Modern Marketing I B.

Com I Sem (NEP Syllabus)

Unit 1 – Introduction to Marketing

1. What is a Market?
According to Philip Kotler, “A market is an area for potential exchange”.
According to American Marketing Association, “A Market is an aggregate demand of the
potential buyers for a product/service”.

2. Define Marketing?
According to American Marketing Association, “Marketing is concerned with the people and
activities involved in the flow of goods and services from production to consumption”.
According to Philip Kotler, “Marketing is the set of human activities directed at facilitating and
consummating exchanges”.

3. Define Marketing Management?

According to Philip Kotler – “Marketing Management is the analysis, planning, implementation
and control of programme designed to create, build and maintain beneficial exchanges and
relationships with target market for the purpose of achieving organizational objectives”.

4. What is Marketing Organization?

It is the structure of the marketing function within the organization. It May be
1. Product-based Marketing organization – It is a marketing structure of an organization
which staff specialists have responsibility for particular products.
2. Market-based Marketing organization - It is a marketing structure of an organization in
which staff specialists have responsibility for particular markets rather than for particular
products.

5. Give the meaning of marketing environment?

According to Philip Kotler, A Company’s marketing environment consists of the factors and
forces outside marketing that affect marketing management’s ability to maintain successful
relationships with its target customers

6. Briefly Explain the Nature of Marketing?

The following are the nature of marketing
1) Marketing is a Consumer-oriented process – A business exists to satisfy human needs,
hence it is essential that the organizations first identify consumer needs and produce
such products/services that best satisfies their needs.
2) Marketing starts and ends with customer – Marketing essentially starts with
understanding the consumer wants and ends with taking the feedback of the consumers
about the product/services.
3) Marketing is the guiding element of business – Marketing involves integration of
various activities and owns the responsibility of reaching the customer at a ma ximum

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speed with minimum cost. Thus its function is directed towards the development of the
organization and thereby the country as a whole.
4) Marketing is a system – Marketing is a dynamic process. It receives inputs from
customer in the form of valuable information, processes these information and produce
products/services to satisfy customer and thereby earn profit.
5) Marketing is a Goal-oriented process – The very basic aim of marketing is to generate
considerable amount of profit through customer satisfaction, increase in sales volume,
increase in profit and growth of the organization. Hence is a goal – oriented process.
6) Marketing is a process of exchange – In marketing Goods and services are exchanged
between the buyers and sellers for money and at the same time information is also
exchanged between them, which is the foundation for the success of the organization.

7. Explain the Concept of marketing?

A concept of marketing refers to the understanding the Idea, views etc., an organisation has
regarding marketing of its product. The following are the five basic concepts of marketing
1) Production concept
2) Product concept
3) Selling concept
4) Marketing concept
5) Societal Marketing concept

1) Production concept
It is the oldest concept of marketing and advocates that consumers will buy products that are
available and affordable. Therefore, a manufacturer in order to sell large quantities of goods
only has to concentrate on production, distribution of goods and price them affordably. The
underlying assumption was that the sales department will sell whatever is produced by the
production department. This concept does not understand consumer preferences and taste
before production or the customer satisfaction after the sale.
2) Product concept
This concept advocates that consumers will buy products that are better in quality,
performance, durability and features. Therefore, manufacturers have to focus on product
improvement continuously. The customers choose good products. This concept does not
attempt to understand the needs and preferences of consumer.
3) Selling concept
This concept advocates that consumers will buy products only when manufacturers put in
sufficient amount of selling and promotional efforts. Therefore, manufacturers have to
advertise, improve the distribution and do everything to bring the product to the notice of the
consumers and make them to buy the product. Even according to this concept, there is no
effort on the part of the manufacturer to understand the consumers’ needs and preferences.
4) Marketing concept
This concept advocates that manufacture should primarily study the consumer and understand
their needs, wants and desires. Later, manufacturer should design a new product or improve an

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existing product strictly based on the needs, desires etc. of the consumer . In this concept the
entire focus will be on the consumer and his needs.
5) Societal Marketing concept
This concept advocates that a manufacturer should understand the consumers’ needs and
preferences, design appropriate products bring them to the notice of the consumers sell them
on Profit but do everything in such a way that the interest of the society of mankind is not
adversely affected. The focus should not merely be on the consumer wants or profit but it
should be equally on the Welfare of the society.

8. State the Objectives of marketing?

Marketing is a series of activities with the ultimate aim of increasing the sales of the goods. The
following are the objectives of marketing
1) The most primary objective of marketing is to understand Consumer wants preferences,
needs, tastes etc.
2) To design an appropriate product according to the taste, preference and wants of the
consumer.
3) To create awareness and demand about the products in the minds of the consumer.
4) To make arrangements that the products is widely available for the consumers to buy
the products
5) To devise a system to study the consumer and understand his needs and wants. And
carry out Market Research to help product development

9. Explain the various Approaches to Marketing?

An approach to marketing means the way in which one approaches to the study of the subject
marketing. The following are the approaches to the study of marketing
1) Commodity approach
2) Institutional approach
3) Functional approach
4) Managerial approach or decision making approach
5) Societal approach
6) System approach

1) Commodity approach
Under this approach, the commodities (products) which have to be marketed become the focus
of the study. The various marketing related aspects of these commodities are studied Such as
distribution channels, merchants, middlemen, advertising, peculiar marketing problems, etc.
2) Institutional approach
Under this approach, a study is made of the various Institutions for individuals who are involved
in the process of marketing of goods. The functions performed, problem faced, the practices,
the methods adopted, cost involved etc. of these institutions are studied. The Institutions or
individuals typically include Merchant middlemen, wholesalers, retailers, selling agents etc.
3) Functional approach

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In this approach, the functions which are necessary to discharge the marketing activity are
studied. The different marketing functions like buying, selling ,pricing, standardizing and
grading, storage, transportation, finance, risk bearing, collecting market information,
advertising, packaging etc. may be studied.
4) Managerial approach or decision making approach
Under this approach, a study is made of the decisions taken by the management of
organisations to discharge the marketing. Under this approach, more importance is given to the
managerial decisions related to marketing like management of the channels of distribution,
advertisement campaigns, pricing, planning market research etc.
5) Societal approach
This approach considers marketing as a means by which society meet its own consumption
needs. This approach focuses on the well-being of the society in the light of the interactions
between the society and the marketing activities.
6) Systems approach
Under this approach, the various aspects of marketing are studied not as though they are all
independent. They are studied in the light of the other forces within the systems which also
affects marketing. Similarly marketing also affects the other forces in the system.

10. Explain the Functions of marketing?

Marketing is a series of activities which are concerned not only with bringing goods and services
from the producers to the consumers but also conveying information from the consumers to
the producers. There are several classifications of marketing functions according to different
experts in the field.

According to Clark and Clark, the following is a classification of marketing functions

1) Functions of exchange
a) Buying
b) Assembling
c) Selling
2) Functions of physical supply
a) Transportation
b) Storage and warehousing
3) Facilitating functions
a) Standardizing and grading
b) Financing
c) Risk bearing
d) Market information

1) Functions of exchange
These functions create exchanges of goods and services for money
a. Buying

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Selling begins with buying. Manufacturers buy raw materials and convert them into finished
goods. Traders such as wholesalers and retailers buy finished goods and later sell them. Buying
is a very important function because the entire selling depends on it.
b. Assembling
Assembling involves getting together or concentration or collecting goods from numerous
sources of supply.
c. Selling
Selling is transferring of goods by the sellers to the buyers for a price. This also involves transfer
of the legal ownership or title of the goods. Selling is the most important characteristic features
of the modern Marketing System

2) Functions of physical supply

a. Transportation
Transportation and marketing means the activity of transporting goods from the place of the
manufacture to the place of their consumption. Most of the goods which are manufactured are
not consumed at the place of their manufacture. Therefore, these goods must be shifted to all
the places where they are consumed. Transportation adds value to the goods by creating utility
of place.
b. Storage and warehousing
Goods have to be stored or warehoused from the time of their manufacture to the time of their
consumption. This is because goods are always manufactured in anticipation of demand.
Therefore, storage and warehousing refers to making arrangements for the goods to be stored
safely till they are consumed.

3) Facilitating functions
a. Standardization and grading
Standardization means establishment of certain standards based on a few inherent attitudes of
the goods such as nutritional content, size, shape, colour, composition, quality, taste,
performance etc.
Grading means the physical sorting and classifying of the goods according to the predetermined
standards. The goods are classified into several grades and all the goods in a certain grade will
have similar characteristics. Grading is done after standardization.
b. Financing
Marketing activities just like any other activities need money. Market financing means
providing finance to individuals and organisations involved in marketing functions to enable
them to carry on marketing functions. Marketing activities generally require more of working
capital than fixed capital.
c. Risk bearing
Risk means an element of uncertainty or possibility of loss on account of danger from
unforeseen and uncontrollable circumstances in future. Marketing activities involved several
risks such as destruction of goods by fire, flood, cyclones etc., theft of goods, changes in the
fashion, price fluctuations, unforeseen competition, bad debts etc.
d. Market information

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To achieve the objectives of sales and profit, a marketer must not only be well informed about
the various facts of marketing but he should also be aware of the latest trends in the market,
which is very dynamic. A marketer should have general information about the market and also
specific information that affects his company and its products.

11. What are the External and Internal environmental forces? Explain. (Or)What are the
factors affecting Marketing environment?
A Marketing environment is of two types -
 Macro Environment
 Micro Environment

Macro Environment
The macro environment consists of the larger societal forces that affect the micro
environment. It includes demographic, economic, natural, technological, political and cultural
forces.
1) Demographic Factors
Demography is the study of the population of a country and also its composition such as
gender, age, income, education, ethnicity, rural and urban, birth rate, death rate and growth of
population etc. Since marketing deals with people of a country an understanding of the
country’s demography is very crucial to a company.
2) Economic Factors
The economic factor constitute factors such as GDP, Per capita Income, inflation, deflation,
recession, rates of interests, money supply, incidence of savings etc, which prevail in a country.
The above factors greatly affect the marketing of a company as they collectively have a great
influence on the purchasing power of the people. A proper understanding of these factors will
enable a company to frame policies in terms of pricing, advertisement, quantity of goods to be
manufactured etc.
3) Natural Factors
Natural factors means factors relating to ecology, environment etc. people will not buy the
products of a company if they are not eco-friendly. A company has to convince the customers
that it is environmentally responsible, that the production processes are eco-friendly, that its
products are safe etc.
4) Technological Factors
Technology is the total of techniques and means employed to provide objects necessary for
human comforts. Every new technology replaces the existing technology. Companies which do
not technologically upgrade constantly will be rejected by the market. Selling technologically
superior products enables a manufacturer to overcome competition. On the other hand too
much of the technology also becomes unacceptable.
5) Political & Legal Factors
The policies framed by the government in terms of finance, economy, consumer protection,
ecology and environment, direct and indirect taxation, imports and exports, foreign
investments etc. have a very strong influence on marketing. These laws also keep changing

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from time to time. Every company has to understand the laws of the country which have an
impact on its marketing and carry on marketing appropriately.
6) Socio-cultural Factors
The customs, traditions, living habits, thinking, human relations etc. of a society are largely
influenced by the culture. Our purchases of goods and services are greatly influenced by such
cultural and social factors. A company has to understand these cultural factors before designing
products or marketing policies. Anything which goes against the cultural factors of a society will
be summarily rejected by the society.

Micro Environment
Micro environment refers to the forces which are close to the company that affects its ability to
serve its customers. It includes the company, suppliers, marketing channel firms, customers,
competitors and public
1) Company
To achieve the task of the marketing the marketing department needs the corporation of
various other company department such as finance department for funding, R&D department
for designing products, purchase department to buy materials, manufacturing department to
manufactured goods, accounts department to maintain accounts of the business, etc.
Therefore, all these departments within the company exerts a strong influence on the company
and its marketing
2) Suppliers
Suppliers are the one who provide raw materials to company to be converted into finished
goods. Supplier must supply quality goods on time at reasonable prices and on favourable
terms and conditions. The cost of the product of the company largely depends on the cost at
which the raw materials are supplied to the company. Therefore suppliers exerts a very strong
influence of the company and its marketing
3) Marketing intermediaries
Marketing intermediaries enable the company to sell and physically distribute the goods
throughout the market. They include transport organisation, wholesalers and retailers and
servicing agents such as banks insurance companies warehousing etc. therefore they exerts a
very strong influence of the company and its marketing
4) Customers
The ultimate success of marketing depends on the customers. The marketing's aim should be to
find customers, develop customers, serve them well and retain them. If customers do not buy
the product of a company there is no way for any company to survive. Therefore customers
exert a very strong influence on the company and its marketing.
5) Competitors
Every business should provide greater satisfaction to its customer than its competitors. For this
every company has to understand its competitors if a business is unaware of its
competitiveness it will find it very difficult to overcome its competitors. Therefore competitive
exams a very strong influence on the company and its marketing
6) Public

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Public means any group which can impact an organization's ability to achieve its objectives.
These public also exert a very strong influence on the company and its marketing

12.Briefly explain the Importance of marketing environment?

The following are the importance of marketing environment
1. Increase the general awareness - It creates an increased general awareness of
environmental changes on part of management
2. Greater effectiveness - it guides with greater effectiveness in matters relating to
government.
3. Marketing analysis - it helps in marketing analysis
4. Resource allocation - it suggests improvements in diversification and resource
allocation
5. Capitalize upon opportunities - it helps firms to identify and capitalize upon
opportunities rather than losing out to competitors
6. Objective qualitative information - it provides a base of objective qualitative
information about the business environment that can subsequently be of value in
designing the strategies.

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