Module - 01

INTRODUCTION

DEFINITION OF MARKETING

According to Philip Kotler, the term ‘marketing’ is a social and managerial process by
which individual groups obtain what they need and want through creating, offering and
freely exchanging product and services of value with others.

MEANING OF MARKETING

Marketing is the process of exploring, creating, and delivering value to meet the needs
of target customers in terms of goods and services.

NATURE OF MARKETING (FEATURES OF MARKETING)

The Nature of Marketing may be studied under the following points:

1. Marketing is an economic function: marketing embraces all the business
activities involved in getting goods and services, from the hands of producers into
the hands of final consumers. The Business steps through which goods progress
on their way to final consumers is the concern of marketing.
2. Marketing is a human activity: Originally, the term marketing is a human
activity under which human needs are satisfied by human efforts. It’s a human
action for human satisfaction.
3. Marketing is a Legal process by which Ownership transfers: In the process
of marketing the ownership of goods transfers form seller to the purchaser to the
end user.
4. Marketing is a social process: Marketing is the delivery of a standard of living
to Society.
5. Consumer-oriented: A business exist to satisfy human needs, hence business
must find out what the desire of customer (or consumer) and thereby produce
goods & services as per the needs of the customer. Thus, only those goods
 should be produced which satisfy consumer needs and at a reasonable profit to
the manufacturer (or producer).
6. Marketing is an art as well as science: In the technological arena, marketing is
the art and science of choosing target markets and satisfying customers through
creating, delivering, and communicating superior customer value. It is a
technique of making the goods available at right time, right place, into right
hands, right quality, in the right form and at right price.
7. It is an exchange Process: All marketing activities revolve around commercial
exchange process. The exchange process implies transactions between buyer
and seller.
8. It starts and ends with customers: Marketing is consumer oriented and it is
crucial to know what the actual demand of consumer is. This is possible only
when required information related to the goods and services is collected from the
customer. Thus, it is the starting of marketing and the marketing end as soon as
those goods and services reach into the safe hands of the customer.
9. It is related to creation of Utilities: Marketing creates four components of
utilities viz. time, place, possession and form. The form utility refers to the
product or service a company offers to their customers. The place utility refers to
the availability of a product or service in a location i.e. Easier for customers. By
time utility, a company can ensure that products and services are available when
customers need them. The possession utility gives customers ownership of a
product or service and enables them to derive benefits in their own business.
10. It is profit oriented: Marketing seeks to achieve benefits for both buyers and
sellers by satisfying human needs. The ultimate goal of marketing is to generate
profits through the satisfaction of the customer.
11. It is a system of Interacting Business Activities: Marketing is the system
through which a business enterprise, institution or organization interacts with the
customers with the objective to earn profit, satisfy customers and manage
relationship. It is the performance of business activities that direct the flow of
goods and services from producer to consumer or user.
SCOPE OF MARKETING (FUNCTIONS OF MARKETING):
Marketing has become the subject of growing interest for everybody in today’s scenario.
Therefore, it is of utmost importance to discuss the scope of marketing. It can be
understood in terms of the functions that a marketing manager performs.

(a) Marketing Research: While sitting in a company’s office, no one can identify the
needs and wants of the consumers. For that purpose, research has to carry out a
research to analyse the consumers’ needs, tastes and preferences. Marketing
manager requires information to be successful in the market by knowing this
information to take timely, accurate and better decisions.

(b) Product Planning and Development: A product is a bundle of utilities offered to

consumers to satisfy their needs. The product must be according to the requirement
and must also be according to the paying capacity of the consumers. There are a
number of decisions involved in this process like a supplier of raw material,
packaging, storage and distribution etc.

(c) Pricing: One of the important functions of a marketing manager is to determine the
price of a product. Price is always influenced by the cost, services attached to it,
government policy, competitors’ prices and marketers’ requirement for profit margin.
A good pricing policy is a significant factor to attract consumers because the price is
the only ‘p’ of the marketing mix which generates revenue for the organisations.

(d) Financing: Financing consumer purchasing has become an important part of

modern marketing. In the era of global competition when there is tough competition
and so many alternatives are available to a customer, certain finance schemes have
become an important device to increase the volume of sales. (e) Insurance: When
goods and services are exchanged from one hand to another, from one place to
another place, a large number of risk factors are involved. Marketing has now
spread its arms to cover these risks through insurance activities.

(f) Promotion: In this era of a competitive world, advertising has become an important
instrument in the hands of marketers. It makes the consumer aware of the product,
 makes him/her curious about the product and then forces them for action and thus
promotes the sale.

(g) Consumer satisfaction: The product or service offered must satisfy consumer.
Consumer satisfaction is the major objective of marketing.

IMPORTANCE OF MARKETING:

There are many important things marketing can do for different business sectors. They
are:

 Marketing helps to boost the sales

Marketing is one way to give information to consumers. Marketing educates many

people about a certain product. When people are well-informed about your product,
your sales will increase.

 Marketing creates revenue options

Marketing is a great help for many business establishments to create revenue
options. It is when business sectors use different marketing strategies to increase
business profits. One way to increase profit is to reduce the product costs. This way
many customers will buy the product. Reducing the product costs will increase the
number of potential buyers, thus getting more sales.
 Set better goals for your business
The success of a business depends on its goals and objectives. Marketing can help
a business set its goals. By practicing some marketing strategies it will lead to the
popularity of their brand. By this, it will motivate the company to maintain its
reputation.
 Builds a Reputation for the Brand
Another benefit of implementing marketing strategies is to build a reputation for the
brand. But it is essential to ensure that business organization gives outstanding
 quality and useful products to target market. This way business not only builds an
excellent reputation for its product, but also to the brand.
 Helps in business planning and decision making: Marketing helps in
business planning as it helps to shape the product from its production to it
reaching the customers. The 4Ps of marketing help the business to make sure
what alternatives are better for the growth of the business and help to make
decisions that prove beneficial for the customers.
 Product development: marketing functions concentrates on developing the
product regarding its branding, labelling, packaging, and how it should be
brought into the market. Moreover, customer feedback and market research
provide a blueprint of how the product has to be further modified to suit the needs
of the consumers.
 Builds relationships with customers: marketing always tries to establish a
cordial relationship with the customers. Modern marketing deals with the
customers as they are the king. Hence continuous efforts make customers
satisfied. And this helps them stay with the brand or company for a long time.

MARKETING CONCEPT:
The marketing concept is a philosophy that forces business firms to focus on the
customers’ needs and wants, and tries to satisfy those needs better than their
competitors.

Types of Marketing Concepts:

Following are the important marketing concepts
1. Production Concept:
This concept is based on the assumption that customers are primarily interested in
products which are easily accessible and affordable. This concept was introduced
at the time when business was focused mainly on production. It says that business
will be able to reduce costs by producing more quantity of goods. It believes in
earning profits by producing and selling large quantity of goods.
2. Product Concept:
The product concept is based on the assumption that customers will be more
interested towards products that are offering more quality, innovative features and
top level performance. Hence, this concept believes in earning profits by selling
quality products.
3. Selling Concept:
The selling concept mainly focuses on selling. It believes that customers will be
buying products only when the product is highly advertised by the company. It does
not focus on building relationship with customers and satisfying their needs. But, it
believes in earning more profits by selling products through effective promotion
technique.
4. Marketing Concept:
This concept mainly focuses on the customer. All the business activities are
undertaken by an organization keeping customer satisfaction in mind. Organizations
are more concerned about the needs and wants of customers, which will
differentiate them from their competitors.
5. Social Concept:
This concept focuses on the needs and wants of customers as well as their safety
and safety of society. This concept believes earning more profit by giving back to
society and making the world better place for human beings.

APPROACHES OF MARKETING:
Approach to marketing nothing but studying the ways in which the marketer markets
his goods and services to customers in an effective manner.

Following are the different approaches of marketing:

1. Product/commodity approach:
This approach of marketing focuses mainly on the product. This marketing
approach mainly relates to studying the flow of goods from original producer upto
the ultimate customer. The marketer under this concept analyses problems
 relating to marketing i.e., sources of supply, nature and size of demand, mode of
transporting, storage and packing of commodity etc.
2. Institutional Approach:
This approach of marketing mainly focus on the study of institutions involved in
marketing. The institutions are middlemen, wholesalers, retailers, importers,
exporters, warehousing etc. engaged in marketing during movement of goods. In
this approach, the marketer tries to understand and analyze the functions of
institutions involved in marketing functions.
3. Functional Approach:
The functional approach gives importance on the various functions of marketing.
In this approach, marketing splits into many functions-buying, selling, pricing,
standardization, storage, transportation, advertising, packing etc.
4. System Approach:
The system approach focuses on interrelations and interconnections among the
functions of marketing. The system examines marketing connections (linkage)
inside as well as outside the firm. Inside the firm there is a coordination of
business activities-engineering, production, marketing, price etc.
5. Societal Approach:

This approach is originated recently. The marketing process is regarded as a

means by which society meets its own consumption needs. Therefore, attention
is paid to ecological factors (sociological, cultural, legal etc.) and marketing
decisions and their impact on the society’s well-being.
6. Legal Approach:

This approach concentrates on only one aspect i.e., transfer of ownership to

buyer. In India, the marketing activities are largely controllable by Sales of Goods
Act, Carries Act etc.

7. Economic Approach:
This approach deals with only the problems of supply, demand and price. These
are important from the economic point of view where marketer mainly intends to
earn profit.
 8. Decision making approach (Management approach):
This approach is of vital importance from the viewpoint of marketing
management. In successful marketing, decision making occupies an important
place. The marketing manager should be very expert and competent in his job so
that he takes proper decisions for marketing the goods and services.

Needs – Something which is required for a safe, stable and healthy life. it is something
inevitable for the existence of life. Needs cover many things like food, shelter, self-
development, security, social belonging, self - esteem and respect.

Wants – wants are our desires and wishes in life, our social setup and culture mould
our wants.

Demands – when our desires, needs, and wants are backed by our ability to pay, they
become demands.

CUSTOMER VALUE:
Customer value is the customer’s perception of the worth of the product or service
he/she purchases. Worth can mean several things such as the benefit these products or
services provide to target market, or the value for money the products or services offer
to customer.

CUSTOMER CREATION:
Customer creation is the process of discovering the customer. It is a process or any
activity that converts potential customers into paying customers.
Selling vs. Marketing:
Following are the differences between selling and marketing
Selling Marketing
It has a narrow scope limited only to It has wide scope covering activities
increasing the volume of sales concerned with identification and
satisfaction of wants of consumers
Increasing the profit through increase in sales Increasing profit with the increased
consumer satisfaction
It starts after the product is manufactured and It starts before the product is
ends after it is sold manufactured and continues even after
the goods are sold
Main emphasis is on changing the consumer Emphasis is on changing the product
according to the product according to consumer
Related to convincing consumers to buy Related to creating value for customers
products and services through the delivery of products and
services
Selling is a short term business plan Marketing is a long term business plan

EVOLUTION OF MARKETING:
Evolution of marketing is the phases through which the concept of marketing evolved.
Marketing has seen lot of transformation for centuries. It started as a distinct discipline
that went through different periods/eras of changes.

Stages (Eras) in evolution of marketing:

1. Production Orientation Era (1800s-1920s):

This era focuses on mass production. Companies thought that customers are willing
to pay for products that are cheap and readily available. During this era, business
efforts were primarily toward increasing the quantity rather than the quality of the
output. Manufacturers followed the principle of mass production to lower costs and
more sales.
 2. Sales Orientation Era (1920s-1940s):
As more companies join the field, the sales tactics become even more
competitive. This era adopted an idea that consumers will buy a company’s
products if they are motivated through eye-catching sales promotions.
3. Marketing Orientation Era (1940s – 1970s):
It is the era in which the industries realized that focusing on only selling is not
sufficient, rather they need to satisfy customers’ needs. At this era, businesses’
adopted tactics of identifying what customers need and effectively producing
those products that address these needs. It revolves around the idea that
reaching the business goals depends on understanding the needs of target
customers first. Additionally, it is related to providing them with the desired
satisfaction than its competitors.
4. Societal Orientation (1970s-Present):
In this era, a marketing theory called societal marketing came into existence. It’s
a concept that emphasizes an organization’s responsibility to develop business
strategies that positively impact the consumers’ well-being and the environment.
They understood that their activities with the intention of earning profit should not
destroy the nature and harm society. During this phase, companies shifted their
goals to provide a better-quality lifestyle while ensuring that the environment is
not polluted.
5. Digital marketing (1990s-Present):
The digital marketing era is a period of time when businesses have transformed
their marketing strategies to use the internet and other digital technologies to
connect with customers. Digital marketing promotes products and services
through channels such as websites, mobile devices and social media platforms.

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.

Importance of Marketing Environment:

Following are the factors explaining the importance of marketing environment.

1. Helps in planning business operations:

Marketing Environment helps in planning of the business operations such as

planning the nature and features of the new products and services to be
launched in the market. It also helps in planning of various marketing and
promotional strategies so as to match the offerings of the company to the
current Marketing environment.

2. Helps in understanding customers:

Marketing environment helps in understanding the exact needs and
requirements of its existing as well as prospective customers. Various factors
of marketing environment such as political influences, advancements in
technology, increase in the market share of competitors, change in
government rules and policies have an effect on the tastes and preferences of
the customers.
3. Helps in understanding new trends in business:
Business is known for its volatile nature which keeps changing and
developing. With the rising competition from the domestic and international
brands, customers started opted for the new and innovative trends in the
market. It is necessary for the brand to understand, tap, and embrace the new
trends that are ruling the market in order to stay relevant and consistent
amidst the changing dynamics.
4. Helps in keeping check on threats:
 Giving attention to the Importance of Marketing Environment, the company is
able to keep a thorough check on the factors that can have a negative impact on
its business operations and act as an obstacle in its path of growth and success.
The brand has to keep an eye on the threatening factors such as growing
competition in the market, price variations, evolving tastes of the customers and
other socio-economic factors.
5. Understand the competition:
The company is able to survive and thrive in the competitive market by
keeping a detailed eye on the competitors by checking and understanding
that what are the features and nature of their offerings, levels of customer
service experience provided by them, marketing and promotional strategies,
steps opted to retain the customers such as loyalty programs, discount offers
etc. The company is able to plan its offering and the marketing strategies that
are higher than that of the competition to gain the advantage in the market.
6. Helps in building business strategy:
Study of marketing environment helps in building business strategies such as
deciding on the nature and unique attributes of the offerings, have competitive
pricing, and working on the channel partner and distribution network amongst
others along with planning the marketing strategies such as selecting the potent
mix of marketing platforms and so on.
7. Innovation:
Understanding of marketing environment helps business organizations to come
up with the innovative line of products and services to its customers as per the
modern and technological advancements, positive impact on the business with
the fruitful government policies, relaxing norms on the tax procedures, and other
such external factors that helps carve a distinctive identity in the marketplace
amidst the tough and ever growing competition.
TYPES OF MARKETING ENVIRONMENT (Factors influencing marketing
environment):

Mainly there are two kinds of marketing environment

1. Internal Marketing Environment (Micro) :

There are various internal factors such as company values, systems and
processes that exist within a company. These are the factors which influence on
various tasks to complete marketing function effectively.
2. External Marketing Environment (Macro):
External marketing environment comprises of the market or field in which a
company performs its business activities. It comprises of the external factors
which affect the entire industry and they also have impact on the business.
Following are the external environmental factors which influence on the
marketing activities of the business:
 Demographic Environment:
Demography refers to the study of the human population especially
concerning sex, age, education, occupation, income size, density, cultural
characteristics, lifestyle, etc. Such information about the population is
significant for any business to develop. It not only helps in selecting items
to produce, but also helps to select the channel of distribution advertising
media, choice of marketing method, choice of manufacturing site, and
other business decisions. The company must understand this environment
to adjust marketing strategies, develop products and target advertising
effectively.
 Economic Environment:
Factors such as government funding, credit availability, market trends,
interest rates and shifts in the global economy are the factors which
influence consumer buying habits and the company’s performance. For
example, an economic recession negatively affects business profits, but
an economic surplus encourages customers to make larger purchases.
 Natural (Physical ) Environment:
Natural environment comprises of topographical elements, climate
changes, weather conditions, or any other ecological factors which play an
immense role while deciding the success of any business firm. For
instance, global warming causes unseasonal rainfall in different areas. As
a result, it may impact the crops and create scarcity in the production of
raw materials.
 Technological Environment:
A technological environment includes technological equipments,
innovative practices and products. Technology like laptops, automated
machines and social media can all improve an organization’s productivity
and reach. Companies should gather information about customer behavior
to help them evaluate and update their technology regularly.
 Political environment:
Changes in a country’s national or local political situation can modify
company’s external marketing environment. Political environment
determines tariffs, regulations and other standards that affect the cost of
purchasing goods and conducting business operations.
 Social environment:
Values, opinions and beliefs of a potential customer, their religion, castes
and their practices may affect the marketing decisions of business
organizations. Hence, business organizations need to understand the
customers’ social needs and how they affect their shopping behavior.
 Cultural environment:
Cultural environment refers to the way local communities interact with
each other and various brands of products/services. Depending on the
region, this type of marketing environment changes widely.
MARKETING MANAGEMENT:
Marketing management refers to the process of planning, organizing, directing, and
controlling an organization’s marketing activities with the intention of increasing sales
and profits by creating a positive image for the organization and building strong
relationships with its customers.

Importance of Marketing Management:

1. Analyzing Market Opportunities:

Marketing management collects and analyses information related to consumer’s
needs, wants and demands, competitor’s marketing strategies, changing market
trends and preferences. This helps to identify market opportunities.
2. Determination of Target Market:
Marketing management helps to identify the target market that the organization
wishes to offer its product.
3. Planning and Decision Making:
Marketing management helps to prepare future course of action. Planning relates
to product introduction, diversification. Decision making regarding pricing,
selection of promotional mix, selection of distribution channel is taken by the
marketing management.
4. Creation of Customer:
Consumers determine the future of the market .Therefore providing the best
product to the consumer according to their preference is the important task of
marketing. Marketing management helps in creation of new customers and
retention of current customers.
5. Helps in Increasing Profit:
Marketing caters to the varied and unlimited needs of consumers. Marketing
management helps to increase profit and sales volume. This is achieved by
expansion of market and increasing customers.
6. Improvement in Quality of Life:
Marketing management aims at providing innovative products and services to the
customers. Marketers continuously attempt to include new technology and
mechanism in their product to provide more satisfaction to customers than
before. This improves quality of life and makes life of consumers easier than
before.
7. Employment Opportunities:
Marketing process is a combination of different activities like research work to
assess the marketing environment, product planning and development,
promotion, distribution of product to customers and after sales service. Marketing
process requires researcher, production engineer, different distribution
intermediaries, sales personnel also creates employment opportunities in
advertisement section. Thus marketing management opened up different
employment avenues thus creating employment opportunities.