Marketing-Unit 1 To 3

UNIT 1
MARKET:
A market is the set of actual and potential buyers of a product – Philip Kotler
MARKETING:
The process of planning and executing the conception, pricing, promotion and distribution of
ideas, goods and services to create exchanges that satisfy individual and organisaitonal
objectives. – The American Marketing Association
CLASSIFICATION OF MARKET
I. Markets on the basis of nature of purchase and consumption

a. Consumer market
b. Industrial market
II. Markets on the basis of Geographical coverage
a. Family markets
b. Local markets
c. National markets
d. World markets
III. Markets on the basis of magnitude of selling
a. Wholesale markets
b. Retail markets
IV. Markets based on the time period
a. Very short period markets
b. Short period markets
c. Long period markets
V. Markets on the basis of products in trade
a. Basic goods market
b. Intermediary goods market
c. Consumer goods market
Prepared by,
S.Bharani Lakshmi., M.Com.,M.Phil.,MBA.,UGC
NET Assistant Professor, Department of Commerce
SDNB Vaishnav College for Women
FEATURES OF MODERN
MARKETING
FEATURES OF
MARKETING
Product
1. Marketing is consumer
Selling
oriented
Advertising
Packa
ge
Service
Brand name
Price
Promotion Distribution
2. Marketing starts with customers and ends with customers

3. Marketing precedes production
4. Marketing is the guiding force of business
5. Marketing is a process
6. Marketing is a system
ROLE
a) Leads to integration of various core sectors

b) Key to industrial production
c) Facilitates the fullest utilisation of the existing assets
d) Mobilises untapped economic energy
e) Contributes to the development of entrepreneurs
IMPORTANCE
a) Results in lower cost of distribution

b) Provides a connecting link between production and consumption
c) Stabilises the price level
d) Marketing precedes production
e) Finds out the right place where goods and services are made available
f) Large number of persons is employed
g) Enhances standard of living
h) Object is to satisfy human wants
i) Reduces the imbalance in the supply
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j) Creates time, place and form utilities
k) Generates revenues for the business firms
DIFFERENCE BETWEEN SELLING AND
MARKETING EVOLUTION OF MARKETING
CONCEPT
a) The exchange concept

b) The production concept
c) The product concept
d) Selling concept
e) The marketing concept
a. Target market
b. Understanding customer needs
c. Integrated marketing
d. Profits through customer satisfaction
f) The societal marketing concept
INNOVATIONS IN MODERN MARKETING
∙ Social marketing
∙ Demarketing
∙ Remarketing
∙ Over marketing
∙ Meta marketing
MARKETING MANAGEMENT- Functions
a) Determining marketing objectives

b) Planning
c) Organising and coordination
d) Staffing and assembling resources
e) Operation and direction
f) Analysing and evaluating
LEVELS OF MARKETING MANAGEMENT
∙ Top management
∙ Middle management
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FUNCTIONS OF MARKETING
I. Functions of Exchange
a. Buying
b. Assembling
c. Selling
II. Functions of Physical Supply
a. Storing
i. Warehouse
b. Transportation
i. Air Transport
ii. Sea Transport
iii. Rail Transport
iv. Road Transport
III. Facilitating functions
a. Financing
i. Short term finance
ii. Long term finance
b. Risk bearing
i. Market risks
1. Time risk
2. Place risk
3. Risk of competition
ii. Natural causes
iii. Human factors
c. Standardisation and Grading
d. Analysis of market information
FACTORS TO BE CONSIDERED WHILE BUYING
∙ Estimating the demand

∙ Source of supply
∙ Market news
∙ Seasonal variations in demand
TYPES OF BUYING
∙ Speculative buying
∙ Conservative buying
∙ Concentrated buying
∙ Diversified buying
∙ Reciprocal buying
∙ Hand to mouth buying
∙ Buying by inspection
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∙ Buying by samples
∙ Buying by description
∙ Contract buying
∙ Period buying
∙ Buying by requirement
∙ Open market buying
ASSEMBLING- Need
∙ Goods are produced by numerous small manufacturers scattered over a wide area ∙
Non-standardised in nature
∙ Supply of goods is seasonal
∙ Necessary for a trader to collect and store goods for convenience ∙
Offers consumers a wide choice
∙ Collection in large quantities makes further processing and handling of goods
ASSEMBLING- Advantages
∙ Ensures steady supply of goods

∙ Standardisation and grading of goods become economical
∙ Results in saving in transportation costs and handling charges
∙ Overcomes the problem of stoppage of production
∙ Market for goods assembled is widened
∙ Helps in getting variety of goods
ASSEMBLING- Disadvantages
∙ Requires specialised knowledge

∙ Products are seasonal or irregular
SELLING-Methods
∙ Personal selling
∙ Sale by advertisement
∙ Sale through vending machines
∙ Sale by inspection
∙ Sale by sample
∙ Sale by description
∙ Tender system
∙ Sale at flat rate
∙ Gentlemen agreement
FUNCTIONS OF TRANSPORT
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∙ Widens the market
∙ Mobility of labour and capital
∙ Specialisation and division of labour
∙ Stability in prices
∙ Transformation of the economy
∙ Employment
∙ Time and place utilities
FUNCTIONS OF WAREHOUSING
∙ Storage
∙ Price stabilisation
∙ Risk bearing
∙ Financing
∙ Other functions
KINDS OF WAREHOUSE
1. On the basis of commodity stored

2. On the basis of ownership
i. Private warehouse
ii. Public warehouse
iii. Cooperative warehouse
DEALING WITH RISK
∙ Prevention of risks
∙ Avoiding of risks
∙ Shifting of risks
∙ Minimising risks
▪ Effective sales efforts
▪ Thorough knowledge of the market
Prepared by,
UNIT 2
MARKETING ENVIRONMENT
Refers to the surrounding of a marketing organisation. All those forces which affect or
influence the marketing efforts of the organisation.
I. Micro environment
a. The company
i. Top management
ii. Finance
iii. Research and Development
iv. Purchase
v. Production
vi. Accounts
b. Suppliers
c. Marketing intermediaries
i. Agents and Brokers
ii. Wholesalers and Retailers
iii. Facilitating organisations
d. Customers
i. Consumer market
ii. Business market
iii. Reseller market
iv. Government market
v. International market
e. Competitors
f. Public
i. Financial public
ii. Media public
iii. Government public
iv. Citizen action public
v. Local public
vi. General public
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vii. Laternal public
II. Macro environment
a. Demographic environment
b. Economic environment
c. Natural environment
i. Shortage of raw materials
ii. Increased pollution
iii. Government intervention
d. Technological environment
e. Socio-cultural environment
i. Culture
ii. Social class
f. Political environment
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UNIT-3
MARKET SEGMENTATION
Market segmentation is the process of dividing the total heterogeneous market for a product
into several segments, each of which tends to be homogenous in all significant aspects.
LEVELS OF SEGMENTATION
∙ Mass marketing
∙ Segment marketing
∙ Niche marketing
∙ Local marketing
∙ Individual marketing
PATTERNS OF MARKET SEGMENTATION
∙ Homogenous preferences
∙ Diffused preferences
∙ Clustered preferences
MARKET SEGMENTATION PROCEDURE
∙ Step 1- Survey stage

∙ Step 2- Analysis stage
∙ Step 3- Profiling stage
MARKET SEGMENTATION – BASES
1. Consumer characteristics
a. Geographic segmentation
b. Demographic segmentation
i. Age
ii. Gender
iii. Income
iv. Occupation
v. Social class
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c. Psychographic segmentation
i. Lifestyle
ii. Personality
iii. Values
d. Behavioural segmentation
i. Occasions
ii. Benefits
iii. User status
iv. Usage rate
v. Loyal status
1. Hardcore loyals
2. Split loyals
3. Shifting loyals
4. Switchers
vi. Buyers’ readiness
vii. Attitude
1. Enthusiastic
2. Positive
3. Indifferent
4. Negative
5. Hostile
2. Consumer responses
BENEFITS OF MARKET SEGMENTATION
∙ Proper choice of target market

∙ Tapping a particular market
∙ Efficient and economic marketing efforts ∙
Benefits to the customer
CRITERIA FOR SUCCESSFUL SEGMENTATION
∙ Substantial scope
∙ Measurable
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∙ Accessible to the market
∙ Representative nature
∙ Growth rate
∙ Response rate
CONSUMER BEHAVIOUR
The activities and action of people and organisation that purchase and use economic goods
and services including the influence on these activities and actions.
NEED FOR STUDY OF CONSUMER BEHAVIOUR/ ROLE/IMPORTANCE

1. Modern Philosophy: It concerns with modern marketing philosophy – identify
consumers’ needs and satisfy them more effectively than competitors. It makes
marketing consumer-oriented. It is the key to succeed.
2. Achievement of Goals: The key to a company’s survival, profitability, and growth in a
highly competitive marketing environment is its ability to identify and satisfy
unfulfilled consumer needs better and sooner than the competitors. Thus, consumer
behaviour helps in achieving marketing goals.
3. Useful for Dealers and Salesmen: The study of consumer behaviour is not useful for
the company alone. Knowledge of consumer behaviour is equally useful for
middlemen and salesmen to perform their tasks effectively in meeting consumers
needs and wants successfully. Consumer behaviour, thus, improves performance of
the entire distribution system.
4. More Relevant Marketing Programme: Marketing programme, consisting of
product, price, promotion, and distribution decisions, can be prepared more
objectively. The programme can be more relevant if it is based on the study of
consumer behaviour. Meaningful marketing programme is instrumental in realizing
marketing goals.
5. Adjusting Marketing Programme over Time: Consumer behaviour studies the
consumer response pattern on a continuous basis. So, a marketer can easily come to
know the changes taking place in the market. Based on the current market trend, the
marketer can make necessary changes in marketing programme to adjust with the
market.
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6. Predicting Market Trend: Consumer behaviour can also aid in projecting the future
market trends. Marketer finds enough time to prepare for exploiting the emerging
opportunities, and/or facing challenges and threats.
7. Consumer Differentiation: Market exhibits considerable differentiations. Each
segment needs and wants different products. For every segment, a separate marketing
programme is needed. Knowledge of consumer differentiation is a key to fit marking
offers with different groups of buyers. Consumer behaviour study supplies the details
about consumer differentiations.
8. Creation and Retention of Consumers: Marketers who base their offerings on a
recognition of consumer needs find a ready market for their products. Company finds
it easy to sell its products. In the same way, the company, due to continuous study of
consumer behaviour and attempts to meet changing expectations of the buyers, can
retain its consumers for a long period.
9. Competition: Consumer behaviour study assists in facing competition, too. Based on
consumers’ expectations, more competitive advantages can be offered. It is useful in
improving competitive strengths of the company.
10. Developing New Products: New product is developed in respect of needs and wants
of the target market. In order to develop the best-fit product, a marketer must know
adequately about the market. Thus, the study of consumer behaviour is the base for
developing a new product successfully.
11. Dynamic Nature of Market: Consumer behaviour focuses on dynamic nature of the
market. It helps the manager to be dynamic, alert, and active in satisfying consumers
better and sooner than competitors. Consumer behaviour is indispensable to watch
movements of the markets.
12. Effective Use of Productive Resources: The study of consumer behaviour assists the
manager to make the organisational efforts consumer-oriented. It ensures an exact use
of resources for achieving maximum efficiency. Each unit of resources can contribute
maximum to objectives.
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BUYING MOTIVE
∙ A motive is an inner urge that moves or prompts a person ton action. ∙
Strongly influence a consumer to buy a particular product. ∙ Any urge
prompting a person to decide to buy is called a buying motive.
CLASSIFICATION OF BUYING MOTIVE

1. Product motive
a. Emotional product motive
b. Rational product motive
2. Patronage motive
a. Emotional patronage motive
b. Rational patronage motive
MASLOW THEORY OF MOTIVATION
1. Physiological needs
2. Safety needs
3. Social needs
4. Esteem needs
5. Self actualisation needs
DECISION MAKING BY CONSUMERS
I. High involvement decision making
II. Low involvement decision making
BUYING DECISION PROCESS
1. Need recognition
2. Search for information
3. Evaluation of alternatives
4. Purchase decision
5. Post purchase behaviour
BUYERS OF NEW PRODUCT
∙ Innovators
∙ Early adopters
∙ Early majority
∙ Late majority
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∙ Laggards
CRM- MEANING
According to Philip Kotler and Gary Armstrong, ‘CRM is concerned with managing detailed
information about individual customers and all customer “touch points” to maximize
customer loyalty. It can also be defined as, ‘an alignment of strategy, processes and
technology to manage customers, and all customer-facing departments and partners’. In short,
CRM is about effectively and profitably managing customer relationships through the entire
life cycle.
CRM helps in providing better service to the customers and developing effective customer
relationships. CRM integrates everything that a company’s sales, services and marketing
teams know about the individual customers to get a 360-degree view of the customer
relationship.
NEED AND IMPORTANCE of CRM:

1. Better service to customers: CRM provides more avenues for customers to communicate
and explain their needs to the organization through numerous contact points. Customers get
increased satisfaction and a feeling of being special and important because of the increased
personalization of services and customization of goods offered to them. For example, ICICI
Bank maintains a list of priority customers and provides them with additional facilities and
special offers such as free tickets to concerts, movies, and so on. Some banks, such as Syrian
Catholic Bank provide personalized services to their important customers.
2. Customization of market offerings: Companies can customize a product or service
depending on the data available with the firm. The firm can facilitate customer-company
interaction through the company contact centre and web site. Such interactions help develop
customized products.
3. Reduction in the customer defection rate: CRM emphasizes on training and
development of the employees to become more customer oriented. Due to CRM training and
development, employees show care and concern towards the valuable customers; therefore,
the customer defection rate may be reduced to a great extent.
4. Increase and improvement in long-term relationships: Some firms treat their customers
as partners. Firms solicit the help of the customers to design new products or to
Prepared by,
improve their services. If the customer gets involved with the firm, they are more likely to
remain with the firm.
5. Increase in customer equity: CRM increases customer equity. Firms focus the marketing
efforts more on the most valuable customers (MVCs). The main aim of CRM is to produce
high customer equity. Customer equity is the sum of lifetime values of all customers. More
focus on MVCs will enable a firm to increase the customer equity.
6. Competitive advantage: The firms that adopt CRM get competitive advantage in the
market. They can face the competition with much ease. Competitive advantage helps in
generating higher returns on investment.
7. Building and maintaining corporate image: The image of the firm also gets enhanced.
Loyal customers become evangelists. The evangelists spread a good word about the company
and its products. This enables a firm to get additional customers to its fold. 8. Higher return
on investment: Due to CRM, a company gains a position to generate higher returns on
investment. This is because of the repeat purchases on the part of the loyal customers. The
company also makes money through cross selling. The higher return on investment increases
the shareholders’ value.
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Marketing-Unit 1 To 3

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UNIT 1

I. Markets on the basis of nature of purchase and consumption

2. Marketing starts with customers and ends with customers

a) Leads to integration of various core sectors

a) Results in lower cost of distribution

DIFFERENCE BETWEEN SELLING AND

MARKETING EVOLUTION OF MARKETING

a) The exchange concept

INNOVATIONS IN MODERN MARKETING

a) Determining marketing objectives

LEVELS OF MARKETING MANAGEMENT

FACTORS TO BE CONSIDERED WHILE BUYING

∙ Estimating the demand

∙ Ensures steady supply of goods

∙ Requires specialised knowledge

1. On the basis of commodity stored

DEALING WITH RISK

MARKET SEGMENTATION PROCEDURE

∙ Step 1- Survey stage

MARKET SEGMENTATION – BASES

BENEFITS OF MARKET SEGMENTATION

∙ Proper choice of target market

CRITERIA FOR SUCCESSFUL SEGMENTATION

NEED FOR STUDY OF CONSUMER BEHAVIOUR/ ROLE/IMPORTANCE

CLASSIFICATION OF BUYING MOTIVE

NEED AND IMPORTANCE of CRM:

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