Marketing Management course for Management Students

1. Unit 1 – Introduction 1

2. UNIT 1: INTRODUCTION
Definition; Nature; Scope and
Importance of marketing;
Approaches to the study of
marketing; Functions of
marketing.
Unit 1 – Introduction 2

3. Meaning:
‘Market’ is derived from the Latin word ‘Maratus’, which
means merchandise, wares, trade or place of business.
- it involves two operation, BUYING &
SELLING. (i.e.) ‘Exchange Activity’
Definition:
“A Market is an aggregate demand
of the potential buyers for a product /
service.”
- American Marketing Association
“ A Market is an area for potential exchanges.”
– Philip Kotler
WHAT IS MARKET?
Unit 1 – Introduction 3

4. Unit 1 – Introduction 4

5. Definition:
“Marketing is concerned with the people and activities
involved in the flow of goods and services from producer to
consumer.”
- American Marketing Association
“Marketing is the human activity directed at satisfying
human needs and wants through an exchange process.”
- Philip Kotler
“Marketing is the management process that identifies,
anticipates and satisfies customer requirements profitably.”
- Chartered Institute of Marketing
WHAT IS MARKETING?
Unit 1 – Introduction 6

6. 6
Simple Marketing System
Industry
(a collection
of sellers)
Market
(a collection
of Buyers)
Goods/services
Money
Communication
Information
Unit 1 – Introduction 7

7. Factory
Existing
products
Selling
and
promoting
Profits through
sales volume
Starting
point
Focus Means Ends
The selling concept
Market Customer
needs
Integrated
marketing
Profits through
customer
satisfaction
The marketing concept
The selling and Marketing Concepts
Contrasted
Unit 1 – Introduction 8

8. Definition:
“Marketing is the process of planning and executing the
conception, pricing, promotion and distribution of ideas,
goods, services to create exchanges that satisfy individual
and organizational goals.”
- American Marketing Association
“Marketing management is the analysis, planning,
implementation and control of programme designed to
create, build and maintain beneficial exchanges and
relationships with target market for the purpose of achieving
organizational objectives.”
- Philip Kotler
WHAT IS MARKETING
MANAGEMENT?
Unit 1 – Introduction 10

9. Marketing Management Activities
M
A
R
K
E
T
I
N
G
M
A
N
A
G
E
M
E
N
T
Designing the Marketing Plan
Setting Marketing Goals
Organizing the Marketing Functions
Implementing the Marketing Plan
Market Control
Marketing Research
Unit 1 – Introduction 11

10. Nature:
1. Marketing is consumer – oriented process:
2. Market starts and ends with the customer (C2C):
3. Marketing is the guiding element of business:
4. Marketing is a system:
5. Marketing is a goal – oriented process:
6. Marketing is a process of exchange:
7. Marketing is a process:
NATURE, SCOPE AND IMPORTANCE OF
MARKETING
12

11. Importance:
 It helps in realization of the objectives for which the
organization has been set up. Effective marketing is essential for
survival and growth of organization.
 It helps the community to satisfy their economic and social
needs and raise standard of living.
 It helps in producing those products needed by customers and
community at large which helps in efficient and productive
utilization of resources.
 It helps in enterprise to adapt to changing conditions and
circumstances.
 It provides guidance to organization on innovations to adopt.
 It helps enterprise in achieving the maximum efficiency,
productivity and profitability with minimum effort and cost.
 It ensures the economic growth of enterprises which results in
growth and economic development of country.Unit 1 – Introduction 14

12. CONCEPTS OF MARKETING
1. Needs, Wants and Demand:
*Needs – something you have to have (i.e.) physiological
needs.
(E.g.) Food and Water, Shelter and Clothing.
* Want – something you would like to have.
(E.g.) New car, Branded clothes, Big house, etc.
* Desire – strong wants to which person is dedicated.
* Demand – it is a desire supported by necessary purchasing
power.
2. Products and Services:
* Product - it is substance that is manufactured or refined for
sale.
* Services - intangible products consultancy, education,
medical treatment. 23

13. 3. Value, Satisfaction and Quality:
a) Value – ratio between what benefits the customer gets and
what he spends.
- product choice is guided by value provided by product.
* Benefits of customers may be functional and emotional.
* Cost of production can be monetary, time and energy.
b) Satisfaction – customer’s perceived performance from a
product in relation to the expectations.
- customer dissatisfied if performance fails to match his
expectations.
c) Quality – it is perception of product excellence by
customers.
- quality level is to maintain and increase the level of
customer satisfaction.
Unit 1 – Introduction 24

14. 4. Markets:
“Market is defined as set of all actual and potential buyers
of a product or service.”
* Market place – is a physical place such as store you shop
in.
- it is digital shopping online.
* Meta markets – some product whose purchase necessitates
the purchase of other products or services is called Meta
market.
( E.g.) new automobile market, where buying a new car calls
for the purchase of insurance, getting a loan from bank, etc.
5. Concept of Consumerism:
- it holds that consumers need to be protected from inferior
products in the markets.
Unit 1 – Introduction 26

15. BENEFITS OF MARKETING
A. Benefits to the Society:
1.Delivery of Standard of Living.
2. Employment and Income.
3. Equilibrium between Supply and Demand.
4. Economic Development.
B. Benefits to the Individual / Business Enterprises:
1. Revenue Earning.
2. Information for Decisions.
3. Management of Innovation and Change.
Unit 1 – Introduction 28

16. APPROACHES TO THE STUDY OF MARKETING
Five basic Approaches:
1. Commodity Approach:
- the flow of a certain commodity and its journey from original
producer right up to the final customer.
- this approach can locate centre of production, people engaged
in buying and selling, mode of transportation, problem of
financing it, etc.
- this use to find out difference in marketing producers,
services and problems.
2. Functional Approach:
- we concentrate our attention on specialized services or
functions or activities performed by marketers.
- it deals with functional activities like selling, buying, storage,
risk bearing, transport financing represents functional
approach. 29

17. 3. Institutional Approach:
- it deals with marketing institutions or agencies like
wholesalers, retailers, transport undertaking, banks, insurance
companies, etc.
- they can participate in discharging their marketing
responsibilities during movement of distribution of goods.
4. Managerial or Decision Making approach:
- it combines certain features of the commodity, institutional
and functional approaches.
- it focus on decision making process and discussion of
different concepts, decision influencing factors, strategies and
techniques methods of problem solving.
5. Systems Approach:
- it is a set of interacting or independent groups co-ordinated
to form a unified and organized to achieve set of goals.
Unit 1 – Introduction 30

18. - this system approach model as i) Objective, ii) Inputs, iii)
Processor, iv) Outputs and v) Feedback.
- it provides best model for marketing activity and
emphasis on input to the system and outputs produced.
- it provides a good basis for logical and orderly analysis of
marketing activities.
- it provides a framework for control.
6. Legal Approach:
- it focuses its attention on legal transfer of ownership of
goods to the buyer.
- it deals with acts like Sales of Goods Act, Carrier Act,
Construct Act, etc.
- the regulated market act at state level provide legal
aspects of marketing.
Unit 1 – Introduction 31

19. 7. Societal Approach:
- society identifies its own consumption needs and
satisfy it.
- consumer in the society project their desires,
producers produce products and sell them to
consumers.
- it projects the idea that “society meets its own
consumption needs.”
8. Economic Approach:
- it considers market forces like demand, supply,
price, etc.
- the market behaviour, types of markets etc. are
considered in this approach.
Unit 1 – Introduction 32

20. FUNCTIONS OF MARKETING
Classification of Marketing Functions:
Many writers classified marketing functions into three
categories like Concentration, Dispersion and
Equalization.
“Equalization means, the activity which occur between
the process of concentration and dispersion.”
“Equalization consists of a department of supply and
demand on the basis of time, quantity and quality.”
- Clark
Unit 1 – Introduction 36

21. Some writers have classified marketing functions under
utility heads.
A) Creating time and place utility (Physical movement):
i) Transporting. ii) Storing.
iii) Packing. iv) Dividing.
v) Grading. vi) Grade assembly.
B) Creating possession utility (Movement of ownership):
i) Determining needs. ii) Creating demand.
iii) Finding buyer and seller. iv) Negotiating.
v) Transporting. vi) Equalization.
C) Creating form utility:
i) Formulating policies. ii) Financing.
iii) Supervision. iv) Accounting.
v) Securing information. vi) Risk bearing.
Unit 1 – Introduction 38

22. Clark and Clark divided the marketing functions into three
divisions:
A) Functions of Exchange:
1. Buying:
- it helps the processes to procure goods of required quality
and quantity at satisfactory price.
It involves subsidiary functions like –
i) Function of planning – buyers must plan in order to
determine their needs and study their own markets to
know the quantity and quality of goods.
ii) The Contractual function – involves finding out the
sources of supply and this function is relevant in case of
consumers.
Unit 1 – Introduction 39

23. iii) The function of Assembling – - goods produced at one
places and assembled to serve the needs of consumers.
iv) Negotiation and Contractual Function – the terms and
conditions of purchased are negotiated with seller.
2. Selling:
- it is essential in all steps of marketing. Its subsidiary
functions are:
i) The function of Product Planning – it is starting point of
marketing activity. Seller must offer a product that satisfies
the buyers and know what kind of goods should produces and
when to produce.
40

24. ii) The Contractual function – this refers to location
of buyers and maintaining contacts with them.
iii) The function of Demand creation – it includes all
efforts of sellers to induce buyers to purchase the
products.
- personal selling, advertising are undertaken by
seller to increase sales.
iv) The Negotiatory function – terms and conditions
related to quality, quantity, time and method of
shipment, payment method, etc.
Unit 1 – Introduction 41

25. B) Functions of Physical Supply:
- it includes supply of goods from producers to consumers by
means of transportation and storage.
1. Transportation:
- it makes possible large scale production, specialization and
widens the market.
- it enables flow of goods from one place to places of
consumption.
2. Storage:
- it is to hold the stocks of goods from time of their production.
- it must be stored for various reasons (i.e.) goods produced
seasonally may used throughout the year, goods used for short
period, manufacturer store raw material for ready supply and
goods are stored in hope of getting higher price in future.
42

26. C)Facilitating Function:
1. Financing:
- normal marketing needs vast financial resources for
investment in land, buildings, furniture, etc.
- large capital is necessary and means by which capital is
supplied called ‘Financing’.
- firms should have either huge amount of capital or they
must be able to borrow it.
2. Risk taking:
- there is risk of loss, fire, flood, theft, damage, bad debts,
etc.
- loss arises due to changes in conditions of supply and
demand and changes in value of money.
- some risks are insured, transferred and incurred against
which is significant for marketing process. 43

27. 3. Market Information:
- it involves function of collection, communications and
interpretation of market information.
- it requires no. of consumers, purchasing power,
locations, brand preferences, etc.
- it involves activities like where to do business, when to
sell, where to change, change in price, direct sell or
middlemen, market conditions, etc.
- this information is adequate, up to date and reliable for
decision making process in marketing.
Computer – based marketing information offers benefits –
i) More timely information.
ii) More complete information.
iii) More reliable and thorough analysis of data.
iv) More thorough evaluation and consideration. 44

28. 4. Standardization and Grading:
“Standardization refers to establishment of
standards of products.”
- it is a measure of designation of quantity and
consists list of specifications like size, colour,
appearance, shape, amount, etc.
- standard is followed in product, but it differs in
quality based on various in chemical contents,
flavour, size, etc.
- established standards for goods are commonly
called ‘Grades’.
- it is dividing the products of varying quality, size,
etc into conforming to certain standards.
Unit 1 – Introduction 45

29. Other functions of marketing:
1. Pricing:
- it is the function around which the supply and demand for
a product balances.
- it is the primary source of revenue which every firm tries
to maximize.
- firm has to maximize the sales by setting right price.
- pricing decision is not only important but also has to be
changing.
Some of the factors influences pricing decision are –
* Objectives of business, competition.
* Product and promotion policies.
* Pricing elasticity, conflicts of manufacturer and middlemen.
Unit 1 – Introduction 46

30. 2. Branding:
“A brand is a term, name, symbol or design or
combination of themes, intended to identify the goods
or services of seller and to differentiate from
competitors.”
- it identifies the product for a buyer and gives seller a
chance to earn goodwill.
- it is the practice of giving a specified name to a
product.
- the organization build bright image of organization
around the brand.
- it offers protection to the consumer as it identifies the
firm behind the product.
- it enables the firm of assured control over the market.Unit 1 – Introduction 47

31. 3. Packing and Packaging:
“Packing may be defined as the general group of
activities in the planning of a product.”
- it indicates design of package and producing product
in attractive wrapper or container.
- it provides handling convenience, maintain freshness
and quality.
“Packaging is advertising on the shelf, a means of
attractive display in retailers shop.”
- is much more than packing and it is marketing
necessity.
- it gives explanation, assurance, confidence and
praise.
- it ensures ultimate success of product as commercial.Unit 1 – Introduction 48

32. 4. Sales Promotion:
- it is one of the facilitating functions of marketing and
considered as key element in marketing strategy.
Prospective buyers must aware of –
a) want of satisfying characteristics of products.
b) as well as availability of product.
- personal selling and advertising are important methods to
achieve objectives.
- branding, packaging, point of purchase, discount sale are
other methods for effective sales promotion.
5. Salesmanship:
“Salesmanship is the art of persuading people to purchase
goods which will give satisfaction with least time & effort.”
- it involves direct personal contact of seller or his
representative with buyer. 49

33. - he make direct contact with buyers and negotiate for sale
of goods and services.
- salesman gives advice to buyers and helps there to take
decisions, clear doubts, shows samples and demonstration
the product.
6. Advertising:
- it must be known to public through sales activities.
- it completes the task of selling goods and services.
- it is direct aid to salesman, because consumers informed
about the product before they bring them.
- it makes the final job of selling less difficult.
- it is beneficial to manufacturer, salesman, retailers,
consumers and to community in general.
Unit 1 – Introduction 50

34. Unit 1 – Introduction 52