Marketing Management

Introduction To Marketing

• The Performance of the business activities that direct

the flow of goods from producer to consumer is known
as Marketing.
• Marketing is human activity directed at satisfying needs
and wants through exchange processes.
• Marketing begins with the customer (by identifying their
needs) and ends with the customer(by satisfying their
needs).
• It is the process of discovering and translating consumer
wants into products and services.
A Simple marketing System
Marketing Concept versus Selling Concept

Starting Point Focus Means Ends

The Marketing Concept

Customer Integrated Profits from
Market
needs marketing satisfied customers

The Selling Concept

Sell and Profits through

Factory Product
Promote it sales volume
 Marketing Vs Selling

Marketing Selling
1. MARKETING is a process of 1. SELLING is a process of transferring
transferring a product or service to a a product or service to a buyer at a
buyer at a competitive price in order price regardless of his or her need”
to satisfy his or her need”
2. Focuses on the needs of the 2. Focuses on the needs of the
Customer Producer
3. Marketing makes use of long-term 3. Selling makes use of short-term
Strategies to get sales tactics to get sales
4. Customers enjoy supreme 4. Product enjoys supreme
importance importance
5. Converts customer needs into 5. Converting products into cash
products
6. Profits through customer 6. Profits through sales volume
satisfaction
 MARKETING FUNCTIONS
1. Buying:
• Buying is one of the significant functions of marketing. It refers to
the process of acquiring goods at the right place, at the right time
in right quantity and quality and from the right source of suppliers.
• However, assembling commences only after the goods have been
bought. It means collection of goods bought from different
sources at a common point.
2. Selling:
• Selling is the heart of marketing task. It is the process of transfer
of ownership of goods to a buyer in exchange for money.
• Thus selling involves all efforts made in persuading the
prospective customers to buy a commodity or service.
3. Transportation:
• Transportation is an important function of marketing as markets
are geographically away from production centres. It implies the
movement of goods from the points of production to the points of
consumption.
• It creates place and time utility of goods by removing them from
the place of production to the place where they are to be
consumed.
4. Storage:
• As goods are produced in anticipation of demand, it becomes
necessary for the businessmen to store the goods properly till the
time of their sale.
• Thus storage is the process of preserving goods from the time they
are produced till they are needed for consumption.
• Storage of goods in warehouses has become very popular in these
days. The storage function of marketing can, therefore, be made
effective through the establishment of warehouses. It creates both
time and place utilities.
5. Financing:
• The importance of financing in the present day economy cannot be
underestimated although it is considered as an ancillary function of
marketing.
• Finance refers to the provision of money at the time it is wanted.
• All the plans of a businessman would remain mere dreams unless
adequate money is available to convert them into reality.
• Thus it is very difficult to conduct smooth marketing without the
availability of adequate and cheap finance.
6. Risk-taking:
• Risk is an inevitable feature of any business activity and marketing
is no exception to it. It is a chance of loss.
• Although a business is run for profit; there is a chance of loss in
spite of the best efforts of the businessman.
• Marketing enterprise has to face innumerable risks in the process of
marketing goods on account of social hazards such as theft,
burglary, bad debts etc or changes in demand as a result of
changing buyer behavior or price decrease, competition,
technological advancements, poor quality, and government
controls.
• Some of these risks can be totally avoided and some others can be
shifted to insurance companies. But risks on account of changes in
prices cannot very easily be shifted, eliminated or reduced.
7. Standardisation and Grading:
• Some major problems of marketing can be tackled with the help of
standardization and grading.
• Standardisation is the process of setting up standards to
manufacture products. The standard is a constant physical
characteristic that gives uniformity to a group of products.
• It is determined on the basis of color, weight, quality and other
special or general features of a product. Grading is a part of
standardization.
• It is the process of sorting out goods into a number of grades or
classes in accordance with quality and size.
• Grading helps in comparing the quality and price of various
commodities, especially agricultural products and raw materials.
8. Market information:
• Any information that is required to improve the market is called
the market information. It provides a marketer with everything he
wants to know.
• In marketing, a marketer has to face a lot of problems.
• He can solve those problems only by careful interpretation of the
available data.
• A knowledge marketer can find the customers tastes and
preferences with the help of marketing information and its proper
analysis. This has paved the way for marketing research which is
now an independent branch of marketing.
 Marketing Mix
• Marketing Mix - A mixture of several ideas and plans followed by a
marketing representative to promote a particular product or brand
is called marketing mix.
• Several concepts and ideas combined together to formulate final
strategies helpful in making a brand popular amongst the masses
form marketing mix.
Elements of Marketing Mix
• The elements of marketing mix are often called the four P’s of
marketing.
• Product
• Goods manufactured by organizations for the end-users are
called products.
• Products can be of two types - Tangible Product and
Intangible Product (Services)
• An individual can see, touch and feel tangible products as
compared to intangible products.
• A product in a market place is something which a seller sells to the
buyers in exchange of money.
• Price
• The money which a buyer pays for a product is called as price of
the product.
• The price of a product is indirectly proportional to its availability in
the market. Lesser its availability, more would be its price and vice
a versa.
• Retail stores which stock unique products (not available at any
other store) quote a higher price from the buyers.
• Place
• Place refers to the location where the products are available and
can be sold or purchased. Buyers can purchase products either
from physical markets or from virtual markets.
• In a physical market, buyers and sellers can physically meet and
interact with each other whereas in a virtual market buyers and
sellers meet through internet.
• Promotion
• Promotion refers to the various strategies and ideas implemented
by the marketers to make the end - users aware of their brand.
Promotion includes various techniques employed to promote and
make a brand popular amongst the masses.
• Promotion can be through any of the following ways:
• Advertising
• Print media, Television, radio are effective ways to entice
customers and make them aware of the brand’s existence.
• Billboards, hoardings, banners installed intelligently at strategic
locations like heavy traffic areas, crossings, railway stations, bus
stands attract the passing individuals towards a particular brand.
• Taglines also increase the recall value of the brand amongst the
customers.
• Word of mouth
• One satisfied customer brings ten more customers along with him
whereas one dis-satisfied customer takes away ten more
customers. That’s the importance of word of mouth. Positive word
of mouth goes a long way in promoting brands amongst the
customers.
 Product life cycle (PLC)
• Product life cycle (PLC) Like human beings, products also
have a life-cycle. From birth to death, human beings pass
through various stages e.g. birth, growth, maturity, decline
and death.
• A similar life-cycle is seen in the case of products. The
product life cycle goes through multiple phases, involves
many professional disciplines, and requires many skills, tools
and processes.
• Product life cycle (PLC) has to do with the life of a product in
the market with respect to business/commercial costs and
sales measures. To say that a product has a life cycle is to
assert three things:
• Products have a limited life, Product sales pass through
distinct stages, each posing different challenges,
opportunities, and problems to the seller,
Product life cycle (PLC)
• Products require different marketing, financing, manufacturing,
purchasing, and human resource strategies in each life cycle stage.
• The four main stages of a product's life cycle and the accompanying
characteristics are:
• Market Introduction Stage
1. costs are very high
2. slow sales volumes to start
3. little or no competition
4. Demand has to be created
5. customers have to be prompted to try the product
6. makes no money at this stage
• Growth Stage
1. costs reduced due to economies of scale
2. sales volume increases significantly
3. profitability begins to rise
4. public awareness increases
5. competition begins to increase with a few new players in
establishing market
6. increased competition leads to price decreases
• Maturity Stage
1. costs are lowered as a result of production volumes increasing and
experience curve effects
2. sales volume peaks and market saturation is reached
3. increase in competitors entering the market
4. prices tend to drop due to the proliferation of competing products
5. brand differentiation and feature diversification is emphasized to
maintain or increase market share
6. Industrial profits go down
• Saturation and decline stage
1. costs become counter-optimal
2. sales volume decline or stabilize
3. Prices, profitability diminish
4. Profit becomes more a challenge of production/distribution
efficiency than increased sales
 ADVERTISING

• The American Marketing Association defines advertising as “any

paid form of non-personal presentation and promotion of ideas,
goods and services by an identified sponsor.”
• Advertising is non-personal as it is not directed to any single
individual.
• Secondly, the sponsor i.e. the manufacturer or producer is
identified as his name and address is always contained in an
advertisement and he also bears all the cost involved in the
process.
• Objectives of Advertising:
i. To educate customers
• Can you remember the advertisement of Dandi Namak on
television? In this advertisement it is said that Dandi Namak is
good for health as it contains Iodine.
• This message educates you that iodine is good for health and Dandi
Namak contains iodine.
ii. To create demand for new product
• You read in newspaper that a new type of pen called ‘Gel pen’ is
introduced in the market, which is very economical and convenient
in writing. This motivates you to buy the said pen.
• Similarly, many students like you shall also buy gel pen after coming
to know about it through advertisement. This will create a demand
for the new product launched in the market.
iii. To retain existing customers
• You might remember that Nirma washing powder was a very
popular detergent. But, after Wheel powder came to the market
the sale of Nirma suddenly decreased.
• Then the Manufacturers of Nirma improved the product and
advertised about the same in different Media.
• After knowing this the persons who were earlier using Nirma did
not switch over to Wheel and continued using Nirma.
• In this manner Nirma sustained its existing demand. Thus,
advertising helps the manufacturers not only to create a demand
for a new product but also to retain the existing customers.
iv. To increase sales
• We have learnt that advertising creates demands for new products
and sustains the demand of old one. Thus, with increase in
demand, the sale of the product also increases.
v. To assist salesman
• In most advertisements the salient features of a product, its
qualities and its uses are expressed in detail. This assists a
salesman to sell the product quickly without spending time in
explaining and convincing the customer.
 Media of Advertising
• The advertisements are communicated by using some media like,
newspaper, journals, radio, television, etc.
(A) Print Media:
• Print media is a very commonly used medium of advertising by
businessman. It includes advertising through newspaper,
magazines, journals, etc. and is also called press advertising.
1. Newspapers
• You must have read Newspapers. In our country newspapers are
published in English, Hindi and in other regional languages. These
are the sources of news, opinions and current events. In addition,
Newspapers are also a very common medium of advertising.
• The advertiser communicates his message through newspaper
which reaches to crores of people.
Advantages
• Advantages of Newspaper Advertising are as below:
i. Newspapers normally have wide circulation and a single
advertisement in the newspaper can quickly reach to a large number
of people.
ii. The cost of advertising is relatively low because of wide publication.
iii. Generally newspapers are published daily. Thus, the same
advertisement can be repeated frequently and remind reader
everyday.
iv. The matter of advertisement can be given to newspapers at a very
short notice. Even last minute changes in the content are also
possible. This makes advertising quite flexible.
Limitations
• Newspaper advertising also suffers from some limitations as
mentioned below:
i. Newspapers are read soon after they are received and then are kept
generally in some corner of the houses. After 24 hours we get a fresh
newspaper and this makes the life of the newspaper short.
ii. People read newspapers mainly for news and pay casual attention
to advertisement.
iii. Illiterate persons can not read and thus, newspaper advertising
does not benefit them.
2. Periodicals
Periodicals are publications which come out regularly but not on a
daily basis. These may be published on a weekly, fortnightly, monthly,
bimonthly, quarterly or even yearly basis.
• For example you must have come across magazines and journals
like Onlooker, India Today, Frontline, Yojana, Swagat, Femina, etc.
published regularly in English, Grihasobha, Nandan and Champak
in Hindi.
Advantages
i. Periodicals have a much longer life than newspapers. These are
preserved for a long period to be referred in future or read at leisure
or read again, whenever required.
ii. Periodicals have a selected readership and so advertisers can know
about their target customers and accordingly selective
advertisements are given.
For example, in a periodical like Femina, which is a magazine for
women, advertisements related to products to be used only by males
are rarely published. However, manufacturers of products and
services to be used by females prefer to give advertisement in this
magazine.
• Limitations
i. Advertising in periodicals is costlier.
ii. The number of people to whom the advertisements reach are small
in comparison to Newspapers.
iii. The advertisement materials are given much in advance; hence last
minute change is not possible. This reduces flexibility.
(B) Electronic Media:
• This is a very popular form of advertising in the modern day
marketing. This includes Radio, Television and Internet. Let us look
into detail about these.
1. Radio Advertising
• All of us are aware about a radio and must have heard
advertisements for various products in it. In radio there are short
breaks during transmission of any programme which is filled by
advertisements of products and services. There are also popular
programmes sponsored by advertisers.
Advantages
(i) It is more effective as people hear it on a regular basis.
(ii) It is also useful to illiterates, who can not read and write.
(iii) There are places where newspapers reading may not possible, but
you can hear radio. For example, you can hear radio while traveling
on road or working at home; but you can not read newspaper.
Similarly, while driving you can hear a radio but cannot read a
newspaper.
Limitations
(i) A regular listener may remember what he has heard. But,
occasional listeners tend to forget what they have heard in Radio.
(ii) The message that any advertisement wants to communicate may
not be proper as there is no chance to hear it again immediately.
There may be some other disturbances that distort communication.
(iii) In comparison to Television, Radio is less effective as it lacks visual
impact.
2. Television Advertising
• With rapid growth of information technology and electronic media,
television has topped the list among the media of advertising.
• TV has the most effective impact as it appeals to both eye and the
ear. Products can be shown, their uses can be demonstrated and
their utilities can be told over television.
• Just like radio, advertisements are shown in TV during short breaks
and there are also sponsored programmes by advertisers.
Advantages
(i) It is most effective as it has an audio-visual impact.
(ii) With catchy slogans, song and dance sequences, famous
personalities exhibiting products, TV advertising has a lasting impact.
(iii) With varieties of channels and programmes advertisers have a lot
of choice to select the channel and time to advertise.
(iv) With regional channels coming up any person even illiterates can
watch the advertisements and understood it by seeing and hearing.
Limitations
(i) TV advertisements are usually expensive to prepare as well as
to telecast
(ii) With almost every manufacturer trying to communicate their
message through TV advertising the impact among the viewers
is also reducing. Now-a-days people are switching on channels
whenever there is a commercial break.
3. Internet
• Infact it is the latest method of communication and gathering
information. If you have a computer and with an access to
internet you can have information from all over the world
within a fraction of second.
• Through internet you can go to the website of any
manufacturer or service provider and gather information.
• Sometimes when you do not have website addresses you take
help of search engines or portals. In almost all the search
engines or portals different manufactures or service providers
advertise their products.
Advantages
(i) Information from all over the world is made available at the
doorsteps.
(ii) User can see the advertisement at their own time and as per their
requirement.
Limitations
(i) It is not accessible without a computer.
(ii) It is not very suitable for general public.
(iii) It is not suitable for illiterate and those having no knowledge about
the operation of Internet.
(C) Other Media:
1. Hoardings
• While moving on roads you must have seen large hoardings placed
on iron frames or roof tops or walls.
• These are normally boards on which advertisements are painted or
electronically designed so that they are visible during day or night.
The advertisers have to pay an amount to the owners of the space,
where the hoardings are placed
2. Posters
• Poster are printed and posted on walls, buildings, bridges etc to
attract the attention of customers.
• Posters of films which are screened on cinema halls are a common
sight in our country.
3. Vehicular displays
• You must have seen advertisements on the public transport like
buses, trains, etc. Unlike hoardings these vehicles give mobility to
advertisements and cover a large number of people
4. Gift Items from manufacturers
• When you buy a cycle, the shopkeeper sometimes gives you a key
ring to hold the cycle key.
• Some jewelers give small purse or boxes when you buy jewellery.
• Sometimes manufacturers give diaries, calendars, purse, etc. to
buyers and prospective customers.
• In all these items the name, address and telephone number of the
manufacturer, or trader or service provider as well as descriptions
of the products in which they deal in are printed.
 Sales Promotion
• “Those marketing activities other than personal selling advertising
and publicity that stimulate consumer purchasing and dealer
effectiveness such as display shows and exhibitions,
demonstrations and various non-recurrent selling efforts not in the
ordinary routine.”
Objectives of Sales Promotion:
• The basic objectives of sales promotion are:
i) To introduce new products
• To induce buyers to purchase a new product, free samples may be
distributed or money and merchandise allowance may be offered
to business to stock and sell the product.
ii) To attract new customers
• New customers may be attracted through issue of free samples,
premiums, contests and similar devices.
iii) To induce present customers to buy more
• Present customers may be induced to buy more by knowing more
about a product, its ingredients and uses.
iv) To help firm remain competitive
• Sales promotions may be undertaken to meet competition from a
firm.
v) To increase sales in off season
• Buyers may be encouraged to use the product in off seasons by
showing them the variety of uses of the product.
Types of Sales Promotion:
• Many sales promotion tools are available to accomplish these
objectives at the consumer level, and at the middle men level. For
the purpose of convenience, the types of sales promotion methods
may be grouped under two categories:
1. Types of sales promotion directed at consumers.
2. Types of sales promotion directed at dealers and distributors.
Consumer Promotion Tools:
• The main consumer promotion tools include samples, coupons;
cash refund offers, price packs, premiums, prizes, patronage
rewards, free trials, product warranties, tie-ins, and point of
purchase displays and demonstrations.
Samples
• Samples are offers of a free amount or trial of a product to
consumers. The sample might be delivered door to door sent in
the mail, picked up in a store, found attached to another
product or featured in an advertising offer.
• Sampling is the most effective and most expensive way to
introduce a new product.
Coupons
• Coupons are certificates entitling the bearer to a stated saving
on the purchase of a specific product. Coupons can be mailed,
enclosed in or on other products or inserted in magazine and
newspaper advertisements.
• Coupons can be effective in stimulating sales of a mature brand
and inducing early trial of a new brand.
 Cash Refund Offers or Rebates
• These are like coupons except that the price reduction occurs
after the purchase rather than at the retail shop.
• The consumer sends a specified “proof of purchase” to the
manufacturer, who in turn ‘refunds’ part of the purchase price
by mail.
• Cash refunds have been used for major products such as
automobiles as well as for packaged goods.
Price Packs
• These are offers to consumers of savings off the regular price
of a product, flagged on the label or package. They may take
the form or a reduced-price pack which is single packages sold
at a reduced price (such as two for the price of one) or a
banded pack, which is two related products banded together
(such as a tooth brush and tooth paste).
• Price packs are very effective in stimulating short term sales,
even more than coupons.
• Premiums or Gifts
• These are merchandise offered at a relatively low cost or free as an
incentive to purchase a particular product.
• Sometimes the package itself is a reusable container may serve as a
premium
• A self-liquidating premium is an item sold below its normal retail
price to consumers who request it.
Prizes
• These are offers of the chance to win cash, trips or merchandise as a
result of purchasing something. Pepsi-cola offered the chance to win
cash by matching numbers under the bottle cap with numbers
announced on television.
• Sometimes the prize is a person, offering the winner either cash or
dinner with actor Sharuk Khan.
Patronage Awards
• These are values in cash or in other forms that are proportional to
one’s patronage of a certain vendor or group of vendors.
• Most airlines offer “frequent flyer plans” providing points for miles
traveled that can be turned in for free airline trips.
• Cooperatives pay their members dividends according to their
annual patronage. Le Meridian adopted an “honoured guest” plan
that awards points for users of their hotels.
Free Trials
• Free trails consist of inviting prospective purchasers to try the
product without cost in the hope that they will buy the product.
Thus, often we see, auto dealers encourage free test drives to
stimulate purchase interest.
Product Warranties
• These are an important tool, especially as consumers become more
quality sensitive. When My TVS offered a two year car warranty,
substantially longer than other competitors’ customers took notice.
They inferred that My TVS quality must be good or else the
company would be in deep trouble.
• Companies must carefully estimate the sales-generating value
against the potential costs of any proposed Warranty
programme.
Tie-in Promotions
• These are becoming increasingly popular. In a tie in promotion
two or more brands or companies team up on coupons,
refunds and contests to increase their pulling power.
Companies pool funds with the hope of broader exposure,
while several sales forces push these promotions to retailers,
giving them a better shot at extra display and ad space.
Point-of-Purchase Displays
• These take place at the point of purchase or sale. Display of
visible mark or product at the entrance of the store is an
example. Unfortunately many retailers do not like to handle
the hundreds of displays, signs and posters they receive from
manufacturers.
• Hindustan Lever often use this tool to promote its products in
the retail market.
Product Demonstrations
• Products are being shown in action. Consumers can visit the store
and see the usage of product in live action so that doubts of the
consumers can be clarified in the store itself.
• When a new product is introduced in the market, the sales
promotional tool is often used. For example ultra modern grinder
mixie being used by the company to demonstrate its speciality
than the other product.