MAM-054

Marketing Management
Indira Gandhi National Open University for Agribusiness
School of Agriculture

Block

1
Basics of Marketing Management
Unit 1
Marketing Environment 7
Unit 2
Marketing Research and Forecasting 30
Unit 3
Planning and Organization of Marketing 45
PROGRAMME DESIGN COMMITTEE
Prof. R. P. Das, PVC, IGNOU
Prof. S.K. Yadav, Director, SoA,
IGNOU
Dr. B.K. Sikka, Former Dean, College
of Agribusiness Management, GBPUAT
Dr. V.C. Mathur, Former Professor and
Head, Div. of Agri. Econ. IARI
Dr. Pramod Kumar, Principal Scientist
(Agri. Econ.) IARI
Prof. M. K. Salooja, School of
Agriculture, IGNOU
Dr. Anjali Ramtake, Associate Professor,
SOMS, IGNOU
Dr. Leena Singh, Assistant Professor,
SOMS, IGNOU
Prof. Sunil Gupta, SOMS, IGNOU
Dr. V. Vijayakumar, Associate Professor,
SoA
Dr. Mita Sinhamahapatra, Associate
Professor, SoA
Dr. Mukesh Kumar, Assistant Professor,
SoA
Dr. P. K. Jain, Associate Professor and
Programme Coordinator, SoA

Programme Coordinator: Dr. Praveen Kumar Jain

Block Preparation Team

Unit Writers Editors
Units 1 to 3 Dr. Sapana A. Narula,
Mr. Sanjay Kehar Professor and Dean,
IMT-MM, New Delhi School of Management Studies,
Nalanda University, Rajgir, Bihar

Dr. Praveen Kumar Jain, SoA, IGNOU

Course Coordinator: Dr. Praveen Kumar Jain

Print Production
Mr. Tilak Raj
Assistant Registrar
MPDD, IGNOU, New Delhi

April, 2022
© Indira Gandhi National Open University, 2022
ISBN : ________________
All right reserved. No part of this work may be reproduced in any form, by mimeograph
or any other means, without permission in writing from the Indira Gandhi National Open
University.
Further information on Indira Gandhi National Open University courses may be obtained
from the University’s office at Maidan Garhi, New Delhi-110068 or visit University’s
Website http://www.ignou.ac.in
Printed and Published on behalf of the Indira Gandhi National Open University,
New Delhi by Registrar, MPDD, IGNOU, New Delhi.
Typesetting & Printed by: M/s Educational Stores, S-5 Bulandshahar Road Industrial
Area, Site-1, Ghaziabad (UP)-201009
MAM-054 MARKETING MANAGEMENT FOR
AGRIBUSINESS
The developing nations are majorly dependent on agriculture, their
economies have agriculture as a mainstay. In South Asia, the dependence
on agriculture is huge as a majority of the population depends on it directly
or indirectly for their livelihoods. (Stamm et al., 2006; Gandhi et al., 2002;
De Fraiture et al., 2010). In India, the agricultural sector contributes to its
economy and a huge amount of the population depends on it, the agriculture
is important as the long-term economic prospect of the country depends
heavily on this sector (Acharya, 1998). Poverty reduction and social
development are also directly related to the agriculture sector (Kohls &
Uhl, 2008; Anriquez et al., 2007), at the same time various constraints are
creating problems in the growth of this sector and one major constraint is
the marketing of agricultural commodities.
Marketing management remains one of the major functions in each sector
of agribusiness, it includes input supply, food sector, production agriculture
sector (Nithyashree, 2017. Typically marketing management comprises of
an amalgamation of numerous varied activities that include advertising,
promotions, selling, web page design, market research, development of new-
product, customer service, and pricing, all concentrated on customer wants,
needs and, eventually, with the goal for customer satisfaction (Barnard et
al., 2020; Christopher et al., 2013). It has been argued oftenly that without
satisfied customers efficiently reached through sales, marketing, promotion
etc no business could effectively function (King et al., 2010). Thus, in most,
agribusiness and food firms marketing management fundamentally plays a
vital role. The Marketing management focussed carefully on planning and
execution of how, why, where, when and who trades a product and service
and to whom it is sold (Barnard et al., 2020). In this case, the decisions
include; products that are produced, services that are offered, information
that is provided, price fixation of a commodity or service, the promotion,
marketing of a product and finally the distribution of products (Barnard et
al., 2020).
Keeping in view the above this course has been designed and it focuses on
the role of the agri-marketing manager as a decision-maker who is often
responsible for formulating strategic marketing plans. This course intends to
cover the varied topics of agribusiness marketing management. This course
will address the basics of marketing management with a special focus on
agricultural marketing by introducing topics on agricultural produce markets,
institutional interventions, and global trade documentation. The strategies
involved in product design and life cycle, pricing, channel and distribution,
promotion and logistics will be covered in this course. Additionally, the
course covers the nuances of agribusiness marketing and the environment.
Overall, the course will provide scientific, technical and research-based
emphasis on agribusiness marketing management.
The Course is divided into three blocks which are as follows:
Block 1: Basics of Marketing Management
Block 2: Agricultural Marketing: An Overview
Block 3: Marketing Strategy
The course assessment as per IGNOU norms will be through assignments
and term-end examination. You must prepare the assignments based on your
understanding of the contents of this course and the application of the same
to the proposed business activity.
BLOCK 1 BASICS OF MARKETING
MANAGEMENT
This Block helps you in understanding the fundamental concepts of marketing
and the role of marketing in the business organisation. Learners will go
through the various principles, strategies and elements of ‘Marketing mix’
that underlay contemporary marketing practices. Learners should be able to
demonstrate their comprehension of marketing concepts and knowledge by
applying those in their written exams, case studies discussions, presentations
and projects. This block will encourage learners to explore for themselves
the role of a marketing manager and the boundaries of marketing. The block
is comprised of three units.
Unit 1: Marketing Environment: The marketing environment refers
to the overall environment under which the firm operates; internal and
external factors, which directly or indirectly influence the organization's
decisions related to marketing activities, to better understand the marketing
environment. This unit provides detailed insights on the topics that include
marketing management, the importance of marketing management,
marketing concepts; the difference between marketing and sales, concept
and types of market, marketing environment, etc.
Unit 2: Marketing Research and Forecasting: This unit will help students
to get familiarized with the fundamentals of Marketing Research. The
Marketing Research includes various parameters that include developing
research questions, data collection, data analysis and drawing the inferences,
in order to make better business decisions. The unit also covers market
information system, forecasting and determining potential.
Unit 3: Planning and Organization of Marketing: This unit enables students
to make a solid marketing plan in the context of the current environment
and determine strategic marketing decisions. It includes Marketing Mix,
Strategic Marketing, Branding, Market Segmentation, Targeting, and
Positioning; Buyer Behaviour, Marketing Information System, Marketing
Organization and Control.
The material provided in this block is supplemented with various examples
and activities to make the learning process simple and interesting. We have
also provided check your progress questions for self-test at a few places of
these units which invariably lead to possible answers to the questions set in
those exercises. What perhaps you ought to do, is to go through units and
jot down important points as you read, in the space provided in the margin.
This will help you in assimilating the content. A list of reference books has
been provided at the end of each unit for further detailed reading.
UNIT 1 MARKETING ENVIRONMENT
Structure
1.0 Objectives
1.1 Introduction
1.2 Concept of Marketing Management
1.3 Importance of Marketing
1.3.1 Importance of marketing to society and consumers
1.3.2 Importance of marketing to business firms
1.4 Marketing Philosophies and Concepts
1.4.1 Production concept
1.4.2 Product concept
1.4.3 Selling concept
1.4.4 Marketing concept
1.4.5 Societal concept
1.5 Characteristics of Marketing
1.5.1 Marketing is organization-wide function
1.5.2 Customer oriented
1.5.3 Value through exchange
1.5.4 Building relationships
1.5.5 Marketing is an integrated process
1.5.6 Marketing is pervasive
1.5.7 Marketing is part of the total environment
1.6 Difference between Marketing and Sales
1.7 Marketing Environment
1.7.1 Why do companies scan the environment?
1.7.2 SWOT analysis
1.7.3 Internal environment
1.7.4 Meso environment
1.7.5 Macro environment
1.8 Let Us Sum Up
1.9 Keywords
1.10 Suggested Further Readings / References
1.11 Answers to Check Your Progress

1.0 OBJECTIVES
After studying this unit, you should be able to:
●● explain the meaning of marketing;
●● define the importance of marketing to organizations and consumers;
●● differentiate between marketing and sales;

7
Basics of Marketing ●● discuss the conceptual framework of marketing; and
Management
●● identify the linkage of marketing and environment.

1.1 INTRODUCTION
Marketing is the process of communicating the value of a product or service
to customers. Marketing might sometimes be interpreted as the art of selling
products, but sales are only one part of marketing. As the term “Marketing”
may replace “Advertising” it is the overall strategy and function of promoting
a product or service to the customer.
From a societal point of view, marketing is the link between a society’s
material requirements and its economic patterns of response. Marketing
satisfies these needs and wants through exchange processes and building
long-term relationships. It is a process of communicating the value of a
product or service through positioning to customers. Marketing can be
looked at as an organizational function and a set of processes for creating,
delivering, and communicating value to customers, and managing customer
relationships in ways that benefit the organization and its shareholders.
Marketing is the science of choosing target markets through market analysis
and market segmentation, as well as understanding consumer buying
behaviour and providing superior customer value.
There are five competing concepts under which organizations can choose to
operate their business; the production concept, the product concept, the selling
concept, the marketing concept, and the holistic marketing concept. The
four components of holistic marketing are relationship marketing, internal
marketing, integrated marketing, and socially responsive marketing. The set
of engagements necessary for successful marketing management includes
capturing marketing insights, connecting with customers, building strong
brands, shaping the market offerings, delivering and communicating value,
creating long-term growth, and developing marketing strategies and plans.
Senior Product &
Marketing management Other services
department departments Communications Channels

Internal Integrated
marketing marketing

Holistic
marketing

Sales
revenue
Performance Relationship
marketing marketing
Brand &
customer equity
Community
Ethics Customers Partners
Legal
Environment Channel

Fig 1.1: Holistic marketing concept

Source: https://www.geektonight.com/marketing-concept-5-philosophy-of-marketing-
management/
8
 Marketing
1.2 CONCEPT OF MARKETING Environment
MANAGEMENT
“Marketing is the activity, set of institutions, and process for creating,
communicating, delivering and exchanging offerings that have value for
customers, clients, partners, and society at large”. (American Marketing
Association 2007)
“Marketing management is an art and science of choosing target markets
and getting, keeping and growing customers through creating delivering,
and communicating superior customer value” ( Philip Kotler and Kevin
Keller – Marketing Management, 12th ed., 2006, Pearson)
“Marketing is the management process which identifies, anticipates and
supplies customer requirements efficiently and profitably.” (Chartered
Institute of Marketing 2001)
“Marketing is the social process by which individuals and groups obtain
what they need and want through creating and exchanging products and
value with others.” —Philip Kotler
In conclusion, we can say that marketing starts with the customer and ends
with the customer. Start in the context of understanding the needs, wants,
and demands of the customer; and ends with the customer in creating and
delivering continuous value to the customer and creating customer delight.
The organizations which practice and manage this concept efficiently can
create and sustain profits, and gain a competitive edge in the competitive
business environment.
Activity 1.1
Visit the nearby market and observe the customers at any retail outlet and
give your own definition of marketing.
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………

1.3 IMPORTANCE OF MARKETING

Marketing is important for all sections of society. The importance of
marketing to society and consumers and business firms are discussed in the
following sub-sections.
1.3.1 Importance of Marketing to Society and Consumers
Marketing is very important for both consumers and society. Through
marketing communications, consumers can decide between buying from the
available options of goods or services they would prefer to possess. Effective
marketing aids consumers to improve their cognition towards the various
shortlisted choices. Marketing plays a big role in society also. It enables
the consumers to be aware of their rights and privileges as a consumer.
Effective marketing also cautions consumers about the evils prevalent in
9
Basics of Marketing society, which enables consumers to be more cautious in making the final
Management choices to buy.
1. Marketing helps to achieve, maintain and raise the standard of
living of the society
Marketing is a continuous process through which marketers innovate
and launch new products and services which makes the lives of
consumers more comfortable and satisfying, and ultimately enhances
the lifestyle of individuals.
2. Marketing increases employment opportunities
Marketing offers career opportunities. These exist in the areas
of selling, brand management, packaging, marketing research,
supply chain management, and apart from this non-governmental
organizations such as Hope and Cry provide great opportunities.
3. Marketing helps to increase national income
The nations’ income is composed of the goods and services that
money can buy. The increase in efficiency of marketing really results
in a lower cost of distribution. Lower prices to consumers mean a real
increase in the national income.
4. Marketing helps in creating utilities
Marketing creates utilities in the areas of form, place, time, and
possession utility.
●● Form Utility: Form refers to the product or service you offer
your customers. Your marketing team carries out research
into customer needs to develop a specification for a product
or service. Your product development team can then develop
a product or service that meets customers’ needs and provides
your customers with important business benefits such as lower
costs, improved productivity, easier installation, or stronger
competitive advantage. Your marketing team is creating utility
by transforming customers’ needs into products or services that
deliver added value.
●● Place: The utility of place refers to the availability of a product
or service in a location that is convenient to your customers.
In business marketing, the place can refer to the convenience
of your distribution channels or direct sales operations. By
improving the utility of place, you are ensuring that your
customers will find it convenient to buy your product. If you
market services, you can improve utility for your customers
by developing self-service facilities on your website, for
example. Customers can find answers to straightforward
technical problems or post questions on a forum where your
team or other customers can provide answers. Fertilizer and
seeds companies establish temporary warehouses in the sowing
season next to villages to aid farmers to get fertilizers and seeds
at a convenient place and optimum pricing near the farmlands
●● Time: By focusing on the utility of time, you can ensure that
products and services are available when customers need them.
10
 Logistics plays an important role in improving the time utility. Marketing
By developing an efficient supply chain, you can ensure that Environment
products are delivered on time. Late delivery could impact your
customers’ own productivity and efficiency if your company
is part of their supply chain. In service marketing, you can
deliver utility by offering service and support 24 hours a day,
seven days a week. That kind of service would add real value
if it reduced customers’ downtime. Rural distribution has also
gained momentum as companies see great opportunities in
these areas, for example, Mahindra & Mahindra and Tata has
dealerships in rural areas and along with that provide loans to
buy tractors and utility vehicles at low-interest rates, and above
that, they have the excellent after-sales network to aid rural
population.
●● Possession: The utility of possession gives your customers
ownership of a product or service, enabling them to derive
benefits in their own business. If you provide customers with
a high-performance component, for example, your customers
can use that component to improve the performance of their
own product. Possession has given them a strong benefit.
You can improve the value of possession by offering business
customers financing options, for example by leasing products
rather than outright purchase. This is very common today for
agricultural farm implements for example harvesters leasing
during harvesting season, and companies like Mahindra &
Mahindra and Tata banks also offer loans at a reasonable rate
of interest to buy farm utilities in the likes of utility vehicles,
tractors, and farm implements.
1.3.2 Importance of Marketing to Business Firms
●● Marketing generates revenue for the firm: Effective marketing
strategies improve revenue for the firm. The firms that understand
the changing needs, wants, and demands of the consumer reap better
benefits in the manner of sustained profits.
●● Marketing enhances customer awareness and creates corporate
image: Marketing aims at creating and sustaining brand equity by
rejuvenation and revitalizing the brands over some time. For example
brand like surf has become generic brand. Consumers recognize the
brand with logos, symbols images, or captions. With an established
brand name, it becomes easier for marketers to expand and grow in
existing as well as new markets globally. Business firms create image
and goodwill through the innovation of products, which is possible
through the profits earned from sales.
●● Marketing helps top management to manage innovation and
changes: Marketing is all about continuous innovation in products
and services offered by the firm and is driven by customer needs
and wants and also with competitive innovation and change. This
forces the top management to improve in the areas of research &
development and continuous change and innovation in technology to
11
Basics of Marketing keep profits alive. With businesses going global today the firms have
Management to continuously innovate and change to create and sustain utility for
themselves and consumers.
●● Changing with the marketing dynamics: Today companies are
choosing a marketing-led philosophy to aid them to win market
share, and also for customer retention, and acquisition of prospective
customers. It has today become all about adding and sustaining benefits
offered to the customer. Today customer is regarded as the queen as
they have to be pampered and retained as the customer acquisition is
becoming costlier due to the increase in the marketing costs.

1.4 MARKETING PHILOSOPHIES AND

CONCEPTS
The marketing concept is the philosophy that firms should analyze the needs,
wants, and demands of their customers, and then makes the decision to
satisfy those needs, wants, and demands better than the competitors, to earn
and sustain profits. Today most firms adopt the marketing concept. But this
has not always been the case. To better understand the marketing concept
it is worthwhile to review other philosophies that once were predominant.
While these alternative concepts prevailed during different historical time-
frames, they are not restricted to those periods and are practiced by some
firms even today.
1. Production

2. Product
Marketing
Management 3. Selling
Philosophies

4. Marketing

5. Social Marketing

Fig. 1.2: Marketing Management Philosophies

Source: https://www.geektonight.com/marketing-concept-5-philosophy-of-marketing-
management/

1.4.1 Production Concept

According to this concept, profits can be maximized by producing at a large
scale, thereby reducing the average cost of production. It was presumed
that consumers would prefer those products which are widely available at
affordable prices. Thus availability and affordability were the keywords for
the success of a firm. The major drawback of this concept was that mere
affordability and availability of the product could not ensure the increase in
sales. This concept was dominant at the beginning of the 20th century, as the
disposable income of consumers was low, and mass production was still in
its initial stage. Customers in this era were completely ignored, as they had
to buy what was produced. Example Henry Ford's Model T. “You can have
12
any colour you want as long as it is black”, he said. In this situation, he can't Marketing
improve its productivity for the choices of colours because the product's cost Environment
is too high in making thousands of cars. More to say, they only provide one
black colour. This means they didn't think of the customers. Take yourself
as the customer, what colour do you want? Green, Blue, or White?
1.4.2 Product Concept
According to this concept, the business goals could be realized when
products of high quality are produced. Therefore the emphasis of the firms
was shifted from quantity to quality of products. Thus product improvement
became the key to the profit maximization of a firm. However product
availability and quality did not ensure the survival and growth of the firm
because of a large number of sellers selling the quality product. This concept
was hence based on the assumption that a good product will sell itself and
marketing was regarded as a secondary activity.
1.4.3 Selling Concept
This concept is based on the adoption of aggressive selling and promotional
efforts because of consumers buying inertia and resistance. The assumption
is that if the consumer is left alone, he would not buy enough of the firm’s
products. The firm must put its products through aggressive selling and
promotional efforts. However, the buyers cannot be manipulated every
time. This strategy is good only in short term, as it focused only on selling
in numbers and ignoring the needs and expectations of the customers. This
strategy is most likely to be found among companies that sell unsought
goods or products that people are unwilling to seek on their own, such as
insurance.
Starting
point Focus Means Ends

Existing Selling and Profits through

Factory sales volume
product promoting

Fig. 1.3: The selling

concept

1.4.4 Marketing Concept

It implies that the focus on consumers’ needs, wants and demands is the
key to the success of any business firm. It assumes that in the long run an
organization can achieve its objectives of profit maximization and increase
in market share by identifying the needs, wants, and demands of its present
and prospective buyers. The firms don’t sell what they make; rather they
make what they can sell. The following are the pillars of the marketing
concept:
●● Identification of market or consumers who are chosen as the target of
marketing efforts
●● Understanding the needs, wants, and demands of the target market
●● Development of products or services for satisfying the needs of the
target market
●● Satisfying these needs better than the competition

13
Basics of Marketing Hence in this, the orientation is strictly towards satisfaction of changes in
Management the needs, wants, and demands of the buyer. Example: Many successful and
well-known global companies have adopted the marketing concept. Procter
& Gamble, Marriott, Nordstrom and Mc Donald's, and Pizza hut follow it
faithfully. Toyota, the highly successful Japanese car manufacturer, is also
a prime example of an organization that takes a customer- and marketing-
oriented view of its business.

Integrated Profit through

Customer
Market marketing customer
needs
satisfaction

1.4.5 Societal concept

The critics of the marketing concept argue that blindly following the goal of
identifying customers’ needs and satisfying them has led to some social and
environmental problems such as pollution, wastage of natural resources.
In other words, marketing should also enhance social well-being. Thus,
business firms need to be concerned about the ecological and ethical aspects
of marketing. Social objectives must be given due importance. This concept
also emphasizes on the aspect of treating consumers as human beings with
minds, hearts, and spirits instead of simply treating people as consumers.
Through this, the profits of the company can be kept alive for a longer period.
This concept also encompasses the concept of relationship marketing both
with internal and external customers. Internal being the employees who
work with the organization and external who buy and consume companies
goods or services.

Fig 1.5: Societal concept

Source: https://www.iedunote.com/societal-marketing-concept
14
Check Your Progress 1.1 Marketing
Environment
Note: a) Use the spaces given below for your answers.
b) Check your answer with those given at the end of the unit.
1) How has marketing changed over time?
…………………………………………………………………………
…………………………………………………………………………
2) What is the selling concept?
…………………………………………………………………………
…………………………………………………………………………
3) What is place utility?
…………………………………………………………………………
…………………………………………………………………………
Activity 1.2
Analyze how your needs, wants, and demands as a consumer have
changed. What were the factors that contributed to these changes? Take a
suitable example.
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………

1.5 CHARACTERISTICS OF MARKETING

The major feature of the marketing-oriented organization is that they are
aimed to stay closer to the customers and ahead of their competitors. The
reason is that the basic aim of these organizations is to attract customers.
Four major characteristics define marketing-oriented organizations
including shared values, organization, strategy, and stakeholders. Firstly,
all decisions of these companies consider the customers first and they
share the common value of superior quality of products. Secondly, their
organizational structure has very few layers and their policies are not very
difficult. Thirdly, the strategy of a market-oriented organization is long-
term, flexible, and participative. Finally, they consider the expectations of
the stakeholders before making any important decision.
1.5.1 Marketing is an organization-wide function
As a business philosophy, marketing is not one function amongst others, the
responsibility of only the marketing department, rather all departments in
the organization contribute to it. “Marketing’s future is not as a function of
business, but as the function of business” In an organization, the front office
staff is the first contact point and creates an impression. (Moment Of Truth)
as the customer goes forward from that point he comes into contact with
the other departments such as finance, sales, logistics, etc. Hence nearly
all departments are equally involved in a marketing job. Thus we don’t say
15
Basics of Marketing that marketing is more important than other business functions. They are all
Management essential. But everyone in the organization must understand the importance
of being marketing-oriented. Everyone has to take customer perspective as
the first priority as s/he is profit for the company.
Adopting a marketing approach to business provides the following benefits
to business firms.
1. Builds customer loyalty
2. Keeps organizations in-touch with the ever-changing needs of the
customer
3. Provides instant feedback
4. Creates Moment Of Truth at every interaction that the customer
encounters
5. Generates products more likely to find a ready market
6. Builds and sustain the goodwill of the organization
7. Offers the opportunity to generate a price premium
1.5.2 Customer oriented
All marketing activities revolve around the customer as mentioned earlier.
The customer is both the start and the endpoint of all marketing activity.
Hence marketing exists to satisfy the needs and wants of the present and
potential customers and build and sustain competitive edge and profits for
organizations. Customer feedback is valuable to all marketers as it helps
them to improve product features, advantages, and benefits offered to the
customer.
1.5.3 Value through exchange
Marketing is an interactive exchange between a firm and its customers. The
fundamental objective of marketing is to create value both for the customers
as well as the firm. Within the organization, marketing creates value in terms
of superior value to shareholders, and outside of the firm to customers.
In short, we can infer that value for all stakeholders. Marketing is more
than simply advertising or selling the product. It involves developing and
managing a product that will that would eventually satisfy the customer's
needs, wants, and never-ending demands. Value is delivered through the
exchange. All exchange activities have to be win-win relationships. In this
process, we have marketers on one side and customers on the other. The
marketers are adopting better technologies to constantly interact with the
customers and make the process of exchange simpler and more manageable
for both. Marketers compete in order to give better value propositions to
the customers, in terms of offering innovative products, at an optimum
price, at an arm’s length (Place), and through new and innovative media of
promotion, and above all welcome and act fast on the feedback offered by
the customer.
1.5.4 Building relationships
Marketing relationships with the customers is the most important for all
businesses. It is all about customer acquisition – retention – building and
sustaining customer loyalty. This aids the organization build and sustaining
16
profits. Companies should also develop strategies to regain the customers Marketing
who have abandoned the firm. Relationship marketing continuously deepens Environment
the trust and confidence in the buyer in the firms' offerings. According to an
estimate, it is five times costlier to acquire a new customer than customer
retention; hence companies save marketing costs by building and sustaining
cordial relations with the customers.
1.5.5 Marketing is an integrated process
Marketing is not a single activity. It is rather a coordination of several inter-
related activities. The interaction between different activities gives a unique
character to marketing. Marketing is a managerial process in so far as it
involves the function of planning and control. Marketing is also a social
process as it is concerned with the satisfaction of human needs and wants,
and this is one of the most important characteristics of marketing.
1.5.6 Marketing is pervasive
Marketing is required in business as well as in social and other organizations.
In other organizations marketing is necessary for spreading socially useful
ideas and programs such as family planning, adult education, strategies to
increase crop yield per hectare, communal harmony, national integration,
environmental protection. This marketing concept is called social marketing
1.5.7 Marketing is part of the total environment
The marketing environment includes competitive, economic, political,
legal and regulatory, technological, and socio-cultural forces and each of
these forces affects the marketing mix. The environment has an impact
upon customers’ lifestyles, the standard of living, and changes in tastes and
preferences towards various products or services. Marketing environment
forces fluctuate dramatically and the marketers need to adjust fast and
promptly to these changes in order to build and sustain profitability. The
recent changes in the environment in India have given an opportunity to
various multinational companies to explore and establish businesses in
India. The marketing environment is always termed as being dynamic as it
is constantly changing.

1.6 DIFFERENCE BETWEEN MARKETING

AND SALES
In general, we use ‘marketing’ and 'selling' as synonyms but there is a
substantial difference between both concepts. Hence it becomes imperative
for a successful marketing manager to understand and interpret these
differences. Selling has a product focus and is mostly driven by the
producer. This is a shortcut to achieving market share, where the needs,
wants, and demands of the consumer are completely ignored and the
emphasis is to earn short-term profits through maximizing sales. There is
no emphasis on creating and sustaining brand equity in the market place and
also the consumer is totally ignored in the sense of not having the customer
relationship management concept in the place where the emphasis is laid
only on customer acquisition, by offering better pricing and special discount

17
Basics of Marketing offers, not on customer retention. Hence the profits are for the short-term.
Management The emphasis of the selling aspect is overall on that “somehow the sale must
be done” Here the main focus of the manufacturer the sales activity should
commence immediately after production in order to realize the cost and
profits over that. Hence the organization that follows a selling orientation
the major philosophy or thought is that selling converts the product into cash
for them in the short run. Hence this is not a forward-looking orientation. It
is the action part of marketing only and has short - term goal of achieving
market share. The emphasis is on price variation for closing the sale where
the objective can be stated, as "I must somehow sell the product". This
short-term focus does not consider prudential planning for building up the
brand in the marketplace and winning competitive advantage through a high
loyal set of customers. The end means of any sales activity is maximizing
profits through sales maximization. When the focus is on selling, the
businessman thinks that after production has been completed the task of the
sales force starts. It is also the task of the sales department to sell whatever
the production department has manufactured. Aggressive sales methods are
justified to meet this goal and customers' actual needs and satisfaction are
taken for granted. Selling converts the product into cash for the company in
the short run.
Marketing as a concept is much wider orientation than selling, also more
dynamic as the focus here is on consumer needs, wants, and demands and
satisfying them, Marketing consists of all those activities that are associated
with the marketing mix and service elements such as product planning,
pricing, place (distribution), promotion, and post-sale service. In other
words, the marketing activity starts with the consumer and ends with the
consumer. Starts in the sense of identifying the needs, wants, and demands
of the consumer and ends with consumer delight and feedback post
consumption as to what extra the consumer is looking for in the product to
increase the factor of consumer delight. Marketing is a prelude to the selling
concept that is guided by the ever-changing consumer needs, wants and
demands, it’s a long process of activities starting from needs identification,
production, packaging, pricing, distribution, promotion, selling, and then
continue working towards adding consistent value to the consumer. The
product offering is as per the buyers and not sellers. Seller develops and
markets products as per the consumers changing needs, here the aspect of
changes in the consumer behaviour is given a priority whereas in selling
orientation it is completely ignored. Selling is all about applying tricks and
tactics of getting the cash from the customers through the exchange of the
company’s products. It hardly bothers whether the consumer is satisfied
with the product and what is the value that the consumer is looking for or
actually derives after consumption of the product. Whereas marketing is
a more integrated activity to ascertain the needs, wants, and demands of
the consumer and then satisfy them at a profit. The profits of the business
firm would be consistent only if the firm continuously innovates and make
necessary improvements in their products or services to create ultimate
value for the consumers.

18
 Marketing
Environment

Fig. 1.6: Difference between marketing and sales

Source: https://www.b2binternationalusa.com/publications/sales-vs-marketing/

1.7 MARKETING ENVIRONMENT

The consumer is guided by basic instincts before making any purchase.
Marketing is a subsystem of the total system with basic characteristics of
interaction, interrelation, and interdependence. The marketer is in a state of
constant flux because of the dynamics of the environment. The environment
is bouncy i.e. the changes are quick and unprecedented, but like most
things in business, rapid change is a double-edged sword – a threat but
also an opportunity. If adaptation is quick towards these changes then the
companies get a competitive edge and would be able to sustain longer in
business. The marketing environment can be broadly categorized under two
heads internal and external environment.
1.7.1 Why do companies scan the environment?
1. To Analyze the strengths, weaknesses, opportunities, threats, and
trends
19
Basics of Marketing A proper analysis of the business environment appraises the marketer
Management of these aspects. Strengths and weaknesses are internal to the
organization and opportunities, threats and trends are to be scanned
from the external environment.
2. To study the changes in human demographics and lifestyles.
Human needs, want, and demands are on a constant change with
change in income, learning, urbanization, rurbanization, changing
socio-cultural patterns, etc. Lifestyles are also constantly changing.
This comprises human activities, interests, and opinions. The marketer
needs to keep abreast with all these changes to make requisite changes
in product design and attributes offered to the consumers.
3. To understand and comprehend changes in the regulatory policies.
Government policies and regulations keep on changing with time to
make markets more competitive and enhance the choices given to
the consumer. Moreover, in the broader sense of it to know about
changing economic and political trends globally, in order to make
their business more competitive and fulfill the needs of the consumer
at a profit.
4. The choice to manage relationships.
Organizations have the choice of how to manage relationships with
the environment. They have the choice to be reactive or proactive, i.e
proactive in the sense of visualizing and making suitable adjustments
in their strategies to manage the environment, or reactive in the sense
of acting on the changes as and when they happen. A successful
organization plays a proactive role and plans for the future by taking
into account the changes that might take place in the future.
5. To make requisite changes in the recruitment strategies.
The labour market has also changed drastically from the 1960s till
today. The organization is constantly looking to upgrade talent by
hiring and retaining the best employees.
1.7.2 SWOT Analysis
The proper evaluation of the environment is just not possible without a
proper SWOT analysis, since it tries to identify (S) strengths (W) Weaknesses
(O) Opportunities, and (T) Threats. Recently there is no more T attached to
the scanning of the environment which is termed as Trends. So now it has
changed to SWOTT. The trends are today changing fast for example trends
towards junk food, fashion, gadgets, hairstyles, brands, consumer spending,
Strengths, and weaknesses are located in the firms' capability in the terms
of enhancing employee skills, resources in the terms of financial, human
capital and technological. Organizational culture, organization structure,
and management style; whereas opportunities and threats are linked to the
external environment and are characterized by the changes occurring in the
areas of cultural, political, legal, economic, global happenings, economic,
trade. Companies that constantly monitor such changes both within the
four walls of the organization and outside can exploit opportunities and
minimize threats. It is all about the firms being reactive or proactive to these
changing situations.
20
 Internal Environment- (Trends) Marketing
Environment
Strengths Weaknesses
Opportunities Threats
External environment- (Trends)
1.7.3 Internal Environment
The internal environment appraises the strengths and weaknesses within
the company. Proper assessment of the internal environment appraises the
organization where they lack, and by overcoming these shortcomings the
firms can achieve competitive advantage. This helps the organization to
understand the pitfalls or gaps between the areas of planning implementation
and ultimately performance, in order to develop and sustain advantage vis-
a-vis competition. The internal factors include the following:
1. Corporate culture
2. Organization structure
3. Marketing competence
4. Financial stability and performance
5. Resource availability
6. Customer relationship management
7. Human resource policy
1.7.4 Meso Environment
Meso environment basically decides the competitive position of the industry
vis-a-vis the organization we study. The environment comprises of those
organizations or groups with which the firm maintains contacts and the
firms’ performance is being affected by those groups. It talks about demand
analysis, suppliers, distribution channels, strategic partners, competition
and business proposition,
Mesoenvironment or competitive environment can be best understood
through Porter's five forces industry analysis.

Threat of
New
Entrants

Bargaining Competitive Bargaining

Power of Power of
Rivalry
Suppliers Buyers

Threat of
Substitute
Products

Fig. 1.7: Five Forces model

Source: Adapted from M.E. Porter

21
Basics of Marketing a. Threat of New Entrants
Management
In this competitive era, very few industries remain static, they are always
under threat of new entrants in the field, these new entrants change the rules
of the game and bring with them new innovative ideas. Entry of private
companies in fertilizer like Tata Chemicals setting up of Tata Kissan Kendras
in rural India and ITC Limited setting up e – choupals as a one-stop shop to
handle queries on agriculture of Indian farmers, right from procurement of
high-quality fertilizers and seeds and increasing yield per hectare. All this
is posing threat to companies owned by the government of India such ad
IFFCO, KRIBHCO, etc, hence they have to employ aggressive strategies to
reach rural farmers and give them value for money. Another example could
be of low cost carriers in Indian skies, with the entering of Tatas the aviation
industry is in for big overhauling, they have tied with Air Asia and to start
operations by October/November 2013. They have posed a big threat to
Spicejet, Jet air, air India, Indigo, and Go air. Entrant’s entry depends upon
the barriers of entry that may exist in any given industry. Entry may be
restricted because of high capital requirement, late entry, achieving of scale
be a necessity and above all exit barriers.
b. Threat of substitute products
“Competitors may hurt you but substitutes can kill you” Substitutes present
a threat if switching costs are low (like, mobile number portability has
posed competition for existing mobile service providers) While deciding
our place in the industry, we must analyze the alternative product offerings
and to what extent they meet needs and wants of customers. A new product
may eliminate the need for the previous product like cassette tapes were
replaced by compact discs. There is also a danger of generic substitution, i.e
consumers may decide to buy a car instead of going for a foreign holiday
c. Bargaining power of buyers
Buyers today dictate the market; the basic need of the buyers is to buy
quality products at optimum prices, so the firms which provide the buyers
these benefits can reap benefits. Companies today are trying their best to
reduce costs as they could pass on the benefit to the buyer in the sense
of offering a lower price than the competition. Foreign retail businesses
are knocking on Indian doors; buyers are viewing it as a great opportunity
to offer them better value for money. Hence in today’s scenario buyer is
termed as Queen, Why? Because she needs constant pampering, as today
customers also need the same.
d. Bargaining power of suppliers
The number of suppliers shall determine whether the industry shall have
a competitive position in buying. If the number of suppliers is few in an
industry dominated by a large number of competitors, the suppliers shall
have more bargaining power. If the suppliers can supply unique customized
products they have better bargaining power. Hence industries today buy
from multiple suppliers to get better prices, have continuous supply even
in times of shortages, and ultimately bargain better pricing and hence have
a competitive edge over the competition. Auto manufacturers today have
set up OEMs (Original equipment manufacturers) to lower their costs of
buying and to keep the bargaining power of suppliers in check.
22
e. Competitive Rivalry Marketing
Environment
The rivalry depends upon several operators, each one is continuously looking
to grab the market share of other competitors, for example, Samsung with
the introduction of android technology has taken away the market share
of Nokia. New entrants in the automobile market have made a dent in the
market share of Maruti Suzuki. Even in the case of low-cost carriers offering
discounts and freebies has become a norm due to competitive forces.
1.7.5 Macro Environment
A company can neither control nor influence the macroeconomic
environment. The macro-environment can be summed up by the abbreviation
STEEPLED –
Where, S stands for socio-cultural, T for technological, E for economic, E
for ethical, P for political, L for Legal, E for environmental also termed as
natural, and D for demographic.
a. Socio-Cultural environment
The social environment includes cultural aspects as well. How do we
behave as consumers, consumers depend upon values, attitudes, beliefs, past
experiences, norms, customs, and the most critical factor today is lifestyle.
All these forces determine and influence what, why, how where, how much,
and when people buy products or services. These offer both opportunities
and threats.
Three areas need specific attention.
1. Demographics: Broadly speaking this is the study of people, how have
people changed with changing times, in their needs, wants, demands,
and moreover in lifestyle, buying habits, education, and income.
2. Values: these comprise core values that come from family norms and
beliefs.
3. Consumerism: This is a movement that began in the west it embraces
the rights and privileges of consumers and protection of their rights.
Culture includes language as a medium of communication between
marketer and consumer, religion, and social institutions to which buyers
belong. There is also the influence of social networking sites like Facebook,
Twitter LinkedIn, etc on buying patterns as it has offered a great opportunity
to buyers to interact in virtual space and share experiences of products or
services purchased and used. With more females now taking on the roles of
working, the discretionary income of the family is hiked and the buyer is
now looking for branded products that offer them better value for money
and of course quality. The demographic trends in rural markets are also fast
changing in India, as mentioned earlier the concept of Rurbanization is fast
catching up with the growing incomes of the rural customer, and the shift of
population from rural to urban areas.
b. Technological Environment
Technology has always played a big role in overall human development
and growth. Recently there has been a big roar globally on the technology
issue of leading brands like Apple and Samsung. Many new technologies
have evolved which have made human lives more comfortable, like the
23
Basics of Marketing innovation of microwave ovens, televisions today changing to SMART.
Management Mobile phones today have shifted towards android technology to offer
consumers a pleasing experience, technology in the areas of automobiles.
c. Economic Environment
The economic environment changes rapidly. This has a far-reaching impact
on the marketing strategies of marketers. The economic environment
includes the economic system of the country (Capitalist, command, or
mixed economy), economic policies (fiscal. Monetary, and commercial),
level of development (Developed, developing, underdeveloped and third
world), sector-wise conditions ( agriculture, industry, and growth in service
sectors), Foreign trade, the balance of payments and economic growth
(GVAs) foreign exchange and gold reserves, distribution of incomes,
competition, business cycle( overall pattern of change in the economy).
Increasing growth rate is an opportunity for global companies to invest here;
Indian market offers a great opportunity for foreign investors as this market
has growing incomes of buyers and the complete change in demographic
trends of owning brands and buying goods which enhance the overall
lifestyle. The economic environment also encompasses the rate of interest,
price hike, and inflation index. The exchange rate is a very important aspect
of the economic environment, it affects the imports and exports scenario.
Consumer spending is based on the economic conditions of any country.
d. Ecological environment
Natural resources today are getting depleted globally, the global warming
aspect is catching up, the biodiversity aspect needs to be taken care of, the
governments, people, NGO’s, and companies are becoming more aware of
their ecological surroundings and have become more considerate towards
saving the environment. In the past, there have been various legislations
passed by the Government of India in this regard i.e. to safeguard and
maintain the ecological balance. Companies have started to concentrate on
the aspect of green marketing i.e. in the areas of packaging and disposal of
waste both at the factory and at the level of consumer.
e. Political environment
There has been always a linkage between politics and business. Political
environment refers to the political system followed by the country; it
typically depends on the ideology of the ruling party, the political stability,
the other parties, and public opinion. Political instability is a big threat to
business. Another case was FDI in the multi-brand retail sector; the issue
took a long time to be resolved as it had come under major criticism. Hence
political environment needs to be conducive for companies to do business
and satisfy the changes in the needs, wants, and demands of the buyer.
f. Legal environment
Law is a complex set of rules and institutions. It consists not only of the
formal rules as per the constitutions, statutes, or precedents, but includes
the legal practices that may or may not follow the formal law, ignorance of
the law is not an excuse if not followed as per the set guidelines. Thus the
legal environment refers to the framework of laws, regulations, and court
decisions intended to encourage, guide, and control business activities. The
24
laws relate to consumers, workers, firms, and communities. Other relates to Marketing
the enforcement of contracts; and products, pricing, channels of distribution, Environment
promotion, sale of goods, negotiable instruments, and market entry laws.
The legal environment also plays a critical role for companies embarking
on global expansion as the study of the host country's legal environment
becomes imperative to minimize the risks of doing business in a faraway
land. They have to be aware of the legal framework and laws pertaining to
conducting business effectively, which enables them a better understanding
of prevailing conditions, and also to minimize the entry and exit barriers
and in case of any legal disputes, they are aware of the methodology for
redressal.
g. Ethical environment
Marketing ethics is the area of applied ethics that deals with the moral
principles behind the operation and regulation of marketing. Some popular
areas of marketing ethics are advertising and sales promotion. These overlap
with media ethics. These days the ethical values among marketers are
diminishing, most of them are wanted to earn huge profits in a short time.
Hence these practices are normally noticed in making wrong commitments to
the consumers, unethical advertising, i.e. to portray the features, advantages,
and benefits of the product and services which they might not possess. These
ads misguide the buyer and hence result in making wrong buying decisions.
Though with the growing education levels of the Indian consumers, they are
becoming aware of these malpractices, they seek physical evidence of the
product before they make the final decision to purchase. Ethics is all about
the application of moral principles, which guide the conduct. The major
ethical dilemmas facing marketing professionals fall under three categories.
Tobacco, alcohol, consumer privacy – for example getting calls on your
mobile phones of various firms especially in the service sector, we wonder
from where they got our numbers. This is all about ethics.
h. Demographic
As mentioned earlier demography in a broad sense means the study of
people, it includes factors like education, ethnicity, income, lifestyle change,
the shift of population from rural to urban. These entire factors influence
consumer buying decisions, and the marketers are working hard to study
and analyze these changes and cater their products and services to these
changing needs, wants and demands of the Indian buyer.
Activity 1.3:
Study the changes in the tastes and preferences of people at your
workplace or in your own family, and analyze the changes taking place in
the demographic environment. After analysis conclude why is the study
of demographics so important for a marketer to study and analyze?
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………

25
Basics of Marketing Check Your Progress 1.2
Management
Note: a) Use the spaces given below for your answers.
b) Check your answer with those given at the end of the unit.
1) What is customer relationship management?
…………………………………………………………………………
…………………………………………………………………………
2) The demography of Indian consumers is changing very fast. Comment?
…………………………………………………………………………
…………………………………………………………………………
3) India is now the growing market for foreign investors. What factors
have contributed to this change?

1.8 LET US SUM UP

In this unit, we have discussed what is Marketing, the concepts and
philosophies of marketing, the difference between sales and marketing,
micro and macro environment. All marketing activities revolve around the
consumer, i.e. to identify the changing needs, wants, and demands of the
buyer and satisfying them at a profit by business firms. Marketing is always
done with a profit motive in mind, but the sustenance of any organization
depends upon accurate planning and execution of marketing plans, and
these are based upon the environment both micro and macro. The success
of any company depends upon how they delight their customers at all
times, and innovate changes in the product design and value offered to the
consumer. Selling is also a very integral part of a company’s strategy as it
ensures sustained profits and it gives first-hand and accurate feedback to
the organization to improve the value to the customer. Even NGOs make a
profit, to meet their daily expenses; they also stress marketing planning and
proper execution of these plans.

1.9 KEYWORDS
●● Building relationships: A basic term used in customer relationship
management, marketing is all about building and sustaining
relationships between the buyer and the seller.
●● Business markets: Buy goods and services for further processing or
use in their production process.
●● Consumer markets: Individuals and households that buy goods and
services for personal consumption.
●● Environment: A company’s marketing environment consists
of the actors and forces outside marketing that affect marketing
management’s ability to develop and maintain successful relationships
with its target customers.
●● International markets: buyers of all types in foreign countries.
●● Marketing: Marketing is the basis of all economic activities, it is
to develop products to the needs of the consumers, select the best
pricing method for selling, determine proper place of distribution,
26
 and communicate with present and prospective buyers about product Marketing
features, advantages, and benefits offered vis-a-vis competition. It Environment
is all about creating and sustaining value for both company and the
consumer.
●● Moment of truth: Every time that a customer interacts with the
marketer, their expectations rise over the previous encounter.
●● Reseller markets: Buy goods and services to resell them at a profit).
●● Government markets: agencies that buy goods and services to
produce public services or transfer them to those that needs them.
●● Rurbanization: This is a term associated with the rural population
being more exposed to the urban way of living, is turning from rural
to urban. The factors contributing to this are media, and the rural
population from nearly every household work in urban areas and
bring back new ideas, and thoughts that have changed the thinking of
rural masses towards more of urban today, this is observed especially
in the change in buying patterns of the rural consumers.
●● Selling: It has a product focus and is mostly producer-driven. It is the
action part of marketing only and has a short-term goal of achieving
market share. The emphasis is on price variation for closing the sale.

1.10 SUGGESTED FURTHER READINGS /

REFERENCES
●● Acharya, S. S. (1998). Agricultural marketing in India: Some facts
and emerging issues. Indian Journal of Agricultural Economics,
53(3), 311–32.
●● America Marketing Association (2007), ‘Definition of Marketing’
available at www.marketingpower.com/mg-dictionary.php
●● Anríquez, G., & Stamoulis, K. (2007). Rural development and poverty
reduction: is agriculture still the key?
●● Barnard, F. L., Foltz, J., Yeager, E. A., & Brewer, B. (2020).
Agribusiness management. Routledge.
●● Chartered Institute of Marketing (2001) ‘Marketing’, Glossary
available at www.cim.co.uk
●● Christopher, M., Payne, A., & Ballantyne, D. (2013). Relationship
marketing. Routledge.
●● De Fraiture, C., Molden, D., & Wichelns, D. (2010). Investing in
water for food, ecosystems, and livelihoods: An overview of the
comprehensive assessment of water management in agriculture.
Agricultural Water Management, 97(4), 495-501.
●● Gandhi, V. P., & Namboodiri, N. V. (2002). Fruit and vegetable
marketing and its efficiency in India: A study of wholesale markets
in the Ahmadabad area (Working Paper Series). Ahmedabad, India:
Indian Institute of Management.
●● King, R. P., Boehlje, M., Cook, M. L., & Sonka, S. T. (2010).
Agribusiness economics and management. American Journal of
Agricultural Economics, 92(2), 554-570.
27
Basics of Marketing ●● Kohls, R. L., & Uhl, J. N. (2008). Marketing of agricultural products
Management (9th ed.). New Delhi, India: Prentice Hall of India.
●● Nithyashree, M. L. (2017). Agriculture, Agribusiness and Small
Farmers. Small, 1, 1-99.
●● Philip Kotler, Kevin Lane Keller, Abraham Koshi, and Mithleshwar
Jha (2009) Marketing Management, 13th Edition, A south Asian
Perspective (India) , Pearson Education
●● Stamm, A., Jost, C., Kreiss, C., Meier, K., Pfister, M., Schukat, P.,
& Speck, H. A. (2006). Strengthening value chains in Sri Lanka’s
agribusiness: A way to reconcile competitiveness with socially
inclusive growth. The German Development Institute (DIE) Studies,
Research Report 15.
●● Willem Burgers (2008), Marketing Revealed: Challenges the Myths,
New York; Palgrave Macmillan
●● http://smallbusiness.chron.com/four-types-business-marketing-
utilities-20698.html

1.11 ANSWERS TO CHECK YOUR PROGRESS

Check Your Progress 1.1
1) Marketing has changed over a period of time as the needs, wants and
demands of the buyer have changed. The changes have been in the areas
of rising incomes, increased learning, and exposure to international
brands. The economic, demographic, and regulatory environment has
changed at a brisk pace, the government of India has opened doors
to transnational companies to establish businesses in India. This has
given the customer a better choice of products and services to select
from, and also companies have turned attention towards consumers'
needs and wants due to an increase in competition. Rural markets
in India also offer a great opportunity to Indian marketers to enter
and earn profits due to the rising incomes and change in tastes and
preferences of the rural consumer. Hence marketing has taken a 3600
turn.
2) The concept is based on the adoption of aggressive selling and
promotional efforts because of customers buying inertia and resistance.
The assumption is that customers if left alone would not buy enough of
the firms’ product. The firm must put its products through aggressive
selling and promotional efforts.
Drawbacks: Buyers cannot be manipulated many times. This is good
in the short term only.
3) Customers do not travel distances to buy goods or services, they
demand that all these should be available to them at an arm’s length
and at the time when they require the same. For example, Mahindra
& Mahindra and Tata offer rural customer farming implements and
utility vehicles, they have set up dealerships in rural areas giving the
customer the place utility as they do not have to travel distance to buy.

28
Check Your Progress 1.2 Marketing
Environment
1) This is all about customer acquisition, retention, and building customer
loyalty over some time. It applies to both pre-sales and post-sales.
2) Demography is concerned with the study of people. This is fast
changing as with the change in incomes, education and most
importantly lifestyle of the consumer. Marketers have to keep abreast
with these changes, to create and sustain continuous value for the
buyer and in turn for the marketer.
3) The factors which have contributed to the entry of many foreign
players are changes in demography, economic policies of the Govt
of India, changing global marketing environment, and socio-cultural
changes.

29
 UNIT 2: MARKETING RESEARCH AND
FORECASTING
Structure
2.0 Objectives
2.1 Introduction
2.2 Concept of Marketing Research
2.3 Importance of Marketing Research
2.4 Process of Marketing Research
2.5 Market Information System
2.6 Forecasting
2.7 Research Tools
2.8 Let Us Sum Up
2.9 Keywords
2.10 Suggested Further Readings / References
2.11 Answers to Check Your Progress

2.0 OBJECTIVES
After studying this unit, you should be able to:
●● explain the meaning and importance of marketing research;
●● state the steps in marketing research;
●● define the market information systems; and
●● discuss the forecasting and determining potential.

2.1 INTRODUCTION
In the previous unit, we understood the concept and importance of marketing
to business firms. All this is based on the collection and interpretation of
data from various sources to study and analyze the recent trends in the
environment. In this unit, we would understand the techniques to collect
and manage data that would aid any business firm to plan for the future and
make necessary changes in their marketing strategies to maintain and gain a
competitive edge. Research is continual in nature, as it enables the marketer
to understand the exact needs, wants, and demands of the buyer. It aids
in understanding the changes to be made in the marketing mix strategies
such as product, pricing, place (distribution), and promotion strategies.
Moreover, it aids in sales and production forecasts. In short, because of
marketing research, the manufacturer is able to take corrective actions
quickly and accurately.

2.2 Concept OF MARKETING RESEARCH

Marketing research is the systematic gathering and interpretation of information
and data relevant to your organization and using this to revamp strategies.
30
According to Still and Cundiff “ marketing research is the systematic, Marketing Research
gathering, recording, and analyzing the data about marketing problems and Forecasting
towards the end of providing information useful in marketing decision
making”
Phillip Kotler in his book Marketing Management – Analysis, Planning,
and Control defines marketing research as “Marketing research is the
systematic problem analysis model building and fact-finding for the purpose
of improved decision making and control in the marketing of goods and
services”
According to American Marketing Association, it is “The systematic
gathering, recording, and analysis of data of problems relating to the
marketing of goods and services”
In conclusion, we can define “marketing research as the process of
objective, comprehensive and systematic design, collection, interpretation,
and reporting on the data, to solve problems and issues linked to marketing
at hand”

Fig. 2.1: Marketing Research

Source: https://www.vectorstock.com/royalty-free-vector/word-cloud-marketing-
research-vector-20553572

2.3 IMPORTANCE OF MARKETING

RESEARCH
Marketing research is indispensable to manufacturers or business firms who
have to make changes in designing marketing operations in accordance
with the changes in the pattern of consumption. With the help of marketing
research, business firms design the marketing operations and decide on a
future course of action in the terms of production and other operations. It is a
very important tool to anticipate and control the changes in the environment. It
aids in the development and implementation of the marketing mix strategies
of marketers. Hence marketing research is very important for marketers
to realize their ambitious marketing and sales plans, and implementation
of the same and make necessary alterations as and when required due to
the changes in the market forces. Marketing research comes to the rescue
through situation analysis, strategy development, marketing programme
development and implementation, and overall decision making.
31
Basics of Marketing
Management
Changing environments and Marketing mix planning and
changing market policies effective implementation

Marketing Prerequisite for mergers and

Sales force management
Research acquisitions

Forecasting Outlook towards business

Fig.2.2: Importance of Marketing Research

1. Changing environments and changing market policies

Present environments are in a situation of regular change. Marketers
have to respond to such changes by changing market policies and
come out with some innovative marketing strategies to realize profits
at all times. To achieve all this, the business firms must consider the
question of growth, maximum utilization of resources, changing
customer needs, and aspects of customer satisfaction and service.
Marketing research provides information to make necessary changes
in all these areas
2. Marketing mix planning and effective implementation
Marketing research helps the marketer to select the most appropriate
marketing mix i.e identification of the new products and services
and value-added offerings for the present and also for prospective
buyers. Selection and management of distribution channels, and
motivation of channel members, also aids in the penetration strategy
into new untapped markets where organizations see future growth
opportunities. Effectively altering pricing and promotion strategies
as per the requirements of the buyers and market forces, to gain and
sustain competitive and profits alive at all times.
3. Salesforce management
Marketing research also gives the marketer insight into recruitment
and selection of appropriate sales force, also determines the number
of salespeople required in any said territory according to the present
and future sales forecasts. Not only this, but it also determines the
caliber of the sales force as per the territory allocated, in order to
achieve the sales objectives of the organization.
4. It is a prerequisite for mergers and acquisitions
Indian firms are following this growth strategy in India and abroad.
Marketing research provides them the much-needed information
of the overall financial strength, and strength and weaknesses in
other related areas, marketing research, therefore, minimizes the
risks associated with mergers and acquisitions. A recent example is
the acquisition of Corus Steel and Jaguar Land Rover by Tata. By
acquisition of Corus steel tata Steel has jumped up to the overall fifth
32
 position from 55th in the world. This has added to the overall strength Marketing Research
of the company and allowed to expand the business globally. and Forecasting

5. Forecasting
Marketing research aids in determining the market size, share,
potential, consumer adoption rate, for investment, business planning
and finally deciding on market entry strategies. Firms would always
prefer to enter into business in which both entry and exit barriers are
reasonably low, and they would prefer to enter markets that offer
them growth opportunities. Effective research also gives insight into
changing socio-cultural patterns of the buyer, perception of buyers
towards various brands, and it also provides the opportunity to have
a competitive edge by monitoring and forecasting competitor moves
and strategies continuously.
6. Outlook towards business
Effective marketing research gives the business firm confidence in
its moves and offers progression in the areas where the firm lacks.
It generates confidence among executives concerned with marketing
planning and implementation. It brings about much-needed stability
to the business. Further adds value to the customer to make him/her
feel important and as a very important stakeholder in business, and
always be in touch with the buyer, for value addition and feedback on
further improvements of strategies.

Activity 2.1
What attributes motivate you to buy apparel for yourself, do research and
buy?
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………

Check Your Progress 2.1

Note: a) Use the spaces given below for your answers.
b) Check your answer with those given at the end of the unit.
1) Define marketing research.
…………………………………………………………………………
…………………………………………………………………………
2) Why do organizations conduct research?
…………………………………………………………………………
…………………………………………………………………………

2.4 PROCESS OF MARKETING RESEARCH

The important steps to be followed in the process of marketing research are
discussed as under:
33
Basics of Marketing • DEFINING THE PROBLEM
STEP 1
Management
STEP 2 • DEVELOPING AN APPROACH TO THE
PROBLEM
STEP 3 • DEVELOPING MARKET RESEARCH PLAN

STEP 4 • FORMULATING THE RESEARCH

STRATEGY

STEP 5 • DATA COLLECTION

STEP 6 • ANALYSIS AND INTERPRETATION

STEP 7 • MARKETING RESEARCH REPORT

Fig. 2.3: Steps in Marketing Research

1) Problem Definition
The first step in the marketing research process is to identify a marketing
problem that needs attention. This problem needs to be understood,
the causes are to be diagnosed and solutions developed of the same.
The problem might be pertaining to the marketing mix decision errors,
competition, change in consumer tastes and preferences towards the
companies offerings, and more. It is the prime task of the researcher
to identify and define the problem in clear terms so that rest of the
process could be carried on effectively. If perchance there is some
lack of understanding of the problem, it would result in the wastage
of time, effort, and money.
2) Developing an approach to the problem
Once the problem is defined clearly and in explicit terms, the next
step is to develop a suitable approach. The development of approach
includes theoretical/objective framework (research-based upon
theory and objective evidence), analytical models (set of variables
and their relationships), research questions (refined statements of
listed and specific components relating to the problem at hand), and
hypothesis (something taken to be true for the purpose of argument or
investigation: an assumption), for example, the kids influence buying
decision for a new car.
3) Research design
Research design is considered the master plan for conducting research.
Broadly speaking there are three categories of research design namely
Exploratory; Descriptive; and Causal.
The choice of the appropriate design depends upon the research
objectives and how much information we possess about the problem
and the stated objectives. The overall research design for a project
may include one or more research designs.
i. Exploratory research
It is the most commonly unstructured informal research
undertaken to take general and background information about
the nature of the research problem. It is usually chosen when
the researcher has limited information about the research
34
 problem and needs to add information on the issue, or some Marketing Research
recent information is desired. Exploratory research is used in and Forecasting
the following situations:
● To gain the background information of the research
problem
● To define terms explicitly
● To clarify problems and hypothesis
● To establish research priorities
The methods available to conduct exploratory research are 1.
Case analysis. 2. Gathering information from focus groups. and
3. Analysis of secondary data, and projective techniques.
ii. Descriptive research
This is undertaken to describe issues like market characteristics
or functions. Simply speaking it addresses the issues on who,
what, where, and how.
iii. Causal research
This may be thought of as understanding a phenomenon in terms
of conditional statements. Causal relationships are determined
by the use of experiments, for example, trying to analyze the
causes for the drop in sales or market share of any product.
4) Data collection
Data is collected as per the method selected for data collection. Data
collected should be reliable, adequate, authentic, and complete in all
respects.
Data may be of two types:
(i) Primary data – This is the data collected firsthand from the
market. This could be done by observing and recording or
collecting directly from the respondent’s sample.
(ii) Secondary data – This refers to the data already available. This
data can be collected from magazines, journals, online search
engines, newspapers, and reports of the surveys done earlier
on the concerned topic and most importantly the government
census reports. The census data is used to study the demographic
profile of the present and prospective buyers.
It is not possible to collect primary data through every respondent
hence the sampling technique is applied. The sample refers to the
respondents chosen from the entire population who comes under the
preview of the research question in mind.
Sampling is of two types:
(i) Probability sampling: Anyone having a known chance of being
selected,
Non-probability sampling: This is more subjective than
(ii) 
probability sampling as it requires more judgment on the part of
the researcher.
35
Basics of Marketing
Management The type of probability sampling is
(i) Random sampling: All respondents have an equal chance of
being selected.
(ii) Stratified sampling: Population is divided into different groups
or strata on some assigned parameters.
Primary data can be collected by the following methods – personal
interviews, telephone, online, mail. This method is resisted by the
respondents due to shortage of time and some respondents are sceptical
in passing personal information such as name, telephone number, age,
income, etc, to the researcher. The respondents are motivated to give
the needed information by giving some offers, for example, you go
to the service station to get your car serviced, after the job you are
given a questionnaire to rate the service quality. As an incentive, the
service station holds a lucky draw of offering free oil change on the
next service for the respondents who have sent the forms duly filled.
Questionnaires should be meticulously prepared in order to gather
the desired information from the respondent. The questions should
be framed in simple language so it is understood properly by the
respondent.
There are majorly three types of questions formats used.
(i) Open-ended questions for example – what are your views about
our customer service?
(ii) Dichotomous – Do you own a car? yes or no
(iii) Multiple Choice – Which part of Delhi do you reside – north,
east, south, west, or central
5) Data analysis and interpretation
The duly filled-in questionnaires are not good enough for tabulation
and drawing conclusions. The collected data needs to be organized
and processed correctly for inferring outcomes of the research. This
processing of data involves the following steps.
1. Preliminary screening of data
2. Editing of the data collected
3. Proper coding of the data
4. Classification of data into meaningful categories
5. Tabulation of data for easy, quick, and meaningful analysis and
interpretation.
To draw effective conclusions it is necessary to arrange them in an
orderly manner. For this purpose, we could take the help of other
members of the team. But the same has to be carried on under strict
supervision of the researcher. This is a lengthy and cumbersome process
and needs top precision to be completed, hence on some occasions,
some specialists are hired for the job. There is also the option of using
advanced statistical techniques in the analysis and interpretation of
data. It is just like making a diagnosis of the problem and offering a
36
 remedy to eradicate the problem, and further, it becomes much easier Marketing Research
to follow up on the issue. As the marketing scenario keeps changing and Forecasting
fast it becomes all the more important for proper follow-up and plan
and implement strategies that would sustain the profits of the business
firms.
6) Report preparation and presentation
The researcher is supposed to submit the report to the marketing
strategies decision-makers. The report would be critically scrutinized
by the decision-makers and conclude implementing certain aspects
of the report in making effective marketing decisions. The report can
come back to the research panel in case any clarifications are needed
by the experts.

2.5 MARKET INFORMATION SYSTEM

The marketing information system is a very essential activity for any
marketer, these are set of methods and procedures particularly designed to
gather, analyze and disseminate information to the marketing department
and all other concerned departments to improve the products or services of
the organization. This information is also very essential to make continuous
changes in the marketing mix elements to create and sustain the brand equity
and market share. This information is stored and utilized further in strategic
planning, effective implementation, and for taking important managerial
decisions.
This is a continuous process as the marketing environment is fast changing
today. All data which is gathered stored and analyzed aids the business firm
in ensuring the longevity of the business, especially in the tough competitive
scenario.

Marketing
Internal Intelligence
Records System

Marketing
Information
System

Marketing Marketing
Decision Support Research
System

Fig.2.4: Market Information System

The marketing department needs the latest information to cater to the

changing needs, wants, and demand of the consumers. This need is met by
the marketing intelligence network. This contains three components.
1. Continuous scanning and monitoring is a procedure by which the
changing environment is regularly viewed.
2. Marketing research is a tool used to obtain information on particular
marketing issues faced by the company also can be termed data
mining
37
Basics of Marketing 3. Data warehousing involves the retention of all types of relevant
Management company records, as well as information collected through continuous
monitoring and marketing research carried on by the business firm,
using both primary and secondary research.
The marketer has to be consistent; the MIS system needs orderliness
and should be complete. This should form the platform of planning and
implementation of all marketing plans, i.e. data collected and interpreted
from the information sought from the marketing intelligence networks.
The advantages of an effective marketing information system are.
1. Organized data collection by the firm through various sources
2. A broad perspective to decide on the future marketing planning and
implementation
3. Storing the important data
4. Sounds an alarm for crises, so it can be avoided
5. Coordinated marketing plans and proper implementation
6. Speed in obtaining sufficient information to make decisions
7. Data gathered can be stored over a long period
8. The ability to conduct a cost-benefit analysis to keep a check on the
marketing cost and plan marketing budgets effectively.
There are some disadvantages of marketing information system such as high
costs in the beginning, costs and the time taken. Moreover, it is a tedious
and complex process of setting up of information system. Marketers often
lack quality marketing information. The solution to this is to have effective
marketing information systems.
The information needed by marketing managers is gathered from the
following sources.
1. Companies internal records – as past sales figures, customers profiles,
inventory, customers service reports, and most important feedbacks
2. Marketing intelligence – It is all about becoming aware of the
surroundings. This could be based upon information gathered from the
competition, suppliers, customers, channel partners, etc. This includes
gathering information about the changes in the environment such as
demographic, consumption patterns, pricing, socio-cultural factors of
the present and the potential buyers, and one of the most important
facets is the changes in the lifestyle of the buyer, as the concept of
rurbanization is catching up that is rural population turning urban.
Along with this is the concept of change in media. All this information
could be gathered by the organization themselves provided they have
the expertise, or the option of outsourcing is always there with the
marketer. There are specialist firms like ORG, IDC, MARG many
financial consultants as price water house coopers. KPMG also are in
the field of marketing intelligence and provides data to the firms as
and when required.
38
3. Marketing research – Business firms need to undertake specific Marketing Research
studies pertaining to various issues at hand to support the planning and Forecasting
and implementation of marketing strategy.
Activity 2.2
What steps you would follow to conduct research for why consumers
prefer handwash over traditional soap?
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………

2.6 FORECASTING
Demand forecasting is the estimation of the quantity of product or a service
that consumers would purchase. It is crucial for any manufacturer, supplier,
or retailer. For example, the future demands of fertilizer in a particular
district. Forecast of future demand is very essential as it would determine
the quantity of raw material to be purchased, production planning, and the
quantity of finished goods to be shipped. The entire process of logistics,
as it is popularly termed, is very time consuming and the depth of stock
at all levels should be monitored very carefully as out-of-stock situations
can harm the competitive advantage enjoyed by the marketer. Moreover,
it gives a chance to the customer to explore some other options due to
the non-availability of the stock in the marketplace. Hence, the business
firms cannot wait for the demand to emerge and then react to the situation.
They should anticipate and plan for the future demand, they are advised to
follow a proactive approach so that they have stocks to meet the customers’
demands at all times, and depth of stock is maintained at levels of the
factory and throughout the distribution channels. The ability to accurately
forecast demand also provides the firm opportunities to control costs
through leveling its production quantities, rationalizing its transportation,
and generally planning for efficient logistics operations.
In general practice, accurate demand forecasts lead to efficient operations and
high levels of customer service, while inaccurate forecasts will inevitably lead
to inefficient, high-cost operations and/or poor levels of customer service,
they can employ the just-in-time approach. In many supply chains, the most
important action we can take to improve the efficiency and effectiveness
of the logistics process is to improve the quality of the demand forecasts.
There are three common techniques of forecasting. It is based upon the
criteria of what people say, what people do, and what people have done.
Based Upon Methods
What People Say Surveys of buyers intentions, Composite
salesforce opinions, Expert Opinions
What People Do Test Markets
What People Have Don Time-series analysis, Leading indicators,
Statistical demand analysis
39
Basics of Marketing Adapted from Principles of Marketing – Prentice Hall
Management
1. Survey of buyers' intentions – This is a survey conducted for what
would buyers ask for, or what changes they would anticipate from
the marketer in the near future i.e in the terms of add-on features,
advantages and benefits, pricing, and availability. For example, the
purchase probability, for example, the farmers' intention to buy a
tractor in the next three months. We need a scale to understand and
estimate the intention of buying. This is based on the Likert scale as
No chance, slight chance, fair chance, good chance, strong chance, or
would certainly buy. From this, the firm can ascertain the probability
of buying and would be in touch with the prospects who have shown
intention of buying.
2. Composite sales force opinion – Sales force is the best media through
which the company can gather and interpret market information. This
information is collected by the salesmen from their own territories, and
then compiled for the entire market by experts. Few companies use
these figures as they consider salesmen to be naturally optimistic or
pessimistic. They may underestimate demand to set their sales targets
on a lower side as they would easily achieve and earn incentives on
the same. Moreover, they might not have the required expertise to
collect and interpret the data collected. Despite all these biases, it
would be worthwhile to involve salesmen in setting sales targets as
they are the frontlines’ and can appraise the company on the latest
trends, and provide useful information about the competition. They
are the people who directly interact with the present and prospective
customers.
3. Expert opinions – Business firms seek opinions and suggestions from
experts in various areas while determining forecasts. These experts
could be industry experts, channel partners, consultants, suppliers, and
trade associations. These people are in a better position to forecast as
they are experts in their own specialized areas. The business firms can
have a group discussion meeting and the data collected is interpreted
and made use of. This technique is known as the Delphi technique.
In these group meetings, experts from production, finance, human
resource, and other departments are also encouraged to participate to
make these meetings more meaningful by solving queries on the spot,
as we have a panel of experts and the answers could be on the spot,
hence it would save time and the forecasting quality would be good.
4. Test Marketing – This is beneficial for the launch of new products. There
are some specifically chosen test markets. The data is then interpreted
and if any changes need to be done the same is communicated to the
marketing department of the firm. This survey is done with the help
of well-formulated questionnaires.
5. Past sales analysis – Future sales forecasts are based upon past sales
figures. This study is based on the factor of trends, seasonal variation
in sales, competitor sales figures, and sales cycle.
6. Leading indicators – Take an example of the rural market as 68% of
the Indian population resides in rural areas. Moreover, with the rural
40
 incomes growing and due to the trend of rurbanization, business firms Marketing Research
see huge potential to market their products or services in these areas. and Forecasting
Companies like LG, Hindustan Unilever, Procter & Gamble, etc.

2.7 RESEARCH TOOLS

As mentioned earlier there are two methods to gather data namely Primary
and Secondary.
Secondary method: It is information that has been previously gathered
by someone other than the researcher and/or for some other purpose than
the research project at hand. This could be gathered through majorly two
sources namely internal and external. Internal being the data gathered from
within the firm, during the normal course of business transactions. External
data is the data obtained from outside the firm.
Sources of secondary data – Textbooks, specialist books, journal papers,
conference papers, magazines and business journals articles, government
and industry reports, web pages, and company reports.
Primary data: Information that is gathered by the researcher specifically for
the research project at hand.
Tools of gathering primary data: Questionnaires, Interviews, observation,
informal conversations, structured group discussions.
1. Questionnaires – These are designed keeping the research objectives
in mind, and administered to the sample unit for gathering information.
The questions must be set in a format that is easily understood by the
respondent, and the language should be simple. The questions should
be mostly closed-ended to get a quick response, and it also saves time
for the respondent, and the results could be easily tabulated by the
researcher. Though we could include some open-ended questions, they
should be specific to the research objective. Jargon and ambiguous
words should be avoided. Response bands should be used to get a
quick and accurate response.
2. Observations – This is a tool employed to observe the consumer in
their habitat. For example, if we are to infer the buying habits of a
rural consumer towards consumer durable products, the researcher
could observe the people visiting an outlet and asking for a product.
Just by her/his observing consumer, s/he could judge whether the
buyer is looking for lower prices, quality, good after-sales service, or
the brand image of the product that s/he intends to purchase.
3. Interviews – These could be done telephonically, online, or physically
keeping the research objective in mind. These interviews could be
structured and sometimes unstructured also.
4. Informal conversations – This technique is generally used to
ascertain the changes in the buying habits of the buyer. Keeping the
research issue in mind, for example, trying to know the reasons why
the consumer prefers brand A over brand B.
5. Structured group interviews – This technique could be applied to
collect data from both internal and external sources. For example,
41
Basics of Marketing in the consumer panels, the interviews are conducted to know the
Management perception, and preference of the respondents towards any product
or service. Internal to organization it could be used for example to
ascertain reasons why the sales were low during a particular month.
The participants of this group are decided and a proper agenda for the
discussion is prepared to gather information.
Activity 2.3
Prepare a questionnaire to ascertain the preference of television brands
consumers buy.
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………

Check Your Progress 2.2

Note: a) Use the spaces given below for your answers.
b) Check your answer with those given at the end of the unit.
1) What are the steps of marketing research?
…………………………………………………………………………
…………………………………………………………………………
2) What is primary and secondary research?
…………………………………………………………………………
…………………………………………………………………………

2.8 LET US SUM UP

Marketing research is an ongoing activity in any business firm as the
business environment is changing fast. The organizations have to keep
abreast with the changing trends in techniques of doing business, to
understand the changing demographics of the buyer, his tastes, preferences,
perception, competition, etc. Hence, it becomes very important for any
marketer to gather and interpret information. The marketer has to forecast
its future business plans to keep ahead of the competition and innovate
better marketing strategies. They follow different research methods and
employ various tools in carrying on the research. Based on the findings they
make necessary changes in products and services and the overall marketing
strategy.

2.9 KEYWORDS
Forecasting: This is a technique employed by business firms to ascertain
the marketing strategies to be adopted in the future and what would be the
expected sales growth
Marketing research: Marketing research is the systematic gathering and
interpretation of information and data relevant to your organization and
using this to revamp strategies.
42
Primary research: This is the collection of first-hand information from the Marketing Research
market using various tools such as questionnaires, observations, interviews, and Forecasting
etc
Rurbanization: Rural population turning urban. This is aided by the media
and the members of the rural families working in urban areas, they share
their experiences with the members of the family which aids them to be
exposed to the urban way of living, further it also stimulates their needs and
wants.
Secondary research: This is the data collected from existing studies done
on the research topic, tools could be publications, websites, journals, past
records, etc.
Test marketing: This is s technique used by the marketer when they launch
a new product in the market, to know the feedback of the prospects on the
feasibility of the product to them.

2.10 SUGGESTED FURTHER READINGS/

REFERENCES
Bennett, Peter D. ed., “Dictionary of Marketing Terms” (Chicago: American
Marketing Association, 1995).
Richa Arora and Nitin R. Mahankale. Marketing Research. PHI learning
Stanton, William J., Michael J. Etzel & Bruce J. Walker, “Fundamentals of
Marketing” (McGraw-Hill, Inc. New York, 1994).
Theodore Levitt, The Marketing Mode (New York: McGraw-Hill, 1969).

2.11 ANSWERS TO CHECK YOUR PROGRESS

Check Your Progress 2.1
1) Marketing research is systematic gathering and interpretation of
information and data relevant to your organization and using this to
revamp strategies. This is an ongoing process in any marketing firm
to ascertain the changes in the needs, wants, and demands of the target
population.
2) The research is an ongoing activity. Organizations research to keep
abreast with the changing trends. These trends are in the terms of
changes taking place in the environment such as competition, buyers
tastes, and preferences, trends in lifestyle, and the overall consumer
buying habits, for example now the buyer preference is that he should
be able to get all those items he needs under one roof, hence the
concept of hypermarkets has gained momentum in India.
Check Your Progress 2.2
1) The steps of conducting marketing research are as follows
a. Problem Definition
b. Developing an approach to the problem
c. Research design
d. Data collection
43
Basics of Marketing e. Data analysis and interpretation
Management
f. Report preparation and presentation
2) Primary research is the collection of first-hand data. In other words,
this is the data collected by the researcher by conducting some
market surveys. The tools for the collection of the primary data are
questionnaires, observation methods, interviews, structured group
interviews. The data collected by this method is up to date and the
most authentic and provides the marketer a better option to base the
future marketing strategies on this data.
Secondary research: It is the research done based on the data already
available the sources of such data could be census reports, publications
such as newspapers, journals, companies’ annual reports, and journals.
This is a fast way to collect data and also cheaper but the data might
be outdated and no more relevant to the research objective.

44
UNIT 3: PLANNING ANd ORGANIZATION
OF MARKETING
Structure
3.0 Objectives
3.1 Introduction
3.2 Marketing Mix
3.2.1 Product
3.2.2 Price
3.2.3 Place
3.2.4 Promotion
3.3 Strategic Marketing
3.4 Branding
3.5 Segmentation, Targeting, and Positioning
3.6 Buyer Behaviour
3.7 Marketing Information System
3.8 Marketing Organization and Control
3.9 Let Us Sum Up
3.10 Keywords
3.11 Suggested Further Readings/ References
3.12 Answers to Check Your Progress

3.0 OBJECTIVES
After studying this unit, you should be able:
●● discuss the concepts of marketing linked to planning and
implementation;
●● explain the marketing mix strategies;
●● indicate the trends in the changing buyer behaviour; and
●● underline the role of branding, segmentation, targeting, and positioning
strategies in the overall success of the marketing plan.

3.1 INTRODUCTION
In the previous two units, we have studied and analyzed what is marketing
environment and the need and the importance of marketing to any
organization. We have also understood the steps to carry out marketing
research activities to plan the business and marketing strategies for the
future. This unit studies the various strategic aspects of marketing such as
the change in the buyer needs and wants, the concept of branding, adapting
the marketing strategies to the changing buyer behaviour and the proper
management of all the marketing activities undertaken by the firm to achieve
overall success.
45
Basics of Marketing
Management 3.2 MARKETING MIX
The marketing mix is often referred to as 4Ps’. Product, price, place, and
promotion, to meet the ever-changing needs, wants and demands. The
marketer must develop products to satisfy them, charge the right price, make
the product available to the consumer at the right place and communicate the
right message to the consumer about the features, advantages, and benefits
of the product. In other words, the marketer must make the existence of the
offering felt by the consumer by the right promotion strategies and tactics.
The marketing mix is a set of controllable tactical marketing tools – product,
price, place, and promotion- that the firm blends to produce the response it
wants in the target market. Kotler and Armstrong (2010)

Fig. 3.1: Marketing mix

Source: https://blog.magezon.com/10-steps-to-building-a-successful-marketing-mix-
strategy/

3.2.1 Product
Goods manufactured by the organizations for the end-users are referred to
as products. Products are of two type’s tangible and intangible (services).
A consumer can feel, touch, and see tangible products as compared to
intangible ones. A product in the marketplace is something that the seller
sells to the buyers in exchange for money.
Types of Products
Product classification can be done from a variety of viewpoints. Based on
the tangible and intangible, products can be classified into two main groups,
namely:
A. GOODS
Goods are physical tangible products that can be seen, felt, touched, held,
stored, and transported. Judging from the sense of durability, there are two
kinds of goods, namely non-durable goods and durable goods.
1. Non-Durable Goods
Non-durable goods are tangible goods that can be consumed within
a limited time. The economic life or the usage of non-durable goods
is typically less than one year. These goods are popularly known as
FMCG (fast moving consumer goods). These are the goods used
mostly in our daily life and form the part of daily attire. Examples of
such goods are soaps, shampoo, hair care, toothpaste, beverages such
as juces. These goods are categorized as these are very fast moving
46
 and are consumed at a very fast pace. The marketers work hard on Planning and
increasing the frequency of purchase, hence companies dealing in Organization of Marketing

these goods categories adopt an intensive (mass) distribution strategy

and aggressive advertising and promotion to induce trial and to
increase the subsequent purchase cycle. i.e. repeat purchase. These
strategies also help to build brand loyalty towards such products. The
demand for this category of goods is also growing in rural areas in
India, as the discretionary income of the consumers in rural India
is going high and also with the change in lifestyle aided primarily
by growing income and the aid of media channels and promotions
strategies adopted by the FMCG firms. The people in these areas
have turned attention towards buying brands as they have adopted
the feeling that they give better value for money. The best example
here would be the revolution in the packaging industry that firms have
introduced small sachet packs in order to induce trial of such products
the most common among them being the shampoo sachets, which
command huge market share in rural India. On these lines now there
are sachets available of toothpaste, tomato ketchup, etc.
2. Durable Goods
Durable goods are tangible goods that normally last longer.
Normally more than one year and these goods possess resale value
also. Examples of such goods are televisions, washing machines,
refrigerators, cars and bikes, tractors, and other farm implements.
These goods require personal selling more than non-durable goods.
Provides greater benefits to the buyer, these goods should be backed
by excellent customer service both pre-sales and more importantly
post-sales, and the firms' warranty policies should be communicated
to the buyer in very explicit terms.
B. SERVICES
Services are activities, benefits, or satisfactions offered for sale. Examples
of this would be telecom services, authorized service centers of firms, beauty
salons, educational institutes, services of electricity and water, metro rail,
railways, airlines, etc.
●● Consumer Products Classification
In addition based on durability, generally, products are also classified based
on who their customers are and what products are consumed. Based on
these criteria the product can be divided into consumer and industrial goods.
Consumer goods are goods that are consumed for the benefit of consumers
or end-users(individuals and households), not for business purposes.
Consumer goods are classified into four categories namely convenience
goods, shopping goods, specialty goods, and unsought goods. This product
classification is based upon the shopping habits of the consumer. This is
reflected in the following three aspects.
1. Attributes used by the consumer in purchasing

47
Basics of Marketing 2. The work done by the consumer to formulate the purchase decision.
Management
3. Frequency of purchase
1. Convenience goods
These goods have a higher purchase frequency. These goods can
be purchased at any time and require minimum time in making the
purchase decision, examples are cigarettes, toothpaste, soaps and
detergents, candy, shampoo. These goods are divided further into three
categories namely, staples, impulse goods, and emergency goods.
a. Staple goods – These are goods that are bought regularly or
as routine by the consumers, such as soaps, detergents, and
toothpaste.
b. Impulse goods – These goods are purchased without planning.
Impulse means on the spot the decision to buy is made. Impulse
is created by visible displays at the outlets, such as displays
in the show windows, just the look attracts the buyer and the
decision to buy is made on the spot without rationalizing the
buying decision. For example, a newly launched soap, candy
chocolate, hence at any supermarket the products are placed at
strategic locations to create impulse of buying for the consumer.
c. Emergency goods – These goods are bought when the consumer
feels the urgency. Examples of such goods are buying umbrellas
or raincoats during the monsoon as there is an urgent need to
protect oneself from rain.
2. Shopping goods
These are products chosen by the consumer as per their changing
needs, wants, and demands, among the options available to the buyer.
Here the consumer takes into consideration the criteria of pricing,
quality of product, trend and design, brand equity vis-a-vis competitor
products. Examples of such category products are household items,
furniture, and clothing. These products are expensive so the consumer
does some market survey before making the final buying decision. The
concept of branding becomes the most important consideration, hence
the promotion activities resorted by the marketers become significant
for the consumer to make a final choice. These goods could be further
classified into two categories namely homogenous and heterogeneous
goods.
a. Homogenous goods – These are goods that the consumer
considers similar in quality and also has made up his mind
towards the band preference but tend to visit more outlets in
search of better pricing and consumer offers. Examples of
homogenous products are cars, televisions, washing machines,
music systems, air conditioners
b. Heterogeneous goods are those products where the buyer
lays more emphasis on the features, advantages, and benefits
48
 rather than the factor of pricing; hence we can infer that the Planning and
consumers’ perception in terms of quality and brand perspective Organization of Marketing
is different. For example apparel, lifestyle household products,
and automobiles.
3. Speciality goods
Specialty goods are products that are characterized or are the mark of
a unique brand where the group of consumers makes special efforts to
buy them. These goods generally consist of luxury goods with specific
brands and models. Examples of such products are Bentley cars,
Christian Dior clothing, and fragrances, or they can also be clothing
designed by famous fashion designers such as Ritu Beri, Rohi Bal
collections.
4. Unsought goods
Unsought goods are goods that the consumer generally does not
seek to buy, but these goods are bought out of fear, precaution, or
might it be a need. The best example of unsought goods can be fire
extinguishers and life insurance policies. These goods require much
advertising and personal selling.
Activity 3.1
Visit the nearby market, observe the customers at any outlet and determine
what the different categories of products are?
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………

3.2.2 Price
Pricing has been always been a sticky problem for marketers, it is the process
of determining what a marketer will receive in exchange for its products.
The various factors that govern the pricing are costs of manufacturing,
marketplace, market condition, competition, and the quality and brand
image of the product. Pricing is the only revenue generating element
amongst the four P’s, the rest three i.e. product, place, and promotion
being cost centers. Profits would be generated only if the pricing strategy
is very well planned and executed. To come to the final pricing, all costs
need to be calculated right from manufacturing costs including the cost of
raw material, cost of people, infrastructure costs, logistics expenses for the
product to reach the right place, at the right time, in the right assortments
to the consumer. Promotion cost really drains the reserves of any marketer,
these costs should be calculated. Promotion strategy should be well planned
and executed even better than planning to control costs and thus have a
competitive edge over the competition, by offering competitive pricing to
the consumer. Hence the key to an effective pricing strategy is to keep costs
low vis-a-vis competitors and generate more revenues through an increase
in sales and build long-lasting brand equity.
49
Basics of Marketing ●● Steps in the pricing process
Management
Set Pricing Objective

Develop Pricing Strategy

Analyse Demand

Analyse Costs

Analyse Competitive Offerings And Costs

Selection Of Pricing Method

Determine Prices

Fig. 3.2: Steps in pricing process

●● Pricing Objectives
This objective is set by the business firm; they have to be in unison with
the corporate objectives. It means what the organization wants to achieve
through pricing its products and services. These objectives could be as
follows
a. Income oriented objectives
b. Sales oriented
c. Targeted ROI
d. Competition
e. Profit maximization
●● Developing pricing strategy
It is the next step, this strategy may be different for new and existing
products, this also varies segment-wise. The other element in pricing strategy
is the cost. Business firms try their best to keep their costs low. So that they
could sell at better prices than the competition which in turn gives them a
competitive advantage. Pricing should be in relation to other products or
services that the firm offers. For example, Gillette adopts a captive product
pricing strategy i.e. they price the razors such as Mach range at a lower
price and then offer blades for the razor at a high price. Pricing strategy is
also governed by the various environmental factors, such as competition,
government policies, changing needs of the target audience, and off-course
the change in perception of the buyer.
●● Analyze demand
Business firms have to analyze demand based on different price levels.
Understand the factors that affect the price sensitivity of the consumer both
existing and prospective, consumers balance costs and the benefits sought,
and hence the business firms try to offer more benefits than the price paid
by the buyer. The organizations must determine the demand curves vis-à-
vis the price changes made in their products or services which they offer,
moreover, understand the price elasticity of demand i.e. elasticity and
inelasticity of demand.
50
●● Analyze costs Planning and
Organization of Marketing
The estimation of various costs such as manufacturing, administration,
logistics, promotion, selling, fixed costs, and variable cost, total and average
costs must be determined to reach the final pricing. Cost varies at different
levels of production; more number of units produced by a firm would lead
to cost reduction. This principle is known as economies of scale. Moreover
differentiated marketing offers create different costs levels.
●● Analyze competitors' offerings and costs
The firm must analyze competition concerning costs, prices, possible price
reactions, conditions of entry into the industry, number of products sold
by each competitor, pricing decisions are also influenced by the quality of
offerings relative to the competition.
●● Selection of pricing method
The various pricing methods available to the marketing firms are as follows.
1. Mark up pricing
2. Target return pricing
3. Perceived value pricing
4. Psychological pricing
5. Going rate pricing
6. Auction type pricing
7. Group pricing
●● Determine price
Finally, the marketing head has to decide the exact price to be charged,
after analyzing further details about, gain and risk factors, company pricing
policies, the impact of pricing on other parties, the influence of other
marketing mix variables.
3.2.3 Place
Place means where and when the customer buys and consumes the product
or service. The place is sometimes referred to as marketing channels and
sometimes as physical distribution, logistics or location. Without proper
distribution, even the best of products fail in the marketplace. Place
component must integrate with the other elements of the marketing mix.
●● What are marketing channels?
Set of interdependent organizations involved in the process of making a
product or service available for use or consumption.
Functions of channel members:
These members perform the following functions
a. Gather information
b. Develop and disseminate persuasive communication
c. Reach agreements on price and terms
d. Acquire funds to finance inventories

51
Basics of Marketing e. Assumes risks
Management
f. Provides warehousing and storage
g. Product availability at the right place and time, and providing goods
in the right assortment to the consumer.
h. Meeting customers service requirements
i. Promotional support
●● Channels of distribution
Channel decisions and structure is decided by the marketing organizations
depending on the product category that they market, whether it is consumer
or business to business. Channel levels vary according to the number of
intermediaries.
a. Zero level – These channels are normally used in industrial products,
popularly known as business to business.
b. One, Two, and three-level channels – These channels network is
set up by organizations to distribute consumer goods, as mentioned
these goods could be durable or non-durable (FMCG) goods. Service
sector channels use agencies and locations to serve their customers,
for example, LG electronics has franchise agencies for servicing
refrigerators and air conditioners. These agencies are chosen by the
firm and work on behalf of them and train the technicians of the
franchise agent.
The distribution channel system could be exclusive distribution as in the
case of Bata they have exclusive stores only limited to selling the brand
Bata, another example could be Levis clothing stores. These stores could
also be set up by franchise agreements.
Selective distribution- in this case, intermediaries are chosen who are
willing to carry the goods of the company, for example, dealership for Sony,
Samsung, LG, etc. The channel network is practiced for consumer durable
products that have got a good infrastructure and have outlets at strategic
locations to attract customers.
The third category is Intensive distribution- The companies offering is placed
in as many outlets as possible as these products need mass distribution.
This system is practiced by firms dealing in non-durable (FMCG) products.
An example is Hindustan Uni Lever Limited, Procter & Gamble, Godrej
consumer care division, Johnson & Johnson. These companies think that
consumer products should be available at an arm's length of the consumer.
The most probable channel network adopted by such companies is
Manufacturer – Distributors – Wholesaler – Retailer – Consumer.
The distributors are appointed town-wise or area-wise, they supply goods
to wholesalers or directly to the retailers in various localities of the chosen
town or area. Consumers buy the products as per their need and want from
the retailers. All these organizations need to ensure the depth of stock and
the availability of the entire range of their products at different levels of
distribution. The terms and responsibilities of these channel members are
always set by the company in the sense of pricing at which the goods are
to be sold to the consumer, payment terms, and warranties. Decision on
52
territory planning of these intermediaries, and services are to be provided Planning and
by them. Organization of Marketing

Channel management decisions- It is indeed a great challenge to manage

their channel network. The marketing and sales team needs to look into the
following aspects:
●● The selection of channel partners needs to be done with precision.
●● Motivate channel members to sell more and practice ethical behavior
with consumers.
●● Train them in new and innovative techniques in selling and customer
service areas.
●● Modify channel arrangements as and when required as per the need of
the market, customer, and the environment.
●● Visit these channel members regularly to oversee their operations.
3.2.4 Promotion
Promotion focuses on communicating with the target market. This is
popularly known as integrated marketing communication. “It is the means
by which the firms attempt to inform, persuade, and remind consumers,
directly or indirectly, about the products or brand they sell” (Kotler & Keller
Marketing management 12th edition).
Role/importance of promotion
1. Inform: It informs customers about the launch of new products/
services/ideas, place of availability, it also informs consumers on the
various promotion offers, most importantly it appraises the prospective
buyers about features, advantages, and benefits of the product.
2. Persuasion: It induces trial the first time among the customers, might
be along with some attractive promotional offers.
3. Remind: Promotion is continuous, it is a saying “out of sight out
of mind”. Hence this is continuous in nature, to increase sales and
increase the loyalty of the brand they promote.
Promotion mix
1. Advertising
2. Sales promotion
3. Direct marketing
4. Personal selling
5. Public relations/publicity
1. Advertising – Any paid form of non-personal presentation and
promotion of ideas, goods, or services, by an identified sponsor.
Advertising media:
1. Electronic and digital media
a. Radio – radio was expected to die out with the introduction
of television, though this happened. But radio has emerged as
one of the most wanted media of advertising with the good of
listeners even with the emergence of DTH networks. India is
53
Basics of Marketing a huge country with a population size of approx. 130 million,
Management and a huge geographical area. Moreover, 68% of the population
lives in rural areas. Also with the emergence of FM channels,
this media has gained momentum in cities, and of course, the
rate of advertising is much cheaper than television media.
b. Television - India is a very big market for television advertising.
The majority of Indian households own television sets.
Community viewing very prevalent in rural areas increases
the coverage many folds. Advertising spending is on a boom
in India and is expected to rise further. On the whole, we can
say that Indians enjoy viewing advertisements on television as
it is both audio and video. Moreover, the number of celebrity
endorsements of leading brands has even made it more attractive.
Advantages and Disadvantages of television advertising
Advantages
●● The biggest advantage of employing television advertising is its
capacity of communicating the product to a large number of people
(both regional and national level) in a short time.
●● By using visuals, sound, and actions, television advertising allows the
target market to see and hear the messages being conveyed through
advertisements. Thus, this improves the credibility of the message
which grabs the attention of a large audience.
●● Television advertising is highly effective in influencing customers
and slowly persuading the target market although it may not induce
the instant sale, like that of search engine advertising.
●● This advertising form has the advantage of utilizing different channels
(say, cartoons) at different timings (say, time at which people usually
watch TV) to hit the required target market. Organizations plan their
advertisements to be telecasted targeting different segments of people,
such as children, housewives, youth, and so on.
●● Since a single product is broadcasted by numerous companies,
customers have a wide variety of options to select from.
●● Small businesses can make the most out of television advertising by
developing creative advertisements to easily attract people and induce
them to purchase the products.
Disadvantages
●● The main disadvantage of television advertising is the high-cost
involvement. Since the advertisement has to be repeated several times
to catch the attention of the customers, it includes a high cost to air the
advertisement on television channels.
●● Producing a television advertisement requires the hiring of
scriptwriters, actors, video editors, or an advertising agency which
means the entire process is a complicated procedure.
●● Making changes in a television advertisement is another demerit of
this advertising medium. The script has to be updated and the entire
advertisement is re-shot which means emptying your pockets further
54
 unlike newspaper advertising wherein updating sale pricing or a Planning and
special offer is as simple as swapping out a coupon. Organization of Marketing

●● Advertisements on the television last only for a few seconds thereby

not being very effective in conveying much about the product to the
target market.
●● At times, due to a lack of relevant information on products, television
advertisements can be obscure and doubtful.
●● Not all advertisements are creative and intrusive. Hence, not all
viewers may be attracted towards the advertisement.
●● The advertisement has to be broadcasted at least 5 to 7 times to
achieve message retention and consumer action. In case the product
is not telecasted several times, it is simply a waste of money.
Other digital media are mobiles and telephones
Print media
It comprises national newspapers, regional newspapers, English dailies,
vernacular papers, consumer magazines, trade and technical journals, and
directories. Newspapers are the second-largest influencer behind television,
as the preferred advertising media.
Advertising through magazines – It permits easy reach to niche markets.
Magazines are today losing popularity dues to the high prices of magazines.
It is affordable to a few of the Indian population. It is also an effective
media of advertising. The circulation of these magazines is strict as per the
demographic profile of the people, such as income, age, gender, religion,
social status, and of course occupation, as magazines are published under
different categories like social, film, business, global news, and trends,
fashion, magazines.
●● Loyal readership. This can be very useful for advertisers as compared
to other media
●● If the company is targeting a particular geographical area, this could be
done with ease through print media. For example, a local newspaper
or a magazine would be the best medium to advertise a new shopping
complex coming up in the area.
●● The marketer can choose the size of the advertisement space. This
would help the marketer to plan the budget of the expenses to be
incurred while advertising.
●● Making a longer impact on the minds of the reader, with more in-
depth reporting and analysis.
Disadvantages
●● The cost incurred may sometimes be expensive considering the
medium chosen by the marketer.
●● This medium may not always give the marketer a wide reach. Internet,
on the other hand, can target a global audience.
●● Advertisements may get lost in the clutter, of editorial and
advertisement by competitors

55
Basics of Marketing
Management
Activity 3.2
Which is your favorite advertisement that you normally prefer to watch on
the television. Analyze the reasons for liking this particular advertisement?
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………

Sales promotion
These are short-term incentives offered to reward the loyal customers for
their loyalty shown towards the brand, and for the prospective customers
to induce a trial of a new product. These are short term incentives because
of the factor of huge costs involved and then if these offers continue for
a longer period of time they would tarnish the image of the product. The
customer would tend to perceive that this product does not sell, and there
must be some flaw as regards the quality of the product hence there are
always offers and incentives on the product. The tools of sales promotion
are as follows:
1. Discounts
2. Quantity discounts
3. Displays
4. Product sales
5. Coupon offers
6. Repeat purchase offers
7. Sampling
8. Contests/ sweepstakes/games
9. Combo offers
These offers are also offered to the trade to increase sales.
1. Window displays to the retailers
2. Point of purchase activities
3. Trade contests
4. Extra commissions
5. Trade allowances
Direct marketing
Marketing messages directly to the consumers to change their tastes and
preferences towards the various products. These strategies could include
short messaging services (SMS) through the mobile network for example
the real estate companies text offers to the people, it can be through catalogs
and brochures distributed to the prospects in any event such as trade fairs,
it could be also toll-free numbers to get consumers to feedback towards the
products or services purchased.

56
Personal selling Planning and
Organization of Marketing
Personal selling is face-to-face selling after which the seller attempts to
persuade the buyer to make a purchase. For example, you go to buy a
television from a multi-brand showroom, the salesman would demonstrate
the features, advantages, and benefits of various brands that he has in the
store. This would aid you to make a final choice of buying.
Public relations/publicity
Public relations are the practice of managing the spread of information
between an individual or an organization and the public. Common practices
include maintain good relations with the press, speaking at conferences,
winning industry awards. Publicity could be achieved through the articles
published in certain business magazines about the company and most
importantly the word-of-mouth publicity in both cases i.e if the customer is
satisfied or dissatisfied by the use of any business firms’ offerings.
Activity 3.3
What promotion offers would excite you and change your preference of
brand, if you are making up your mind to buy a new LED television?
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………

Check Your Progress 3.1

Note: a) Use the spaces given below for your answers.
b) Check your answer with those given at the end of the unit.
1) What is a marketing mix?
………………………………………………………………………
………………………………………………………………………
2) What are the different elements of promotion?
………………………………………………………………………
………………………………………………………………………

3.3 STRATEGIC MARKETING

The term “Marketing” is not understood by people well. It’s been observed
that many people when asked; “What is marketing” would respond
marketing is all about fancy packaging, writing catchy slogans about the
product, sponsoring events, luring people to buy your products, producing
fancy brochures and catalogues to provide information to your prospects
about your offering, creating and enhancing brand awareness. All these are
part of marketing but comprise only a small portion of it. These activities
are described by marketers as promotions mainly designed to create interest,
awareness, and the final decision of buying among prospective customers.
57
Basics of Marketing Strategic marketing is a very wide concept than only promotions. It addresses
Management many other issues which the marketer has to consider, beginning with
which product or service to launch as this has to match with the customer
changing needs, wants, and demands, what price we should charge from the
customer? how to ensure availability and timely delivery of the products
through effective distribution channels, creating and sustaining value
to the customer, further improvements to be made in products to sustain
profits, plan and execute effective competitor strategy, provide excellent
pre and post-sales service to generate confidence in the minds of the
consumer and enhance the satisfying experience ownership of any product.
Effective segmentation of the potential consumers, continuously thinking
and analyzing the question of why the consumer would prefer to buy our
products or services?
Hence strategic marketing is a much broader term as perceived to be as this
encompasses all the minute details of the marketing concept and catering
to the ever-changing needs and wants of your target audience, and above
all how to acquire new customers and retain existing ones to sustain profits
for long. Strategy changes from time to time, especially in the field of
marketing where every day is a new challenge to the marketer, especially
today in this fast-changing world where consumers expect organizations to
be innovative to take care of the needs, wants, and demands of the buyer.
Moreover as mentioned earlier the lifestyle of the consumer is changing,
with the increase in income, and education levels, and now they are more
exposed to the global trends, in fashion and changing technology, hence
it has become a real challenge for the companies today to tailor-make the
marketing mix as per these changes in the human behavior.
●● Steps in developing effective marketing mix strategy

Step 1: Goals and Step 2: Set a Budget Step 3: Determine the

Objectives product’s USP

Step 4: Research Step 5: The marketing

target users team need to consult
Marketing with customers
mix
strategy
Step 6: You need to Step 7: Distribution
define your product channels
details

Step 8: Create a Step 9: Choose a Step 10: Inbound

pricing strategy form of promotion marketing!

Fig. 3.3: Marketing mix strategy

Activity 3.4
Analyze the marketing strategy of the company to whose products you
are loyal. What strategies do they adopt to influence the buyer to purchase
their products or services?
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………

58
 Planning and
3.4 BRANDING Organization of Marketing
The brand is the “name, term, design, symbol, or any other feature that
identifies one seller’s good or service as distinct from those of other
sellers”. A brand is often the most valuable asset of a Corporation. Brand
owners manage their brands carefully to create shareholder value, and brand
valuation is an important management technique that ascribes a money
value to a brand and allows marketing investment to be managed (e.g.:
prioritized across a portfolio of brands) to maximize shareholder value.
Although only acquired brands appear on a company's balance sheet, the
notion of putting value on a brand forces marketing leaders to be focused on
long-term stewardship of the brand and managing for value.
A brand is often the most valuable asset of a Corporation. Brand owners
manage their brands carefully to create shareholder value, and brand
valuation is an important management technique that ascribes a money
value to a brand and allows marketing investment to be managed (e.g.:
prioritized across a portfolio of brands) to maximize shareholder value.
Although only acquired brands appear on a company's balance sheet, the
notion of putting value on a brand forces marketing leaders to be focused on
long-term stewardship of the brand and managing for value.
Proper branding can result in higher sales of not only one product, but on
other products associated with that brand. For example, if a customer loves
Pillsbury biscuits and trusts the brand, he or she is more likely to try other
products offered by the company such as chocolate chip cookies. The brand
is the personality that identifies a product, service, or company, vis-a-vis
competitors. A brand can be defined as a name, term symbol sign or design
and combination of all these elements, how it relates to the competitors,
customers, staff, investors, and partners, in the term of the image that they all
hold of a brand in their mind. Branding is linked to the psychology of people,
brand preferences are linked to the thoughts, feelings, perception, previous
experiences that they had with the brand, beliefs, and attitudes. Brands have
an experiential value, The experiential aspect consists of the sum of all
points of contact with the brand and is known as the brand experience. The
experience that a customer perceives after using a particular brand would
always remain in his mind for long and is very difficult for any marketer
to alter the same. Brand equity is the overall image that the customer holds
in his mind for a long, Equity is always made after a considerable time
period and this needs to be sustained by the marketer by adding features,
advantages, and benefits in the product for example Lifebuoy soap even
after nearly 100 years of its existence holds considerably high brand equity
in the minds of the users, Hindustan Unilever's has worked very hard on
this aspect, they have improved the product considerably and launched new
variants of the soap, moreover came up lifebuoy hand wash, talcum powder
in order to encash on its very strong brand equity, and hence they have been
able to keep the brand moving and profits alive.
Brand awareness refers to customers’ ability to recall and recognize the
brand under different conditions and link to the brand name, logo, jingles,
and so on to certain associations in memory. It consists of both brand
recognition and brand recall. It helps the customers to understand to which
59
Basics of Marketing product or service category the particular brand belongs and what products
Management and services are sold under the brand name. It also ensures that customers
know which of their needs are satisfied by the brand through its products
(Keller). Brand awareness is of critical importance since customers will not
consider your brand if they are not aware of it.
There are various levels of brand awareness that require different levels
and combinations of brand recognition and recall. Top-of-Mind is the goal
of most companies. Top-of-mind awareness occurs when your brand is
what pops into a consumer's mind when asked to name brands in a product
category. For example, when someone is asked to name a type of facial
tissue, the common answer is “Kleenex,” which is a top-of-mind brand.
Aided Awareness occurs when a consumer is shown or reads a list of brands,
and expresses familiarity with your brand only after they hear or see it as
a type of memory aide. Strategic Awareness occurs when your brand is not
only top-of-mind to consumers but also has distinctive qualities that stick
out to consumers making it better than the other brands in your market. The
distinctions that set your product apart from the competition are also known
as the Unique Selling Point or USP. Marketing mix modeling can help
marketing leaders optimize how they spend marketing monies to maximize
the impact on Brand Awareness or sales effects. Managing brands for value
creation will often involve applying marketing-mix modeling techniques in
conjunction with brand valuation.
Brands are always built over a period of time and it is very important to
sustain the brand equity (The image of a brand in consumer mind) of these
brands, for example, the brands Lifebuoy which came into existence in
1895 by Hindustan Lever Limited now Hindustan Uni Lever Limited. It has
always stood for health and hygiene, delivered through germ protection. The
new formulation of the soap was launched in 2002. The current formulation
offers a superior bathing experience. More than a hundred years old brick
shape, “the health soap” now had an easy grip and a modern look. All this
was backed by an excellent television advertising campaign showing that
children are secure bathing with the lifebuoy soap. Indian advertising rests
upon affective advertising technique which broadly means the addition
of emotional touch to campaigns. This strategy is popularly termed as
rejuvenation and revitalization of the brand. Further to this lifebuoy hand
wash, hand sanitizer, and talcum powder was launched. This is known as
brand extension or in modern marketing called the flank ring of the brand.
This is done to encash upon the brand equity. Levers also launched the
lifebuoy Swasth Chetna (LBSC) program for rural India. This was also a
step taken towards building brand equity and of course, it was also a part
of the corporate social responsibility campaign. From 20012 to 2010 the
campaign touched 120 million Indians.

3.5 SEGMENTATION, TARGETING, AND

POSITIONING
As mentioned earlier, marketing starts with the customer and ends with
the customer. Starts by identifying the needs, wants, and demands of the
consumer and ends with consumer delight. In any market we have a mix of
60
consumers, coming from various cultures, having varied interests, tastes and Planning and
preferences. A marketer then has to address the needs, wants, and demands Organization of Marketing
of all these segments of consumers, the products offered by the marketer
have to create and sustain value for the consumer and the marketer has to
be different than its nearest competitor. An organization thus has to alter
the strategies of the marketing mix for the various target audience. Keeping
these variances, marketers came up with the concept of STP.
STP stands for
S – Segmentation
T – Targeting
P – Positioning

Fig. 3.4: Segmentation, Targeting, and Positioning

Segmentation refers to dividing the market into groups with distinct

needs, behaviour, or other characteristics who might need separate product
features, advantages or benefits, or marketing mix. Consumer markets can
be segmented based on the following criteria:
1. Geographical segmentation – This is primarily concerned with the area
where the consumer resides. World, city, region, state, it is dependent
upon the size of the city or metro, the density of population, and also
climate to a certain extent.
2. Demographic segmentation – Demography is primarily concerned
with the study of people concerning age, gender, income, education,
occupation, generation, nationality, size of the family, etc.
3. Psycho graphical segmentation – This is concerned with the mindset
of consumers, such as lifestyle, Social classes to which they belong,
cultural patterns, and personality that they possess.
4. Behavioural segmentation – This is concerned with the various
occasions for which the consumers buy a particular product, the
benefits sought from any products that the consumers purchase for
consumption, consumers' attitude towards the product, loyalty of
consumer towards the product.
Targeting – Target market is that market that the marketer targets to enter and
serve its consumers, this market consists of buyers primarily having similar
needs and characteristics, based on demographic, geographic behavioural,
etc. While entering into target markets the marketer should analyze the size
of the market. The market size and growth need to be large enough for the
organization to earn and sustain profits. Competitors analysis needs to be
61
Basics of Marketing done as to how is competition is fierce or not. Business firms might ignore to
Management enter the market segments where the competition might be fierce and choose
to enter into areas where they would be able to manage the competitors well
and with less cost, business firms should be aware of the substitute products
available in that target market, also awareness of the power of buyers and
suppliers and they have to be very clear about companies objectives and
resources that the company possess in terms of expertise, financial strength,
strong brand equity, consumer loyalty, etc.
Positioning – It refers to the place that any product is placed in the minds
of the consumer relative to the competitor’s product; it can be defined in
the terms of the attributes that any product offers to the consumer, it is
typically linked to the brand perceptions vis-a-vis competitors. Here the
business firm has to identify the various possible advantages relative to the
competition, such as unique selling proposition, and benefits offered by the
product. These should be continuously monitored over a period of time in
order to sustain the market position.
SEGMENTATION
Choose variables for segmenting markets
Build a profile of segments
Validate emerging segments

Targeting
Decide on targeting strategy
Identify which and how many segments to be targeted

Positioning
Understand consumer perceptions
Position products in the minds of the consumer
Design appropriate marketing mix to communicate positioning

Fig. 3.5: Process of segmentation, Targeting, and Positioning

Source: Adapted from Dibb, S. Et al. (1997 p. 205)

Activity 3.5
Analyze the reasons for yourself preferring to buy known brands of
clothing.
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………

3.6 BUYER BEHAVIOUR

Buying behaviour is the behaviour of individuals and households expressed
towards buying products for personal consumption.
62
The factors that influence consumer buying decisions are: Planning and
Organization of Marketing
1. Cultural – India is a country of diverse cultures, majorly divided
into four zones viz. North, south, east, and west. Each of these zones
pertains to different cultures. The marketer hence has to cater to the
needs, wants, and demands of these varied cultures. Some specific
products have large, small, or medium market shares in each of these
zones. Further, these cultures could be divided into subcultures based
upon a particular territory or state.
2. Social- Consumer wants, learning, motives, etc. are influenced by
opinion leaders, person's family, reference groups, social class, and
culture.
Opinion Leaders – They are spokespersons. Marketers try to attract
opinion leaders to promote their products. They are the expert people in
various fields, who can testify the uses, attributes, features, advantages,
and benefits of any product to the present and the prospective buyers.
For example, news channels in their motor show episodes invite an
opinion leader who can answer consumer queries on buying a new
vehicle and they can understand the feasibility of purchase. It also
helps them to understand its performance against competitor brands
in the same category. These spokespersons could also be paid by the
marketers to propagate the products manufactured by them.
Family influences - They also play a big role in forming the purchase
decision of the buyers. Family exerts the broadest influence on the
consumer buying decision; family includes parents, spouse, and
kids. Each of these people has got a different view, perception,
expectations, motives, etc, and hence influences the buying decision.
For example, if a family intends to buy a car, Kids might have a say in
deciding the brand and colour of the car, the wife expects comfortable
seating and comfort, the husband pays the price hence the budget has
to be suitable and of course, driving comfort and fuel average. It is a
combined decision.
Reference groups – These are groups to which we all belong, it can
be family, friends, corporate groups, sports groups, study classes to
which we belong. Interaction with all these reference group members
influence the buying pattern, tastes, and preferences of the buyer, for
example, if you are looking to buy a new handset for yourself, these
group members would aid in making a final choice for buying a brand
which is most accepted by the group members and offer better value
for money to you as a consumer. These groups further influence the
lifestyle of consumers, as we all strive for the better.
Social class: An open group of individuals who have a similar social
rank. The criteria for this are based upon – occupation, income,
education, race, and wealth. The classification of social classes is as
follows
1. Upper upper class
2. Lower upper
3. Upper middle
63
Basics of Marketing 4. Middle class
Management
5. Working class
6. Upper lowers
7. Lower lowers
Social classes determine to a certain extent the types, quality, quantity,
that a person buys or consumes. Family, reference groups, social
classes are all social influences on buyer behavior.
Culture and sub-culture – Culture refers to the set of values, beliefs,
ideas, and attitudes that are accepted by a homogenous group of
people and transmitted to the next generation. Culture also determines
what style of advertising do people prefer, it further determines what
people wear, eat, reside and travel. In India time scarcity is posing
a big problem to consumers, hence there is a growing market for
packaged food, fast food chain of restaurants, retailers also provide
home delivery services of essential goods such as food and FMCG
products, moreover, there is now pick and drop facility offered by a
car dealer for servicing your vehicle.
3. Personal – These factors are linked to the buyers on taste and
preferences and are influenced by age, gender, occupation, lifestyle,
and personal preference of brands that each consumer prefers. It could
be also based on past experiences that the buyer has had with any
particular product that he or she has purchased. Moreover it is also
linked to income and the willingness to spend.
4. Psychological – This factor also governs the consumer buying
decision to a great extent in the terms of what motivates him? It could
be the brand, optimum pricing, value for money, attitudes and beliefs,
and perception, the most common perception among consumers being
that of price versus quality.
●● Stages of the Consumer Buying Process:
1. Need recognition – Needs could be caused and stimulated by internal
or external stimuli. Internal needs could be based upon normal day-to-
day needs or some special needs that could change with age, income,
lifestyle, and other factors. These stimulate consumers towards
deciding to buy certain products. External stimuli could be promotion
activities carried on by business firms or the influence from groups of
which the consumers might be members of, such as friendship, and
workplace groups.
2. Information search – Once the need becomes clear then the
consumer begins to scan information about that particular product.
This information could be flowing through various sources namely
personal, through promotion campaigns, word-of-mouth, etc. This
information helps a consumer to decide what to buy or not.
3. Evaluation of alternatives – Now once information is gathered now
consumer evaluates certain positives or negatives of buying products
that he or she intends to buy. The factors that they would consider
64
 could be price versus quality, brand preferences, attributes that various Planning and
products offer. Organization of Marketing

4. Purchase decision – final choice of buying a particular product,

mode of payment, a preferred outlet of purchase, and the right time to
purchase the product
5. Post-purchase behaviour -This aspect is concerned about the
satisfaction or dissatisfaction that the consumer experiences post-
purchase. If the buyer is satisfied with the purchase he would spread
favorable word-of-mouth of the product and if dissatisfied then not so
favorable feedback. This stage is linked to the cognitive dissonance of
the buyer.
Activity 3.6
How you have changed as a buyer of goods or services?
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………

3.7 MARKETING INFORMATION SYSTEM

A marketing information system (MIS) is a set of procedures and methods
designed to generate, analyze, disseminate, and store anticipated marketing
decision information on a regular, continuous basis. It aids marketers to
strategize marketing options to create and sustain value for themselves and
the consumer.

Four Basic or Main Components of

Marketing Infromation System (MIS)

Internal Marketing Marketing Marketing Decision

Records Intelligence Research (MR) Support System

Provides reliable Collects Is used to solve Are tools which helps

internal or inside information from specific marketing marketing managers to
information of the the external problems of the analyze data & take better
company. sources. company. marketing decisions.

Fig 3.6: Basics of marketing information system

For effective marketing planning and implementation, the marketer should

study and analyze both internal and external variables, they are also popularly
labeled as controllable and uncontrollable. Thus, to know which forces are
acting on it and their impact, the marketer needs to gather the data through
its own resources, which in terms of marketing we can say, s/he is trying
to gather the market information or form a marketing information system.
The collection and interpretation of information is a continuous process that
gathers data from a variety of sources might be as stated internal or external
sources through primary or secondary research, synthesizes it, and send it
65
Basics of Marketing to those responsible for meeting the market places needs. The effectiveness
Management of marketing decisions is confirmed if the firm has a strong and effective
information system giving the business firm the competitive edge over its
nearest competitors. With trends changing very fast in today’s scenario it
becomes imperative to carry on research but if it is not done in the prescribed
manner the firm could face many risks.
1) Missed opportunities
2) The firm might not be aware of the recent environmental changes and
the actions of competition
3) Marketing plans and decisions may not be reviewed properly and this
would delay the action plan
4) Actions may be reactive rather than proactive.
5) Data collection may be disjointed and not provide adequate
information.
6) Previous data and studies may not be stored in an easy-to-use format.
A marketing intelligence system or network caters to the total information
needs of the marketing department. This is comprised of three components:
1) Continuous monitoring is the procedure by which the changing
environment and also the changes in the consumer’s needs, wants and
demands are regularly viewed.
2) Marketing research is used to obtain information on particular
marketing issues, for example, on the changing tastes and preferences of
the consumer, changes towards the brand preferences.
3) Data warehousing involves the retention of all types of relevant
company records, as well as the information collected through continuous
monitoring and marketing research that is kept by the organization.
The ingredients for a good MIS are consistency, completeness, and
orderliness. Marketing plans should be planned and implemented based on
information obtained from the intelligence network.
The information needed by marketing managers comes from three main
sources:
1) Internal company records – For example, past sales records to analyze
the past sales figures, variance if any in orders town-wise, consumer
profiles, stocks inventory, consumer service reports, etc
2) Marketing intelligence – This information can be gathered from many
sources, including suppliers, customers, distributors, and competitors.
Marketing intelligence is a term that includes all the everyday
information about developments in the market trends and moves that
helps a business prepare and adjust its marketing plans accordingly.
It is possible to buy intelligence information from outside specialist
agencies, which have expertise in this job and possess first-hand
market information.
3) Market research – Marketers cannot always wait for information to
arrive in bits and pieces from internal sources. The sources of market
intelligence cannot always be relied upon to provide the latest, and
relevant (especially for smaller or niche market segments). In such
66
 a case, marketers often need to undertake specific studies to support Planning and
their marketing strategy – this is market research. Most importantly Organization of Marketing
the marketing information provides information to the marketer about
changes in trends, tastes, preferences, attitudes, and lifestyle of the
present and the prospective buyers, it also provides an update about
the competitors’ activities, based on this the marketer can base their
competitive strategies.

3.8 MARKETING ORGANIZATION AND

CONTROL
Marketing organization means the collection of people within an organization
who have come together to achieve a common purpose i.e. to plan and
execute the marketing plans successfully and hence earn profits for your
organization, and further, the strategy is to sustain this profitability. These
profits could only be ensured if the marketing organizations adapt fast to the
changes in the environment that is the changes in the socio-cultural patterns,
needs, wants, and demands of the buyer, the changing global scenario.
Marketing organization further entails the recruitment and selection of
efficient marketing staff, retains these members, and channelizes their
attention to the marketing grey areas, these areas may be like competition
becoming stronger or generally speaking of the changing scenario. Further,
placing people in various positions as per their skills and competencies.
Control is a very important function to the success of any organization.
Marketing control means the steps which an organization takes to ensure
that its marketing plans are successful. The control areas are as follows:
i. Setting standards based on plans
ii. Measuring performance against standards
iii. Correcting deviations from standards and plans
iv. Control of sales personnel’s and territories
v. Keeping an eye on the changing market scenario
vi. Competition
Check Your Progress 3.2
Note: a) Use the spaces given below for your answers.
b) Check your answer with those given at the end of the unit.
1) Strategy formulation is the major issue in marketing management.
Comment.
………………………………………………………………………
………………………………………………………………………
2) What are the elements which determine buyer behaviour?
………………………………………………………………………
………………………………………………………………………
3) What is STP?
………………………………………………………………………
………………………………………………………………………
67
Basics of Marketing
Management 3.9 LET US SUM UP
Planning and organizing marketing is one of the most important branches
of marketing functions. This Unit gives us an insight into the core areas of
marketing such as marketing mix, branding, strategic marketing, STP, and
managing the marketing organization. As mentioned earlier marketing is all
about finding the changes in the needs, wants and demands of the present
and prospective buyers, here we have come to know the aspects of strategic
marketing, how to plan and execute the entire plan, to keep the profits of the
company alive at all times.

3.10 KEYWORDS
Brand: A tern, name, logo, or a symbol assigned to any product that gives
the product its identity, and distinguishes it from the competition.
Marketing mix: marketing mix is often referred to as the 4 Ps of marketing,
namely product, price, place, and promotion
Media: Media are the vehicles to promote the products and brands to the
existing and prospective buyers, for example, broadcast media, print media,
and outdoor media.
Opinion leaders: These are people who are experts in their own areas
of specialization and guide the people towards making the final choice of
products they have considered to buy
STP: Segmentation, targeting, and positioning. This gives an insight
into how to divide the broad market into manageable parts. Once the
segmentation is done then devise various marketing strategies for the target
audience chosen and positioning broadly means the image of any product in
the minds of the buyer.

3.11 SUGGESTED FURTHER READINGS/

REFERENCES
Bennett, Peter D. ed., “Dictionary of Marketing Terms” (Chicago: American
Marketing Association, 1995).
Philip Kotler, Kevin Lane Keller, Abraham Koshi, and Mithleshwar Jha
(2009) Marketing Management, 13th Edition, A south Asian Perspective
(India), Pearson Education
Stanton, William J., Michael J. Etzel & Bruce J. Walker, “Fundamentals of
Marketing” (McGraw-Hill, Inc. New York, 1994).
Theodore Levitt, The Marketing Mode (New York: McGraw-Hill, 1969).

3.12 ANSWERS TO CHECK YOUR PROGRESS

Check Your Progress 3.1
1) Marketing mix is the combination of 4ps of marketing namely product,
price, place, and promotion
2) The different elements of promotion are 1. Advertising 2. Sales
promotion 3. Personal selling. 4. Direct marketing and 5. PR/publicity
68
Check Your Progress 3.2 Planning and
Organization of Marketing
1) Strategy formulation and execution is the key to the success of any
marketing plan. The statement is very true as the strategy formulation
begins with the marketing mix elements then the marketer has to
formulate the strategy of STP. Branding and the market information
system in order to collect and interpret the data from the market,
and implement changes needed as per the change in the tastes and
preferences of the buyer
2) The study of buyer behavior is very important for any marketer to
have long-term success in the market, as the behavior changes with
time and the mindset of the present and the prospective buyers. The
factors or elements that govern the buyer's behavior are socio-cultural
factors, demographic factors, psychological and personal factors.
3) Segmentation, targeting, and positioning. Segmentation is segmenting
the markets as per the needs and the wants of the buyer, and segments
that the marketers can manage easily. The segment chosen should
always show growth opportunities for the marketer in the long-term
future in order to keep the profits alive. Targeting is the set of the
population chosen from the segment and the need here is to service
this target market well to build up customer loyalty towards your
goods or services. Positioning is making an image in the minds of the
existing and prospective buyers.

69