SCHOOL OF MANAGEMENT STUDIES

COURSE MATERIAL

Program : UG / B.Com.,

Semester : III

Course : Marketing Management Course Code : B19BC3040

Unit. No. :1

Unit Title : Introduction to Marketing:

Course Presenter : Manjunath V S

Course Mentor : Prof. Maria Shashi Boaler

Course Objectives:

 To understand the basic concepts of marketing, Consumer Behavior and

Advertisement Strategies and impart in depth knowledge about Market
Segmentation, Market targeting and Product Positioning.
 To impart the depth knowledge about the Marketing Mix and Global Market
Environment and understand the concept of types of marketing and its issues.

Course Outcomes:

 Able to know the strategies of advertising and Consumer behavior process.

 Know about the Target Market Selection and Strategies of Product Positioning.
 Know the techniques of 7P’s of Marketing Mix and Social Media Marketing in
Global Environment
 Know different types of marketing and distribution system in India.
Course Content:

Unit-1 Introduction to Marketing: 08 Hrs

Meaning, Evolution of marketing concepts, functions, marketing
environment- Micro and Macro environmental factors, Consumer
Behavior –Consumer buying process, Factors influencing consumer
buying decisions.
Marketing-Nature and Scope of Marketing; Marketing Promotional
Strategies Advertising Strategies for Promoting New Product Vs
Existing Products Advertising Structure-Source-Advertising Budget.

Unit-2 Segmentation Targeting Positioning: 10 Hrs

Market segmentation – concept, importance and bases, Target
market selection: Positioning concept, importance and bases:
Product differentiations.
Retaining Customer & STP Market Segmentation: Levels –
Importance-Procedures-Types of Segmentation-Market Targeting-
Procedures-Product Positioning Objectives-Differentiating the
Product-Product Positioning Strategies Procedure for Creating
Customer Relation Management Database-E-Trading.

Unit-3 Marketing Mix: 12 Hrs

Marketing Mix 7Ps and 4As-New Challenges of Marketing Field-
The Functions of Marketing Management-Understanding Marketing
Management in the context of National and Global Market
Environment Social Media Marketing.
Marketing Promotional Strategies: Advertising Strategies for
Promoting New Product Vs Existing Products. Advertising
Structure-Types of Advertisement-Measuring Effectiveness of
 Advertisement-DAGMAR approach: Kinds of Promotion-Tools and
Techniques of sales promotion-Push-Pull Strategies of Promotion-
Personal Selling.

Unit-4 Developments & Issues in Marketing: 12 Hrs

Distribution System and Recent Trends in Marketing: Online

Marketing – Merits and Demerits-E-Tailer-Impact of FDI in to
Indian –Cloud Sourcing-Meaning and Purpose of Channel of
Distribution-Managing Distributing Channels-Channel Alternatives
Factors affecting Channel Choice-Direct Marketing and E-
Commerce Managing Retailing-Wholesaling and Logistics, Retail
Distribution System in India.

Unit 1:Introduction to Marketing:

Marketing – Meaning:

Generally, Marketing refers to the action or business of promoting and selling

products or services, including market research and advertising. But Marketing has
much more meaning than that. American Marketing Association (AMA) defines
Marketing as “Marketing is the activity, set of institutions, and processes for
creating, communicating, delivering, and exchanging offerings that have value for
customers, clients, partners, and society at large.

Evolution of Marketing Concepts:

Marketing has been derived based on many different orientations of business. Even
today an organization can choose its goals based on its orientations.

Production Concept:
The basic idea of this concept is that businesses will want to produce widely cheap products in
maximum volumes to maximize profitability and scale. Businesses assume that consumers are
primarily interested in product availability and low prices while customer’s needs might not be
fully addressed.

Such an approach is probably most effective when a business operates in very high growth
markets or where the potential for economies of scale is significant.

The product concept:

It is not so much about the production and business output but focuses more on the product.

Potential customers favor products that offer quality, performance, or innovative features.

Here, businesses will concentrate on making superior products and improving them over time.
The problem is many businesses do not balance the need for a product all while realizing what
the marketing needs. There is a fine line between focusing on the customer and still defining
your role and leadership in the industry.

This marketing concept believes in potential customers and how their brand loyalty is closely
tied to options of products, the quality of those products and the benefits they get from the
product and the business they invest in.

The selling concept:

It is the bread and butter of marketing efforts as it believes that people will not buy enough of a
business’s product so businesses need to persuade them to do so.

In today’s marketing, we know that selling is not the way to full marketing success. We more so
find this marketing concept popular in the days of WWII where there was aggressive advertising
to promote people to buy bonds and different products.
The marketing concept:

It is the concept of competition. It is a marketing concept that believes that the success of a
business depends on the marketing efforts that deliver a better value proposition than its
competitors.

This concept focuses on the needs and wants of target marketing as well as delivering value
better than its competition. Through marketing, it’s your goal to be the preferred option
compared to your competitors. Competitive advantage is key!

The societal marketing concept:

It is the most progressive and modern-day applicable marketing mindset to have. It is a

marketing concept that believes in giving back to society by producing better products that help
the world be a better place.

This orientation arose as some questioned whether marketing and businesses are addressing the
massive problems society has like environmental deterioration, resource shortages, population
growth, poverty, and social disruption.

Functions of Marketing:

1] Identify Consumer Needs

One of the first steps the company needs to take is to identify the needs and wants of the consumers
in the market. To do so they must gather information and analyse this information. Once you
understand your customer thoroughly you can base your product design on this information.

2] Planning

The next logical step would be to make a marketing plan. Firstly you must be very clear about the
objectives of the company and what it wishes to achieve. Then you figure out a timeline to achieve
these objectives. And finally, you plan the marketing strategy of your company accordingly.
3] Product Development

As per your consumer research, we then develop the product that suits the needs of the consumer.
The design of the product is also an important factor in many products. Like for example when
buying a car, the design will play a huge factor. There are other factors to be considered like cost,
durability etc

4] Standardisation and Grading

Standardisation means ensuring uniformity in the product. All customers must get the same product
of the same design and quality. And these standards need to be maintained throughout.

Grading is the process of classification of products according to similar characteristics and/or

quality. If the product does not have any predetermined quality or other specifications like
say agricultural products. Grading will ensure the consumer knows your goods are of the highest
quality.

5] Packing and Labeling

The package and the label are the first impressions your product makes on the consumer so they are
of essential importance. They are not only to protect and identify the goods but are great marketing
tools. There is proof that an attractive package and label can go a long way in making a product a
success.

6] Branding

One important decision the company has to make is whether they want the product to have an
individual identity in the market or they want it to be recognized by the brand name.

Certain brands enjoy incredible goodwill in the market and it can benefit the product. But you may
also want the product to have a separate identity so it can flourish on its own attributes.
7] Setting up Customer Support Services

Depending on your product there may be a variety of customer services that the company has to set
up. Pre-sales service, consumer helpline, maintenance services, technical support are just some of
the services that your product may require. These are important functions of marketing.

8] Pricing

This may be one of the most important functions of marketing. The price of a product will largely
determine its success or failure. Factors like demand, market conditions, competition prices etc will
be considered to come up with the correct pricing strategy.

One other thing the company must remember that prices of the products should not be changed too
frequently. This leads to confusion in the market.

9] Promotion

This is where you inform the customers of your product and persuade them to buy it. There are four
major promotion methods – advertising, personal selling, sales promotion and publicity. The
company must decide on its best promotion mix, a combination involving all or some of these four
methods.

10] Distribution

Here the company must ensure the correct distribution channel for its product. It will depend on a
variety of factors such as the concentration of the market, shelf life of the product, company’s
capital requirements etc. Inventory management is another important factor the company must look
into.

11] Transportation
The physical movement of the goods from its place of production to its place of consumption is
transportation. It is a very important function of marketing. The company must analyse the
geographical boundaries of its market. This will help them choose the correct modes of
transportation.

And in the global economy where we live in, there are almost no barriers to international trade. So
if a company wishes to go global transportation will be a key factor in their marketing mix.

12] Warehousing

As we have seen there is always a lag time between the production and the consumption of most
goods. Sometimes the products are seasonal or the supply is irregular or there are production
difficulties. But companies like to maintain a smooth flow of goods. So storage and warehousing of
goods are necessary.

Marketing environment:
Marketing Environment is the combination of external and internal factors and forces which
affect the company’s ability to establish a relationship and serve its customers.

The marketing environment of a business consists of an internal and an external environment.

The internal environment is company-specific and includes owners, workers, machines,
materials etc. The external environment is further divided into two components: micro & macro.
The micro or the task environment is also specific to the business but external. It consists of
factors engaged in producing, distributing, and promoting the offering. The macro or the broad
environment includes larger societal forces which affect society as a whole. The broad
environment is made up of six components: demographic, economic, physical, technological,
political-legal, and social-cultural environment.

“A company’s marketing environment consists of the actors and forces outside of marketing that
affect marketing management ability to build and maintain successful relationships with target
customers”. – Philip Kotler
Components of Marketing Environment
The marketing environment is made up of the internal and external environment of the business.
While the internal environment can be controlled, the business has very less or no control over
the external environment.

Internal Environment
The internal environment of the business includes all the forces and factors inside the
organisation which affect its marketing operations. These components can be grouped under the
Five Ms of the business, which are:

 Men
 Money
 Machinery
 Materials
 Markets
The internal environment is under the control of the marketer and can be changed with the
changing external environment. Nevertheless, the internal marketing environment is as important
for the business as the external marketing environment. This environment includes the sales
department, marketing department, the manufacturing unit, the human resource department, etc.

External Environment
The external environment constitutes factors and forces which are external to the business and on
which the marketer has little or no control. The external environment is of two types:

Micro Environment
The micro-component of the external environment is also known as the task environment. It
comprises of external forces and factors that are directly related to the business. These include
suppliers, market intermediaries, customers, partners, competitors and the public

 Suppliers include all the parties which provide resources needed by the organisation.
 Market intermediaries include parties involved in distributing the product or service of the
organisation.
  Partners are all the separate entities like advertising agencies, market research
organisations, banking and insurance companies, transportation companies, brokers, etc.
which conduct business with the organisation.
 Customers comprise of the target group of the organisation.
 Competitors are the players in the same market who targets similar customers as that of the
organisation.
 Public is made up of any other group that has an actual or potential interest or affects the
company’s ability to serve its customers.
Macro Environment
The macro component of the marketing environment is also known as the broad environment. It
constitutes the external factors and forces which affect the industry as a whole but don’t have a
direct effect on the business. The macro-environment can be divided into 6 parts.

Demographic Environment
The demographic environment is made up of the people who constitute the market. It is
characterised as the factual investigation and segregation of the population according to
their size, density, location, age, gender, race, and occupation.

Economic Environment
The economic environment constitutes factors which influence customers’ purchasing power and
spending patterns. These factors include the GDP, GNP, interest rates, inflation, income
distribution, government funding and subsidies, and other major economic variables.

Physical Environment
The physical environment includes the natural environment in which the business operates. This
includes the climatic conditions, environmental change, accessibility to water and raw materials,
natural disasters, pollution etc.

Technological Environment
The technological environment constitutes innovation, research and development in technology,
technological alternatives, innovation inducements also technological barriers to smooth
operation. Technology is one of the biggest sources of threats and opportunities for the
organisation and it is very dynamic.
 Political-Legal Environment
The political & Legal environment includes laws and government’s policies prevailing in the
country. It also includes other pressure groups and agencies which influence or limit the working
of the industry and/or the business in the society.

Social-Cultural Environment
The social-cultural aspect of the macro-environment is made up of the lifestyle, values, culture,
prejudice and beliefs of the people. This differs in different regions.

Consumer Behaviour:
Consumer behaviour is the study of how individual customers, groups or organizations select,
buy, use, and dispose ideas, goods, and services to satisfy their needs and wants. It refers to the
actions of the consumers in the marketplace and the underlying motives for those actions.

Marketers expect that by understanding what causes the consumers to buy particular goods and
services, they will be able to determine—which products are needed in the marketplace, which
are obsolete, and how best to present the goods to the consumers.

The study of consumer behaviour assumes that the consumers are actors in the marketplace. The
perspective of role theory assumes that consumers play various roles in the marketplace. Starting
from the information provider, from the user to the payer and to the disposer, consumers play
these roles in the decision process.

The roles also vary in different consumption situations; for example, a mother plays the role of
an influencer in a child’s purchase process, whereas she plays the role of a disposer for the
products consumed by the family.

1. Problem Recognition.

2. Information Search.

3. Evaluation of Alternatives.

4. Purchase Decision.
5. Post-Purchase Evaluation.

When making a purchase, the buyer goes through a decision process consisting of 5 stages.

1. Need or Problem Recognition

During need or problem recognition, the consumer recognizes a problem or need that could be
satisfied by a product or service in the market.

Problem Recognition is the first stage of the buyer decision process.

At this stage, the consumer recognizes a need or problem. The buyer feels a difference between
his or her actual state and some desired state.

This could be a simple as “I’m hungry, I need food.”

The need may have been triggered by internal stimuli (such as hunger or thirst) or external
stimuli (such as advertising or word of mouth).

2. Information Search

Once the need is recognized, the consumer is aroused to seek more information and moves into
the information search stage.

The second stage of the purchasing process is searching for information.

After the recognition of needs, the consumers try to find goods for satisfying such needs. They
search for information about the goods they want.

Consumers can get information about goods from different sources.

 Personal sources: This includes family, friends, neighbors, acquaintance, etc.

 Commercial source: This includes advertising, salespeople, dealers, packaging, display, etc.
 Public sources: This includes mass media, consumer rating organizations, etc. they also become
confidential to provide information.

 Experimental sources: This includes handling, examining, using, etc. Such information
becomes decisive and confidential.

3. Evaluation of Alternatives

With the information in hand, the consumer proceeds to alternative evaluation, during which the
information is used to evaluate” brands in the choice set.

Evaluation of alternatives is the third stage of the buying process. Various points of information
collected from different sources are used in evaluating different alternatives and their
attractiveness.

While evaluating goods and services, different consumers use different bases.

Generally, the consumers evaluate the alternatives on the basis of attributes of the product, the
degree of importance, belief in the brand, satisfaction, etc. to choose correctly.

4. Purchase Decision

After the alternatives have been evaluated, consumers take the decision to purchase products and
services. They decide to buy the best brand.

But their decision is influenced by others’ attitudes and situational factors.

5. Post-Purchase Evaluation

In the final stage of the buyer decision process, post-purchase behavior, the consumer takes
action based on satisfaction or dissatisfaction.

In this stage, the consumer determines if they are satisfied or dissatisfied with the purchasing
outcome. Here is where cognitive dissonance occurs, “Did I make the right decision.”
Factors influencing buying decisions:

Personal factors: Individual person’s age & Life Cycle Stage, economic situation,
Life style influence an individual buying behaviour.

Psychological factors: Motivation, Perception, Learning, Belief and attitudes of

the consumer influence to a great extent while making a purchase at the market
place.

Social factors: Family influences, reference groups that the consumer has
connected with, roles played by an individual and the status that the consumer
possesses influence an individual buying behaviour.

Cultural factors: Various actions depending on the culture of the consumer

influence the buying decision of the individual consumer. Sub-culture and Cross-
culture also influence the decision making of the consumer

Advertising for existing and new products:

Advertising refers to any non-personal paid form of promotion, made

by the identified sponsor. Advertising can serve many purposes in
promoting a product. May it be:

 To create awareness if the product is very new;

 To Develop interest in the minds of the prospects;
 To Create desire and strong intention of purchase
 To make the prospective customers decide positively and buy the
product.
The Ad-agencies:

Ad agencies play a crucial role in promoting a product. Typically ad

agencies work as per the requirement of the company tat is going to
promote its products. There are some ad agencies that give end to end
solution to the requirements of the promoting organizations whereas,
some other organizations offer a limited range of services of
specialization.

The above diagram focuses on the functions of an Ad agency.

Typical structure of an Ad Agency