figure: A Block Diagram of Five Basic Markets and
buyers.
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UNIT-1 BASICS
(b) Consumer Markets
Consumer markets are the markets where consumer
goods and services are sold like cosmetics, soft drinks,
garments, shoes etc. Achieve success in this markets is a
difficult task, as consumers tastes and preference change very
frequently. Sellers in the consumer markets focuses more on
building a good brand image. The company's brand image
rely upon its product quality, product availability, packaging
services offered and its investment on promotional activities.
(c) Global Markets
Selling gods and services in the global market is a
very complicated task than compared to selling goods and
services in consumer or business markets. Various decisions management are discussed below.
have to be taken regarding which nation has been entered,
how to enter each nation, what product and service features
have to be offered in each country, what would be the product
prices offered in each country/nation etc.
Non-Profit and Governmental Markets
(d)
As name suggests, generating profit is not the
objective of non-profit organizations. Few examples of non-
profit organizations are,
Educational institutions, Charities, Temples,
Churches or Governmental organization. The sellers in the
Governmental market must offer their products and services
at lower prices because the buyers in the Governmental
market are non-profit organizations and they have restricted of the entire market simultaneously, marketing management
purchasing capacity. Most ofthe govemment purchasing are
made based on bidding system where the lowest bidder wins
the bid, in case of absence of bidders bidding high prices.
1.3 MARKETING MANAGEMENT DEFINITION, the needs and wants of the customers of that segment.
OBJECTIVES, FUNCTIONS AND PROCESS 3. Organization Growth
Q7. What is marketing management? What
are the aims and objectives of marketing
management? Stat the furictions ofmarketingOT
marketing
growth, an organization must focus
management? volume and net profits.
Refer Only Topic: Functions of Marketing (a)
Management)
OR
the functions of marketing
Briefly explain
management. May/June-12, Q2ta)
Answer:
Marketing Management
Marketing management is the combination of two (h
words i.e., marketing and management.
In the words of 'William J. Santon' -"Marketing is
a total system of interacting bu_iness activities designed to
plan, price, promote and distribute wants satisfying products
and services to present and potential consumers".
In the words of 'Stanley,yance' "Management is
-
Simply the process of decision making and control".
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1.9
If we combine the above two definition we will get
the definition of marketing management.
In the words of 'William J. Stantom' - "Marketing
action".
management is the marketing concept in
Marketing management is the process of performing
business activities through management. Profit maximization
and customer satisfaction are the two main objectives of
marketing management'.
Aims and Objectives of Marketing Management
The marketing management success is judged on the
basis of the degree to which it is successful in attaining its
objectives. Some ofthe aims and objectives of marketing
1. Identifying Customer's Needs and Wants
The new concept of marketing is customer-oriented
and emphasizes on satisfying customer's needs and wants.
Each and every marketing activity of the organization
aims at meeting customer's needs ând wants. And due to
this reasdn, identifying customers needs and wants has
become an important and foremost objective of marketing
management. Marketing research is the best technique
which can be adopted for determining the needs and wants
of customers.
2. Segmenting the Market
As it is very difficult to satisfy the needs and wants
aims at dividing the entire market into various segments.
The market is segmented depending upon age, sex, location,
income and so on. After segmenting, one particular segment
is selected and targeted by the organization in order to satisfy
Growth ofthe organization is the third main objective
management. In order to achieve organizational
on increasing its sales
Enhancing Sales Volume
Generally speaking, marketing is nothing but selling.
Each and every marketing management activity
should focus on enhancing the sales volume of
volumes must be set
organizations products.) Sales
as targets and attempts must be made to meet those
targets. The targets set might be either long-term or
short term targets.
Enhancing Net-profits
(As each and every business irrespective of its nature
aims at gaining and maximizing its profit-levels.
Marketing management also aims at the same] Each
and every marketing management activity of the
company focuses on maximizing its profit levels.
Profits must be maximized by meeting customer's
needs and wants.
 1.10 MARKETING MANAGEMENT
4. of a firm.
Enhancing Customer Satisfaction Levelss (a) Setting
objectives/goals

subordinates to
achieve company's g0al
Profit maximization is the main Guiding the to ensure that the.
objective of each| b) Supervising the
subordinates
and every business and to achieve this objective, customers accordance with the pres,
of the is in
organization have to satisfied first. Organization performance
profits depends upon customer satisfaction. standards.
customer satisfaction level, Higher the Controlling Marketing Activities

higher will be the profits of the 5. function of marketina

organization) The organization's
marketing activities, plans Controlling is animportant
and programmes must be of its effectiveness determines the
needs and wants.
designing to satisfy customer's management. The extent
or any policy
of business unit
Success of any programme
u s , the above are the four main ohiectives af Even the best effort cannot produe a
of control involves four
marketing management. controlled properly. The process
main activities. They are,
Functions of Marketing
Management (a)
Determination of standards
(The functions of marketing management helps Evaluation of actual performance
achieving the objectives of marketing, which is crucialin| (b) with the standards
for the success of the firm) Through Comparison ofactual performance
proper utilization of Taking correctivemeasures
marketing functions, it is possible to carry on the activities
like planning, Q8. Who is a marketer? What are the eight
organizing, staffing, directing and controlling demand conditions which are possible ina
of marketing tasks.
1. market?
Planning of Marketing Activities
Answer
Planning is an integral part of marketing management. Marketer
This function is based on the
marketing opportunity The term marketer refers to persons or companies who
which is key to the successful
marketing management and involved in selling products and services to
performance) Marketing planning is used to develop and are customers
Amarketer expects a response from customer in the form of
define objectives and then derive
strategies and design purchase. Managing the market demand is the responsibility
programmes that enable the fim to achieve these preset
of marketer
aims/goals. In case of planning, marketer needs to define
the ways, Demand Conditions
timings, location and persons through/at which
different marketing activities can be performed. The eight demand conditions which are possible in a
market are,
2. Organizing of Marketing Activities
1. Non-existent Demand
(Organizing is a function of classifying similar Customers might lack knowledge regarding the
activities into same group. Different marketing activities
product and due to this, demand for the product doesn't
could be purchase, sale, storage, packing, pricing, advertising exists.
and explaining the rights and duties of the managers (e.g,
2. Declining Demand
sales manager) and subordinates working under him) The
Customers buy the products but not
basic element of organizing in marketing management is to repeatedly and
sometimes, they don't buy at all. This two conditions leads
carry out the function of each personnel effectively.
to reducing/declining demand.
3. Staffing for Marketing Activities 3. Full Demand
Staffring function deals with the appointment of When customers are buying all the
different personnel for marketing department) Nowadays, in the market, then this condition is products available
known as 'Full demand
a separate personnel department has been introduced in | condition.
organizations with an intention of recruiting, selecting and Unwholesome Demand
placing qualified personnel for filling its vacant posts.
Sometimes, customers prefer those
4. Directing Marketing Staff harmful to them. For products which are
example, demand
tobacco etc., form an unwholesome for drugs,
alcohol
Marketing is essentially an art/a process of getting demand.
5.
things done by others. Marketing manager is not only Negative Demand
responsible planning and organizing the activities but
for Negative demand states a condition where
also for guiding and supervising hissubordinate He should don't like the product and customers
motivate the subordinates through his leadership abilities so 1gnoring it
might be ready to
pay price fo
that subordinates function efficiently for the attainment of 6. Latent Demand
marketing goals. The function'of directing has three essential Latent demand téfers to
situation where
components. They are, product had failed in meeting the customers existing
latent demand
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UNIT-1 BASics
1.11
7. Irregular Demand CThe marketing environment can be divided into micro
The customers demand for environment and macro environment. Micro environment
a
particular product
or service differ as per the season, month, week, day or comprises of various parties who can directly influence the
sometimes even hour. companys capability to manufacturer and sell products The
8. Overfull Demand various participants in the micro environment are suppliers,
channel members, competing firms and customers. Macro
Overfull demand refers to a market condition where
environment comprises of various factors like political
demand is more than supply.
factors, legal factors, social factors, economic fartors,
A marketer need to find out the causes behind each demographic factors, and technological factors which
of the above demand conditions and influences company's profit and sales levels.
proper planning must
be made to change the existing demand condition to a more
profitable demand condition. Another system is the marketing research system
which helps the company in understanding customers needs,
1.4 TASKS AND PHILOSOPHIES OF wants, preferences, their buying behaviours etc. Estimating
MARKETING MANAGEMENT future demand and assessing market potential are the two
Q9 What are the various tasks to be main objectives behind studying environmental factors.
performed
by the marketing manager in order to achieve
In order to convert marketing strategies into marketing
success in marketing
management? plans, marketing management must prepare budgets and
Answer marketing operations for different products.
The various tasks which a marketing manager
3. Maintaining Contact with Customers
must perform
in order to achieve success in marketing
management are listed down below. The marketing management of the company must
focus on providing added value to its targeted market
1. Developing marketing strategies and programs
segment and should build and maintain long-term contacts
2. Gathering marketing related information with its customers. Ifthe target market segment is a consumer
3. Maintaining contact with customers market then, the marketing management must possess clear
4. Establishing brand image knowledge regarding the size of the potential customers,
their buying behaviour, their perception regarding competing
5. Designing the product
products, their expectations pertaining to product in the form
6. Offering value to the customers of product attributes and prices ete
7. Creating awareness in the customers
On the other hand, if the target market segment is a
8. Establishing growth. business market comprising of big corporations, retailers,
1. Developing Marketing Strategies and wholesalers, professional companies and government
Programs organizations, then marketing management must gather
Primarily, the marketing management ofthe company information regarding the buying behaviours of the above
must determine the various opportunities available in the mentioned organizations. The customers of business markets
market for its products and services. Apart from this, it can be served well through experienced and skilled sales
must also assess its strengths to grab such opportunities. team possessing excellent presentation capabilities.
The marketing management can include new and improved 4. Establishing Brand Image
features into its products through its marketing expertise
and capabilitie It can use its knowledge and expertise in a The company must have clear knowledge regarding
particular field to develop new, related products and expand the products strengths and weaknesses. A company must
its offering, Irespective ofwhether a marketing manager has decide how it wants to position its brand/product in the
decided to develop new products, related products or expand market. The three alternatives available are,
its business offerings, an effective marketing plan has to be
. Positioning the brand as an excellent product, pricing
developed which describes the company marketing strategies
it at higher level along with super service and ensuring
and tactics. This strategies and tactics help the company in
mass media presence.
forging ahead.
2. 2. Positioning the product as a medium quality offered
Gathering Marketing Related Information
at reasonable price or
CA company requires an effective marketing
information system and marketingresearch system in order| 3. Positioning the brand as a simple product offered
tounderstand and keep itself updated with the marketing at lower price in order to attract price conscious
related information. consumer group.
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 MARKETING MANAGEMEN
1.12 various markat
The product Q10.
Discuss in detail
the
ting
the life cycle
positioning strategy will change during management philosophies.

of the product. The decision about the strate8 OR

also rely upon what role a
the market i.e., a market company's product is playing in the five
different marketi
leader, follower, richer or each
marketing management of the company must challenger.
What are
A orientations? Justify of
on the
keep track management
examples.
competitors and their strategies in order to prepare them whit
appropriate
itself well in advance to
respond to those strategies. Jan./Feb.-11, Q2(0
5. Designing the Product Answer: customers and socie.
organization,
The core of the The opinions of from one
differ
marketing program is the product
itself. The physical objects offered marketing management
philosophies
various marketing concept
on
by the company through another. And due to this reason
product are product attributes, quality, product design and concept
The various confiicting
packaging. A company's product can lead other competitors have been put forward. have implemented the
products, if even services are offered along with the physical considering which organizations
marketing activities are,
objects. Services may be repairing, providing demo, delivery
of the product to the customers place etc.) 1 Product concept
One significant decision to be taken in marketing is 2. Marketing concept
concerned with price. This includes decision about wholesale
3. Production concept
prices, retail prices, rebates, credit policies and allowances.
The products price must match with the customer's 4. Selling concept
perception about the product value ore else customer's wil 5. Holistic marketing concept.
shift to competitors brand. Product Concept
1.
6. Offering Value to the Customers The product concept is based on the assumption
(The marketing management of the company must that consumers give more preference to product quality
decided how the product/service value can be offered to innovative attributes and product performance. The
the target audience. The number of distribution channels
organizations following this concept emphasize on
are available which
helps the company products in reaching producing products and improving them with the span of
target audience. An effective channel must be selected to time. In order to achieve success in the newly introduced
deliver the product/service value to the target
audience) product, the activities like pricing, advertising, transportation
7. ,Creating Awareness in the Customers and sales must be undertaken carefully.
The marketing management of the company must
create awareness in the customers regarding the value offered Example
by it through its products and services. The target market Onida' introduced Golden Eye Technology t
can be made aware of the company's the Indian market but at that time Indian customers were
offerings through
various communication channels.)Massive communication unaware of the benefits of this
technology. Later on when
programs like advertising, sales promotion, public relations, customers came to know about the various television brand
personal selling must be designed. Integrated marketing and technology concerning the
televisions,
LG introduco
communication program ensures optimum contribution of new echnology into the market and attained success in is
each and every communication medium. marketing efforts.
8. Establishing Growth 2. Marketing Concept
The company should focus on continuous growth of Marketing concept states that,
its products and services and profits of the company should objectives can be attained successfully when organizationd
be increased simultaneously. one step forward than the firm5
its competitors in
Depending upon the product positioning, new products customer value to the offering superi"
target audience. Companies
mpanies followin
followim
have to be introduced and innovated. The evolving global marketing concept
cept focus on nrod
focus
opportunities and challenges must be taken intoconsideration the neede
needs and producing products as pe
while planning the marketing strategy of the company)
requirements of the customers
expecting customers to accept what rather tha
The final task is to assemble its marketing capabilities company has
produce
Whichever companies
and put marketing program controls in place. Due to attain good results. adopt marketing concept w
inevitable set backs and other unforeseen happings, it is Identifying customer specified nee
and wants and
necessary to get market information on anything that is not satisfying
market orientation". them is concerned with "Reaci
going according to the marketing plan and exercise necessary On the other
on customers
latest hand, emphasizu
controls. Appraisal and estimation of marketing functions
marketing orientationThe needs is concerned with
"proac
essential to know how effective and organized they have
proactive and reactive companies following bo
been as well as find ways and'means to improve. orientation" and are market orientation follow "total ma
achieving comparatively good
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 UNIT-1 BASICS 1.13

Example (c) Internal Marketing

The best example to explain the
marketing concept Internal marketing involves recruiting, training and
would be "Dell Computer". Instead of focusing on
manufacturing a perfect computer for its target audience, motivating employees who are capable and have
Dell offers product platforms wherein each individual gets desire to provide good services to the customers.
an opportunity to add feature in the computer as per his/her
(d) Social Responsibility Marketing
requirements.
Social responsibility marketing states that, a company
3. Production Concept
Production concept is a traditional concept in the must take into consideration the social and ethical
activities.
business market. Production concept is based on the aspects while planning its marketing
assumption that consumers favour those products which Unethical practices should be totally avoided in social
are manufactured in big volumes at a low unit cost. responsibility marketing.
Organizations following production concept focuses
on increasing their production levels, minimizing costs Example
and making the produced products available to the mass Companies such as Wal-Mart, Toyota and Nike can

customeTs. be taken as examples which have applied holistic marketing

Production concept is best applicable in developing concept in their companies.
countries like China. Organizations can use production
concept to achieve success in market expansion programmes. 1.5 MARKETING MIX EXPANDED
MARKETING MIX
4. Selling Concept
Selling concept focuses on selling what the company a11. Discuss the various components of marketing
has produced rather than producing products as per the mix. (June-07, Q2bYJune-06/Jan.-07, Q2(6))
needs and requirements of the customer. Selling concept is OR
usually applied to sell those products which consumers do
Explain the elements of marketing mix?
not prefer using. For example, Insurance, Encyclopedias etc.
Application of selling concept involves huge risk. Answer: (Model Paper-I, Q2(a), May- 13, Q3(a))
Various selling and promotional activities like -
Marketing mix is a mix of marketing components
Advertising. public relations, sales promotion and personal
which are used by the company in achieving its marketing
selling have to be undertaken in order to attract consumers objectives. These components can be considered as
towards the organizational production.
"marketing tools" because they are used as a weapons for
5. Holistic Marketing Concept attaining success in marketing activities.
According to the Holistic marketing concept,
The task of marketing involves developing,
marketing concept rely upon the creation, planning and and delivering customer value and these
communicating
practical application of marketing programs, processes and tasks can be accomplished successfully through four
activities which identifies their scope and their dependence
elements/components of marketing. They are product, price,
on each other.
Holistic marketing is a marketing approach which place and promotion. These four elements have become
synonym for the term "marketing mix" and were popularly
make efforts to identify the scope and complications involved
known as 4 P's of marketing.
in implementing the marketing activities. Holistic marketing
The four P's of marketing mix focusing on target
comprises of four components. They are,
market customers is depicted through the following figure,
(a) Integrated Marketing
The marketing management task is to recognize
marketing activities and integrate them into a
Promotion
(b)
completely integrated marketing plans in order to
develop,communicate and provide customer value.
Relationship Marketing Target
market
Product
Relationship marketing focuses on building long customers
lasting and close relationship with each and every d
influence the
person who can directly or indirectly
company's success in its marketing efforts. The main
parties with whom a relationship has to be built are
.

suppliers, channel membèrs, customers and other

JVii.

marketing partners. Figure

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 MARKETING MANAGEMENY ENT
marketing
play an ean
1.14 of
four P's of the companv
Thus, the marketing
mix
Each element/component of "marketing mix role in
the
significant
than others
significant more

comprises of various sub-elements. Each element of element is

considered
the markete.
one represents
marketing mix is discussed briefly in the following text: marketing
P's of these four P'
1. The four customers, of
Product to the
According customers. These four
The first "p" of marketing mix is product. It deals point of view. four benefits
to the
provide offour C's ofcu
customer,
with producing the desired product for the target customers. marketing
represented
in the form
Product might include a tangible good or intangible service benefits c a n be
C's of Customer
Marketer4
or a mixture of both.
|4 P's of Customer solutions
The various sub-components of the component Product Customer cost
product' are -product attributes, product quality, warranty,
Price
packaging. branding. product benefits, tangible goods, Convenience
intangible services, installation etc. Place
Communication
A product is produced by the company to fulfill the |Promotion
of marketing
mix with
needs and requirements of the target market audience. elements
Q12. Explain the Jan/Feb-15,Q20)
2. Place suitable examples.

(A product can be made available to the target market OR

customers through distribution channels. The various mix of any retail organization
Explain marketing
decisions to be taken pertaining to place are type of aware of.
you are
distribution channels to be setup, types of intermediaries, Dec-08, 02
place of storage etc)The objective is to make sure that the Answer:
organization deals with the 4Ps
right products and services are accessible in right quantities, Marketing mix of any
at the right time and in the right place. of marketing and they are,
The distribution channel may be very short, where Product
manufacturer sell its products to the ultimate consumers
2. Price
directly. On the other hand, distribution channel may include
wholesalers and retailers who act as intermediaries in the 3. Place
channel of distribution. 4 Promotion
3. Promotion An control these elements of
organization can
effective the
(The third'P-promotion is related to communicating marketing and to make the marketing mix
with the target customers and other participants of the has to appealing to the customers in the company's
product
distribution channel regarding the product offered by the target market.
company. Promotion is nothing but promoting the product
Marketing Mix of Nokia
in the market) The four main sub-components of promotion
and Nokia is an international telecommunication company
are Advertising, public relations, sales promotion
which has managed to remain the favorite of the customers
personal selling. Through all these sub-elements, the target in the mobile phone industry. The annual sales of Nokia is
customers are made aware of the products and services
available to them in the market. $30.8 billion across 130 countries. The organizational culture
Promotion activities in some situations aims at of Nokia places more importance to innovation at all levels
customers and in some other situations
so the global market share of Nokia is 38 percent.
retaining existing
aims at attracting new customers. 1. Product
4. Price The first P of marketing mix is
product. Nokia
Setting the right price for the product is very essential concentrates on the customers and. respond effectively to
it at the
apart from producing the right product, delivering changing customer needs by creating the right products to
right place and promoting it through the right promonona target customers. Nokia offers wide range of products to
mix element. its customers with different features
with Nokia 9i, Nokia
Price is the amount paid by the customer as an 686, Nokia 1250, Nokia 6800, Nokia
1100, Nokia 7210
exchange to product/service purchased by tnem. wn NOKia 3600 and many more. The Nokia 7210 phone has
of
deciding the price ofa product, the aspects like type features like new keypad
-

involved layout and four way scroll whic

competition prevailing in the market place and cost makes it easy to manage the
high resolution colour display
consideration.
in marketing mix have to be taken into It also has polyphonic sounds
which can be
The price of the product has to be decided very a
speaker and gives a improved sound qualityplayed
for
throug
of the company and message alerts. This ring tone
carefully because all marketing activities phone has a tri-band which operate
do not accept the in three networks and
will fail in their attempts, when eustomers provides
product price. The Nokia 7210 phone has the coverage on five continent
following enhanced feature>s
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UNIT-1 BASICS 1.15
Digital enhancement identification The products of Nokia are targeted towards teenagers
i) Stereo Audio and young adults ranging from 15 to 27 years and the
(i) Fast data
connectivity products will be designed according to their tastes, needs and
(iv) FM Radio preferences. The slogan for Nokia products is "connecting
people".
(v) WAP, Games.
Thus, Nokia with the help of marketing mix designs
2. Place
widerange of products for their
customers.
Place deals with the
distribution channel set up, Q13. Explain the term "marketing mix" with suitable
level intermediaries,
of
establishment of retailers, adequate examples. Why does the marketing mix change
warehousing and maintenance of high level of stock. The as the product moves through its life cycle?
main purpose is to make sure
are accessible in right
that the products and services Answer : Feb/March-12, Q2b)
quantities, at the right time and in the| Marketing Mix
right place. The phones of Nokia can be
from Nokia's Website and the
purchased directly For answer refer Unit-I, Page No. 1.14, Q.No. 12.
users can download software
and games. Nokia mostly deals with direct Changes in Marketing Mix as the Product Moves
include, telemarketing and internet marketing which through its Life Cycle
selling. The life cycle basically has five stages namely
3. Price product
Price refers to the amount development, introduction, growth, maturity and decline.
paid by the customer to The market mix which is used during the different stages of
purchase a product or service. It is very important for the
product life cycle also differs as the product moves through
firm to set the right price for the
right product. The cost of its life cycle.
Nokia phones are very high but as
they have great customer 1. Development Stage
loyalty. Many customers prefer to buy the Nokia products At this stage the product is just either an idea or may
when compared to other mobile
phones. Nokia phones be it is in the manufacturing process or is not yet ready for
follows two types of pricing
strategies. They are, the sale. As the product is being developed, marketing mix
Penetration pricing and is in the planning stage. The marketing mix for this phase
(i) Competitor based pricing. involves the different methods to develop product awareness
() Penetration Pricing in the minds of the potential customers with the help of

Penetration pricing strategy is mostly used by those marketing campaigns and special promotions.
2. Introduction Stage
companies who wants to gain their market share in
new market or by those This stage explains the process of introduction of
companies who are already product into the market. The sales are usually low at this
known in the market does it with new products that
carry new technologies in order to gain market share moment/stage as people are not much aware of the product
from their competitors. yet. Therefore, greater amount is spent as marketing expenses
in order to bring awareness about the
(i) Competitor Based Pricing product. The marketing
mix of this stage involves methods to create/
Competitor based pricing is used by the company develop a
market and also the demand for the product.
when there is a lot of competition in the market and 3. Growth Stage
the company wants to take another company's market
Growth stage refers to the growth of the
share by offering same or similar products at relatively
due to increase in the awareness of
product
low price. product and increase in
sales. The marketing mix strategies needs
4. Promotion brandingwhich
distinguishes the product from other products in the market.
Promotion deals with adoption of methods by the Marketing the product basically axis at depicting the fact
company to convey the quality and other valuable attributes as how the customers feel that their
to
product is good and
of their products and services to customers and inspire advantageous when compared to the competitor's products
them to buy. Promotion advertising, personal selling, sales and thereby brand preference is also
being built.
promotions and public relations. Promotion strategy of 4. Maturity Stage
Nokia takes into consideration political factors, economic After successfully reaching the
high position i.e., when
factors, social factors and technological factors. It also takes the
product is being preferred more than the competitor's
into
account the SWOT analysis which means the strength, products, it is said to be in the maturity stage of the product
weakness, opportunities and threats of the product before life cycle. The
marketing mix tactics
deciding about the promotion strategy. Nokia makes useof to build customer loyalty, which can comprises
the efforts
be achieved through
a
range of advertisements of their products on television and special
magazines for promoting their products.
promotions and incentives to customers who
skips
from competitor's brand to this brand.
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 MARKETING MANAGEMENNT
1.16
5. Decline Stage known as decline, stage
declines. Therefore, it is
the product market saturates, thc demand for the product loyalty 1s being built
of , mix strategies also decline at this stage. If customer
The efforts and marketing
ef onlyethencycle.
betore these customers could be retained. brand
image
New
usomers cannot be attracted the marketing mix at this stage involves strengtheningthe
available
oftheproducttoremain positive in the eyes ofthe productand its loyalcustomers
Q14. Explain the difference between the marketing strategies of goods and services.

Answer:
on the basis of four basic
factors and three
strategies of goods and services can be differentiated
marKeting
different categories.
Process
Physical Evidence
Categories Participants
Product is equal to
Intangibility The person render their Customer usually does nothave any and the
process
prior performance
its
services i.e., frontline physical product to assess
and generated
the perceived is developed
personnel are regarded as use. In orderto reduce facilities equipments
one ot the part
of product. In risk of customer any of the means | by using
case of shared services the might be used. and personnels.

customer usually efect each

other service experiences.
the physical| Production and consumption
Simultaneity Customer can directly interact | The customer assessesand outcome. are concurrent in nature
with the service provider | evidence in the process
as they are regarded as co-| Evaluation is carried out for all the | and
the product is usually
producers. Service providers| costumes and props. The product | developed on the right/|
need to be recruited, trained outcome must be recorded for the | perfect time. Blueprinting and
dramatization must be used for
effectively and must perform| purpose of customer evaluation.
their roles carrying outthe performance.
perfectly in order to manage
the customer participation.

Perishability Demand ofthe customers and If in case the equipments and | Holding inventories or stock
supply of the providers must staff remains idle then it would of product is not possible.
be equal. Any sort ofvariation be considered as a loss in the Bundling and effectively
in demand must be equated producing capability. For instance, pricing ofservices would help|
during high demand sub-contracting | in maintaining consistency||
properly. and outsourcing are taken into | in demand which results in||
consideration, in case of low|greater profitability.
demand renting or leasing methods
are considered.
4. Heterogeneity A product is usually hetero Segments should be modified Theprocessmay becustomized
genous in nature i.e., differs and customized according to the or standardized the differing
from
one customer- to-another physical evidence. In order to |levels
customer and from one l accommodate such segments the customer in various steps of
of participation of|
supplier to another supplier. physical facilities and equipment the process can also be taken
office employees must be
| categorized or separated.
Both the frontline and back may into consideration.

motivated and compen- sated

on the basis of the customer
satisfaction.
Q15. Write in detail about expanded marketing mix.
Answer:
(Model Paper-1I, Q2(a), July/Aug.-16, 22(6)
The traditional marketing mix comprises of four element ie., product, price, place and promotion. Traditiona
marketing mix is applicable to products but not applicable to services, as services are intangible and includes additionat
features.
SIA PUBLISHERS AND DI8TRIBUTORS PVT. LTD.
 UNIT-1 BASICs
Zeithaml and Biner focused on service 1.17
customers. 6. Physical Evidence
According to them, service customers
usually
tangible clues in services in order to judge the seek for
service As service is intangible, it very difficult to market
experience. Due to intangible nature of services, more services. Some physical evidences are used to market
elements were added to the
which is known as
traditional marketing mix services. Services quality can be judged by taking into
expanded
The additional elements are marketing mix for services. consideration this physical evidences. Facility design, sign
process.
people. physical
evidence and boards, equipments, employee uniform and other tangibles
Such as guarantees, reports statements and business cards
The 7'P's of
1. Product
marketing for services are as follows, come under physical evidences.

2. Price 7. Process
3. Place The element process includes decisions pertaining
4 Promotion to flow of activities, number of steps and level of customer
5 People interest. Either standardized or customized flow of activities
6.
Physical evidence may be selected. The service marketing process may include
7. Process. either simple steps or complicated steps.
1. Product Thus, the above are the seven p's of extended
The first P of
marketing mix is product. It deals
with producing the desired
marketing mix for services.

Product
product for the target customers.
might include a tangible good or intangible service 1.6 MARKETING PROGRAM AND
or a mixture of both.
MARKETING STRATEGY
2. Place
A product can be made Q16. What are the various elements of a
available to the target market company's
customers through distribution channels.
The various marketing program?
decisions to be taken pertaining to
place are type of Answer:
distribution channels to be setup, types of
intermediaries,
place of storage etc. The objective is to make sure that the A
"marketing program" is derived by integrating
right products and services are accessible in right quantities, all themarketing plans of the company. In other words,
at the right time and in the right place. marketing program is a mixture of various marketing plans
3. Price of the company. The entire
company is responsible to
Price is the amount paid by the customer as an
implement this program.
exchange to product/service purchased by them. While
deciding the price of a product, the aspects like type of The various elements of a
company's marketing
competition prevailing in the market place and cost involved program can be made clear with the following figure,
in marketing mix have to be taken into consideration.
4. Promotion Target Marketing
market mix
The P-promotion is
related to communicating with
the target customers and other participants of the distribution
channel regarding the servics offered by the company. The
four main sub-components of promotion are-Advertising, Control procedures
Marketing
public relations, sales promotion and personal selling. strategy
and
Through all these sub-elements, the target customers are Time-related details
made aware of the products and services available to them
in the market.
5. People
People involved in service marketing are employees
Marketing Other marke ting
plan plans
and customers. Recruitment and selection, training,
motivation, appraisal and team work are the various activities
to be undertaken for employees. Employees have to be
given proper training as.employees behaviour is also taken Marketing
into consideration while judging service quality. Service program
organisation must also; focus on educating and training
service customers. Figure: Element of a Firms Marketing Program
SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.
 1.23

1.9 MARKETING ENVIRONMENT

cOMPANY"S MICRO AND MACRO
ENVIRONMENT
Q22. Explain the various environmental forcess
which influence the marketing decisions.
(Model Paper-1, Q2(6), Jan./Feb-15, Q2(a)
OR
Write the following marketing environment
factors:
(i) External environment factors

(ii) Internal environment factors.

May/June-12, 026)
OR
The micro environmental affects on marketing
are greater than macro environment forces'.
Discuss.
Feb-13, 02(a)
OR
factors
macro-environmental
Explain various
which influence the marketing decisions.
April-15, Q1)
(Refer Only Topic: Macero Environment
OR
Discuss in detail about micro environmental

forces of marketing management.

(Refer Only Topic: Micro Environment)
Jan-16, Q2(a)
Answer
Marketing Environment
environment as
Philip Kotler' defined marketing
"External factors and forces that affect the company's ability
with its
to develop and maintain successful relationships
target customers".
encircled by an
Each and every company is
environment within which it has to take up all its marketing
of various factors and
activities. Environment comprises
business operations.
forces which influence the company's
environment of the company can be
The marketing
divided into,
Macro environment and
1.
Micro environment.
2.
Macro Environment
environmental factors cannot
be
The external
The various m a c ro
controlled by the organization.
environmental factors influencing
the company's marketing
functions are,
(a) Demographic factors/forces
factors/forces
(b) Political and legal
(c) Economic factors
factors
(d) Social and cultural
(e) Competition
( Technological factors.

PUBLISHERS AND DISTRIBUTORS PVT. LTD.

 MARKETING MANAGEMENT

1.24
Competitlon factor
(a) Demographic Factors (e)
Competition is a significant
environmental

programs
Demographic factors are concerned with population marketing plans,
which influences
the company's
characteristics like - age. gender, size of the population, three kinds of competition,
There exists
and strategies.
Substitute Products Competition
income, birth rates, death rates, marriage rates, etc. All these
factors influence the fim's marketing activities)For example, () companies producing
competition
if there is an increase in the In this type of with one another
population size, there will be substitute products
compete
but in a
need
an increase in the customers needs and this enhanced
increases in company's sales. Demographic factors are of
needs Substitute satisfy the
products
same

USA an increasing
better mannet) For
example, in
interest to the company because demographic factors are wood flooring rather than
house o w n e r s are preferring demand in USA.
concermed with population characteristics and people form reduced the carpet
the market. carpeting. This
Brand Competition
The fims marketing activities are highly intfluenced () similar products compete on
Companies producing
by demographic factors. For example, Coca cola, Pepsi,
the basis on brands.
field of soft drinks)
(b) Political and Legal Factors the
and Thums compete in the
Up
One category of factors influencing
more General Competition
company's marketing functions/activities are political (ii) each and every company
In this type of competition,
and legal factors. The legal factors influence company's restricted purchasing power of
is a competitor for the
manufacturing capability, product pricing. product design the customers.
and promotion decisions,)Govemment agencies are making
trade
() Technological Factors
new laws to save consumers and society from unfair the way of
Technological improvements change
practices of the company and to encourage competition in and standard of living of the
market. The rules, regulations, policies, procedures
and living, consumption patterns
consumers are benefited through
the
laws laid down by the govemment determines the company's society. Both industries and
For example, invention of
marketing plans. programs and strategies. technological developments.
manual
had out dated the practice of maintaining
For instance, some of the legal factors influencingcomputers
records.
company's marketing activities are, The six macro environmental factors influencing
Consumer protection Act, MRTP (Monopolistic and can be depicted through the
companys marketing operation
Restrictive Trade Practices) Act etc.
Even the and ideas of the political party in following figure.
opinions
considered while making Demographic
power and in opposition have to be
marketing related decisions. factors
Economic Factors
(c)
Market comprises of people who have money to MACRO
spend and have desire to spend. The various economic
factors which may have impact on the company's marketing
functions are stages of business life cycle, inflation rate,
interest rates, GNP (Gross National Product), per capita
ENVIRONMENT
income .
income, disposable income, consumer savings,
etc)All these factors influences the
consumers
distribution
behaviour and thereby influences company's JEmyno pue jemoos
buying
marketing decisions.
Social and Cultural Factors Figure: Macro Environmental Factors
(d) Micro Environment
Social factors come out of the social responsibility 2.
has been Micro environmental factors are those factors which
of the company. Social responsibility concept
introduced in marketing as a substitute to marketing concept are in close with the company. The internal environmental
Social responsibility concept states that a company operating of the company also comes under micro environment. The
various micro environmental factors influencing company's
in a society is socially responsible and should
not produce
various marketing functions are,
products which are dangerous to the society)The
social groupsavailable in the society put restrictions on the (a) Suppliers
company's marketing activities. b) Customers
Few cultural values prevailing in the society also (c) Marketing Intermediaries
restricts company's marketing activities. For instance, (d) Competitors
Hindus do not eat beef as they worship Cow. This beliefof (e) Public
Hindus influences the demand of beef,products. ( Company's internal environment.
SIA PUBLISHERS AND DISTRIBUTORS PVT. LTR:
UNIT-1 BASICs 1.25
(a) Suppliers (e) Public
In order to produce
goods and services, the companies The operations of the company will also have impact
borrow raw materials from suppliers. The
suppliers who on the general public. Apart from competitors and customers,
can supply raw materials at reasonable cost with sufficient a company must also focus on satisfying the general public
quantity and quality who can offer credit and give warranties because they are also one of the factors influencing the
are selected. All these will have influence on the
company's company's capability to achieve its objectives.
manufacturing activities, manufacturing cost and product
quality and help the company in achieving competitive|( ) Company's Internal Environment
advantage over other competitors. The company's internal environment comprises of
(b) Customers financial resources, Human resource capabilities, Research
The company's customers can be of five types. They and Development activities, company's image, production
are, facilities and location. All these act as factors which influence

) Industrial Consumers company's marketingdecisions.

Industrial consumers are the business
who buy goods and services to
organizations
manufacture some
other goods and services from them.
() Final Consumers
Final consumers are the consumers who
buy goods
and services for their own
consumption.
(i) Resellers
Resellers buy goods and services to resell them again
to others for profit. Market intermediaries such as
wholesalers and retailers are resellers.
(iv) International Customers
International customers might be individuals or
business organizations of other country, buying goods
and services from our country.
(v) Government and Non-profit Customers
This type of customers buy goods and services to
provide services to the public.
The company's marketing strategy rely upon
the type of customers the company is targeting at,
(c Marketing Intermediaries
Marketing intermediaries are the channel partners
who help the company in making its products and services
available to the target customers. Wholesalers, retailers,
distributors, services agencies and financial institutions etc,
come into the category of marketing intermediaries.
(d) Competitors
Competitors are the companies which are involved in
selling same or similar type of goods and services in the same
market. In addition to price factor, product differentiation
is also one factor based on which competitors compete in
the market. In order to achieve success in the competitive
environment, a company should keep track on its competitors
marketing strategies, programs and plans. The competitors
marketing strategy influences, the company's marketing
strategy.
- SlA PUBLISHERS AND DISTRIBUTORS PVT. LTD.
Q23. Discuss the importance of marketing
environment. How does socio-cultural
environment influence the marketing
decisions?
Answer Jan/Feb-11, 0Na)
Importance of Marketing Environment
The reasons why we need to analyze marketing
environment are clear from the following points,
1. Marketing environment is analyzed to estimate the
future marketing environment.
2. Marketing environment is analyzed to keep track on
the environment changes and the outcomes of such
changes.
To identify the
3. opportunities and threats posed by
the marketing environnment, marketing environment
is analyzed.
4.
The marketing strategies, plans and programs of
the company have to be designed by taking into
consideration the opportunities and trends in the
marketing environment. And for this clear analysis
of marketing environment is very essential.
Marketing environment is analyzed to determine the
scope of each opportunity posed by the marketing
environment and to select those opportunities which
can positively influence
company's marketing
operations.
Socio-cultural Environment
Marketing environment consists of micro-environment
and macro-environment. Socio-cultural environment is an
important element of macro-environment which deals with
culture, social-class, traditions, lifestyles, values and beliefs
of the society. The two important factors of socio-cultural
environment are,
(a) Culture and..
6) Social claaa:
 MARKETING IANAGEME
1.26
dringing. Asociev
A society)
(a) Culture and up
language
ofvalues are called as core
education, ar
religion, Such type
tntegrated outcome ofthe
factors such as
easily. and c a n be modis modifie
. established and will not change adaptable to change
certain cultural values which are firmly i n f o r m a t i o n about-
which a r e useful the
values and practices
other obtaining
Cultural values. A also has
society environment
for
essential
for the marketers .to
casily. A marketer can conduct a survey of socio-cultural It is very threats,
behaviour ofthe
customer. and
opportunities
and the buying both marketing
estyles
cultural shifts involves
L r h e cultural environment closely as

(b) Social Class diTerent soCial classes

consists of
environment. A society
Soci Class IS also an important factor of socio-cultural
These concepis vary and have
and behaviour.
dl

location of living, occupation, lifestyle

upon the income,
g and the consumption
pate.
a signincant on the society's buying behaviour
impact

Influence of Socio-cultural Environment on Marketing Decisions

like pollution of environment, health
Socio-cultural environment is widely influenced by marketing activities incurred from
of products is done through
machinery. The wastages
hazards, child labour activities etc. The production house effect. The wastages released
these equipments have a significant effect on the ozone layer
which is called as a green
environments. For example, in a petroleum
industry, the crude oil
irom various industries affects the air, land and marine
and the smoke which
1IS processed for creating petroleum products. But in this process,
the equipment burns oil 24 hours
is released from it affects the ozone layer.
for weakening the ozone
There are products which limit CFC (Chloro Fluro Carbon gas) and is responsible
also
movement for protecting the world.
layer. Thus, many organizations like consumer groups have started a great house
In another example, there are many fast food centers which are unhealthy and leads to obesity in young generations.
These food giants are only busy in getting profits and are not concerned about the health of their consumers.

Many small scale industries in the developing countries encourage child labour which has a significant influence
on the society. Thus, the society protests when the products and technology poses a great threat to the safety and health of
the individuals.