UNIT 1 Introduction to Market and Marketing

Learning Objectives
After reading this unit, students will be able to:
Explain the meaning and concept of marketing
Understand the importance of marketing to Marketer, consumers and society
Understand the scope of marketing
Distinguish between marketing and selling
Learn the journey of marketing through different philosophies
Explain the meaning of certain keywords

INTRODUCTION

Consider a typical day in one’s life. We start our day with consumption of different sorts of
products from the moment we wake up in the morning to the time we go to bed. Most of the
times we start our day by taking a bath with the soap and the shampoo that we use. The
breakfast we take might be a paratha, bread, butter, milk, tea or juice, the cloth we drape in.
We may be using public and private transport for commuting to go to schools or workplace.
The use of gadgets throughout the day, the television shows we watch for entertainment, the
books and newspaper or information material we read, the bed mattress we sleep on and the
list of products we use are endless. The entire day we consume different sorts of products. Have
we ever thought of where do these products come from? Who does manufacture them? How
does the product reach us and how have we come to know about the product?

There are three classes involved in the complete process of consumption i.e., the
manufacturer or producer, marketer and the end user. A manufacturer is someone who
makes products in a factory; anything from a needle to a plane. A producer is someone who
makes the product but not in a factory. For example, a farmer is a producer of fruits and
vegetables. On the other hand, marketer is someone who performs various activities to
facilitate exchange of goods and services between the producers or manufacturers and users
(consumer) of the product. End user is a person who ultimately uses or intends to use the
product also known as consumer.

For example, 'Fiama Di Wills soap', ‘Engage deo’, ‘Aashirvaad aata’, ‘Sunfeast biscuits’,
‘Bingo snacks’, ‘Yippee noodles’, ‘B Natural juices’, ‘John player’ and ‘Miss player cloths
‘are manufactured by Indian Tobacco Company (ITC) and marketed by ITC too. But there can
be different set of manufacturers and marketers like ‘GoodDay Crunches’ is manufactured by
J.B.Manghram Food Pvt. Ltd but marketed by Britannia. Similarly, ‘Polo mint candy’ is
manufactured by Makson Pharmaceuticals but marketed by Nestle India. Thus, Britannia and
Nestle are marketers but not manufacturers of the products. These firms undertake various
activities to stimulate the demand of their products and earn profit by meeting customers’ needs
and wants. These firms perform various activities by the marketers to facilitate exchange of
goods and services between the producer and consumer called marketing activities. We as
consumers might know the marketer’s name as that is what is popularly known.

The aim of every economic activity is to satisfy human wants which can be satisfied by goods
and services. But they must be transferred or moved from the producer to the final consumer.
This involves the creation of markets.
The undertaking of several activities i.e. buying, assembling, transporting, warehousing, risk
bearing, financing, selling etc. brings about a need to study market and marketing. In the words
of Paul Hoffman-. “It is illusory to think that a country would be industrialized by building
factories”.

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Industrial activity has no meaning unless they are fully supported by ‘marketing inputs’, i.e.,
production has no input unless it is exchanged for money or money’s worth. Industrialization
meant building markets.

What is market?
Market originates from Latin word ‘MARCATUS’ which means a place where buyer and
sellers meet for business. Earlier in our country buyer and seller gathered at a specific place
called ‘haats’or ‘melas’. But with passage of time buyers and sellers need not meet face to face
for transaction, they can meet virtually through e-commerce platforms. On the basis of end use,
market can be of different types: Consumer Markets (FMCG-Fast moving consumer goods,
consumer durables, soft goods), industrial markets (finished goods, components and services),
intermediate markets (wholesale and retail markets), geographical location (local, national,
global/international markets, rural and urban markets), Governmental Markets and Non-profit
organizations.
Thus, market would imply: -
 A place where goods and persons are physically present
 An assembly of people (buyers and sellers)
 An area of operation
 An act of buying and selling
 A place where consumers wants are satisfied
However, in a general sense, it is a whole of any region in which buyers and sellers are brought
in contact with one another and by means of the prices of the goods tend to be equalized easily
and quickly.

Definitions
 According to Philip Kotler, “Market is an area or atmosphere for exchange.”
 According to American Marketing Association, “Market is the aggregate demand
of potential buyers for the product.”

Classifications of Markets
Markets can be classified on the following basis:
A. Based on Area:
 Local markets: Confine to a locality mostly dealing in perishable and semi-perishable
goods like fish, flowers, vegetables, eggs, milk, and others.
 Regional market: Covers a wider area may be a district, a state or inter-state dealing in
durables and non-durables both consumer and industrial products, including agricultural
produce.
 National market: Covers national boundaries dealing in durable and non-durable
consumer goods, industrial goods, metals, forest products, agricultural produce. Eg- Tea,
Cement- Ambuja cement
 World or International market: The movement of goods is widespread throughout the
world, making it as a single market. It should be noted that due to the latest technologies in
transport, storage and packaging, even the most perishable goods are sold all over the
world, not that only durables. (Eg- perishable goods- flowers, Durable- Toyota car)
B. Based on Time:
The time duration is the factor. Accordingly, there can be short period and long period markets
 Short-period markets are for highly perishable goods of all kinds and services.

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 Long-period markets are for durable goods of different varieties that may be produced or
manufactured.
C. Based on Transactions:
Taking the nature of transactions, these can be spot and future markets.
 Spot Market
The market where delivery or handing over of the goods is made immediately after sales is
called spot market. In such market, price of product is paid immediately at the spot and
ownership of the product is transferred to buyer at the same time. E.g.- stock and
commodities market – spot transaction.
 Future Market
In this type of market contract is signed for sale of products in future, but no delivery of
product is made. In this market, buyer and seller sign a contract for buying and selling
products at certain rate of price or on condition to determine the price in future. E.g.- stock
and commodities market – future transaction.
D. Based on Regulation:
Taking regulation as basis, markets can be regulated and non-regulated.
 Regulated is one in which business dealings take place as per set rules and regulations
regarding quality, price, source, changes and so on. These can be in agricultural products
or produce and securities.
 Unregulated market is a free market where there are no rules and regulations; even if they
are there, they are amended as per the requirements of parties of exchange. E.g.- money
lenders.
E. Based on Volume of Business:
Taking volume of business as a basis, there can be two types of market, namely ‘wholesale’
and ‘retail’.
 Wholesale markets are featured by large volume of business and wholesalers. Here, goods
are purchased in bulk.
 Retail markets are those where quantity bought and sold is on small scale. The retailers
are one who buy from wholesalers and sell back to consumers.
F. Based on Nature of Goods:
Taking the nature of goods, there can be commodity markets and capital markets.
 Commodity markets deal in favour of material, produce, manufactured goods – may be
consumer and industrial and bullion market dealing in precious metals.
 Capital market is a market for finance. These markets can be subdivided into ‘money’
market dealing in lending and borrowing of money; ‘securities’ market or ‘stock’ market,
dealing in buying and selling of shares and debentures and ‘foreign exchange’ market
where it is a forex market dealing in buying and selling of foreign currencies may be hard
or soft.
G. Based on Nature of Competition:
Based on competition or competitive forces, there can be variety of markets for a product
or service.
 A Perfect market is one which is characterized by considerable number of buyers and
sellers, prevalence of single lowest price for products those are ‘homogeneous’, perfect

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 knowledge on the part of buyers and sellers, free entry and exit of firms in the market.
These types of markets exit hardly. Eg- Gold shops
 Imperfect markets – Their products may be similar but not identical, different prices for
a class of goods, no perfect knowledge of the products by the buyers and sellers and
existence of physical and psychological barriers on movement of goods.
 Monopoly Market
If there is full control of producer over market, then such market is called monopoly market.
In such market, the producer determines price of his products in his own will. In such
market, only one producer or seller controls market. In practice, the producer or seller can
supply products or achieve monopoly on price only in small or limited area, but in wide
area it becomes impossible.
H. Based on Demand and supply:
 A seller’s market is one where sellers are in driver’s seat and the buyers are at the receiving
end. In other words, it is a situation where demand for goods exceeds supply whereas
 Buyer’s market is one where buyers are in commanding position, i.e. supply is exceeding
the demand for the goods.

Activity 1

Pick out products that you consume every day basis. It can be from chewing gum to a
Car. Find out is the manufacturer and marketer the same. Mention at least 10 products
with the (i) same marketer and manufacturer and (ii) different marketer and
manufacturer.

Introduction to Concept and Definition of Marketing

The term marketing has been described by different people in different ways. For some it is a
fun activity of ‘shopping’, for some it is shopping along with entertainment. There are others
who question, does marketing mean selling?
Some of us believe marketing starts after selling, they believe ‘selling’ is merely where a
salesman is required to sell. However, selling is a part of marketing, selling includes selling of
goods, services and ideas. Marketing is a broader term and selling is one of the functions of
marketing. Some people question does marketing mean advertising?
Marketing undoubtedly includes advertising; the main role of advertising is to ‘communicate’.
But marketing is much bigger than advertising. Does marketing mean distribution? The
answer is same as in the above two cases, thus the product that reaches us is another function
of the marketer i.e. distribution function, but marketing is much bigger than this too. Some
even believe that marketing is a post-production activity. Marketing involves various activities
that take place even before the products are produced.

What does the term marketing mean?

Marketing refers to the process of ascertaining consumer needs, converting them into
products and services, and then moving the product or service to the final consumer segment
with emphasis on profitability and customer satisfaction, ensuring the optimum use of the
resources available to the organization.

Marketing is the process of planning and executing the conception, pricing, promotion, and
distribution of ideas, goods, and services to create exchanges that satisfy individuals and
organizational objectives.

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As per Philip Kotler, the marketing guru, “marketing is a social and managerial process by
which individuals and groups obtain what they need and want through creating and
exchanging products and value with others.”

The author has considered marketing as a social process where interaction of people is an
essential component of it. Through this interaction the persuasion for selling the products or
services begins. Thus, marketing is purely purchase decision of the customer but through
continuous marketing initiatives at different stages. Marketing starts before the production of
the goods and continues even after the selling of the products. So, we say marketing is a
continuous process. Where activities pertaining to identification of the needs, wants and
demands of the customer, then designing of a suitable product to meet the needs, giving name
to the product and converting it to a brand by communicating it to the customers.

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Figure 1.1: Core Marketing Concepts, source: www.expertsmind.com

Let’s understand few Marketing Concepts that are a part of the definitions:
Need(s), Want(s) and Demand(s)

Need(s)
Marketing is a continuous process. Our marketers are individuals who enter in the market and
have understanding of the activities of marketing. For understanding the activities properly,
understanding the needs and wants of customers becomes essential. Thus, marketing is
satisfaction of the needs and wants of the customer. Needs are the state of being deprived of
something.

Needs can be physical like hunger, clothing, shelter and other basic necessities. If unsatisfied,
it leaves a person unhappy and uncomfortable. For example, when we are fasting and didn’t
have food since morning the moment a person names our favorite food it is tough for us to
resist. Needs can also be social like love and belongingness, self-esteem like status and self-
actualization needs. These needs are not invented by marketer, rather, the widely known
academic model of needs was proposed by psychologist Abraham Maslow. Although this
model is prominently used in motivational studies but can also be applied for studying
customer’s needs. Customer needs are the problems that customers plan to solve with the
purchase of goods or services. A marketer can’t create needs. Marketers have the option of
identifying, analyzing, anticipating and fulfilling the needs only.

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Want(s)

Wants are the form taken by human needs as they are shaped by culture and individual
personality. These are essentially dependent upon needs. For example, a person in North India
would satisfy his hunger with rajma and chawal while a person from South India would like
to have fish curry and rice.

Demand(s)

We may want to dine out in a five-star hotel. But the question is do we have money to dine at
Taj? If yes, then it will become demand. Wants backed by willingness and purchasing power
is known as demand. The top marketing companies like HUL, Idea and Airtel etc. first
understand needs and wants of customers and then fulfil the needs, wants and demands by
conducting consumer research and get regular feedback from their salesmen in the market
about unfulfilled customer needs. For example: Big Bazaar a retail store of Future group, shop
floor managers regularly mingle with customers on the shop floor and try to satisfy every
customer.

Objectives of Marketing

A company must be clear with its marketing objectives and these objectives must fit in
with the overall business objectives for formulation of proper business strategy. The
objectives of marketing the company must take care are:
1. Creation of Demand: The marketing management’s first objective is to create
demand through various means. A conscious attempt is made to find out the
preferences and tastes of the consumers by the company. Demand for the products
and services are created by informing the customers their utility. Accordingly, the
products and services are produced to satisfy the needs of the customers.

2. Customer Satisfaction: The first and foremost marketing manager must study the
demands of customers before offering any product or services. Marketing begins
and ends with the customer. Satisfaction of the customers is outcome of
understanding of needs and meeting them successfully.

3. Market Share: Every business aims at increasing its market share. It is the ratio of
its sales to the total sales in the economy. For instance, both Pepsi and Coke
compete to increase their market share. For this, they have adopted innovative

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 strategies. These strategies can be adopted in marketing, advertising, sales
promotion activities and even through innovative packaging, etc.

4. Generation of Profits: The marketing department is the only department which

generates revenue for the business. Enough profits must be earned as a result of
sale of want-satisfying products. If the firm is not earning profits, it will not be able
to survive in the market. Moreover, profits are also needed for the growth and
diversification of the firm.

5. Public Image: To build up the public image of a firm over a period is another
objective of marketing. Goodwill of company is created over a period with regular
emphasis on customer satisfaction through continuous improvement in product and
services. The marketing department provides quality products to customers at
reasonable prices and thus creates its impact on the customers.

Create a Market Offering

Why do we purchase or own anything? Many of us own iPods. We own one because we want
to hear music. Or we own one because we have been influenced to buy one. After iPods were
introduced, few purchased the device because the image it had was, they were “cool”. Owning
an iPod became a cool fashion statement. But now iPods have become quite common but the
impact that iPods had on the music and entertainment industry has been huge because the
product was a revolution in the entertainment industry which replaced Walkman a device used
earlier. People buy things to solve needs. In the case of the iPod, the need is to have better
access to music or to look cool, or both. ‘Market Offerings’ are products and services designed
to deliver value to customers—either to fulfil their needs, satisfy their “wants,” or both. Market
offering refers to a complete offer for a product or service. The product or service that is sold
into the marketplace is called as a market offering.

Product

Needs and wants can be satisfied with products and services offered to the market. A product
is not limited to physical objects or tangible items i.e. they can be touched, seen and felt rather
it is anything that satisfies a need is called a product. Product also includes services which are
intangible along with tangible goods. A product can be a person, place, organization, activities
and even ideas. There are thousands of examples of products like food products, TV, Laptop,
Mobile Phones, and Clothes etc.

Fig 1.3: Products

Services
Services are deeds, processes and performances coproduced/provided by one person for
another person. Services are intangible products which can’t be touched, seen and felt. As
economy grows, the service sector also starts flourishing. The same can be seen in Indian
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scenario, here, services contribute more than 55% to the GDP. Service sector includes banking,
insurance, teaching, advertising, consultancy etc.

Fig 1.4: Services

Customer Value
As discussed in the example of buying an iPod, we buy an iPod because it not only gives good
music output (benefit) but also the cool fashion statement associated with it. Imagine one
buying a product, while buying a product, aren’t we thinking of the benefits the product brings
to us. It’s not only benefit it is rather the bundle of benefits associated with the product in the
form of product quality, after-sales services, warranty, repairs costs, free home delivery, user
friendliness etc. Customers are smart and they evaluate between benefits they are acquiring
and price they are paying for those benefits. Customer value is difference between the value
benefits the customer gains from owning a product and cost of obtaining the product. The cost
of product is not limited to price but also time and energy spent on shopping. Customer value
can be shown as an equation as below:

Customer Value = Total Customer Benefits – Total Customer Costs

Thus, the marketer’s role is to add more value to product in terms of benefits so that customer
prefers the product in relation to competitor’s product.

Customer Satisfaction
Customer satisfaction is the measure of success of an organization. Customer satisfaction is
the match between customer expectations of the product and the Product’s actual
performance. Customer satisfaction differs from one person to another; it’s an experience
which is different for different individuals. A proper evaluation of a product or service can only
be done by experiencing it. So, customer satisfaction is a post-purchase phenomenon.
Satisfaction can only be measured by comparing pre-purchase expectation and post-purchase
experience. The equation used to determine the level of a customer’s satisfaction is:

Customer Satisfaction=Experience – Expectation

Customer satisfaction is only obtained once the customer has experienced a product or service.
It is always a post purchase phenomenon which is quite emotional in nature.

Exchange Process
Exchange is the act of obtaining a desired object from someone by offering something in return.
Marketing works through exchange. Exchange process is simply when an individual or an
organization obtain and satisfy a need or want by offering some money in exchange of products
or services. For example, we go get a haircut at a salon, we pay for the haircut. The money paid
in lieu of the service taken is an exchange process. This exchange process extends into
relationship marketing and we enter exchange relationships all the time. With relationship
marketing the purpose is to build a long-term relationship with the customer. In the above
example if we are satisfied by the haircut service, we may intend to take more services from
the same saloon and intend to become a permanent customer with the salon. By delivering
value to customers, a relationship with customers is developed. So marketing is earning profit
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by building relationship with customer through satisfying his needs and wants. The same can
be applicable for a product too.

Marketing is a Science as well as an Art.

Marketing is an art because many marketing functions like sales and advertising require people
with certain personality traits to be able to do justice to the functional role. Salespersons for
example, should have extroversive personality and flair for interaction with people, and not
just the good knowledge of the products and sales processes etc. Also, a good advertisement
can come from highly creative minds. Therefore, a good marketing calls for certain innate traits
that cannot be transferred easily, and hence it is an art.
On the other hand, good marketing overall can also be classified as science as well. Because
many marketing processes like distribution and setting prices are quite standardized and
scientific.
Besides this, marketing can overall also be described as the standard process of understanding
consumer needs and wants, creating things aimed at satisfying these needs and wants, and
making such things available to consumers in exchange of profit. Because of these standard
and scientific processes of marketing, that can be transferred easily, marketing can be termed
as scientific. Marketers’ performance can markedly improve by receiving formal training on
this body of knowledge.

Differences between Market and Marketing

BASIS FOR
MARKET MARKETING
COMPARISON

Meaning Market is defined as an arrangement Marketing is a function that

whereby buyers and sellers meet identifies human and social needs
each other to conclude the and satisfies them.
transaction.

Outlet It is an outlet to let out the products It is gigantic machinery to move

the goods by creating utilities.

Process Market is a process that fixes the Marketing is a process that

price of commodities through analyses, creates, informs and
demand and supply forces. delivers value to the customer.

Concept Market is a narrow concept. Marketing is a wide concept that

includes diverse activities.

Consistency Market varies by products, place, Marketing philosophy remains

factors and so on. same, no matter where it is
applied.

Occurrence of Market is the starting point Marketing comes thereafter

events

KNOWLEDGE ASSESSMENT 1

Fill in the blanks with appropriate answers:

1. _________________ makes products but not in factories.
2. _________________starts before production of goods but continues after selling of
products.
3. _________________ are state of being deprived of something.
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 4. Wants are human needs shaped by________________and ________________.
5. Wants backed by willingness and purchasing power are called_________________.
6. The intangible acts and deeds offered from one party to another without the transfer of
title is called___________________.
7. Customer value is a __________________, which reflects the state of difference
between customer benefits and customer costs ___________purchase (pre-purchase)
8. Customer satisfaction is a __________________, which reflects the state of difference
between product or service experience with that of expectation (post-purchase).
9. ______________________is the act of obtaining a desired object from someone by
offering something in return.
10. The exchange process extends into _____________________________.

[Ans: 1. Producer, 2. Marketing, 3. Needs, 4. Culture and personality, 5. Demands, 6.

Services, 7. Proactive component, before, 8. reactive component 9. Exchange, 10.
Relationship marketing]

Session 2: Scope and Importance of Marketing

Gone are the days when marketing was confined only to goods and services. Now the scope of
marketing has increased and one can also market people, ideas, experience, events, places,
properties, organisations and information and not just confined to goods or services. In other
words anything that is of value to others can be marketed. The scope of marketing are
explained as under:

Goods: A tangible item which can be an article, commodity, material, merchandise, supply-
wares produced from agricultural, construction, manufacturing or mining activities.

Services: Products that have intangible properties such as banking, consultancy, education,
insurance, accounting, expertise, medical treatment or transportation.

Experience: Marketers can create stage and market experiences to the customers. For example,
Water Park and theme parks provide experience marketing. Another different real life
experience is being enjoyed by customers at modern retail outlets. Now retailing is not an
activity involved in just selling goods to the customers, it has now become an experience.
Shopping in a mall where the delightful experience comprises of not only shopping but also,
spending time with family and friends, eating out, watching movie and enjoying the complete
day.

Fig 1.5 Marketing of Experiences

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People
Marketing can help people to market themselves. Politicians are the most suitable and common
example of people marketing. Politicians market themselves to the customers (voters) by
promising them certain bundle of benefits. Cricketers, film stars, authors, painters, musicians
and sportsperson market themselves. Some of the well-known personalities are Amitabh
Bachchan, Sachin Tendulkar, Salman Khan etc. These people are not only successful in
marketing themselves but also they lend their names to products like perfumes (Shilpa Shetty),
retail stores by the name of True Blue (Sachin Tendulkar) and clothes and accessories by
Salman Khan with the name of ‘Being Human’.

Figure 1.6: Marketing of people

Places
Cities, state and nation can be marketed to the consumers. Place marketers include real estate
developers, commercial banks, businesses etc. One can’t forget the incredible India campaign
by Indian government to market India as tourist spot. In India, Bangalore is known as the
silicon valley of India. Kerala is known as God’s own country. Madhya Pradesh is known as
“Heart of incredible India”. A campaign by Amithabh Bachchan for Khushboo Gujarat ki is an
example for marketing places.

Fig 1.7 Marketing of Places

Fig 1.8 Marketing of Organizations

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Organizations
Organizations market themselves to create and boost their image in customers’ mind. They try
to create a unique and favourable image in the eyes of customers that can give organizations
an edge over others in the market place. ‘Tata group’ comprising of multiple brands, stands for
trust and quality globally. Philips promises its customers products which are technologically
advance and hassle free. So its marketing campaign is based on sense and simplicity platform.

Property
Properties, whether tangible like real estate or intangibles like stocks can be marketed to the
customers. Properties are bought and sold and this exchange process seeks the role of
marketing. Real estate developers (DLF, Unitech, and Supertech) develop property and seek
buyers for the same. Same is the case with any investment company that wishes to sell its
securities to individuals as well as institutions.

Fig 1.9 Marketing of Properties

Events
Marketers promote different events from time to time to their customers. These events can be
for individuals or organizations. Sports events like Commonwealth games, Cricket world cup
series, Musical Concert, Awards, and Fashion shows, etc are examples of some events.

Fig 1.10 Marketing of Events

Information
Information is basically produced and marketed and distributed by universities, schools,
colleges, newspapers, magazines, books etc. to the customers at a price. The customers here
might be parents, students and communities.

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Fig 1.11 Marketing of Information
Ideas

Every marketer offers some idea. Some offer it for money, whereas others do it for the society
in general. Marketers make profit from the society and they shall also give it back to the society.
Social marketing comprises of creating awareness on few ideas like Family planning, AIDS
awareness, discouraging smoking and child labour, wearing helmet while driving, blood and
eye donation, polio eradication program, etc.

Fig 1.12 Marketing of Ideas

Activity II

Collect 5 advertisements from latest newspaper or magazines for marketing of (i) services (ii)
properties (iii) ideas (iv) places and (v) events. Understand the messages conveyed in each
case. How each message is different from another and which is more appealing.

The Importance of Marketing

Earlier finance was considered backbone for any business but gradually marketing gained
importance and was considered more important than other functions of business i.e. Finance,
Production and Human resources. Later it was realized that to run business profitably
companies need to market their products if they want to gain more profits. As for every business
the leading factor for success is the customer. Thus with the customer as a controller, marketing
becomes a major integrative function of the organization. However, Marketing cannot be kept
apart and the Product, Pricing, Placement and Promotions of the product ultimately depends
on the marketing function.

Currently marketing is a core business discipline since it contributes greatly to the success of
the organization. It’s also essential to appreciate the concept of marketing as the cost of
marketing amounts to forty to sixty percent of the total cost. Production and distribution depend
largely on marketing. Marketing covers advertising, promotion, public relations and sales. It is
the process of introducing and promoting the quality product or service into the market. If the
company targets more of customer’s needs, they will come back again and again and even
bring along other customers. On the other hand, if the company pushes more on the product
and ignore customer’s needs and wants, they will in no time lose their customers.

Marketing plays an important role to the marketer, customers, society and economy.

Importance to the Marketers

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1. Marketing Promotes Product Awareness to the Public
The primary task of marketing is to get the product or service recognized by the market. It is
important that public awareness of product and company information is spread to the buying
public, this is possible if heavy advertising, sales promotion, personal selling, direct marketing
is done for creating awareness. There is no fixed rule for all but obviously the use of a particular
technique depends upon the nature of product, market and the financial conditions of the
company.

2. Marketing Helps in Enhancing Product Sales

Apart from public awareness about a company’s products and services, marketing helps boost
sales and revenue growth. Once the public learns about your product through TV
advertisements, radio commercials, newspaper ads, online ads etc., it will generate sales. More
the people know a product or a service; more interested they would be in buying the products.

3. Marketing Builds Company Reputation

Marketers continuously aim to create an image of the company in general public eyes. They
tend to create brand name recognition. This is done so that consumers can easily associate the
brand name with the images, logo, or caption that they hear and see in the advertisements. For
example, McDonalds is known for its arch design which attracts people and identifies the
image as McDonalds. With an established name in the industry, a business continues to grow
and expand because more and more customers will purchase the products from a trustworthy
and reputed company.

Importance to Customers

1. Marketing creates Utilities: Marketing creates different types of utilities, form utility –
from wood to furniture, place utility- product moving from the factory to the customer, time
utility- product available when needed, information utility- ingredients of the product and even
how to use the product, and possession utility- transfer of ownership from retailer to customer.

2. Large number of choices available: Marketers create needs and wants and try to satisfy
that through offering variety of product choices. If one wants soap, there are many brands
available, for example Lux, Pears, Rexona, Dove are range of soaps offered by HUL.

3. More platforms available: With the advent of technology, the marketers are offering
customers both offline and online platforms to purchase. Now marketers are serving more
number of customers through different ways, reminders of sales comes through sms, e-mail,
facebook, whatsapp. Even customers have become smarter, they search for information from
different online platforms and buy the best deal.

Importance to the Society

1. Source of Employment: Marketing offers a great range of wide and exciting career
opportunities. Marketing offers employment in the field of personal selling, packaging, and
advertising, marketing research, consultancy, distribution and channel sales.

2. Welfare of Customers and Stakeholders: Though profit maximisation is main motive of

every business but many marketers have taken up corporate social responsibility in order to
give back to society. Different forms, for example, HUL’s – Behaviour Change Program
where washing hands with soap before a mother touches her baby is proved to prevent many
infant deaths in villages. Where, over 40% of child deaths under the age of 5 happen in the first
28 days of life. This campaign is to help teach mothers this lifesaving habit and ‘Help A Child
Reach 5’.

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3. Marketing is helpful in raising and maintaining the standard of living of the
community: Marketing is all about giving a standard of living to the community. Paul Mazur
states, “Marketing is the delivery of standard of living”. Professor Malcolm McNair has further
added that “Marketing is the creation and delivery of standard of living to the society”. By
making available the uninterrupted supply of goods and services to consumers at a reasonable
price, marketing has played a significant role in raising and maintaining living standard of the
community.
Community comprises of three classes of people i.e., rich, middle and poor. Everything which
is used by these different classes of people is supplied by marketing. In the modern times, with
the emergence of latest marketing techniques even the poorer sections of society have attained
a reasonable level of living standard. This is basically due to large scale of production and
lesser prices of commodities and services. Marketing has in fact, revolutionized and
modernized the living standard of people in modern times.

Importance to the Economy

Marketing is helpful in development of an Economy: Adam Smith has remarked that

“nothing happens in our country until somebody sells something”. Marketing is the kingpin
that sets the economy revolving. The marketing organization, more scientifically organized,
makes the economy strong and stable, the lesser the stress on the marketing function, the
weaker will be the economy.

FUNCTIONS OF MARKETING
The scope of marketing is very wide. It may be analyzed in terms of marketing functions.
Marketing functions are inherent in every marketing process and these functions may have to
be performed many times in marketing a product. For example, every time the title to a product
changes hands, buying and selling functions are performed.
The most widely accepted classification of marketing functions is given by Clark and Clark
which is given below.

I. EXCHANGE FUNCTION:
These functions form the cornerstone for any marketing activity. As seen earlier, goods are
produced for satisfying human wants. This is achieved only when goods finally reach the hands
of consumers. The process of passing goods into the consumer’s hands is called function of
exchange. These consist of the following:

This function consists of the following:

1. Marketing Research: It is a technique of finding out the likes and dislikes of the
consumers. The feedback from the market enables the business to produce goods and
services as per the needs of the consumers. It is useful in collection of information about
market environment, nature and extent of market competition. It helps consumer-
oriented marketing as it rises to analyze the markets and products to be sold.
2. Product Planning and Development: It means to select promising product, conduct
its promotion on commercial lines and decide to supply the same to consumers. Product
development means to bring change in the existing product by improving its features,
functions, benefits, convenience, etc. or to bring new product as per the requirements
of the consumer.
3. Buying: This function in marketing is concerned with selection of goods to be sold. It
also includes buying raw materials which are used to manufacture finished goods.
Efficient and economic buying is essential to earn good profits. The function involves
planning of purchases, selection of proper sources of supply, selection of goods to be
sold, terms of safe mode of delivery, negotiation etc. there are four methods of buying.
a) By inspection
b) By sample
15
 c) By description
d) By grade

4. Assembling: It means bringing together, collecting and concentrating goods of the

same type from the various sources of supply at centrally located places. It becomes
necessary in case of goods produced by small producers scattered over a wider area.
Agricultural goods, non-standardized goods and seasonal goods need assembling.
Assembling ensures regular supply of goods in massive quantities and thus enjoys
wider market.
5. Selling: The objective of selling is to dispose goods at satisfactory prices. All marketing
efforts revolve around selling. It includes possession of prospective buyers to complete
the purchase of goods. It covers the cost of marketing and leaves a reasonable margin
of profit. This function is becoming difficult, complicated and challenging because of
market competition, availability of substitutes and changes in the needs and
expectations of the consumers. This calls for the best marketing strategy.

II. PHYSICAL SUPPLY FUNCTION:

The second group of marketing activities, Viz., functions of physical supply, tend to ease
buying and selling processes. This consists of the following:

1. Transportation: It facilitates movement of goods from the place of production to the

place of consumption. In today’s modern industrial system based on factory production
there is mass production, which calls for mass distribution. The distance between the
places of production and consumption has also increased calling for good transport
system. The cost of transport must be justified by the creation of place utility.
Transportation provides for:

 Help for growth and distribution of wealth.

 Develops distinct markets.
 Encourages specialization.
 Division of labour.
 Helps in making better use of labour and capital.
 Stabilizes prices in various markets.
 Creates employment.
Modern transport has brought the world closer, widened the market, not only to
cover our country but also the entire globe.

2. Storage: It is storing goods systematically at a suitable place called godown or

warehouse. Storage protects the good and stabilizes prices of seasonal goods. It also
helps certain goods to mature in their quality and facilitates trading in future markets.
Storage helps to stock the goods when they are not in demand and can be supplied easily
when demand arises.
Storage is necessary because there is time gap between the production and consumption of
goods. It is necessary in concentration and distribution. It is essential in both agricultural
marketing and manufactured goods marketing. The goods to be stored may be selected,
inspected, branded and packed in the warehouse and transported from there.

III. FACILITATING MARKET FUNCTIONS

These functions are in fact subsidiary in nature. But they have a direct relationship with the
marketing process and hence cannot be treated as non-essential functions. The later
improvements and additions to the marketing process are found in this group of functions.
1. Standardization: It means prescribing basic limits or grades to different classes of
products. It refers to establishment of norms for features, qualities and functions of a
16
 product. For example: footwear of a certain length and shape answer to a certain size
which will fit a certain foot size. If the product confirms to be standard, the pair of
shoes can be referred to as a certain standard size.
2. Grading: It is an extension of standardization function. To grade is to divide goods
into lots which has nearly the same characteristics as to size, color, weight etc. It is the
classification of goods into grades after due inspection. Grading helps the marketer to
compare the different qualities of the same product in different markets. The main
purpose of grading is to stabilize price of goods and to keep it uniform in various places
at various time. Eg ISI, Bureau of Indian Standards, ISO, AGMARK.
3. Branding: A brand is a symbol, name, term, mark or any other sign of identification
which highlights goods or services of a certain seller. By seeing this identity marks on
the products the consumers can associate them with a seller. It popularizes the product,
differentiates them and creates consumer preferences. It makes advertising campaign
more effective. Branding is an important marketing function as it promotes sales and
higher turnover. Common examples include the Nike “swoosh,” the golden arches of
McDonald’s and the apple used by Apple Computers.
4. Packing and Packaging: Packing means covering or wrapping the product for safety,
convenience and handling. Packages are the wrapper materials used in packing.
Packaging includes planning the package, size, shape, color, labelling etc. It is an
important marketing function as it brings about a change in demand through product
differentiation and positioning. However, it should adhere to social and environmental
norms.
5. Financing: An integral part of marketing means providing money and credit to
producers, wholesalers and retailers in the marketing operations. It assumes importance
because of the time lag between the production and consumption of goods. Availability
of adequate funds is extremely important for smooth functioning of the business.
6. Risk Management: Risk means an element of uncertainty or possibility of loss. The
major risks which marketing must face are physical loss (damage of goods-secured by
insurance), economic loss (fluctuation between demand and supply minimized by
market research) and credit loss (insolvency and bad debts-reduced by maintaining
proper reserves for future contingency)
7. Pricing: Pricing plays a key role in modern marketing as profit depends on turnover
and turnover upon the price of the product and service. The price should cover all costs
including normal profit. The pricing policy should be framed very cautiously as the
unsound policy may bring the life of an enterprise to an end. It also pulls down the
reputation and goodwill of the organization. However, it must be flexible and permit
changes from time to time as needed.
8. Promotion: A basic marketing function refers to use of techniques such as advertising
campaign, personal selling, sales promotion techniques, not only is the buyer influenced
by promotion, but marketer can also increase their market share through effective
promotion and persuasive communication.
9. Marketing Information System: Information is a vital resource in any business. MIS
will be able to study environmental changes, trends in the market demand, price, etc.
through effective market intelligence up-to-date, internal records, internal market
research, computer based DSS & exhaustive data bank.

Utilities & Kinds

17
The marketers sell benefit through the exchange process to satisfy the various needs of the
customers. This benefit is termed as utility/value satisfaction.
Utility is the measure of satisfaction obtained by receipt of something of value in the
exchange process. Utility of each product changes from person to person, product to product
and the various stages of the product life cycle.

The various kinds of utility could be as follows:

1. Form Utility – Conversion of raw materials into finished product so that it becomes
beneficial to the consumers. It could be in the form of a total transformation/grading to
mere change in package which could enhance the usefulness of the product. E.g. Grading
milk – the milk is first boiled, cooled, pasteurized (to kill germs), then it is put in cartons
and sold. It is also graded into low fat, skimmed milk, full cream etc. Milk is going to be
totally transformed to curd. E.g. Packaging – package of a box of apples (cardboard, paper).

2. Time Utility – Certain goods become useful/are needed only at a part time after which its
utility no longer exists. Therefore, the marketer should make sure that these goods are
available at the right time. E.g. Newspapers, medicines. There are certain goods that
improve in value with the passage of time, making it more useful to the consumer. Thus,
creating time utility e.g. Wine, pickles.

3. Place Utility – When goods are taken from areas of abundance to areas of scarcity creation
of place utility takes place. Moreover, consumers prefer to buy goods that are easily
available then taking efforts to locate them. Examples of place utility range from a retail
store’s location to how easy a company’s website or services are to find on the internet.
E.g. Apples of Kashmir, bananas from Philippines, Kiwi from Africa are being sold in
Dubai.

4. Information Utility – It is the utility which aid the consumer to know if a product exists
and from where it can be brought without which the product has no value and the marketer
cannot increase the sales. E.g. Air humidifier or Colgate toothpaste, a product becomes
more useful to the consumer if it can be described as to why it should be used, when it
should be used, how it should be used, who should use it and where it is available. This
kind of information persuades the target market. This maybe done through mass
advertisements, publicity, personal selling and sales promotion.

5. Possession Utility – The process of transferring the product where they acquire the right
to own the product in exchange for some consideration is called possession utility. In other
words, the titles to the goods have been exchanged after which the consumer could do
anything with the product. E.g. buying a watch, buying shares etc. or in a car dealership,
the term “delivery’’ refers to the turning over of a vehicle to its new owner after purchase.

6. Image Utility – This is a special kind of information utility where the emotional and
psychological value that a person attaches to the product in increased. This is associated
with prestige/self-esteem wherein importance is for reputation or social standing in owning
18
 that product. E.g. you have got a western gold watch and now it is in fashion, your prestige
increases. It can also be the satisfaction acquired from the emotional or psychological
meaning attached to products. Some people pay more for toothpaste perceived to be more
effective at fighting cavities and whitening teeth.

KNOWLEDGE ASSESSMENT 2

1. ______________the potential customers of future.

a) Customer
b) Consumer
c) Prospects
d) Marketer
2. Consumer Markets comprises of ________________________
a) Fast moving consumer goods (FMCG)
b) Industrial markets
c) Intermediate markets
d) All the above
3. Market offering can be combination of
a) Product & services
b) Information
c) Places
d) All of above
4. Market consists of
a) Potential buyers
b) Actual buyers
c) Both a and b
d) None of the above
5. Marketers builds company’s reputation by creating _______________ of company in
general public’s eyes.
a) Sales
b) Image
c) Logo
d) None of above
6. The public comes to know about the product of the company through ______________.
a) Television
b) Newspaper
c) Radio
d) Online
e) All the above
7. Marketing is a core business discipline it covers_________________.
a) Advertising
b) Promotions
c) Public relations
d) All the above
8. Scope of marketing is not limited to products, services but now one can market ideas,
people, events, places, properties, information, organisations and _____________.
a) Goods
b) Agents
c) Experiences
d) None of above
9. Customer value is a difference of total customer benefits and __________________.
a) Total customer experience
b) Total customer cost
c) Warranty
d) None of the above
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10. Marketing creates ____________________utilities.
a) Form utility
b) Place utility
c) Time utility
d) Information utility
e) All of the above

Ans: 1. A 2. D 3. D 4. C 5. B 6. E 7. D 8. C 9. B 10. E

Session 3: Marketing Philosophies

Business has evolved significantly, and markets have changed all over the world with the
passage of time. The companies have also changed the way they deal with the market,
progressing through different phases of progress. The advances in all areas of life change the
way people live and work. In line with this progress, the marketing function has come into
being. Understanding the use of modern marketing technology and emerging communication
strategies in the new marketing era can help the company build deeper relationships in the
marketplace. As every company differs in philosophy and objectives, the decisions too differ
on the basis of factors adopted i.e. whether the company focuses on mass production
/innovative product/ aggressive selling /customer satisfaction/ societal development
/relationship building. Hence, understanding philosophies right from Production concept has
been explained.

1. Production Concept
Production concept lays emphasis on affordability and availability of products.
Affordability is possible by reducing cost of production by producing large quantities and
achieving mass production. Availability is possible by mass distribution by making the product
widely available. This philosophy states that any amount of goods produced will sell if it is
available and affordable to customers.
The production concept is almost extinct now with companies paying more and more attention
to the customer as the basic ideology here is customers will choose products and services that
are widely available and are economical. So business is mainly concerned with making as many
units as possible. By concentrating on producing maximum volumes, such a business aims to
maximize profitability by exploiting economies of scale. This seems a viable strategy in
developing markets i.e. India, Brazil, Russia, China, and South Africa.
The Mantra for this concept is “Low cost and mass production” as rightly proven by Lenovo
computers of China.

2. Product Concept
During production concept supply increased over demand. Gradually low cost and availability
couldn’t ensure increase in sale and survival along with growth of the firm. The companies had
to innovate products and started giving more choices to customers which lead to product
concept. This concept is based on the philosophy that consumers will prefer products that have
better quality, performance and features. It emphasises on innovation to produce better quality
products. It believes in the ideology that a “good product will sell itself” as rightly proven by
Apple and Google brands. Both of these companies have strived hard on their products and
deliver customers rich feature, innovative and diverse application products that people just love
these brands. So, a good product backed by right price and proper distribution and promotion
will sell in the market and need not to be low priced (production concept) to sell in market.
Thus, product improvement became the key to profit maximisation for firms in product
concept.
3. Selling Concept
With the passage of time marketing environment further underwent changes, competition was

20
constantly increasing and just the improvement in product and making it available to customers
was not working. There was something more required then just a quality product for the
survival and growth of the companies as large number of sellers started manufacturing quality
product. Something more was required to persuade the customers now. Business philosophy
changed it was believed that customer would not buy or would not buy enough until or unless
they are convinced and influenced to do so. Therefore, Selling is the act of influencing a
customer to buy a product or service. Businesses had to concentrate on ways of selling their
products.
This concept is based on the belief that customers, be individual or organizations will not buy
enough of the organization’s products unless they are persuaded to do so. So, organizations
should undertake selling and promotion of their products for success. Thus, making good
products was not enough rather focus changed to pushing the sales of products through
aggressive selling. The selling effort is supported by promotional activities and aggressive
advertising. The company does not consider the needs and wants rather thinks that anything
and everything can be sold. This concept can also be applied in the firms having over capacity
in which their goal is to sell what they produce than what the customer really wants.
For example, this concept is effectively applicable in the cases of unsought goods like life
insurance, vacuum cleaner, firefighting equipments including fire extinguishers where the
customer doesn’t need them but if persuaded constantly the customer buys them. The
disadvantage with this approach is that it assumes that customer will certainly buy the product
after due persuasion and if dissatisfied will not speak to others about the product, which is not
true.
4. Marketing Concept
By this time customers were fed up of too much influence of the salesman during purchase of
products which led to unnecessary purchase that did meet customer’s needs and wants.
Customers expected that companies should be more responsible enough to understand their
actual needs and wants rather than imposing products on them. The marketing concept
proposes that the success of the firm depends on how well it understands the needs and wants
of the customers and how successfully it converts these needs in to products and services that
will satisfy the customer’s requirements. Marketing starts before the product; service or
solution is ready and continues even after the sale has been made. In marketing company makes
honest efforts towards retaining the customers and also attracting new ones. Customer
satisfaction is the strongest pillar of marketing where company assures that customers are
satisfied after buying a product or service. This is a customer centric approach rather than
product centric one. In marketing concept, customer satisfaction is the focal point and all
decisions like the product to be produced, features to be included are based on it. The price and
the place to be sold all depends on the customers. For example, if customer is in need of a pen,
pencil and eraser all in one, Linc pens have met that need of customers. If customers want triple
door in refrigerators LG, Godrej, Hitachi companies will produce them to satisfy their needs
and wants. These companies spend a lot on research to understand and meet customers’
requirements.

5. Societal Marketing Concept

Mother earth has given us everything which is a rich source of air, water, minerals, and land
that we live on. Further we all live in a society and are a part of it. We cannot even think of a
single day without family and friends. Our environment is facing a lot of problems in the form
of pollution, deforestation, increasing population, depleting natural resources, poverty, and
environmental deterioration. There are many more challenges posed by social problems too.
The duty of business does not end by just meeting needs and wants of customers rather the duty
of business to consider a larger perspective by really acting in the best interest of individuals
and society. The societal marketing concept believes in giving back to the society as it believes
that the company is profiting because of society and hence it should also take measures to make
sure the society also benefits from the company. The concept advocates to deliver the customer
21
satisfaction in a way that preserves or enhances the customer’s and the society’s well-being.
Societal Marketing can be defined as a marketing function in which the organizations identify
the needs and wants of the target market and then align the marketing activities of an
organization in such a manner that their marketing efforts are socially responsible and thereby
help the organization in gaining the trust of the society by having an image of a socially
responsible organization, but still remaining profitable.
Societal marketing is marketing with a noble cause. Now a day’s one can find number of
examples where companies are supporting one or another good cause. Aircel is promoting
‘Save Tiger Campaign’, Idea is concerned about increasing population and deforestation, ITC’s
project of spending each rupee from sales generated through Classmate stationery, Tata Tea
Jago Re campaign are some of the prominent companies who are very active in societal
marketing.
Body Shop, a cosmetic company uses only vegetable-based materials for its products. It is also
against Animal testing, supports community trade, activate Self Esteem, Defend Human
Rights, and overall protection of the planet. Procter and Gamble also practices societal
marketing concept wherein it gives certain percentage of sales of its products for deprived
classes of the world specifically the developing countries.

New Marketing Concepts

1.Meta Marketing:
Meta marketing was originally used by Prof. Kelly which means more comprehensive. It is to
bring the whole scientific, ethical, social, managerial experience on marketing. In the words of
Philip Kotler, it is a set of processes involved in attempting to develop or maintain exchange
relations involving products and services, organizations, persons, places etc. It is an attempt to
widen the horizons of marketing by covering non-business organizations.
E.g. selling of ideas on prohibition to teen cultures, selling family planning ideas or the idea
of prohibition, etc.

2.Re-Marketing- It takes the form of finding or creating new uses or users for an existing
product E.g.: nylon, originally used for making cloth and the hosiery, baking soda now used as
cleaning agent or a technology company may remarket its computer with new features to
improve sales after a recent developed system has been introduced in the market.

It is an extension of strategic marketing. Thus, in real sense, marketing is a method by which

new type of satisfaction is created for old products. This concept takes uniform finding or
creating new use for existing product. E.g. Use of baking soda- it extends the life of the product
which means optimum utilization of resources and greater satisfaction to the society. For
example, Lakme Company of India has set up a chain of beauty parlors to sell its products.

3.De-Marketing- De-marketing is that aspect of marketing which deals with discouraging the
customers in general, or certain class of customers on either a temporary or permanent basis.
The aim of De marketing is not to destroy demand but only reduce or shift it. It may be
employed by any organization to reduce the level of total demand without alienating loyal
customers, to discourage the demand coming from certain segments of the market which may
be either unprofitable or unsafe. Whatever may be the objectives there is always a danger of
damaging customer relations. Therefore, to be creative, every organization has to ensure that
its long run customers remain undamaged.

4.Over Marketing: Here the marketer’s efforts are applied for increasing sales, by all possible
means. It is a case of down trading that is reducing quality standards and benefits of efficiency
and diverting all their resources in increasing sales. It works well in the case of rural markets
and new markets. The firm might gain but the society will be penalized for not getting real
value for the price they pay.

22
5.Counter Marketing:
It is a deliberate attempt to damage or totally kill the demand for the goods and services because
they are known for harmful effects on the consumers, the suppliers and the people engaged in
making available these products or services. We are all aware that excessive drinking, smoking,
use of powerful pesticides, fertilizers, drugs, etc, are harmful. In case of such products the
demand is virtually killed or an attempt is made to change one’s choices by providing safer
alternatives. E.g. statutory warning or regulations for smoking, organic products to prevent
harmful effects of pesticides etc., thus, here, service rather than profiteering is the marketing
philosophy.

6.Green Marketing or Eco-marketing:

Green Marketing, an offshoot of societal marketing concept emphasizes that it is the task of an
organization to determine the needs, wants and interests of target markets, and deliver them
effectively and efficiently without creating imbalances in the environment or eco-systems. E.g.
Raising trees in forests has reduced rainfall, increased global warming; restricted use of forest
trees or projects like ‘planting tree’ campaign. Also, to check whatever products are used, be it
car or cups, medicine or pesticides, are to be environment friendly which are bio-degradable.
A good example is a global cry to replace plastic bags with paper bags or jute bags. The aim
of Green marketing is to protect endangered species of flora and fauna and eco-systems.

OTHER RECENT MARKETING CONCEPTS ARE:

7.Relationship Marketing
The approach came into existence in 1990’s. As the name suggest this approach focuses on
customer retention and satisfaction rather than being transactional in nature. The approach aims
to build stronger relationship with customers and its business partners. Although the idea of
building relationships with customers was given its due importance in the marketing concept
but extending relationships to business partners makes relationship marketing unique.
The approach suggests developing strong relationship with its partners who are suppliers and
distributors. It will lead to better channel arrangements, higher levels of cooperation, less
conflict, and increased efficiency. In relationship marketing everyone is treated as customers.
By relationship-building with all of these organizations and individuals, we can develop
strategies that are in the best interest of everyone in the entire channel of distribution. As a
result, everyone wins.

8.Mega Marketing (opening of closed markets, e.g. Pepsi and Cola)

Mega stands for the set of strategies to reopen the closed markets and reign over strongly again
for longer period. These strategies may be economic, political, psychological, public relation
skills and gaining cooperation of strongly opposing parties. In India, Indira Gandhi banned
Coca Cola and swadeshi companies were encouraged to come up with similar soft drinks, Parle
Company came out with Thumbs up which was a thundering success.
On the fall of the Indira Gandhi government, once again Pepsi and Coca Cola entered Indian
markets. Thus, happy days are again here, where colas were banned in India.

9.Synchro-marketing (marketing efforts to regulate price and distribution of some seasonal

products Peak-season products by exclusive offers)

Synchro marketing is matching the fluctuating demand supply conditions to minimize the loss
to the firms. Synchro Marketing is marketing process which solves the problem of irregular
demand pattern of a product. Demand for variety of goods, especially seasonal, fluctuates
greatly causing an imbalance making the parties to suffer or gain.
Marketing efforts are aimed at trying to bring inconsistent or seasonal demand levels in sync
with supply levels. Restaurants use early-bird dinner specials to bring in customers during the
slow period between normal lunch and dinner hours. Ski resorts promote summer activities and
festivals to bring in tourists during the summer months.
23
For example a Beach side hotel is overcrowded during evening time, whereas it is almost like
desert during morning hours. A cotton shop is crowded during summer season whereas during
winter it is not.
So, Synchro Marketing finds a way to solve the problem of inconsistent demand pattern by
the following methods:-
(a) Keeping high price during season
(b) Offers lucrative options during off-seasons
(c) Using the stores with many varieties of item
(d) Promotion and incentives

10.Event marketing (marketing of social events of sports and entertainment)

Event marketing describes the process of developing a themed exhibit, display, or presentation
to promote a product, service, cause, or organization leveraging in-person engagement. Events
can occur online or offline, and can be participated in, hosted, or sponsored. The promotion of
these activities can occur through various inbound and outbound marketing techniques.
Events must be memorable to make an impact. Of course the desired impact depends on your goals, but most
companies want events to be more than just a staged advertisement for their brand. When done well, events have
the power to create a lasting and powerful impression of all that your company can deliver. By allowing people
to experience and interact with your company, product or service while participating in an event, you are
connecting with potential buyers.
Examples: Tradeshows, Seminars, Conferences, Webinars, Live streaming, virtual events, melas, fun n fairs,
etc.
In short, marketing concept essentially represents a shift in orientation:
 From production orientation to marketing orientation
 From product orientation to customer orientation
 From supply orientation to demand orientation
 From sales orientation to satisfaction orientation
 From internal orientation to external orientation

It is obvious that the marketing concept represents a radically distinct approach to business. It
is the most advanced of all ideas on marketing that have emerged through all the years. Only
that marketing concept can keep the organization free from marketing myopia.
E.g. Marketing concept put into practice by British Airways BA took a novel approach to
customer orientation. The new team in customer relations, decided to take a proactive role in
retaining customers. The new motto was: To champion the customer, as opposed to defending
the company.

KNOWLEDGE ASSESSMENT 3

State True or False:

1. Product means only physical products
2. Needs and wants are same.
3. Marketing is more than selling.
4. Marketing concept doesn’t just end with understanding customers’ needs and wants,
it is making customers satisfied.
5. Product concept led to production concept.
6. Production concept believed in improvement in product and making it available to
customers.
7. The production concept is extinct in India.
8. Marketing begins before production and continues after sales.
9. Marketing is no longer a function of marketing department only.
24
 10. In selling concept, it is the customer and not the seller that needs to beware.

Answer: False- 1, 2, 5, 6, 7 True- 3, 4, 8, 9, 10

Session 4: Marketing vs. Selling

Many people confuse selling and marketing as one and same thing. In reality both are quite
different from each other. Selling is an important part of marketing but its not marketing.
Marketing is much wider in scope than selling.

Selling is characterized by product focus approach. It has short term goal of achieving market
share. It does not consider a planning for building up the brand in the market place and doesn’t
have a high loyal set of customers. The end means of any sales activity is maximizing profits
through sales maximization. The marketer is of the view that once the production completes,
the task of sales force begins and it’s the duty of the sales force to sell what has been produced.
Aggressive selling is adopted for achieving the sales which gives cash to the company.

Marketing as a concept is wider than selling and focuses on customers’ needs and wants rather
than the product. Marketing starts before the production and product is produced according to
the needs and wants of the customers. Customer satisfaction is given vital importance and
changes are made if customer is not satisfied. It is a long chain of activity, which comprises
production, packing, promotion, pricing, distribution and then the selling. Profits are not
ignored but they are built up on a long run basis and realized with customer satisfaction.

Every business is for profit, even marketing believes in profit maximisation but through
following pillars:

Identification of target customers of target market

Understanding of needs and wants of customers
Developing products or services as per the needs and wants of customers
Satisfaction of needs of customers

Fig 1.14 Selling and marketing Concepts

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Differences between Marketing and Selling Concept

Basis Marketing concept Selling concept

Definition Marketing is the process of
creating value for customer
and delivering goods and
services for earning profit.
Objective The objective of this concept
is to satisfy customer
through goods and services.
Scope It has a wider scope
Emphasis It lays emphasis on
consumer needs
Profit It earns profit through
customer satisfaction
Start This concept starts with
actual and potential
customers
Market segmentation It thinks deeply about
market segmentation
Marketing mix It gives equal importance to
marketing mix
Effectiveness This concept is applicable in
pure competition market
Price Consumers determine the
price
View on business It views business as a
consumer satisfying process
Selling is the process of
encoring customers for
increasing sales
Its objective is to increase
sale of goods and services
Its scope is narrow
It lays emphasis on products
and services
It earns profit through
attractive sales and
promotion
This concept starts with
existing product
It never thinks about market
segmentation
It gives importance to only
promotion
This concept is useless in
pure competition market
Cost determines the price
It views business as goods
producing process

Comparative Analysis of Marketing Philosophies

Orientation Production Product Selling Marketing Societal

Marketing
Basis

Philosophy Quality Product with Products Satisfied Consider

products at good quality, don’t Sell Customers Social
lower price Features and themselves. responsibility
performance. Customers while
need to be marketing
convinced to
buy.

Objective Minimize Offer Best Maximize Profit With Profit With

cost and Quality Sales Customer customer
maintain Product Satisfaction Satisfaction
volume and protected
social interest
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Method Focus on Focus on Aggressive Focus On Marketing
production Product and Promotion to total mix changed
and its features sell more Marketing according to
distribution mix Society’s
efficiency. best interest

KEY WORDS

Marketing: marketing is a social and managerial process by which individuals and groups
obtain what they need and want through creating and exchanging products and value with
others.

Needs: need is basic requirement of human being such as hunger, clothing, shelter and sex. If
unsatisfied it leaves a person unhappy and uncomfortable.

Wants: Human needs shaped by culture and individual personality are wants.

Demands: Wants backed by willingness and purchasing power is known as demand.

Product: A product is tangible item that can be touched, seen, felt and satisfies need.

Services: Deeds, processes and performances provided by one person for another person

Customer Satisfaction: Expectations of customers match with the actual performance of

the product

SUMMARY

 Traditionally, market refers to a place where buyers and sellers meet to enter into
transactions involving in exchange of goods and services.
 In modern marketing sense, market is set of actual and potential buyers of products or
services.
 Marketing is not merely a post-production activity. It includes many activities that are
performed before goods are actually produced and continue after goods have been sold.
 Anything can be marketed that is of value to others. It can be a product or a service or
an idea or information or a place or a property or an event and even experience.
 Many people confuse selling for marketing but selling is only a part of process of
marketing. Marketing is customer focused and selling is seller focused.
 Production concept believes in ideology of ‘mass production and mass consumption’
 Product concept believes in ideology of product with good quality, features and
performance.
 Selling concept believes that products don’t sell themselves. Customers need to be
convinced to buy.

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KNOWLEDGE ASSESSMENT 4

Short Answer Questions

Q1. What is marketing? Can a marketer be a manufacturer, support with relevant examples?

Q2. Distinguish between production and product concepts.

Q3. Distinguish between Marketing and selling.

Q4. ‘Customer is the king’, which philosophy follows this ideology?

KNOWLEDGE ASSESSMENT 5

Long Answer Questions

Q1. Define Market? Explain the types of markets?

Q2. What is marketing? Give examples to support your answer.

Q3. Marketing is not merely limited to selling of products and services. Elaborate

Q4. Importance of Marketing is not merely for customers but for society and marketer too.

Q5. Societal marketing is earning profits by working for society, explain and support with
examples.

KNOWLEDGE ASSESSMENT 6

Projects

Visit in a team of 4-5 students in a group to different marketing organisations in your

locality (distributors, wholesalers, retailers). Make a report to find the marketing
activities of each of them respectively. Is there any difference in the activities in the
organizations visited? Which activities are common to them?

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b)www.t20worldcup2016schedule.org

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