BFT-1st

International Marketing Management

Meaning of Marketing

Marketing is a wide term embracing all resources and economic activities needed to direct the
flow of goods and services from producers to consumers. It is a distribution process so far as
businessmen are concerned.

“A total system of interacting business activities designed to plan, price, promote and distribute
want-satisfying products and services to present and potential customers” — William J Stanton. It
is a modern activity that has developed about the middle of the current century as a scientific
process and organized activity and a body of knowledge.

The Committee of the American Marketing Association, 1960, defined marketing as “the
performance of business activities that direct the flow of goods and services from producers or
suppliers to the consumers and end-users.”

It is the management function which organizes and directs all those business activities involved
in assessing and converting customer purchasing power into effective demand for a specific
product or service and in moving the product or service to the final consumer or user so as to
achieve the profit target or other objectives set by a company (U. K. Institute of Marketing).

Definition of Marketing Management

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

Product-oriented Definition -Marketing may be narrowly defined as a process by which goods and
services are exchanged and the valued determined in terms of money prices.

Customer-oriented Definition - According to Cardiff and Still “Marketing is the business process
by which products are matched with the markets and through which transfers of ownership are
affected.”

System-Oriented Definition -William J. Stanton has given a system oriented definition of

marketing. “Marketing is a total system of interacting business activities designed to plan, price,
promote and distribute wants satisfying products to target markets to achieve organizational
objectives.

Kotler’s Definition -Kotler has defined marketing as a social and managerial process by which
individuals and groups obtain what need and want through creating, offering and exchanging
products of value with others.

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Importance of Advantages of Marketing

Marketing is a very much part of our normal lives, wherever we live. Firms cannot exist without
marketing wings. Peter Drucker said that marketing is everything. All other activities in the
organisation are support services to the marketing strategy. Take research or design or purchase
or production or finance- all these are support services to marketing.

Marketing is inevitable for the company, government, society and the economy as a whole.

Marketing plays as important role in the development of a society. Marketing bridges the gap
between firm and society. It has built a bridge between the farms and factories, which has
benefited both agriculture and industry and also society as a whole.

The advantages of marketing to society are as follows:

1. Provides Employment: Marketing provides effective and continuous employment in the School
of Distance Education production, distribution and promotion of goods. A large number of males
and females opt for career in marketing after graduation. It is estimated that out of 5 persons, 4
persons are employed in marketing.

2. Raises standard of living: Marketing improves the quality of life of people by satisfying varied
and innumerable needs and wants of consumers.

3. Creates utilities: Marketing creates place, time and possession utilities. Transport creates
place utility. Storage creates time utility. Exchange creates possession utility.

4. Reduces costs: Marketing ensures optimum production and optimum consumption. This
reduces the cost of production. Thus the consumers get quality goods at cheaper prices.

5. Solves social problems: Marketing creates social awareness among people. We watch
different advertisements related with family planning, ecological balance, pollution control,
consumers’ health, morals of the community etc. Societal marketing provides a proper platform to
these problems.

6. Makes life easier: Marketing meets the changing needs and aspirations of people by providing
goods of their choice at comfortable prices and places. Thus, marketing makes human life easier.

7. Enriches Society: Many firms encourage their employees to participate in activities that benefit
their communities and invest heavily in socially responsible actions and charities.

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Marketing is said to be the eyes and ears of a business organization. This is so because
marketing keeps the business in close contact with its economic, political, social and
technological environment and informs it of events that can influence its activities as per the
requirements of the market. Following are the advantages of marketing to business firms.

1. Helps in income generation: Marketing helps in manufacturing products and services. No firm
can survive unless it markets its products. Thus marketing helps in generating revenue or income
for the firm. In short, marketing is the only revenue producing activity for the organization.

2. Helps in planning and decision-making: Marketing planning is an integral part of overall

business planning. It helps in formulating marketing strategies and decisions.

3. Helps in distribution: Marketing helps the firm in selecting the distribution channels that deliver
goods to the consumer conveniently at minimum cost.

4. Helps in exchanging information: Marketing gives up-to date information to the top
management about nature and character of demand.

5. Expands global presence: Today many firms such as Honda, Sony, Nestle, Coca Cola etc.
operate in almost all countries. This is made possible through marketing.

6. Helps to earn goodwill: Marketing earns goodwill for the company. School of Distance
Education

Marketing is very important for consumers also. The importance of marketing to consumers can
be seen as under.

1. Provides quality products: Marketer undertakes research and development activities. This
helps in improving the quality of products. In this way, the consumers get better quality products.

2. Provides variety of products: Marketing facilitates production and distribution of a wide variety
of goods and services for use by the consumers. On the basis of information collected form
markets, the production department produces variety of products.

3. Helps in selection: Marketing provides variety of products to the consumers. These products
are available in different sizes, designs, colors and prices. In this way, marketing provides various
options to consumers.

4. Consumer Satisfaction: Today the goal of marketing is consumer satisfaction. Consumers can
buy products according to their needs and wants.

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Marketing is a key ingredient in economic growth. It stimulates research and innovation. The
importance of marketing to the economy may be studied as under.

1. Saves the economy from depression: Marketing makes fullest utilization of the existing
capacity of the firms. During depression, the purchasing power of consumers is very low.
Marketing develops new markets and adopts promotional tools to save the economy from
depression.

2. Increase in national income: As already stated, marketing provides employment opportunities.

This increases the income of the people. The higher income of the people facilitates expansion of
markets. Thus production and consumption increases. This ultimately increases the national
income.

3. Economic growth: The economic system moves forward with the marketing activities by using
the scarce resources effectively to produce useful commodities and meet the consumption needs
of the society. In this way, marketing facilitates economic growth.

Functions of marketing:-

The following are the functions of marketing:

1. Identify needs of the consumer: the first step in marketing function is to identify the needs and
wants of the consumer that are present in the market. Companies or businesses must therefore
gather information on the customer and perform analysis on the collected information.

By doing this they can present the product or service that matches closely with the customer
needs and wants.

2. Planning:The next step in marketing function is planning. It is considered very important for a
business to have a plan. The management should be very clear about the company objectives and
what it wishes to achieve from the created plan.

The company should then chalk out a timeline that is essential for achieving the objectives.

3. Product Development:After the details are received from the consumer research, the product is
developed for use by the consumers. There are many factors that are essential for a product to be
accepted by the customer, a few factors among the many are product design, durability and cost.

4. Standardization and Grading: Standardization refers to the process of ensuring uniformity in the
product which means that a product developed by a business shall be standard for every
consumer with the same quality and design and this is one of the key aspects that needs to be
maintained by the business.

Grading is referred to as the process of classifying products that are similar in quality and
characteristics. Grading helps in making the customer know about the quality of the product

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offered. It helps in making customers understand that the products conform to highest quality
standards.

5. Packing and Labeling: The first impressions of a product are its packaging and the label attached
to it. Therefore, packaging and labeling should be looked after very well. It is a well known fact
that a great packaging and labeling goes a long way in ensuring product success.

6. Branding: Branding is referred to as the process of identifying the name of the producer with the
product. Certain brands are there in the markets which have a lot of goodwill and any product
coming from the same brand will be accepted more warmly by the consumers. Although, having a
separate identity for the product can be helpful.

7. Customer Service: A company has to set-up various kinds of customer service based on their
product. It can be pre-sales, technical support, customer support, maintenance services, etc.

8. Pricing:It can be regarded as one of the most important parts of marketing function. It is the
price of a product that determines whether it will be successful or a failure. Some other factors
are market demand, competition, price of competitors.

The company or business should understand clearly that bringing about frequent changes in the
price of a product can lead to confusion in the minds of consumers.

9. Promotion: Promotion is the process of making the customers aware of the product by
presenting it to customers across various channels of promotion and entices them to buy the
product.

The major channels of promotion are: advertising, media, personal selling and promotion
(publicity). An ideal promotion mix will be a combination of all or some methods.

Distribution refers to the movement of consumer goods to the point of

10. Distribution:
consumption. A company must ensure that the correct channel of distribution is selected for the
product.

The mode of distribution is dependent on the factors such as shelf life, market concentration and
capital requirements. Proper management of inventory is also essential.

11. Transportation: Transportation is defined as the physical

movement of goods from one place to
another. In other words, it is the movement of goods from the place of production to the place of
consumption.

Also, the correct mode of transportation can be selected based on the geographical boundaries of
the market.

12. Warehousing: Warehousing of products creates time utility. It is often seen that there is a gap
between the time a product is produced and the time when it is consumed. Companies like to

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maintain the smooth flow of goods even when the products are of seasonal nature. Warehousing
and storing provides the opportunity to provide goods during off season also.

Marketing concepts means the philosophy, belief or attitude of the management of a firm which
guides its marketing efforts.

Types of Marketing Concepts

All companies will not adopt the same marketing concept. There are different marketing concepts
or marketing management philosophies under which business enterprises conduct their
marketing activities. All marketing concepts can be broadly classified into two-traditional School
of Distance Education concepts and modern concepts.

1. Exchange concept: Exchange is the origin of marketing activity. When people need to
exchange goods, they naturally begin a marketing effort. Wroe Alderson (a leading marketing
theorist) has pointed out, “It seems altogether reasonable to describe the development of
exchange as a great invention which helped to start primitive man on the road to civilisations”.
The exchange concept holds that the exchange of a product between the seller and the buyer is
the central idea of marketing.

2. Production concept: The production concept holds that the consumers prefer the goods which
are easily available at lower prices. Therefore, it is necessary to produce in large quantities at
lowers costs. Henry Ford is an example of production-oriented entrepreneur.

3. Product concept: It is a belief of the management that consumers favour the products of
superior quality, better performance and innovative features. Therefore, successful marketing
requires continuous product planning and development and improvement in quality standards. It
is based on the assumption that” a good product will sell itself”.

4. Selling concept: This concept assumes that consumers will not buy goods voluntarily. The
seller must, therefore, undertake a large scale selling and promotional efforts, Emphasizing upon
the selling concept, Sergio Zymen, Coca-Cola’s former Vice president of Marketing has said, “The
purpose of marketing is to sell more stuff to more people more often for more money in order to
make more profits”.

1. Marketing concept: This is the modern concept of marketing or marketing philosophy. This
concept holds that the primary task of a business firm is to study the needs, desires and
preferences of the potential consumers and produce goods which are actually needed by the

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consumers. When an organisation practices the marketing concept, all its activities are directed
to satisfy the consumer. Successful companies realise that a satisfied customer is the best
advertiser for their product. Profits are generated not from their production, products or selling
efforts, but from the satisfaction of consumers. Consumers are marketing assets.

Features of Marketing Concept (Modern Concept)

a. The consumer is the key. Therefore, the satisfaction of consumer is the prime object of an
enterprise.

b. A business enterprise has dual objectives of customer satisfaction and profit maximization.
Profit is a by-product of supplying what the customer wants.

c. Needs and wants of customers must be identified properly and deeply before starting
production.

d. Goods must be produced according to these needs and wants.

e. All the resources of production must be utilized to their best extent so that the cost of
production may be minimized.

2. Societal concept: Modern business is regarded as an integral part of society. An activity which
satisfies human needs may be detrimental to the interest of the society at large. Firms should not
only consider consumer wants and profits but also society’s interests while making their
marketing decisions. Thus, societal marketing concept is a management philosophy that takes
into account the welfare of society, the organisation and its customers.

3. Holistic marketing concept: Holistic marketing concept is a new marketing concept. Holistic
marketing recognizes that “everything matters” with marketing. There are four components of
holistic marketing concept. They are relationship marketing, integrated marketing, internal
marketing and social responsibility marketing. Holistic marketing concept is based on the
principle that marketing is not a department but it is pervasive throughout the company.

A marketing manager is the professional responsible for an organization’s advertising and

marketing endeavors. They work within a set budget and create strategies aimed at raising the
brand profile and reputation. Aside from coming up with creative concepts, they review and
approve all print and digital advertising materials. They may work with an in-house marketing
team or an external advertising agency to create and customize marketing campaigns for
different marketing channels.

Role of a marketing manager?

A marketing manager has the following job responsibilities:-

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Developing and implementing marketing plans, policies and strategies according to

organizational goals and market demands.
Designing promotional activities and events for marketing products and services.
Gathering and analyzing data involved in marketing campaigns and activities.
Planning a budget, evaluating campaign expenditure and estimating potential sales.
Formulating competitive pricing strategies that meet organizational objectives and appeal
to customers.
Evaluating the effectiveness of marketing campaigns and adjusting or implementing
strategies to improve them.

Meaning of Marketing Environment:

The marketing environment refers to all internal and external factors, which directly or indirectly
influence the organization’s decisions related to marketing activities. Internal factors are within
the control of an organization; whereas, external factors do not fall within its control. The external
factors include government, technological, economical, social, and competitive forces; whereas,
organization’s strengths, weaknesses, and competencies form the part of internal factors.
Marketers try to predict the changes, which might take place in future, by monitoring the
marketing environment. These changes may create threats and opportunities for the business.
With these changes, marketers continue to modify their strategies and plans.

Features of Marketing Environment:

Today’s marketing environment is characterized by numerous features, which are mentioned as

follows:

1. Specific and General Forces: It refers to different forces that affect the marketing environment.
Specific forces include those forces, which directly affect the activities of the organization.
Examples of specific forces are customers and investors. General forces are those forces, which
indirectly affect the organization. Examples of general forces are social, political, legal, and
technological factors.

2. Complexity: It implies that a marketing environment includes number of factors, conditions,

and influences. The interaction among all these elements makes the marketing environment
complex in nature.

3. Vibrancy: Vibrancy implies the dynamic nature of the marketing environment. A large number
of forces outline the marketing environment, which does not remain stable and changes over time.

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Marketers may have the ability to control some of the forces; however, they fail to control all the
forces. However, understanding the vibrant nature of marketing environment may give an
opportunity to marketers to gain edge over competitors.

4. Uncertainty: It implies that market forces are unpredictable in nature. Every marketer tries to
predict market forces to make strategies and update their plans. It may be difficult to predict
some of the changes, which occurs frequently. For example, customer tastes for clothes change
frequently. Thus, fashion industry suffers a great uncertainty. The fashion may live for few days or
may be years.

5. Relativity: It explains the reasons for differences in demand in different countries. The product
demand of any particular industry, organization, or product may vary depending upon the country,
region, or culture. For example, sarees are the traditional dress of women in India, thus, it is
always in demand. However, in any other western country the demand of saree may be zero.

Types of Marketing Environment:

The sale of an organization depends on its marketing activities, which in turn depends on the
marketing environment. The marketing environment consists of forces that are beyond the control
of an organization but influences its marketing activities. The marketing environment is dynamic
in nature.

Therefore, an organization needs to keep itself updated to modify its marketing activities as per
the requirement of the marketing environment. Any change in marketing environment brings
threats and opportunities for the organization. An analysis of these changes is essential for the
survival of the organization in the long run.

A marketing environment mostly comprises of the following types of environment:

1. Micro Environment

2. Macro Environment

The discussions of these environments are given below:

Micro environment refers to the environment, which is closely linked to the organization, and
directly affects organizational activities. It can be divided into supply side and demand side
environment. Supply side environment includes the suppliers, marketing intermediaries, and

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competitors who offer raw materials or supply products. On the other hand, demand side
environment includes customers who consume products.

Let us discuss the micro environment forces in the following points:

i. Suppliers: It provides raw material to produce goods and services. Suppliers can influence the
profit of an organization because the price of raw material determines the final price of the
product. Organizations need to monitor suppliers on a regular basis to know the supply shortages
and change in the price of inputs.

ii. Marketing Intermediaries: It helps organizations in establishing a link with customers. They
help in promoting, selling, and distributing products. Marketing intermediaries include the
following:

a. Resellers: It purchases the products from the organizations and sell to the customers.
Examples of resellers are wholesalers and retailers.

b. Distribution Centers: It helps organizations to store the goods. A warehouse is an example of

distribution center.

c. Marketing Agencies: It promotes the organization’s products by making the customers aware
about benefits of products. An advertising agency is an example of marketing agency.

d. Financial Intermediaries: It provides finance for the business transactions. Examples of

financial intermediaries are banks, credit organizations, and insurance organizations.

iii. Customers: Customers buy the product of the organization for final consumption. The main
goal of an organization is customer satisfaction. The organization undertakes the research and
development activities to analyze the needs of customers and manufacture products according
to those needs.

iv. Competitors: It helps an organization to differentiate its product to maintain position in the
market. Competition refers to a situation where various organizations offer similar products and
try to gain market share by adopting different marketing strategies.

2. Macro Environment: Macro environment involves a set of environmental factors that is beyond
the control of an organization. These factors influence the organizational activities to a significant

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extent. Macro environment is subject to constant change. The changes in macro environment
bring opportunities and threats in an organization. Let us discuss these factors in details:

i. Demographic Environment: Demographic environment is the scientific study of human

population in terms of elements, such as age, gender, education, occupation, income, and location.
It also includes the increasing role of women and technology. These elements are also called as
demographic variables. Before marketing a product, a marketer collects the information to find
the suitable market for the product. Demographic environment is responsible for the variation in
the tastes and preferences and buying patterns of individuals. The changes in demographic
environment persuade an organization to modify marketing strategies to address the altering
needs of customers.

ii. Economic Environment: Economic environment affects the organization’s costs structure and
customers’ purchasing power. The purchasing power of a customer depends on the current
income, prices of the product, savings, and credit availability. The factors economic environment
is as follows:

a. Inflation: It influences the customers’ demand for different products. For example, higher petrol
prices lead to a fall in demand for cars.

b. Interest Rates: It determines the borrowing activities of the organization. For example, increase
in interest rates for loan may lead organizations to cut their important activities.

c. Unemployment: It leads to a no income state, which affects the purchasing power of an

individual.

d. Customer Income: It regulates the buying behavior of a customer. The change in the customer’
s income leads to changed spending patterns for the products, such as food and clothing.

e. Monetary and Fiscal Policy: It affects all the organizations. The monetary policy stabilizes the
economy by controlling the interest rates and money supply in an economy; whereas, fiscal policy
regulates the government spending in various areas by collecting the revenue from the citizens by
taxing their income.

iii. Natural Environment: Natural environment consists of natural resources, which are needed as
raw materials to manufacture products by the organization. The marketing activities affect these
natural resources, such as depletion of ozone layer due to the use of chemicals. The corrosion of
the natural environment is increasing day-by-day and is becoming a global problem. Following
natural factors affect the marketing activities of an organization in a great way:

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a. Natural Resources: It serves as raw material for manufacturing various products. Every
organization consumes natural resources for the production of its products. Organizations are
realizing the problem of depletion of resources and trying best to use these resources judiciously.
Thus, some organizations have indulged in de-marketing their products. For example, Indian Oil
Corporation (IOC) tries to reduce the demand for its products by promoting advertisements, such
as Save Oil, Save India.

b. Weather: It leads to opportunities or threats for the organizations.

For example, in summer, demand for water coolers, air conditioners, cotton clothes, and water
increases while in winter, the demand for woolen clothes and room heaters rises. The marketing
environment is greatly influenced by the weather conditions of a country.

c. Pollution: It includes air, water, and noise pollution, which lead to environmental degradation.
Now-a-days, organizations tend to promote environment friendly products through its marketing
activities. For example, the organizations promote the usage of jute and paper bags instead of
plastic bags.

iv. Socio-Cultural Environment: Socio-cultural environment comprises forces, such as society’s

basic values, attitudes, perception, and behavior. These forces help in determining that what type
of products customers prefer, what influences the purchase attitude or decision, which brand they
prefer, and at what time they buy the products. The socio-cultural environment explains the
characteristics of the society in which the organization exists. The analysis of socio-cultural
environment helps an organization in identifying the threats and opportunities in an organization.

For example, the lifestyles of people are changing day-by-day. Now, the women are perceived as
an active earning member of the family. If all the members of a family are working then the family
has less time to spend for shopping. This has led to the development of shopping malls and
super markets, where individuals could get everything under one roof to save their time.

v. Technological Environment: Technology contributes to the economic growth of a country. It

has become an indispensible part of our lives. Organizations that fail to track ongoing
technological changes find it difficult to survive in today’s competitive environment. Technology
acts as a rapidly changing force, which creates new opportunities for the marketers to acquire the
market share. Marketers with the help of technology can create and deliver products matching the
life style of customers. Thus, marketers should observe the changing trends in technology.

Following points explain the technological trends that affect the marketing environment:

a. Pace of Technological Change: It leads to product obsolescence at a rapid pace. If the pace of
technological change is very rapid then organizations need to modify their products as and when
required. On the other hand, if the technology is not changing at a rapid pace then there is no
need for the organization to bring constant changes in the product.

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b. Research and Development: It helps in increasing growth opportunities for an organization.
Many organizations have developed a separate team for R&D to bring innovation in its products.
Pharmaceutical organizations, such as Ranbaxy and Cipla, have started putting greater force in
R&D and these efforts have led to great opportunities in global market.

c. Increased Regulation: It refers to government guidelines to ban unsafe products. Marketers

should be aware of these regulations to prevent their violation. Every pharmaceutical organization
takes the approval of the Drugs Controller of India, which lays down the standards for drugs
manufacturing.

vi. Political and Legal Environment: Political and legal environment consists of legal bodies and
government agencies that influence and limit the organizations and individuals. Every
organization should take care of the fact that marketing activities should not harm the political
and legal environment prevailing in a country. The political and legal environment has a serious
impact on the economic environment of a country. For example, in some regions of Uttar Pradesh,
Reliance Fresh had to shut down its stores because of the lack of political support.

MEANING OF PRODUCT:-

A product is something that is manufactured for sale in the market. Customer needs are met
by the usage of products. Product is one of the main components of marketing—all marketing
activities revolve around the product. Products can be tangible or intangible. Tangible
products are known as goods while intangible products are called services.

The term product can be understood in narrow as well as broad sense. In a narrow sense, it is
a set of tangible physical and chemical attributes assembled in an identifiable and readily
recognizable form

Definition:-

In a narrow sense, “A product is a set of tangible physical attributes in an identifiable form”

(W.J. Stanton). But in marketing, product is used in a broader form.

According to W. Alderson “A product is a bundle of utilities consisting of various product

features and accompanying services”.

According to Philip Kotler “A product is anything tangible or intangible that can be offered to a
market for attention, acquisition use or consumption that might satisfy a need or want”.

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LAYERS OF PRODUCT:-

The needs of customers vary according to their economic conditions and social situations. As
customers grow economically, they require enhanced products that can satisfy their current
needs. The organizations address the varied needs of customers by producing a same
product at different levels. Each level adds some valuable features in a product. For example,
mobile phones come with different features and functions to satisfy the varied needs of
customers.

If a customer wishes to use mobile phone only for communication purposes, he/she can buy a
very simple mobile phone. However, if the customer wishes to use mobile phone for
communication, business and entertainment purposes, he/she can buy the mobile phone with
additional features.

Now, let us discuss the different layers of a product in brief:

i. Core Product:

It includes the key feature of a product. It forms the basis for other product offering levels. For
example, the key feature of a car is to travel from one place to another. Therefore, a simple
and small car with no additional features is a core product.

ii. Basic Product:

It includes some added benefits along with the basic feature of a product. For example, a
clean and spacious car is the basic product.

iii. Expected Product:

It refers to a product that is desired by customers. It varies from individual to individual

depending on other factors, such as social class. For example, a customer buying a car may
expect an air conditioner and music system in it.

iv. Augmented Product:

It includes additional attributes of a product as compared to products offered by competitors.

The additional benefits satisfy rational customers more in terms of value. For example, a car
may have special in-built features, such as LCD TV or refrigerator.

v. Potential Product:

It compares the benefit derived from the product in future with the current product. It creates
a value for customers beyond their expectations. For example, a high technology gadget car
with good ambience and comfort is a potential product.

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