Marketing Management

1st semester MBA

Objectives:
1. To sensitize the students to the dynamic nature of Marketing Management.
2. To expose students to a systematic frame work of marketing & implementations
and to highlight need for different marketing approaches for services, goods, and
for household consumers, organizational buyers.
3. To introduce the concept of Marketing Mix as a framework for Marketing
Decision making.

Module-I
Definition & Functions of Marketing, Scope of Marketing, Marketing
concept, Selling versus Marketing, Concept of Marketing Myopia. 80: 20
Principle, Introduction to the Concept of Marketing Mix, Bottom of the
pyramid concept; Concept of Marketing Environment: Macro and Micro,
Need for analyzing the Marketing Environment.

Marketing
Definition: Marketing is the process of converting prospective buyers into actual
customers by communicating complete information of the product or services to
the customer. The key elements which are the secret to a successful marketing
practice are thorough market survey and research, framing a competitive strategy,
designing a realistic marketing plan and implementing different tactics to execute
the plan.

Marketing is an ongoing practice to capture customer‘s attention towards a product

or service. It is the core of all the business practices, without which any business
will prove to be a colossal failure.

Scope of Marketing
Scope of marketing spreads to different entities as given below.
Anything which is sellable needs marketing. Based on the above statement, the
following is the list of entities to which marketing is a necessary function:

Goods: Any product manufactured in mass quantity, requires proper marketing to

make it available to its consumers located in different places of the country or
world.
For example; Mobile phones manufactured in China and sold all over the world

Services: An economic activity performed to meet the consumer‘s demand, needs,

promotion and marketing.
For example; Ola cabs providing for local taxi services

Events: Various trade fairs, live shows, local events and other promotional events
need advertising and publicity.
For example; Indian Fashion Expo is the event where leading fashion houses
participate in displaying exhibit their creation needs marketing to reach customers,
manufacturers and traders.

Experiences: It even organises and customises the impression made by certain

goods and services to fulfil the customer‘s wish.
For example; A Europe trip package provided by makemytrip.com or
tripadvisor.com
Persons: A person who wants to promote his skills, profession, art, expertise to
acquire customers, take the help of marketing functions.
For example; A chartered accountant updates his profile over linkedin.com to
publicise his skills and talent to reach clients.

Places: Marketing of tourist places, cities, states and countries helps to attract
visitors from all over the world.
For example; India‘s Ministry of Tourism promoting India through ‗Incredible
India‘ campaign

Properties: It provides for selling of tangible and intangible properties like real
estate, stocks, securities, debentures, etc.
For example; Real estate agents publicise the residential plots to investors

Organizations: Several corporations and non-profit organisations like schools,

colleges, universities, art institutes, etc. create and maintain a public impression
through marketing.
For example; Circulars and advertisements made by colleges as ‗admission open.‘

Information: Certain information related to healthcare, technology, science,

media, law, tax, market, finance, accounting, etc. have to demand among the
corporate decision-makers who are marketed by some leading information
agencies.
For example; Bloomberg provides all current financial, business and market data

Ideas: Brands market their products or services through advertisements spreading

a social message to connect with the consumers.
For example; Idea 4G‘s advertisement spreading the message of ‗sharing our real
side.‘

Nature of Marketing
Marketing is a complex function and does not sum up to sales alone.
To develop a better understanding of the marketing practices, let us know about its

nature:

 Managerial Function: Marketing is all about successfully managing the

product, place, price and promotion of business to generate revenue.
 Human Activity: It satisfies the never-ending needs and desires of human
beings.
 Economic Function: The crucial second marketing objective is to earn a
profit.
 Both Art and Science: Creating demand for the product among consumers is
an art and understanding human behaviour, and psychology is a science.
 Customer-Centric: Marketing strategies are framed with the motive of
customer acquisition.
 Consumer-Oriented: It practices market research and surveys to know about
consumer‘s taste and expectations.
 Goal-Oriented: It aims at accomplishing the seller‘s profitability goals and
buyer‘s purchasing goals.
 Interactive Activity: Marketing is all about exchanging ideas and
information among buyers and sellers.
 Dynamic Process: Marketing practice keeps on changing from time to time
to improve its effectiveness.
 Creates Utility: It establishes utility to the consumer through four different
means; form (kind of product or service), time (whenever needed), place
(availability) and possession (ownership).
Objectives of Marketing
Marketing majorly focuses on achieving consumer satisfaction and maximising
profits.

Following are the illustration of different aims of marketing practices:

 Customer Satisfaction: The primary motive of a company is to satisfy the

needs of customers.
 Ensure Profitability: Every business is run for profit, and so goes for
marketing.
 Building Organizational Goodwill: It portrays the product and the
company‘s positive image in front of the customers.
 Create Demand: It works for generating the demand for products and
services among the customers.
 Increase Sales Volume: It is a rigorous process of increasing the sale of
product or service to generate revenue.
 Enhance Product Quality: Marketing initiates customer feedback and
reviews to implement them for product enhancement.
 Create Time and Place Utility: It makes sure that the product or service is
available to the consumer whenever and wherever they need it.

Functions of Marketing
Marketing is not just selling off goods and services to the customers; it means a lot
more than that.

It starts with the study of the potential market, to product development, to market
share capturing, to maintain cordial relations with the customers.
Following multiple operations of marketing helps the business to accomplish long-

term goals:

Market Research: A complete research on competitors, consumer expectations

and demand is done before launching a product into the market.

Market Planning: A proper plan is designed based on the target customers,

market share to be captured and the level of production possible.

Product Design and Development: Based on the research data, the product or
service design is created.

Buying and Assembling: Buying of raw material and assembling of parts is done
to create a product or service.

Product Standardisation: The product is graded as per its quality and the quality
of its raw materials.

Packaging and Labelling: To make the product more attractive and self-
informative, it is packed and labelled listing out the ingredients used, product use,
manufacturing details, expiry date, etc.

Branding: A fascinating brand name is given to the product to differentiate it from

the other similar products in the market.
Pricing of the Product: The product is priced moderately keeping in mind the
value it creates for the customer and cost of production.

Promotion of the Product: Next step is to make people aware of the product or
service through advertisements.

Warehousing and Storage: The goods are generally produced in bulks and
therefore needs to be stored in warehouses before being sold in the market in small
quantities.

Selling and Distribution: To reach out to the consumers spread over a vast
geographical area, selling and distribution channels are to be selected wisely.

Transportation: Transportation means are decided for transfer of the goods from
the manufacturing units to the wholesalers, retailers and consumers.

Customer Support Service: The marketing team remain in contact with the
customers even after selling the product or service to know the customer‘s
experience, and the satisfaction derived.

THE FIVE MARKETING CONCEPTS

Marketing is the process of “creating, communicating, delivering, and

exchanging offerings that have value for customers, clients, partners, and
society at large,” according to the American Marketing Association. This process
is done in a number of different ways; marketing professionals use one or more of
the five concepts of marketing in order to earn consumer confidence and create
profitable, long-term relationships with consumers. But not all the concepts are
equally effective.

Robert Katai, an experienced marketing strategist, provides the definition of a

marketing concept: ―A strategy that companies and marketing agencies design and
implement in order to satisfy customers‘ needs, maximize profits, satisfy customer
needs, and beat the competitors or outperform them.‖ The main five include the
production, product, selling, marketing, and societal concepts, and they have been
evolving for decades. Not every concept is beneficial to every business, so here is a
timely and convenient opportunity to learn more about each one.
The Production Concept
The production concept is focused on operations and is based on the assumption
that customers will be more attracted to products that are readily available and can
be purchased for less than competing products of the same kind. This concept
came about as a result of the rise of early capitalism in the 1950s, at which time,
companies were focused on efficiency in manufacturing to ensure maximum
profits and scalability.

This philosophy can be useful when a company markets in an industry

experiencing tremendous growth, but it also carries a risk. Businesses that are
overly focused on cheap production can easily lose touch with the needs of the
customer and ultimately lose business despite its cheap and accessible goods.

The Product Concept

The product concept is the opposite of the production concept in that it assumes
that availability and price don‘t have a role in customer buying habits and that
people generally prefer quality, innovation, and performance over low cost. Thus,
this marketing strategy focuses on continuous product improvement and
innovation.

Apple Inc. is a prime example of this concept in action. Its target audience always
eagerly anticipates the company‘s new releases. Even though there are off-brand
products that perform many of the same functions for a lower price, many folks
will not compromise just to save money.

Working on this principle alone, however, a marketer could fail to attract those
who are also motivated by availability and price.

The Selling Concept

Marketing on the selling concept entails a focus on getting the consumer to the
actual transaction without regard for the customer‘s needs or the product quality —
a costly tactic. This concept frequently excludes customer satisfaction efforts and
doesn‘t usually lead to repeat purchases.

The selling concept is centered on the belief that you must convince a customer to
buy a product through aggressive marketing of the benefits of the product or
service because it isn‘t a necessity. An example is soda pop. Ever wonder why you
continue to see ads for Coca Cola despite the prevalence of the brand? Everyone
knows what Coke has to offer, but it‘s widely known that soda lacks nutrients and
is bad for your health. Coca Cola knows this, and that‘s why they spend
astonishing amounts of money pushing their product.

The Marketing Concept

The marketing concept is based on increasing a company‘s ability to compete and
achieve maximum profits by marketing the ways in which it offers better value to
customers than its competitors. It‘s all about knowing the target market, sensing its
needs, and meeting them most effectively. Many refer to this as the ―customer-first
approach.‖

Glossier is a recognizable example of this marketing concept. The company

understands that many women are unhappy with the way that makeup affects the
health of their skin. They also noticed that women are fed up with being told what
makeup products to use. With this in mind, Glossier introduced a line of skincare
and makeup products that not only nourish the skin but are also easy to use and
promote individualism and personal expression with makeup.

The Societal Concept

The societal marketing concept is an emerging one that emphasizes the welfare of
society. It‘s based on the idea that marketers have a moral responsibility to market
conscientiously to promote what‘s good for people over what people may want,
regardless of a company‘s sales goals. Employees of a company live in the
societies they market to, and they should advertise with the best interests of their
local community in mind.

The fast-food industry is an example of what the societal concept aims to address.
There‘s a high societal demand for fast food, but this food is high in fat and sugar
and contributes to excess waste. Even though the industry is answering the desires
of the modern consumer, it‘s hurting our health and detracting from our society‘s
goal of environmental sustainability.
How to Choose the Right Marketing Concept
While not all of the above concepts are effective (or perhaps as effective as they
once were), you can utilize aspects from multiple concepts in designing and
strategizing a marketing plan. As you plan, you need to ask yourself some
questions before deciding which marketing concept(s) to base it on. Consider the
following:

 Who is your target audience? Which demographics are interested in your

products or services? Where are they looking for you and what you have to
offer? What attracts this demographic to your company? How can you use
that to turn these people into customers?

 What are your goals besides making money? For example, are you trying to
establish a loyal customer base? Are you trying to fill a hole in the industry
you‘re selling in?

 What makes your brand unique? What education do they need to be enticed
to buy?

MARKETING vs SELLING
BASIS OF MARKETING SELLING
DIFFERENCE
Source Marketing is a new means of Selling is a humanistic word
arriving

Actions It involves the integrated It involves only the material

procedure of determining and distribution of goods and
fulfilling the customer needs services

Extent Marketing involves the conducts Selling is restricted only to

of many associated actions also the substantial dispersion

Product/Custom It is customer aligned It is product aligned

er orientation

Goals The goal of marketing is to fulfill The goal of selling is to draw

the customer wants the utmost profit

Way to Profit It emphasizes on the escalation It emphasizes on the

of gains by highest social escalation of gains
 contentment by the expansion of sale

Essence Marketing has continuing goals Selling is a day-to-day

with certain rational suggestions periodic activity with interim
goals

Product What shall be provided as a The seller decides what

assurance "product." is resolved by the "product." is to be presented
consumer

Perspective Marketing considers business as Selling consider business as

a " Consumer gratifying a "product manufacturing
procedure." procedure."

Perseverance of In marketing customer regulates In selling cost ascertains

cost price and price ascertain the cost price

What is Marketing Myopia? Definition and Examples

Marketing Myopia, first expressed in an article by Theodore Levitt in Harvard

Business Review, is a short-sighted and inward looking approach to marketing
which focuses on fulfilment of immediate needs of the company rather than
focusing on marketing from consumers‘ point of view.

When a company focuses more on sales than on marketing or consumers‘ needs,

that‘s when marketing myopia strikes in.

What Is Marketing Myopia?

Marketing myopia is a situation when a company has a narrow-minded marketing

approach and it focuses mainly on only one aspect out of many possible marketing
attributes.

For example, a brand focusing on development of high-quality products for a

customer base that disregard quality and only focuses on the price is a classic
example of marketing myopia.

When Does Marketing Myopia Strike In?

Marketing myopia strikes in when the short term marketing goals are given more
importance than the long term goals. Some examples being:

 More focus on selling rather than building relationships with the customers
 Predicting growth without conducting proper research.
 Mass production without knowing the demand.
 Giving importance to just one aspect of the marketing attributes without
focusing on what customer actually wants
 Not changing with the dynamic consumer environment
Business, according to Levitt, is actually a customer satisfying institution and
hence should be based on customers’ needs and desires.
Self-Deceiving Cycle

Growth is never assured. The business environment is ever changing and so should
be a business. Businesses that don‘t asses their own capabilities, competitors,
customers‘ needs, and changing trends, always tend to get trapped in a self-
deceiving cycle.

Conditions That Lead To The Self-Deceiving Cycle

 A belief that growth of the business is guaranteed by growth in population.

 The belief that there is no competitive substitute for the company‘s product
 Supply creates its own demand, hence mass production.
 Overestimation of product‘s qualities without conducting scientific research.
If you ever think there is an absence of future problems, there can be a problem in
your thinking.
Examples Of Marketing Myopia

Here are some companies that are suffering from or have suffered from marketing
myopia

Kodak lost much of its share to Sony cameras when digital cameras boomed
and Kodak didn‘t plan for it.
 Nokia losing its marketing share to android and IOS.
 Hollywood didn‘t even tap the television market as it was focused just on
movies.
 Yahoo (worth $100 billion dollars in 2000) lost to Google and was bought
by Verizon at approx. $5 billion (2016).
Marketing Myopia in future
  Dry cleaners – New types of fiber and chemicals will result in less demand
for dry cleaners.
 Grocery stores – A shift to the digital lifestyle will make grocery stores to
disappear.

Applying the Pareto Principle in Your Marketing—the 80/20 Rule

In 1906, an Italian economist named Vilfredo Pareto created a mathematical

formula to describe the unequal division of wealth in his country. The Pareto
principle (also known as the 80/20 rule or the law of the vital few) states that in
many cases, roughly 80% of the effects of action comes from 20% of the causes.
Pareto showed that approximately 80% of the land and wealth in Italy was owned
by 20% of the population. Here are some examples you may have already
experienced in your business:

 80% of your sales volume is generated by 20% of your customers

 80% of your revenues are generated by 20% of your products

 80% of your complaints come from 20% of your customers

 80% of your quality control issues involve 20% of your products

 The 80/20 Rule was once the golden rule of effective social
media marketing. It states that 80% of your social media posts should
inform, educate, and entertain your audience, while only 20% should
directly promote your business.
Later he discovered that virtually all economic activity was subject to this
principle. Pareto‘s 80/20 rule is now used to describe almost any type of output in
the real world. In particular, we can apply it to our marketing and productivity
outcomes. Here‘s how:

Mining Your Customer Analytics

Who are those customers in that 20% that generate 80% of your sales? If you can
identify the characteristics of your top 20% of customers, then you can find more
customers like them and grow your total sales. Apply the R-F-M Rule. Check your
sales log to look up who bought most recently, bought more frequently, and who
spent the most money. That‘s a big chunk of your top 20% of customers. Focus
your marketing message on them.
Get Stingy with Your Time

We‘re all tempted to waste our time trying to please all our customers instead of
the most profitable ones. Then there is our ―to-do lists‖. Crossing items off a long
jobs list may be satisfying, but the 80/20 rule applied to our list suggests we need
to prioritize where we spend our time. Prioritize handling your larger items that
will generate the most significant results first. The small items still need attention
but not at the risk of neglecting the most productive actions.

When evaluating your mid-season goals, focus on a few goals or activities that are
most critical to your success. Just like your to-do list, not all duties and goals are
created equal.

Check your online analytics to see which blog post, Facebook posting, or other
social media posting generated the best results. Make more posts similar to those
and incorporate tools such as videos and more pictures in your postings. Also,
check out Google Analytics to find the ranking of the keywords on your website.
Consider that 80% of your web visitors came there from 20% of your listed
keywords.

Product Development

Determine your ―Hot Sellers‖, those items that makeup 80% of your sales. These
are the core products that you should work to enhance, promote, advertise, and
push. That‘s not to say you shouldn‘t develop new products or diversity your
offerings. Perhaps seasonal items or an alternative package size is a good fit for a
new product. Realize that offering an entirely new product line will need additional
time, resources, and staff support. Don‘t ignore opportunities to add new items to
your inventory, but don‘t neglect your already branded items.

Conclusion

The Pareto Principle is not a law. The rule is a useful construct when analyzing
your efforts and outcomes. Apply it with caution to your production and marketing
efforts but; do apply it.

Bottom of Pyramid Marketing

The diagram below depicts a typical pyramid containing different groups
according to their purchasing power parity.

The bottom of the pyramid, bottom of the wealth pyramid or the bottom of the
income pyramid is the largest, but poorest socio-economic group. In global terms,
this is the 2.7 billion people who live on less than $2.50 a day.
Management scholar CK Prahalad popularised the idea of this demographic as a
profitable consumer base in his 2004 book The Fortune at the Bottom of the
Pyramid, written alongside Stuart Hart.
The more current usage refers to the billions of people living on less than $2.50 per
day, the definition proposed in 1998 by C.K. Prahalad and Stuart L. Hart. It was
subsequently expanded upon by both in their books: The Fortune at the Bottom of
the Pyramid by Prahalad in 2004 and Capitalism at the Crossroads by Hart in
2005.
Prahalad proposes that businesses, governments, and donor agencies stop thinking
of the poor as victims and instead start seeing them as resilient and creative
entrepreneurs as well as value-demanding consumers. He proposes that there are
tremendous benefits to multi-national companies who choose to serve these
markets in ways responsive to their needs. After all the poor of today are
the middle class of tomorrow. There are also poverty reducing benefits if multi-
nationals work with civil society organizations and local governments to create
new local business models.
Good business sense and the BoP markets[edit]
Kash Rangan, John Quelch, and other faculty members at the Global Poverty
Project at Harvard Business School "believe that in pursuing its own self-interest in
opening and expanding the BoP market, business can make a profit while serving
the poorest of consumers and contributing to development."[16] According to
Rangan, "For business, the bulk of emerging markets worldwide is at the bottom of
the pyramid so it makes good business sense – not a sense of do-gooding – to go
after it."[16] But in the view of Friedman "the social responsibility of business is to
increase its profits only, thus, it needs to be examined whether business in BoP
markets is capable of achieving the dual objective of making a profit while serving
the poorest of consumers and contributing to development?"[17]
Erik Simanis has reported that the model has a fatal flaw. According to Simanis,
"Despite achieving healthy penetration rates of 5% to 10% in four test markets, for
instance, Procter & Gamble couldn‘t generate a competitive return on its Pur
water-purification powder after launching the product on a large scale in
2001...DuPont ran into similar problems with a venture piloted from 2006 to 2008
in Andhra Pradesh, India, by its subsidiary Solae, a global manufacturer of soy
protein ... Because the high costs of doing business among the very poor demand a
high contribution per transaction, companies must embrace the reality that high
margins and price points aren't just a top-of-the-pyramid phenomenon; they‘re also
a necessity for ensuring sustainable businesses at the bottom of the
pyramid."[18] Marc Gunther states that, "The bottom-of-the-pyramid (BOP) market
leader, arguably, is Unilever ... Its signature BOP product is Pureit, a countertop
water-purification system sold in India, Africa and Latin America. It's saving lives,
but it's not making money for shareholders."[19] Several consulting companies have
modeled the profitability of accessing the bottom of pyramid by utilizing
economies of scale.[20]

Examples of BoP business

Microcredit
One example of "bottom of the pyramid" is the growing microcredit market in
South Asia, particularly in Bangladesh. With technology being steadily cheaper
and more ubiquitous, it is becoming economically efficient to "lend tiny amounts
of money to people with even tinier assets". An Indian banking report argues that
the microfinance network (called "Sa-Dhan" in India) "helps the poor" and "allows
banks to 'increase their business'". However, formal lenders must avoid the
phenomenon of informal intermediation: Some entrepreneurial borrowers become
informal intermediaries between microfinance initiatives and poorer micro-
entrepreneurs. Those who more easily qualify for microfinance split loans into
smaller credit to even poorer borrowers. Informal intermediation ranges from
casual intermediaries at the good or benign end of the spectrum to 'loan sharks' at
the professional and sometimes criminal end of the spectrum.
Market-specific products
One of many examples of products that are designed with needs of the very poor in
mind is that of a shampoo that works best with cold water and is sold in small
packets to reduce barriers of upfront costs for the poor. Such a product is marketed
by Hindustan Unilever.
Innovation
There is a traditional view that BOP consumers do not want to adopt innovation
easily. However, C. K. Prahalad (2005) claimed against this traditional view,
positing that the BOP market is very eager to adopt innovations. For instance, BOP
consumers are using PC kiosks, Mobile phone, Mobile banking etc. Relative
advantage and Complexity attributes of an innovation suggested by Everett
Rogers (2004) significantly influence the adoption of an innovation in the Bottom
of pyramid market (Rahman, Hasan, and Floyd, 2013). Therefore, innovation
developed for this market should focus on these two attributes (Relative advantage
and Complexity).
Venture capital
Whereas Prahalad originally focused on corporations for developing BoP products
and entering BoP markets, it is believed by many that Small to Medium
Enterprises (SME) might even play a bigger role. For Limited Partners (LPs), this
offers an opportunity to enter new venture capital markets. Although several social
venture funds are already active, true Venture Capital (VC) funds are now
emerging.
Brand
There is a traditional view that BOP consumers are not brand conscious (Prahalad,
2005). However, C. K. Prahalad (2005) claimed against this traditional view,
positing that the BOP market is brand conscious. For instance, brand influences the
new product adoption in the bottom of pyramid market (Rahman, Hasan, and
Floyd, 2013). Rahman et al. (2013) mentioned that brand may positively influence
the relative advantage of an innovation and it leads to adoption of innovation in the
BOP. In point of traditional view BOP market, people were not aware about brand
concept. Sopan Kumbhar (2013)
Business and community partnerships
As Fortune reported on November 15, 2006, since 2005 the SC Johnson
Company has been partnering with youth groups in the Kibera slum
of Nairobi, Kenya. Together SC Johnson and the groups have created a
community-based waste management and cleaning company, providing home-
cleaning, insect treatment, and waste disposal services for residents of the slum.
Concept of Marketing Mix
Marketing mix is the policy adopted by the manufacturers to get success in the
field of marketing. Those days, when goods were matched with the market, have
gone. The modem market concept emphasizes the importance of the consumer‘s
preference. Manufacturers take various policies to get success in the market and
the marketing mix is one of the important policies.

In marketing planning, we make use of marketing information to assess the

situations. Therefore, a manufacturer first analyses the nature of the consumer‘s
needs and then plans his product to give satisfaction to the consumers. All the
marketing effort focuses attention around the consumer‘s need.

The management therefore is concerned with the markets and market behaviors to
identify the target groups of consumers through market information. Then the
management plans to meet the consumer‘s needs and to face the competitors. All
these programmes involve a number of functions, which are to be planned
carefully; and planning‘s need analysis of the market to take a decision-prediction
and forecasting, to the future needs of the public.
Marketing departments perform the operations and the market offering mix is the
result. Thus, the identification of demand and supply involves various functions of
marketing to attain success in the market and the combination of these functions is
known as marketing mix.

Definition of Marketing Mix:

According to Borden, ―The marketing mix refers to the appointment of efforts, the
combination, the designing and the integration of the elements of marketing into a
programme or mix which, on the basis of an appraisal of the market forces will
best achieve an enterprise at a given time‖. According to Stanton, ―Marketing mix
is the term used to describe the combination of the four inputs which constitute the
core of a company‘s marketing system-the product, the price structure, the
promotional activities and the distribution system.‖

Thus marketing mix is the combination of the product, the distribution system, the
price structure and the promotional activities. The term marketing mix is used to
describe a combination of four elements-the product, price, physical distribution
and promotion. These are popularly known as ―Four Ps.‖

These four elements or sub-mixes should be taken as instruments, by the

management, when formulating marketing plans. As such, marketing manager
should have a thorough knowledge about the four Ps. The marketing mix will have
to be changed at the change of marketing conditions like economical, political,
social etc. Marketing mix is developed to satisfy the anticipated needs of the
identified markets.

A brief description of the four elements of marketing mix (Four Ps) is:
1. Product:
The product itself is the first element. Products must satisfy consumer needs. The
management must, first decide the products to be produced, by knowing the needs
of the consumers. The product mix combines the physical product, product
services, brand and packages. The marketing authority has to decide the quality,
type of goods or services which are offered for sale.

A firm may offer a single product (manufacturer) or several products (seller). Not
only the production of right goods but also their shape, design, style, brand,
package etc., are of importance. The marketing authority has to take a number of
decisions as to product additions, product deletions, product modifications, on the
basis of marketing information.
2. Price:
The second element to affect the volume of sales is the price. The marked or
announced amount of money asked from a buyer is known as basic price-value
placed on a product. Basic price alterations may be made by the manufacturer in
order to attract the buyers. This may be in the form of discount, allowances etc.
Apart from this, the terms of credit, liberal dealings will also boost sales.

3. Promotion:
The product may be made known to the consumers. Firms must undertake
promotion work-advertising, publicity, personal selling etc., which are the major
activities. And thus the public may be informed of the products and be persuaded
by the customers. Promotion is the persuasive communication about the products,
by the manufacturer to the public.

4. Distribution (place):
Physical distribution is the delivery of products at the right time and at the right
place. The distribution mix is the combination of decisions relating to marketing
channels, storage facility, inventory control, location, transportation warehousing
etc.
Companies should view the four Ps in terms of the customer‘s four Cs.

A firm‘s marketing efforts should start and end with the customers. The marketing
mix-Four Ps, are the important tools or instruments used by the marketing manager
in formulating marketing planning to suit the customer‘s needs. A share in the
market and the goodwill depends upon the marketing plans. Change is constant.

The customer‘s need and desire may change often, because of the changes that take
place in the market. The decisions on each element of four Ps are .aimed to give
greater consumer satisfaction. The elements of Four Ps are interrelated,
complementary and mutually supporting ingredients.

For service marketing following three mixes are essential along with above four
P‘s.

People
A company‘s people are at the forefront when interacting with customers, taking
and processing their enquiries, orders and complaints in person, through online
chat, on social media, or via the call centre. They interact with customers
throughout their journey and become the ‗face‘ of the organisation for the
customer. Their knowledge of the company‘s products and services and how to use
them, their ability to access relevant information and their everyday approach and
attitude needs to be optimised. People can be inconsistent but with the right
training, empowerment and motivation by a company, they can also represent an
opportunity to differentiate an offering in a crowded market and to build valuable
relationships with customers.

Process
All companies want to create a smooth, efficient and customer-friendly journey –
and this can‘t be achieved without the right processes behind the scenes to make
that happen. Understanding the steps of the customer journey – from making an
enquiry online to requesting information and making a purchase – helps us to
consider what processes need to be in place to ensure the customer has a positive
experience. When a customer makes an enquiry, how long will they have to wait
before receiving a response? How long do they wait between booking a meeting
with the sales team to the meeting taking place? What happens once they make an
order? How do we make sure reviews are generated after a purchase? How can we
use technology to make our processes more efficient? All of these considerations
help build a positive customer experience.

Physical Evidence
Physical evidence provides tangible cues of the quality of experience that a
company is offering. It can be particularly useful when a customer has not bought
from the organisation before and needs some reassurance, or is expected to pay for
a service before it is delivered. For a restaurant, physical evidence could be in the
form of the surroundings, staff uniform, menus and online reviews to indicate the
experience that could be expected. For an agency, the website itself holds valuable
physical evidence – from testimonials to case studies, as well as the contracts that
companies are given to represent the services they can expect to be delivered.

Marketing Environment: Macro and Micro

Marketing Environment
The marketing environment of a company is composed of the people, institutions,
and forces outside marketing that influencer marketing management‘s ability to
develop and maintain a successful relationship with its target customers.

Constantly watching and adapting to the changing marketing environment is

important because the marketing environment offers both opportunities and threats.

For example, an alliance with the supplier and distributor may help an organization
to get a competitive edge over its rivals.

On the other hand entry of many competitors poses a threat to the organization as
some of their customers may shift to a new seller.

By conducting a regular and systematic environmental analysis, the company can

revise and adapt marketing strategies to cope with the new challenges and
opportunities in the marketplace.

The marketing environment is the combination of the microenvironment and

macro environment.
According to Philip Kotler, ―A company‘s marketing environment consists of the
internal factors & forces, which affect the company‘s ability to develop & maintain
successful transactions & relationships with the company‘s target customers‖.

According to Pride &Ferrell, ―The marketing environment consists of external

forces that directly or indirectly influence an organization‘s acquisition of inputs
and generation of outputs‖.

To sum up, the marketing environment is a set of diverse, dynamic and

uncontrollable forces that impinge on an organization‘s marketing operations and
opportunities.

Let‘s look at this chart that shows the micro (internal) and macro (external)
elements of the marketing environment.

Macro Environment of Marketing

Macro environment factors which consist of external forces. These external factors
influence the company‘s marketing strategy is a great length.

The external environment factors are uncontrollable and the company finds it hard
to tackle the external factors.
 Elements of macro-environment of marketing are;

1. Demographic factors.
2. Economic factors.
3. Natural forces.
4. Technology factors.
5. Political factors.
6. Cultural factors.

In the following ways, they affect business strategy.

Demographic Environment

Demography is the study of human populations in terms of size, destiny, location,

age, gender, race, occupation, and other statistics.

This is the very important factors that help the marketer to divide the population
into different market segments and target markets.

Demographic data also helps in preparing geographical marketing plans, age, and
sex-wise plans.

Economic Environment

Economic Environment is those macro factors that affect consumer buying power
and spending patterns.

It includes the level of income, policies, and nature of an economy, economic

resources, trade cycles, distribution of income and wealth.
When the income of a family or country (per capote income) changes it also
changes the buying behavior and spending pattern of the family or country.

Natural Environment

Natural environment involves the natural resources that are needed as inputs by
marketers or they are affected by marketing activities.

So marketers should be aware of several trends in the natural environment.

Technological Environment

Technological forces are perhaps the most dramatic forces which are changing
rapidly. These macro-environmental forces create a new product, new markets and
marketing opportunities for marketers.

Political Environment

It includes government actions, government legislation, public policies, and acts

which affect the operations of a company or business.

These forces may affect an organization on a local, regional, national or

international level.

So marketers and business management pay close attention to the political forces
to judge how government actions which will affect their company.

Cultural Environment

Cultural factors in heritage, living styles, religion, etc. also affect a company’s
marketing strategy. Social responsibility also becomes part of marketing and
slowly emerged in marketing literature.

Socially responsible marketing is that business firms should take the lead in
eliminating socially harmful products.
 Micro Marketing environment

The micro-environment refers to the forces that are close to the company and affect
its ability to serve its customers. It influences the organization directly.

It includes the company itself, its suppliers, marketing intermediaries, customer

markets, competitors, and the public.

5 components of the micro environment of marketing are;

1. Internal Organizational Environment.

2. Marketing Channel.
3. Types of Market.
4. Competition.
5. Organizational Objectives.

Internal Organizational Environment

The first is the organization‘s internal environment—its several departments

and management levels as it affects marketing management‘s decision making.

Marketing Channel

The second component includes the marketing channel firms that cooperate to
create value: the suppliers and marketing intermediaries (middlemen, physical
distribution firms, marketing-service agencies, financial intermediaries).
Types of Market

The third component consists of the five types of markets in which the
organization can sell: the consumer, producer, reseller, government, and
international markets.

Competition

The fourth component consists of the competitors facing the organization.

Organizational Objectives

The fifth component consists of all the public‘s that have an actual or potential
interest in or impact on the organization‘s ability to achieve its objectives:
financial, media, government, citizen action, and local, general, and internal
publics.

Differences between Macro and Micro Environment of Marketing

Micro and macro refer to economic environments within which marketing takes
place.

Though not exactly opposites, broad differences exist between macro marketing
and micromarketing.

The differences between macro environments and micro-environments may be

relevant to identify in the following table:

Point of
Macro-environment Microenvironment
difference

External environment of an Inter environments of an

Meaning
organization. organization.

Nature Very complex. Less complex to perceive.

The task of the Marketer interacts with, the The marketer interacts with other
marketer elements prevailing outside the functional areas of the
organization. organization.

Extent of Factors remain beyond the Factors may be controlled to a

control control of marketers. large extent by a marketer.

Remains comparatively
It creates a huge impact on
Impact independent are shaping marketing
shaping marketing decisions.
decisions.

Factors reveal the capabilities of

Factors may create an
an organization to exploit the
opportunity or pose a threat to
Function opportunities or to combat the
the marketing activities of an
threat through its marketing
organization.
activities.

How environmental factors affecting the consumer decision process?

Economic factors
Economic factors play an important role in consumer buying behavior decisions. It
also directly affects the purchasing power of consumers.

If consumers‘ purchasing power is weak, they cannot decide to buy goods or

services even if they like very much.

But, if they have purchasing power, they can take a prompt decision to buy goods
or services they like.

Income level, the income of their family members, liquid asset, spending attitude,
credit facility, etc. are the economic factors to determine consumers‘ buying
decision.

Technological factors

Technological forces are perhaps the most dramatic forces which are changing
customer habit by introducing a new product for the customer.

Cultural factors

Culture is crucial when it comes to understanding the needs and behaviors of an

individual. Throughout his existence, an individual will be influenced by his
family, his

friends, his cultural environment or society that will ―teach‖ him values,
preferences as well as common behaviors to their own culture and buying
behavior.

Demographic factors

Demography is the study of human populations in terms of size, destiny, location,

age, gender, race, occupation, and other statistics. This is very important because
these factors directly influence consumer decision making.

Discuss Importance / Need of Marketing Environment Analysis

Analysis of the marketing environment is of great importance to marketers because
of the following reasons-
1) The impact of the environment on the organisation is enormous. To understand
the trends and events in the market and successfully analysing the data to produce
a product of customers need.

2) The changes in the environment affect the functioning of all the departments.
The organisations who constantly screen the environment become future ready to
overcome the challenges from environmental changes.

3) A change in any one factor of the environment can have a direct or indirect
impact on all the functions. For example, a change in taxes by the government will
affect the finance department, but also other functions like supply, production, etc.
Hence its study becomes very critical.

4) The organisations list out the strengths and weaknesses which are internal to the
organisation. It helps in analysing the efforts to be put in to upskill the staff,
expectations of the suppliers, distributors, etc.

5) It helps in analysing the opportunities and threats to the organisation.

6) It helps the organisation produce a right product of customers‘ choice in line

with the trends, culture, climate, etc.

7) It gives an organisation a competitive advantage as analysing the competitors is

part of environment scanning. A bright marketer will gather all the information
he/she can get to outperform their products in the market.
Advertisements
By constantly analyzing the changes that are occurring in the Marketing
Environment, organisations are better prepared to –
• Adapt to change,
• Prepare long-range strategy,
• Meet the needs of customers,
• Forecast tomorrow‘s needs, and
• Compete with the intense competition present in the global marketplace.

Course Outcomes:
Upon the successful completion of this course students will be able to:
1. Understand the concept of market, marketing, and its dynamic
nature.

2. Understand the different strategies & policies of marketing.

3. Plan & implement marketing tools and techniques to enhance

performance of a business organization.
4. Take timely decision to create and develop market share to achieve
marketing goal of firm.

5. Increase customers satisfaction level and fulfill the social

mission of an enterprise