Definition of Marketing

•To achieve organization’s goals by determining

the needs & wants of the target market customers
& delivering the desired satisfactions more
effectively & efficiently than the competitors.
•The delivery of customer satisfaction at a profit.
•The process by which companies create value for
customers & build strong customer relationships in
order to capture value from customers in return.
Marketing Mix
Product
Variety, Quality, Design , Style, Features, Branding, Packaging,
Durability, Reliability, Guarantee etc
Price
Monitory value of Product /services
Cost of production, Competitor’s prices, Lisr price, Discount
price, Credit terms, Levels of margins,
Right price is crucial for maximizing profits.
Place
Target Market, Place, Time & Possession utility
Physical distribution activities, marketing channels, warehousing,
transportation, order processing, inventory management ,
Channel remuneration etc
Promotion
It is communication to the customer.
Advertising, Sales promotion, Personal selling & Publicity
4 Ps & 4 Cs
Product – Customer solution
Price – Customer cost
Place – Customer Convenience
Promotion – Communication
Evolution of Marketing
Stages in Evolution of Marketing
1.Stage of Self Sufficiency
At this stage small families as production units aimed
at self sufficiency & they meet all their own need for
food, clothing, & shelter.
2. Stage primitive communism
At this stage the custom was that one who had more
than others was to share his surplus with all others
till every one had equal quantity . In a few societies ,
the person had no personal right to his acquisition.
It had to be divided among the people in his village.
In these two stages there was no exchange & hence
no marketing.
3. Bartering Stage
At this stage a family or village could not meet all
its needs & therefore had to take the surplus of
what it produced in excess of its needs & entered
into a bartering relationship with others.
Hence trade commercial due to the production of
surplus . This initiated a search of such people
who had surpluses & who desired to exchange
them for what the searchers had & then
negotiations between the two parties started.
No money transactions.
4. Money economy stage
The exchange of money , a common medium of exchange , quickened the pace of
trade. Here every product was being valued in terms of money.
5.Stage of capitalism
In the stage of early capitalism where production began not only for meeting their
own & family needs but also for making profit.
This gave the way for production centers & employment of people to facilitate the
distribution of goods produced.
The knowledge of marketing helped in understanding consumer needs , optimum
utilization of All resources , providing the most suitable product to consumer,
leading to better standard of living & economic growth.
6. Mass Production stage
It was a result of development in population & improvement in transportation &
communication. Large cities formed. Increased use of capital equipments in jobs,
availability & flow of funds through banks & a professional management. Spurred
the growth of large scale enterprises.
 7. Affluent Society Stage
 Some sections of the people have surpluses of
money over their basic needs.
 Goods & Services which meet their
psychological, Cultural, Social desires /wants are
needed.
 A study has to be made about these wants of
the different segments of people.
 This makes necessary to make market
information & conduct market research , so that
the goods produced will meet the requirements
of the customers.
 Marketing included earlier searching & negotiation in
the stages of barter & local markets. ( i.e. Money
economy stage)
 Later in the stage of early capitalism it included
distribution to centers of consumption in other towns or
areas.
 Mass production stage saw the growing importance of
branding , packaging & advertising.
 In affluent society steps are taken to interpret consumer’s
desires & producing goods that will satisfy these desires.
 The marketing functions increases according to the
stages of development through which a country passes.
 The orientation of trade which is traditional in the
beginning becomes international when the economy
becomes fully commercial.
 Functions of Marketing

A. To Plan
B. To Organize
C. To Direct
D. To Control
A. To plan :
 To finalize the appropriate course of action for
future to achieve objectives/Predetermined goals.
 Planning means to decide in advance ,
What to do ?
When to do?
How to do?
 To workout the broad outline of the things that
need to be done & the methods of doing them to
accomplish the purpose which is set for the
enterprise.
 Planning is essential for proper utilization of
resources Man , Machine , Materials.
Planning includes following aspects
• Forecasting
• Formation of objectives
• Framing policies
• Planning the programs
• Planning the schedules
• Procedures & Budgets
B.To Organize
Establishing formal structure of authority
Getting prepared
Management to organize all its resources
Division of work
It includes
Identification of activities
Departmentation (Grouping of activities)
Delegation of Authority
Assigning of responsibility
Establishment of relationship
C.To Direct
To supervise the actions of staff
It is continuous task of making decisions, giving
orders & instructions & serving as a head.
It involves ,
a) Decision making
b) Guiding
c) Supervising
d) Communication
e) Motivation
f) Leadership
D. To Control
Establishing performance standards as per
company’s objectives.
Job evaluating & reporting of actual job
performance
To take corrective actions in case of any deviation.
It involves following steps
1. Establishment of standard of performance
2. Measurement of actual performance
3. Comparison of actual performance with the
standards & finding out deviation if any.
4. Corrective action
 Importance/Significance of Marketing
• Stimulates demand
• Costa a large part of sales ( Large portion of sales
revenue goes to cover marketing costs.)
• Employs people
( People are involved in activities like Retailing,
Wholesaling, Transportation, Warehousing,
Manufacturing, Financial sector, Service industries (
Advertising agencies ), Marketing research etc)
• Plays major role in daily lives of people
• Affects customers
• Generates consumer’s interest for goods/services
• Helps to increase GNP of a nation.
• Contributes significantly to the success of
organization.
• Production & Distribution depends largely on
marketing
• Marketing covers Advertising, Promotion, Sales ,
PR
• Economic development
• Industrial development
 Marketing Organization
Organization
A group of people working together to achieve
common goals & objectives of the business.

Marketing organization provides a vehicle for

making decisions on products , marketing
channels, physical distribution, promotion &
prices.
Why Marketing organizations are necessary?
• To divide and fix authority among the people
working in the marketing organization
(e.g. Vice President ( Marketing), Marketing
Manager, Assistant Marketing Manager,
Marketing Executive )
• To locate responsibility
• To ensure proper supervision of sales force
• To enable the top management people of the
organization to devote more time for planning &
long term strategies formulation of the
organization.
Factors affecting Marketing Organization
Internal factors
1. Top Management Philosophy
Whether it is good or bad ?
e.g. Centralization vs. Decentralization
2. Product Policy
No. of Product lines & its length , Product Mix etc
3. People
Number of people
Their qualifications
Capabilities
Personality
Attitude
Fear
Ambition etc
External Factors
1.Business environment
a.(Technical,Political,Economical,Demographic etc)
b. Availability of Raw material, Manpower etc
c. Growth trend of Industry
2. Markets
a. Size of Market
b. Scope
c. Location
3. Consumer requirements & expectations
The more the varied services expected by the
consumers, greater the workload on the marketing
organization.
4. Channels of distribution
What is the strategy of the organization?
e.g. in case of Direct Marketing there will be no
distribution channels set up. Hence there will
be more number of sale people in the
organization.
But in case of existence of distribution channel
set up in the organization there will be network
of Wholesalers & Retailers for distributing the
products of the organization.
In this case there will be relatively lesser
number of sales people in the organization.
 4. Consumer Marketing Channels & Levels
Channel Level - A Layer of Intermediaries that Perform Some Work in
Bringing the Product and it’s Ownership Closer to the Buyer.

Channel 1
Direct
M C

Channel 2 Indirect
M R  C

Channel 3
M  W R  C
 Types of Marketing Organizations
1.Line & Staff Organization
2.Functional Organization
3.Product oriented Marketing Organization
4.Customer oriented Marketing Organization
5.Geography oriented Marketing Organization
• This is the old & most simple type.
• The authority flows from top to bottom.
• Line Managers & executives
have the responsibility & authority & who are accountable
for the accomplishment of primary objectives.
Make business decisions for their respective departments
e.g. Marketing dept., Production dept.
The line managers generate the organization’s revenue.
• Staff
Perform tasks in support of the directives issued by the line.
They have responsibility & authority for providing advice &
services to line officers in the attainment of objectives.
The staff is composed of every non-revenue generating
department.
Merits of line & Staff organization
• Provides expert advice from specialists
• Expert knowledge
• Relives line executives of routine functions
• Easy to operate
• Helps to achieve effective coordination
Demerits
• Delayed decisions
• Allows shifting of responsibilities
• Conflict between Line manager & Staff specialist
• Expensive
• Workers may receive command from both line &
staff
• Too much is expected from executives
 Line & Staff Organization
Chief Executive

Sales Manager

Physical
Promotion
Sales Marketing
Distribution Manager Research
Manager Manager Manager
2.Functional Organization
In this type the departments are created on the
basis of specified functions to be performed in
marketing.
e.g. Sales
Market research
Promotion
Physical Distribution etc
 Functional Organizations

Vice-President (Marketing)

Physical Marketing
Promotion Sales
Distributi Research
Manager Manager
on Manager
Manager
Merits
• Division of work according to specialization
• Relieves line executives of routine functions
• Promotes application of expert knowledge
• Helps to overall efficiency
Demerits
• Leads to complex relationships
• Makes coordination ineffective
• Promotes centralization
• Lack of proper coordination
• Delay in taking decisions
3. Product Oriented Marketing Organization
• In this type , the companies producing
multiple products have individual
manager to look after the product
• The concern manager develops the
strategy related to the product
• He is responsible for the sales,
advertising, promotion, distribution
for that product.
 Merits
• Sales persons have good product knowledge
• Better customer service
• Better customer relationship
• Individual product departments responsible for its sales
• It facilitates effective coordination
Demerits
• Increases the employment of a number of managerial
personal
• Many salesmen of same enterprise attend same
customer each representing a separate product which
creates confusion in the minds of the customer.
• There may be duplication of activities
Product-Oriented Mktg.Organizations
Vice-President
Marketing

Manager Manager
For For
Product Product
A B
4.Customer Oriented Marketing Organization
Departmentation of sales organization on customer basis
Merits
• It takes into account needs of each class of customers.
• It provides specialization among the enterprise staff
Demerits
• It makes coordination difficult
• It may lead to under utilization of resources
• There may be duplication of activities
• Not suitable for small enterprises.
Customer -Oriented Organizations
Vice-President of
Marketing

Manager Manager

Retail Institutional
consumers Customers
5.Geography/Territory
The responsibilities for marketing of various
products is given on the basis of territory.
Merits
• It leads to economy in terms of time and money
• It helps in effective control
Demerits
• It requires employment of number of
managerial personnel.
• It dilutes control from head quarters
Geography (Market) -Oriented Organizations

Vice-President of
Marketing

Sales Manager

Regional Regional Regional Regional

Sales Sales Sales Sales
Manager Manager Manager Manager
East North West South
 Marketing Environment
Factors influencing the business
1. Micro Environmental factors
2. Macro Environmental Factors
Micro environmental factors are internal factors
close to a business that have a direct impact on its
strategy.
Micro environment can be separated into
a. Internal Environment
b.External Environment
Internal environment ( Micro)
• Management structure of the organization
• Strategies & objectives of management
• Employees of the organization
• Ability to serve its customers ( Competitiveness)
External Environment (Micro)
• Suppliers
• Marketing Channels
• Customers
• Competitors
• Publics (Media, Environment Protection, social groups etc )
(Macro) External environmental factors
• These are wider factors/forces that affect demand for
company’s goods.
• Demographic environment
( Age, Population pattern, Education, Gender etc)
• Economic Environment
(Inflation, Interest rates, Per capita income etc)
• Natural Environment
( Raw material ,Natural resources availability,
• Technological Environment
(Technological development in the country)
• Political Environment
( Regulatory environment, Political influences etc)
• Cultural Environment
• Changing culture , Change In people’s opinions & tastes )