Marketing as “a human activity directed at satisfying needs and wants through exchange process”.

Marketing concept holds that a key to achieving organizational goals consists in determining the
needs and wants of target markets and delivering the desired satisfactions more ef ciently and
effectively by competitors.

FEATURES OF MARKETING
1. Needs and Wants:
• The process of marketing helps consumers in obtaining what they need and want.
• A need is a state of deprivation or a feeling of being deprived of something.
• Needs are basic to human beings and do not pertain to a particular product.
2. Creating a Market Offering:
Market offering refers to a process of offering and introducing a product or service, having given
features like size, quality, taste, etc. for the purpose of selling.
3. Customer Value:
The process of marketing facilitates exchange of products and services between the buyers and the
sellers.
4. Exchange Mechanism:
• The process of marketing works through the exchange mechanism.
• Exchange refers to the process through which two or more parties come together to obtain the
desired product or service from someone, offering the same by giving something in return. For E.g.
money is the mode of exchange used to buy/ sell a product or a service.
• Conditions to be satis ed for exchange:
a. At least two parties
b. offering something of value to the other
c. communication
d. Freedom to accept or reject offer
e. Parties willingness to enter into a transaction

Marketer
• Marketer refers to any person who takes more efforts in identifying the needs of the consumers,
offer the product / service and persuade them to buy the product in the process of exchange.
• Sellers as marketer are the providers of satisfaction. They makes available products/services and
offers them to customers with an intention of satisfying customer needs and wants.
• They can be divided into:
a. Goods marketers (such as Hindustan Lever)
b. Services marketers (such as Indian Airlines)
c. Others marketing experiences (such as Walt Disney) or places (like tourist destinations).
• Marketing activities are the activities carried on by the marketers to facilitate exchange of goods
and services between the producers and the consumers.

Marketing management means management of the marketing functions. It is the process of

organizing, directing and controlling the activities related to marketing of goods and services to
satisfy customers’ needs & achieve organizational goals.
he process of management of marketing involves:
a. Choosing a target market
b. Demand creation by producing products as per the customers’ requirements and interests.
c. Create, develop and communicate superior values to the customers: To provide superior
fi
fi
 value products/ services to prospective customers and they communicate these values to other
prospective buyers and persuade them to buy the product/ service.

1. Production concept:
In the earlier days of the industrial revolution, the number of producers were limited, so the
industrialists believed that, the consumers are only interested in easily and extensively available
goods at an affordable price.
2. Product concept:
• With passage of time, the supply improve and the customers started favouring the products that
were superior in performance, quality and features.
• Thus, product improvement became the key to pro t maximization of a rm.
3. Selling concept:
• Increase in scale of production led to competition among the sellers. Product quality and
availability alone did not ensure survival, as a large number of rms were selling similar products.
• The consumers on their own will not buy any products unless the enterprise take aggressive sales
and promotional activities.
4. Marketing concept :
• Marketing begins with nding what the consumers want and thus satisfy consumers and make
pro ts.
• Customer satisfaction is the precondition for realizing the rm’s goals and objectives.
5. Social marketing concept:
• Under this concept customer satisfaction is supplemented by social welfare.
• A company that adopts the societal concept has to balance the company’s pro ts,
consumer satisfaction and society’s interests.

FUNCTIONS OF MARKETING
1. Gathering And Analyzing Market Information:
• Systematic accumulation of facts and analysis of information.
• Analysing the strengths, weakness, opportunities, and threats of a business environment.
fi
fi
fi
fi
fi
fi
fi
• Identifying customer needs and wants, identifying buying motives, choice of a brand
name, packaging and media used for promotion etc.
• Data is available from primary as well as secondary sources.
2. Marketing planning :
• To develop an appropriate marketing plan so that the marketing objectives can be achieved.
• It should specify the action programs to achieve these objectives .
• E.g if a marketer tries to achieve a bigger market share in the country in the next three
years, then his marketing plan should include various important aspects like plan for increasing
level of production, promotion of products etc.
3. Product designing and development:
• Involves decisions regarding the product to be manufactured and it‘s attributes such as its quality
considerations, packaging, models and variations to be introduced etc.
• A good design can improve performance of a product and also give it a competitive advantage in
the market.
• Anticipate customer needs and develop new products or improve existing products to satisfy their
needs.
4. Standardization and grading:
• Standardisation refers to producing goods of predetermined speci cations, which helps in
achieving uniformity and consistency in the output E.g. ISI Mark etc.
• Grading is the process of classi cation of products into different groups, based on some of its
important characteristics such as quality, size, etc.
5. Packaging and labeling:
• Packaging‘ refers to designing and developing a package for a product.
• It protects the products from damage , risks of spoilage, breakage and leakage. It also
makes buying convenient for customers and serves as a promotional tool.
• Labeling refers to designing a label to be put on the package. It may vary from a
simple tag to complex graphics. For e.g. colgate, lays etc.
6. Branding
• It helps in differentiation of the product, builds customer loyalty and promote its sale.
• Important decision area is branding strategy, whether each product will have a separate
brand name or the same brand name to be used for all products.
7. Customer Support Services:
• Customer support services are very effective in increasing sales from the prospective customers
and developing brand loyalty for a product.
• It aims at providing maximum satisfaction to the customer and building brand loyality.
• Eg. sales services, handling customer complaints and adjustments, procuring credit
services, maintenance services, technical services and consumer information.
8. Pricing of Product:
• Price of product refers to the amount of money customers have to pay to obtain a product.
• It is an important factor in the success/ failure of a product.
• Demand for a product/ service is related to its price, so price should be xed after
analysing all the factors determining the price of the product.
9. Promotion:
• Promotion of products and services involves informing the customers about the rm’s product, its
features, etc. and persuading them to buy the products.
• Methods of promotion are advertising, Personal Selling, Publicity and Sales Promotion.
fi
fi
fi
fi
10. Physical Distribution:
• The two major decision areas under this function are
(a) Decision regarding channels of distribution or the marketing intermediaries to be used
e.g. wholesalers, retailers
(b) Physical movement of the product from where the place of production to the place of
consumption.
11. Transportation:
• Transportation means physical movement of goods from one place to the other.
• Various factors like nature of the product, cost, location of target market etc. should be
considered in choosing the mode of transport.
12. Storage or Warehousing:
• To maintain smooth ow of products in the market, there is a need for proper storage of the
products.
• Storage and warehousing is used to protect against unavoidable delays in delivery or to meet out
contingencies in the demand.

MARKETING MIX
• A large number of factors affect the marketing decisions they are ‘Non-controllable factors and
Controllable factors’.
• Controllable factors are those factors, which can be in uenced at the level of the rm.
• Certain factors which affect the decision but are not controllable at the rm’s level are
called environmental variables.
• To be successful, a rm needs to take sound decisions after analysing controllable factors
while keeping the environmental factors in mind.
• The set of marketing tools that a rm uses to pursue its marketing objectives in the target
market is described as Marketing Mix.
• Success of a market offer depend upon how well these ingredients are mixed to create
superior value for customers, simultaneously achieve their sales, and pro t objective.

I. PRODUCT MIX
From the customer's point of view, a product is a bundle of utilities, which is purchased because of
its capability to provide satisfaction of certain need.

Branding is creating a corporate brand identity for consumer, and getting that brand identity
imprinted on the minds of consumer, and this requires brand positioning and brand management.

Advantages to the Marketers

•Enables Product Differentiation Through Marking: It aids in distinguishing its
product from that of its competitors.
•Aids in the development of advertising and display programs
•Differential Pricing: It allows a company to charge different prices for different products.
•Ease of New Product Introduction
Advantages to the Customers
•Aids in Product Identi cation: Assists customers in identifying products.
•Ensures Quality: Ensures product quality
fi
fl
fi
fi
fl
fi
fi
fi
 •Status Symbol: Brands become status symbols due to their quality As an example, consider Benz
automobiles.

PACKAGING
Packaging: The act of designing and developing a product's container or wrapper. Because good
packaging often aids in the sale of a product, it is referred to as a silent salesman.

Levels of Packaging
1. Primary Package: This is the product's immediate container/covering, such as
toffee in a wrapper, a match box, a soap wrapper, and so on.
2. Secondary Package: It's all about additional layers of protection that are kept until the product is
ready for use, such as a red cardboard box for Colgate toothpaste.
3. Transportation Package: refers to additional packaging components required for storage,
identi cation, and transportation, such as putting a package of toffees into cardboard boxes for
storage at a manufacturer's warehouse and transportation.

Functions of Packaging
• Product Identi cation: Packaging aids in product identification.
• Product Protection: The primary function of the packaging is to protect the product.
• Facilitating Product Usage: It makes transportation, stocking, and consumption easier.
• Product Promotion: Packaging makes sales promotion easier

Importance of packaging:
• Rising Health and Sanitation Standards: It is believed that there is minimal adulteration in
packaged goods.
• Self-Service Outlets: Good and appealing packaging can help to promote a product.
• Opportunities for Innovation: Packaging innovation has increased the shelf life of products.
For example, tetra packs for milk.
• Product differentiation: The color, size, material, and other characteristics of packaging in uence
customers' perceptions of the product's quality.

LABELLING
Labeling is the process of af xing identi cation marks to a package. Labels are information carriers
that provide information such as the name of the product, the name of the manufacturer, the
contents of the product, the expiry and manufacturing date, general information for use, weight, and
so on.
Labels perform following functions:
1. Identify the product: It assists customers in identifying the product among the various types of
products available. For example, the purple color of a Cadbury chocolate label easily distinguishes
it from other chocolates.
2. Describe and specify the product's contents: The manufacturer provides all information regarding
the product's contents, etc.
3. Product grading: With the help of labels, products can be classi ed into different categories based
on quality, nature, and so on, for example: Brooke Bond Red Label, Brooke Bond Yellow Label,
Brooke Bond Green Label, and so on.
fi
fi
fi
fi
fi
fl
4. Aids in product promotion: Attractive and colorful labels excite customers and entice them to
purchase the products. For example, 40 percent extra free, as stated on detergent, buy two get one
free, and so on.
5. Providing legal information: There is a legal requirement to print the batch number, maximum
retail price, weight/volume on all products, and a statutory warning on the packet of cigarettes,
“Smoking is harmful to one's health”:

II. PRICING
Meaning of Price:
It is considered as the sum of the values that customers exchange in exchange for the bene t of
owning or using the product. Price can thus be de ned as the sum of money paid by a buyer (or
received by a seller) in exchange for the purchase of a product or service.

FACTORS DETERMINING PRICE DETERMINATION:

1. Pricing Objectives
• The marketing rm's goal is to maximize pro ts. Pricing objectives can be determined in both the
short and long run. If the company wants to maximize pro ts in the short run, it will charge the
highest price for its products. However, in order to maximize its total pro t in the long run, it would
choose a lower per unit price in order to capture a larger share of the market and earn higher pro ts
through increased sales.
2. Product cost:
• Price should cover all costs and aim to earn a reasonable pro t above and beyond the cost.
• It takes into account the costs of manufacturing, distribution, and sale of the product.
• Costs establish the oor price, or the lowest price at which the product can be sold.
• The price should rise. Total costs (Fixed costs/overheads + Variable costs + Semi-variable costs) in
the long run, but in certain circumstances (introduction of a new product or entry into a new
market), the product price may not cover all costs for a short period of time.
3. Utility and demand:
• The utility provided by the product, as well as the demand for the product, determine the
maximum price that a buyer will be willing to pay for that particular product.
• Buyers would be willing to pay until the utility of the demand exceeded or equaled the utility
derived from it.
• According to the law of demand, consumers buy more at a lower price.
• Demand elasticity is the responsiveness of demand to changes in product prices. If a small change
in price leads to a larger change in quantity demanded, demand is elastic. Firms can set higher
prices if demand is inelastic.
4. Extent of Competition in Market:
Before setting prices, competitors' prices and anticipated actions must be considered.
5. Government Policies:
In the public interest, the government can intervene to regulate product prices.
6. Marketing Methods Used:
Other marketing elements such as distribution system, sales promotion efforts, packaging type,
product differentiation, credit facility, and so on all have an impact on the price xing process.

III. PHYSICAL DISTRIBUTION

• A series of decisions must be made in order to make the product available for purchase and
consumption by customers.
fi
fl
fi
fi
fi
fi
fi
fi
fi
fi
 • The marketer must ensure that the product is available in suf cient quantities, at the appropriate
time, and in the appropriate location.
• A channel of distribution is a group of companies and individuals who take title, or assist in the
transfer of title, to speci c goods or services as they move from producers to consumers.

TYPES OF CHANNELS:
Direct Channel ( Zero Level)
The manufacturer and the customer establish a direct relationship. Manufacturer- Customer. For
example, mail order, internet, and door-to-door sales.
Indirect Channel
The distribution network is referred to as indirect when a producer uses one or more intermediaries
to move goods from the point of production to the point of sale.
1. Manufacturer-Retailer-Customer (One Level Channel)
Between the manufacturers and the customers, one intermediary, namely retailers, is used. Typically
used for high-end items such as watches, appliances, automobiles (Maruti Udyog), and so on.
2. Manufacturer-wholesaler-Retailer-customer (Two Level Channel):
This channel is primarily used for consumer goods distribution. Typically used for consumer goods
such as soaps, salt, and so on.
3. Manufacturer → Agent → Wholesaler → Retailer → Customer (Three Level Channel):
Manufacturers use their own selling agents or brokers in this case, who connect them with
wholesalers, then retailers, and nally consumers.

Components of physical distribution:

1. Order Processing: Provide accurate and timely order processing, without which orders would
arrive late or in the wrong quantity. As a result, customers will be dissatis ed, with the risk of losing
business and goodwill.
2. Transportation: It transports goods from manufacturers to consumers, making the product
available at the point of sale.
3. Inventory control: Choosing the level of inventory is an important inventory decision.
Additional demand can be met in less time, and inventory requirements will be minimal.
4. Warehousing: The act of storing and sorting products in order to create time utility in them is
referred to as warehousing. It is required to bridge the gap between the time the product is
manufactured and the time it is distributed for consumption.

The major factors determining inventory levels include:

(a) rm’s policy regarding the level of customer service to be offered. Higher the level of service
greater will be the need to keep more inventories;
(b) degree of accuracy of the sales forecasts. In case more accurate estimates are available, the need
for keeping very high level of inventory can be minimised;
(c) responsivenessofthedistribution system i.e., ability of the system to transmit inventory needs
back to the factory and get products in the market. In case the time required to respond to the
additional demand for the products is high there is a need to maintain higher inventory. But if the
additional demand can be met in less time, the need for inventory will also be low; and
(d) cost of inventory, which includes holding cost such as cost of warehousing, tied up capital, etc
and the manufacturing cost.

PROMOTION MIX
fi
fi
fi
fi
fi
 A promotion mix is considered as a combination of promotional tools used by a company to achieve
its communication goals.

1. ADVERTISING
Advertising, as de ned by a speci c sponsor, is a paid form of nonpersonal presentation and
promotion of goods, services, or ideas.
The most widely used promotional tool. It is a cold, impersonal form of communication that is paid
for by marketers (sponsors) to promote their products and services. Newspapers, magazines,
television, and radio are all common mediums.

FEATURES
• Paid form: The sponsor must bear the cost of communicating with customers.
• Lack of personalization: There is no direct face-to-face contact between the prospect and the
advertiser.
• Identi ed sponsor: Advertising is done by a speci c person or company.
• MassReach: a large number of people can be reached across a large geographical area.
• Increasing customer satisfaction and trust.
• Expressiveness: It is a powerful medium of communication.
• Economy: Because of its wide reach, is a very cost-effective mode of communication.

LIMITATIONS
• Less Forceful: There is no pressure on the prospects to listen to the message.
• Feedback De cit:
• In exibility: It is less exible because the message is standardised and not tailored to the
individual.
• Low Ef cacy: It is dif cult to get advertising messages heard by the intended prospects.

2. PERSONAL SELLING
Personal selling entails personally contacting prospective buyers of a product, i.e. engaging in a
face-to-face interaction between seller as well as the buyer for the purpose of sale.

Features of the Personal Selling

1. Under personal selling, personal contact is established.
2. Establishing relationships with prospective customers, which are critical in closing sales.
3. Oral communication
4. Quick response to queries.

Merits of Personal Selling

1. Flexibility
2. Direct Feedback
3. Minimum wastage

3. SALES PROMOTION
Short-term incentives or other promotional activities that aim to pique a customer's interest in
purchasing a product are referred to as sales promotion.
fl
fi
fi
fi
fi
fi
fl
fi
fi
 Merits of Sales Promotion
•Attention Value: Using incentives, attract people's attention.
•Useful in New Product Launch: Sales promotion tools persuade people to abandon their usual
purchasing habits and try new products.
•Synergy in Total Promotional Efforts: Sales promotion activities contribute to the overall
effectiveness of a company's promotional efforts.

Limitations of Sales Promotion

•Re ects Crisis: A company that frequently relies on sales promotion activities may give the
impression that it is unable to manage its sales and that its products are unpopular.
•Damages Product Image: Customers may believe that the products are of poor quality or are
overpriced.

5. PUBLIC RELATIONS
Public relations encompasses a wide range of tactics and is typically concerned with providing
information to independent media outlets in the hope of obtaining favorable coverage. It also
includes a mix of promoting speci c products, services, and events as well as promoting an
organization's overall brand, which is an ongoing tactic.

public relations also helps in achieving the following marketing objectives:

Building awareness: Public relations department can place stories and dramatise the product in the
media. This will build marketplace excitement before the product reaches the market or media
advertising takes place. This usually creates a favourable impression on the target customer.
Building credibility: If news about a product comes in the media whether print or electronic it
always lends credibility and people believe in the product since it is in the news.
Stimulates salesforce:Itbecomes easier for the sales force to deal with the retailers and convince
dealers if they have already heard about the product in the news before it is launched. Retailers and
dealers also feel it is easier to sell the product to the ultimate consumer.
Lowers promotion costs: Maintaining good public relations costs much less than advertising and
direct mail. However, it requires a lot of communication and interpersonal skills to convince the
media to give space or time for the organisation and its product.
fl
fi
 Business environment :

Features of Business Environment

● Totality of external forces: Includes every external or outside force that
could impact a business organisation such as government, competitors, etc.
● Speci c and general forces: Speci c forces are the forces which directly affect a speci c
business organisation. General forces are those forces which pose a direct impact on the overall
industry, but pose an indirect effect on a business enterprise.
● Inter-relatedness: The changes in general forces may result in changes in speci c forces. For
example, a change in the government (a political force) may lead to a change in tax rates, import-
export rates (an economic force).
● Dynamic nature: The external forces keep changing due to constant change in technology,
consumer preferences, availability of different types of raw material etc.
● Uncertainty: Constant changes in environment makes it dif cult to predict changes in the
external environment.
● Complexity: The interrelated and dynamic nature of external forces makes it dif cult to prepare
one single strategy to handle all the changes.
● Relativity: The impact of changes depends on business to business country to country region to
region etc.

Importance of Business Environment

● Identi cation of Opportunities: It enables the rm to identify opportunities
and getting the rst mover advantage. The positive external changes provide opportunities to a
business organisation to improve its performance.
● Identifying Threat: It helps the rm to identify threats and provide early warning signals.
Adverse changes in the external factors act as ‘threats’ to the business which hinders performance.
Early identi cation of threats helps managers to make strategies to convert threats into
opportunities.
● Tapping Useful Resources: Business utilizes the resources of the external environment as inputs
like nance, labour etc., and supplies its output to the environment in the form of goods and
services, taxes, etc.
● Coping with Rapid Changes: The business environment is extremely dynamic so the managers
need to develop strategies not only to cope with the changes but also to use them as their strengths
to improve their market shares.
● Planning and Policy Formulation: Clear understanding and analysis of the business
environment help businesses to formulate its future plans and strategies to cope with all the external
changes.
● Improves Performance: The continuous monitoring of the business environment and changing
business practices from traditional methods help business in improving their present performance
and also continue to retain its market position in the long run.

Demonetization
● The term demonetisation means to invalidate all the currency notes of a particular denomination
by the government of a country.
● The Indian Government demonetised the two largest denomination notes of Rs 500 and Rs 1000
on 8th November, 2016.
● The aim of this move was to curb corruption and illegal activities and stop hoarding of black
money.
fi
fi
fi
fi
fi
fi
fi
fi
fi
fi
fi
fi
 Features of Demonetisation
● After demonetisation, cash is deposited into banks for exchanging with new notes which makes
the payment of tax compulsory with penalty rate.
● Government introduced demonetisation to reduce tax evasion.
● Demonetisation reduces the cash transactions in the economy which means more savings through
the nancial system and improving tax payment system.
● Demonetisation facilitates tax administration, and pave way for a cashless
economy
fi