MODULE – 1
INTRODUCTION TO MARKETING MANAGEMENT :
MEANING OF MARKET :
The term market does not necessarily mean any particular place, where
goods are bought and sold. A place for the purpose of meeting of buyers and
sellers is just a matter of convenience. So, a market may mean either a particular
place or the whole of any region. Thus, the term market merely refers to getting
together of buyers and sellers of a particular commodity of any region, small or
In a broader sense, a market is a collection of people sharing a common
want or need and who are motivated to enter into exchange process to satisfy need
or want. In spatial terms, a market may be local, regional, national or international
MEANING OF MARKETING :
Marketing is a comprehensive term and it includes all resources and a set of
all activities necessary to direct and facilitate the flow goods & services from
producer to consumers in the process of distribution.
According to American Marketing Association (AMA) “marketing is the
process of planning and executing the conception, pricing, promotion and
distribution of ideas, goods & services to create exchanges that satisfying individual
and organizational objectives”.
In other words “marketing is that phase of business activity through which
human wants are satisfied by the exchange of goods and services”.
Thus, modern marketing concept is of consumer oriented. It analysis the
needs of the consumers before the products are produced and offered to sale.
MEANING OF MARKETING MANAGEMENT :
Marketing Management represents marketing concept in action. It may be
defined as the process of management of marketing programmes for
accomplishing organizational goals and objectives .Marketing management
performs all managerial functions in the field of marketing .It represents an
important functional area of business management efforts for the flow of goods &
services from the producers to the consumers.
The elements of a marketing programme are conceptualized in terms of 4 p’s
– product, price, promotion & place. These 4 main elements are known as
Product : It includes design, features, quality, range, size, models,
appearance, packaging, warranties and name. It also includes presale and post sale
services like training for use, repairs, maintenance or replacements.
Price : It includes concession on basic price, discounts, rebates, credits,
installment facilities and delivery terms.
Promotion : It includes advertising, publicity media choices, messages,
frequency of exposure, public relations, campaigns, sales promotion, point of
purchase, displays etc.,
Place : It includes retail outlets, wholesalers, transportation, warehousing,
inventory levels, order processing procedures etc.,
EVOLUTION OF MARKETING :
“Some organizations remain at the product orientation stage”.
PRODUCT ORIENTATION SALES ORIENTATION
“Some organizations have progressed only to sales orientation stage”.
PRODUCT ORIENTATION SALES ORIENTATION MARKET ORIENTATION
“Many organizations have progressed to the market orientation stage”.
Marketing has evolved through 3 successive stages of development, product,
and sales & market orientation. Although many firms have progressed to the
market orientation Stage, Some are still in the first or second stage, as shown in the
PRODUCT ORIENTATION STAGE :
Manufacturers at this stage typically focused on the quality & quantity of
output while assuming that customers would seek out & buy reasonably priced well
In this era, the demand for goods generally exceeded the supply, and then
the primary focus in business was to efficiently produce large quantities of
products. The primary concern of business was how to produce & distribute an
adequate quantity of acceptable products to meet the needs of a rapidly growing
population. Manufacturers, wholesalers & retailers operating in this stage
emphasized internal operations & focused on efficiency & cost control.
There was not much need to worry about what the customers wanted
because it was highly predictable. Most people spent the vast majority of their
incomes on necessities. When this was the prevailing approach to business, the
term “marketing was not in use.
Producers had sales department , headed by executives whose primary
responsibility was simply to carry out a transaction , at a price after dictated
by the cost of production.
SALES ORIENTATION STAGE :
Managers began to realize that to sell their product in an environment
where consumers had limited resources & numerous options required
substantial post production effort. Thus, the sales orientation stage was
characterized by a heavy reliance on promotional activity to sell the products the
firm wanted to make.
The main economic problem no longer was how to manufacture efficiently,
but rather it was how to sell the resulting output. Just offering a quality product
was no assurance of success.
In this stage , advertising consumed a large share of a firm’s resources
& sales executives began to gain respect & responsibility from company
MARKET ORIENTATION STAGE :
In this stage , companies identify what customers want & tailor all the
activities of the firm to satisfy those needs as efficiently as possible. Many
companies recognized that to put idle capacity to work they had to make available
what consumers wanted to buy instead of what the businesses wanted to sell. In
this third stage, firms are marketing rather than merely selling.
Note that, not every organization needs to be market oriented to prosper. A
monopolist selling a necessity is guaranteed of having customers. Therefore, its
management should be much more concerned with low –cost, efficient production
than with marketing. Potential customers here consider the product to be so
superior that they will seek it out. For ex : the world’s best heart surgeons or
particularly popular artist find a market for their services regardless of their
ROLE AND IMPORTANCE OF MARKETING :
1) Marketing is a sum of several distinct activities that facilitates the flow of goods
from the producers to final consumers. That means, marketing stimulates to
division of labour and specialization which contributes to the satisfaction of
consumers needs quickly, efficiently and economically.
2) Marketing helps to watch the organization’s human, financial and physical
resources with the wants of customers along with maximum economy and
3) Customers do not always run to a producer and demand supplies, however
useful and valuable the product may be. It must be available when needed, at
places they are convenient and at prices that seem reasonable. They have to
know what is available, where and at what price. Often they have to be
persuaded, that the purchase is beneficial to them.
4) Marketing initiates a company to know its customer’s buying habits which in
turn helps the company to decide the ;
Quantity of supplies to be sent to various outlets.
Frequency of such supplies.
Places where the stocks may be held in the meantime
Economical ways and route of transportation
5) Marketing helps to add value, by finding a better match between the product
6) It reduces wastages, which would otherwise occur if the product is not needed
or production does not match demand.
7) It improves effectiveness of communication through better targeting of
8) It cuts the costs, through more effective distribution arrangements.
9) It improves better understanding between the marketing and customer because
of increased contracts.
10) Marketing also brings coordination between various levels of operation in a
business. Every task is well knit with other tasks and the whole activity is carried
out within the set time frame, thereby increasing managerial efficiency and
progressive team work.
As a manager or as an entrepreneur, you would definitely be interested to
improve your market share and expand your business. This you can do better
through an understanding of marketing management. It is essential for a marketing
professional to identify, respond and adapt to market changes and understand the
customer’s need and the market ahead of competitors.
Marketing management is concerned with the skills to analyze, plan
coordinate and implement the various marketing strategies towards the
accomplishment of customer’s requirements and the company’s objectives. It has
Plan and develop the product on the basis of known consumer demand.
Build up appropriate marketing plan or marketing mix (product, price,
promotion, and place) to fulfill the set goals of the business.
Formulate sound marketing policies and programmes.
Looks after their implementation and control.
In marketing management, our major concern is to manage that process which;
- Identifies the needs and interests of the customers.
- Helps in designing a product or service that matches the customer needs.
- Promotes, sells and delivers that product or service.
CONCEPTS OF MARKETING :
There are 5 Marketing concepts under which organization conducts its marketing
PRODUCTION CONCEPT : – It is one of the oldest concepts in business. The
production concept holds that the consumers will prefer products that are widely
available and inexpensive. Managers of production oriented business concentrate
on achieving high production efficiently, low costs and mass distribution. They
assume that consumers are primarily interested in product availability and low
prices. This orientation makes sure in developing countries where consumers are
more interested obtaining the product than its features.
It is also used when a company wants to expand its business and market.
Some service organization also operates on the production concept. Many medical
and dental practices are organized in assembly line principles, as are some
government agencies (such as employment offices). Although this management
orientation can handle many cases per hour, it is open to chances of impersonal
and poor quality service.
PRODUCT CONCEPT : Other businesses are guided by this concept, which holds
that consumers will favor those products that offer the most quality, performance
or innovative features. Managers in these organizations focus on making superior
products and improving them over time. They assume that buyers admire well
made products and can evaluate quality and performance. Product oriented
companies often trust that their engineers can design exceptional products. They
get little or no customer input and very often they will not even examine
SELLING CONCEPT : It is another common business orientation. It holds that
consumer and business if left alone will ordinarily not buy enough of the
organization’s products. The organization must, therefore must undertake an
aggressive selling and promotion effort.
“Sell more stuff to more people more often for more money in order to make
The selling concept is practiced most aggressively with unsought goods,
goods that buyers normally do not think of buying, such as insurance,
encyclopedias etc. Most firms practice the selling concept when they have over
capacity. Their aim is to sell what they make rather than what the market wants.
Sellers have to scramble for customers. Prospects are bombarded with TV
commercials, newspaper ads, direct mail and sales costs. At every turn, someone is
trying to sell something. Hard selling carries high risks such as bad mouth and
negative publicity affecting the goodwill and company’s regulations and thereby
affecting its sales/profits.
THE SOCIETAL MARKETING CONCEPT : Some have questioned whether the
marketing concept is an appropriate philosophy in an age of environment
deteration, resource shortages, explosive population growth, world hunger and
poverty and neglected social services.
Are companies that do an excellent job of satisfying customer’s wants
necessary action in the best long run interest of consumer and society. The
marketing concept sidesteps the potent ional conflicts among customer wants
customer interiors and long run societal welfare.
For example, the fast food hamburger industry offers tasty but unhealthy
food. The hamburgers have a high fat contents and the restaurant promote fries
and pies produce high in starch and fat. The products are wrapped in convenient
packing which leads to much waste. In satisfying customer’s wants, these
restaurants may be hurting customer heath and causing environmental problems.
Hence , the Societal Marketing concept holds that the organization task is to
determine the needs , wants and interests of target markets and to develop and
deliver the desired satisfaction more effectively and efficiently than competitors in
the way that preservers or enhances the customer and the society’s well being.
The Societal marketing concept calls upon marketers to build social and
ethical considerations into there marketing practices. They must balance and juggle
the often conflicting criteria of company profits, consumer satisfaction and public
THE MARKETING CONCEPT : The Marketing concept holds that the key to
achieving its organization goals consist of the company being more effective than
competitors in creating, delivering and communication superior customer value to
its chosen target markets.
This can be explained in many ways
• Meeting needs profitably
• Find wants and fill them
• Love the customer not the product
• Putting people first and so on.
The marketing concept rests on four pillars,
• Target market
• Customer needs
• Integrated marketing
Target Market :
The markets can rarely satisfy everyone in a market. E.g., Not everyone likes
same soft drinks, automobiles etc.
Therefore marketers, start by dividing up the market they identify and profile
distinct groups of buyers who might prefer or require varying product and service
Market segments can be identified by demographic method. Thus the market
decides which segment presents the greatest opportunity is called ‘Target
For each chosen target market offering, the offering is positioned in the
minds of target buyers. For e.g., Volvo develops its cars for buyers to whom
automobile safety is major concern.
Customer needs :
Companies do best when they choose their target market but fail to correctly
understand the customer needs
Understanding customer needs and wants is not always simple. Some
customers have needs of which they are not fully conscious or they cannot
articulate these needs.
For example, the customer asks for an inexpensive car, a powerful lawn
An inexpensive car to a customer means he needs a care whose operating
cost is low and it should give him good service hence the market should produce a
care which includes both the qualities to satisfy his customer.
Integrated Marketing :
When all the companies department works together to server the customers
interests results in integrated marketing.
The ultimate purpose of marketing concept is to keep organizations achieve
their objectives. In the case of private firms the major objective is long run
Profitability. In the case of non profit and public organizations it is serving and
attaching enough funds to perform useful work.
DIFFERENCE BETWEEN SELLING AND MARKETING
no SELLING no MARKETING
1 Selling is a promotional effort 1. Marketing is to achieve organizational
. which focuses mainly on the goals by being more effective in
sales of the company output. creating, delivering and communicating
It is like forcibly pushing the 2. It is pulling strategy where the product
2. product into the market is sought by the customer himself
(pushing concept). (pulling concept).
It requires aggressive 3. It requires only well planned, customer
3. marketing strategy. oriented marketing strategy.
It focuses on needs of a seller. 4. It focuses on the needs of a buyer.
It is preoccupied with sellers 5. It is customer satisfaction which seller
5. needs to convert his product converts into cash(profit).
into cash (profit).
Customer may show buying 6. Customer gets attracted with the
6. inertia or resistance and must product and lays the product according
be co-axed into buying. to his/her wish and will.