Market

The term “market” originates from the Latin word “Marcatus” which means “a place where business is

conducted.” A layman regards market as a place where buyers and sellers personally interact and

finalize deals.

Market in Marketing Perspective

According to Philip Kotler a market from a marketer’s point of is “collection of customers”.

According to Perreault and McCarthy, market is defined as a group of potential customers with similar

needs or wants who are willing to exchange something of value with sellers offering various goods

and/or services to satisfy those needs or wants. This can be done face-to-face at some physical location

(for example, a farmer’s market) or it can be done indirectly through a complex network that links

middlemen, buyers and sellers living far apart. Depending upon what is involved, there are different

types of markets which deals with products and/or services such as

(1) Consumer Market: In this market the consumers obtain what they need or want for their personal

or family consumption. This market can be subdivided into two parts—fast moving consumer goods

market from where the consumers buy the products like toothpaste, biscuits, facial cream etc. and

services like internet, transportation etc. Another is durables market from where, the consumers buy
the products of longer life like motorcycles, cars, washing machines etc. and services like insurance

cover, fixed deposits in the banks and non-banking financial companies etc.

(2) Industrial/Business Market: In this market, the industrial or business buyers purchase products like

raw materials (iron ore, coke, crude oil etc.), components (tyres, picture tubes, micro-processors etc),

finished products (packaging machine, generators etc.), office supplies (computers, pens, paper etc.)

and maintenance and repair items (grease, lubricating oil, broom etc.). Apart from products, now-a-days

due to outsourcing the industrial buyers also require a number of services like accounting services,

security services, advertising, legal services etc. from the providers of these services.

(3) Global Market: it is integration of international markets. The world is rapidly moving towards

borderless society thanks to information revolution and the efforts of WTO to lower the tariff and

nontariff barriers. The product manufacturers and service providers are moving in different countries to

sustain and increase their sales and profits. Although the global companies from the developed

countries are more in number (McDonald’s, Ford Motors, IBM, Sony, Citi Bank etc.); the companies from

developing countries are also making their presence felt in foreign countries

(4) Non-Profit and Governmental Markets: Non-profit organizations such as charitable trusts,

universities, churches, temples, government agencies etc. can be collectively called as Non-Profit and

Governmental Markets. Companies selling their products to non-profit and governmental markets need

to price carefully, because these buyers have limited purchasing power.

Marketing

Definitions:

1. Marketing is the process that seeks to influence voluntary exchange transactions between a

customer and a marketer. —William G. Zikmund and Michael d’Amico

 2. Marketing is the process of discovering and translating consumer needs and wants into

products and services, creating demand for these products and services and then in turn

expanding this demand. —H.L. Hansen.

3. Marketing is the business process by which products are matched with markets and through

which transfer of ownership are affected. —Edward W. Cundiff

4. According to Philip Kotler “Marketing is a societal process by which individuals and groups

obtain what they need and want through creating, offering and freely exchanging products and

services of value with others”.

5. American Marketing Association offers a formal definition: “Marketing is an organizational

function and a set of processes for creating, communicating, and delivering value to customers

and for managing customer relationships in ways that benefit the organization and its

stakeholders”.

Nature of Marketing

Nature of Marketing evolves from its multidisciplinary coverage of activities which is as follow:

1. Customer Oriented: Marketing is customer oriented. Marketing is the process of finding needs and

wants of customers and satisfying those needs profitably.

2. Dynamic Process: Marketing is an ongoing activity which does not stop at any step. After finding

customer’s needs and wants it needs to develop such products or services which can satisfy these needs

and after this there is need to do promotion, distribution, etc the process goes on.

3. Core Functional Area: Marketing is the core functional area of modern day organizations and is

the driving force behind every organization. Marketing provides the vital input for corporate planning

which in turn dictates the plans for other functional areas. Marketing focuses on achieving customer
satisfaction through fulfilling their needs. Satisfied customers are likely to stay with organization, as a

result organization remain in business.

4. Integrating: Marketing integrates all the departments of an enterprise be it production, finance, IT,

HR, etc. Marketing is interlinked with other functional areas of the organization. Marketing people

collects the information regarding (customer’s requirements and pass it to) the research and

development and engineering people who‘ll turn the customer requirements into the product or service

features. The finance people help in obtaining the money for the development of new product, and also

help in arriving at the final price decision. The human resource department provides the necessary

manpower for carrying out various activities not only in the marketing area but also in the other

functional areas.

5. Creative: Marketing is creative in nature, it looks out for new ideas, views and activities and solves

problems or avail opportunities in a creative way.

Scope of Marketing

1. Marketing is typically seen as the task of creating, promoting and delivering goods and services
to consumers and businesses. In fact, marketing people are involved in marketing 10 types of
entities:
 I. Goods—
Good is defined as something tangible that can be offered to market to satisfy a need or want.
Physical goods constitute the bulk of most countries production and marketing effort. In a
developing country like India fast moving consumer goods (shampoo, bread, ketchup, cigarettes,
newspapers etc.) and consumer durables (television, gas appliances, fans etc.) are produced and
consumed in large quantities every year.
II. Services—
A service can be defined as any performance that one party can offer to another that is
essentially intangible. Its production may or may not be tied to a physical product. Services
include the work of hotels, airlines, banks, insurance companies, transportation corporations
etc. as well as professionals like lawyers, doctors, teachers etc. Many market offerings consist of
a variable mix of goods and services. For example at a fast food restaurant, the customer
consumes both a product and a service.
III. Experiences—
By mixing several services and goods, one can create stage and market experiences. For
example water parks, zoos, museums etc. provide the experiences which are not the part of
routine life. There is a market for different experiences such as climbing Mount Everest or
Kanchanjunga, travelling in Palace on Wheels, river rafting etc.
IV. Events—
Marketers promote time–based, theme-based or special events such as Olympics, company
anniversaries, sports events (Samsung Cup—India Pakistan Cricket Series), artistic performances
(Lata Mangeshkar live concert, Jagjit Singh live concert), trade shows (International Book Fair at
Pragati Maidan, Automobile fair), award ceremonies (Filmfare awards, Screen awards), beauty
contests (Miss World, Miss Universe, Miss India, Miss Chandigarh).
V. Persons—
Artists, musicians, high profile lawyers and other professionals can also be marketed. Celebrity
marketing has become a major business. Years ago, someone seeking fame would hire a press
agent to plant stories in newspapers and magazines. Today most of cricket players like Sachin
Tendulkar, Saurav Ganguly, Virat Kohali etc. are drawing help from celebrity marketers to get
the maximum benefit.
VI. Places—
Places–cities, states, regions and whole nations—compete actively to attract tourists, factories,
company headquarters and new residents. India and China are competing actively to attract
foreign companies to make their production hub. Cities like Bangalore, Hyderabad and Gurgaon
are promoted as centre for development of software. Bangalore is regarded as software capital
of India and Hyderabad is emerging as the hub of biotechnology industry. The government of
India is marketing India as a tourist destination through the “Incredible India” advertising
campaign.
VII. Properties—
Properties are intangible rights of ownership of either real property (real estate) or financial
property (share and debt. instruments). Properties are bought and sold, and this requires
 marketing effort. Property dealers in India work for property owners or seekers to sell or buy
plots, residential or commercial real estate.
VIII. Organizations—
Organizations actively work to build a strong, favorable image in the mind of their publics.
Companies can gain immensely by associating themselves with the social causes. Universities
and colleges are trying to boost their image to compete successfully for attracting the students
by mentioning their NAAC grades in the advertisements and information brochures.
IX. Information—
Information can be produced and marketed as a product. This is essentially what schools,
colleges and universities produce and distribute at a price to parents, students and
communities. News papers like Times of India and Magazines such as India Today provide
information about the things happening around us.
X. Ideas—
Film makers, marketing executives and advertising continuously look for a creative spark or an
idea that can improve their work. Idea here means the social cause or an issue that can change
the life of many.

2. Channels of distribution

The pathway through which the goods move from producer to consumer is the channel of distribution.
It includes a number of intermediaries like wholesaler, retailers etc.

3. Physical distribution

The physical movement of the goods from producer to consumer is physical distribution. It includes
transportation, warehouses, inventory control, etc.

4. Promotional decisions

Being an excellent product is not sufficient to get sold if customers are unaware of it, therefore there is
need to promote it properly. The basic objective of promotion is to inform the market about the product
features and its availability.

5. Pricing decisions

This is an important element of marketing to generate revenue. Factors such as cost, competitor’s price,
pricing policies, purchasing power of customers are generally taken into consideration for setting up the
price.

6. Environmental analysis

The various micro and macro factors should be analyzed to develop the understanding about the
strength, weaknesses, opportunities, and threats, for an organization. This understanding helps in
formulating the marketing strategies.
 7. Marketing research

As marketing starts from the need assessment of customers, marketing research helps to find out the
relevant information from market through a systematic study.

8. Consumer behavior

Marketers are eager to analyze the patterns of taste, preferences and purchasing habits of consumers,
in order to develop a better understanding of consumers to satisfy them.

9. Feedback from customers

For successful marketing of goods it is essential that the marketer obtains the required feedback from
customers. A proper feedback mechanism should be developed so that reasons for failure or less
satisfaction may be identified and improvements in the products be made.

10. Responsibility towards society

Business and society are interrelated and interdependent. It derives much needed inputs from society.
These social activities are the part of marketing as the units have to protect and promote the interest of
the society.

Importance of Marketing
(A) To the Society

1. Improves living standards: It is instrumental in improving the living standards. Marketing

continuously identifies the needs and wants satisfying products or services which can propel the
people to do an extra to earn money which can be exchanged for the desired products or
services. Thus marketing by indirectly increasing the earning ability will help in improving the
standard of living of the customers.
2. Generates gainful employment opportunities: Marketing generates gainful employment
opportunities both directly and indirectly. Directly, marketing provides employment to the
people in various areas like in advertising agency, in the company sales force, in the distributor’s
sales force, in public relation firms etc. Indirectly, marketing is responsible for selling the
offerings of the organization. If the organization’s products or services are able to satisfy the
customers, then customers will demand organization’s products or services again and again,
thereby sustaining the production activities. Thus marketing indirectly provides employment in
other functional areas like finance, production, research and development, human resource
management etc.
3. Helps in stabilizing economic condition. Marketing helps in stabilizing economic condition in
the sense that marketing helps in selling the products or services, which keeps the various
organizations functioning and gainful employment is available to the people. With the earnings
from the employment, the people will purchase the products and/or services, thus sustaining
 the demand. This will happen in all the industries, then gainful employment will be available
throughout the time period and economy will remain stable, healthy and vibrant.

(B) To the firms/companies

1. Generates Profit: Marketing sustains the company by bringing in profits. Marketing is the
only activity that brings revenue to the firm, whereas other activities incur expenditure. If the company’s
products or services satisfy the customer’s requirements, then the satisfied customers will keep the
company in business by repeat orders and recommending other profitable customers. Thus marketing is
the driving force behind a successful company.

2. Source of new ideas: Marketing is the source of new ideas. New product or service ideas usually
come from the research laboratories, employees or from marketplace. It’s the marketing people who
are in continuous touch with the consumers and marketing intermediaries. Interaction with them helps
in identifying strong and weak points of company’s product or services as well as competitor’s products
or services. This interaction can also help in identifying unmet needs or wants of the consumers and the
features, consumers are looking into the products or services which can satisfy those unmet needs or
wants. Thus marketing can help immensely in identifying new product or service ideas which can help in
sustaining the firm’s operations. Successful companies, identify customer’s requirements early and
provides the solution earlier than the competitors.

3. Provides direction for the future: Marketing provides direction for the future course. The marketing
oriented company continuously brings out new product and service ideas which provide the direction
for corporate strategic planning for longer time horizon.

(C) To the Customers

1. Fulfills the need: Marketing identifies those needs or wants which were not satisfied and helps in
developing the product or service which can satisfy those unmet needs or wants of the people. For
example a number of drugs were invented to treat various physical problems of the people. Again the
low cost formulations were developed to treat the people who are unable to afford the expensive drugs.

2. Reducing the price of products: Marketing helps in popularizing the product or service which attracts
the customers as well as competitors towards that product or service categories. Due to increase in
demand, the manufacturing capacity increase which brings down per unit fixed costs of the product or
service. Furthermore increase in competition led to decrease in the prices charged by the firm. Thus the
growing demand and increasing competition both help in bringing down the price of the product or
service.

3. Convenience in availability of products: Marketing is also responsible for making products available
to the customers at suitable places. Marketers workout on distribution channels and delivery
mechanisms to take their products to customers.
 Marketing Management
According to Philip Kotler, “Marketing Management is the art and science of choosing target markets
and getting, keeping, and growing customers through creating, delivering, and communicating superior
customer value”.

The American Marketing Association offers the following definition:

Marketing Management is the process of planning and executing the conception, pricing, promotion,
and distribution of ideas, goods, services to create exchanges that satisfy individual and organizational
goals.

Core Concepts of Marketing

Marketing can be further understood by defining several of its core concepts.

1. Needs, Wants and Demand

Need: It is state of deprivation of some basic satisfaction. eg.- food, clothing, safety, shelter.

Want: Desire for specific satisfier of need. eg.- Indians needs food – want rice or
chapati. Americans needs food- want burger or French fries.

Demand: Want for a specific product backed up by ability and willingness to buy.

eg.- Need – transportation.

Want – Car (say, Mercedes, Maruti, Audi)……but able to buy only Maruti. Therefore, demand is Maruti.

Marketers cannot create needs. Needs preexists. Marketers can influence wants. This is done in
combination with societal influencers.

2. Product or Offering

People satisfy their needs and wants with products. A product is any offering that can satisfy a need or
want. The major types of basic offerings are goods, services, experiences, events, persons, places,
properties, organizations, information, and ideas.

3. Value and Satisfaction:

The product or offering will be successful if it delivers value and satisfaction to the target buyer. The
buyer chooses between different offerings on the basis of which is perceived to deliver the most value.
We define value as a ratio between what the customer gets and what he gives. The customer gets
benefits and assumes costs. The benefits include functional benefits and emotional benefits. The costs
include monetary costs, time costs, energy costs, and psychic costs.

Thus value is given by :

 Value = Benefits/ Costs

Benefits = Functional benefits + emotional benefits

Costs= monetary costs + time costs + energy cost + psychic costs

Value=Functional benefits + emotional benefits/ monetary costs + time costs + energy

cost + psychic costs

4. Exchange & Transaction

Exchange: – The act/ process of obtaining a desired product from someone by offering something in
return. For exchange potential to exist, the following conditions must be fulfilled.

1. There are at least two parties.

2. Each party has something that might be of value to the other party.
3. Each party is capable of communication and delivery
4. Each party is free to accept or reject the exchange offer.
5. Each party believes it is appropriate or desirable to deal with the other party

Transaction: – Event that happens at the end of an exchange. Exchange is a process towards an
agreement. When agreement is reached, we say a transaction has taken place.

5. Target Markets, Positioning, and Segmentation

Not everyone likes the same cereal, restaurant, college, or movie. Therefore, marketers start by dividing
the market into segments. They identify and profile distinct groups of buyers who might prefer or
require varying product and service mixes by examining demographic, psychographic, and behavioral
differences among buyers. After identifying market segments, the marketer decides which present the
greatest opportunities— which are its target markets. For each, the firm develops a market offering that
it positions in the minds of the target buyers as delivering some central benefit(s). Volkswagen develops
its cars for buyers to whom safety is a major concern, positioning its vehicles as the safest a customer
can buy.

6. Marketing Channels

To reach a target market, the marketer uses three kinds of marketing channels.

I. Communication Channels- Communication channels deliver and receive messages from target
buyers and include newspapers, magazines, radio, television, mail, telephone, and the Internet.
Beyond these, firms communicate through the look of their retail stores and Web sites and
other media. Marketers are increasingly adding dialogue channels such as e-mail, blogs, and toll-
free numbers to familiar monologue channels such as ads.
 II. Distribution Channels- The marketer uses distribution channels to display, sell, or deliver the
physical product or service(s) to the buyer or user. These channels may be direct via the
Internet, mail, or mobile phone or telephone, or indirect with distributors, wholesalers,
retailers, and agents as intermediaries.
III. Service Channels- To carry out transactions with potential buyers, the marketer also uses
service channels that include warehouses, transportation companies, banks, and insurance
companies. Marketers clearly face a design challenge in choosing the best mix of
communication, distribution, and service channels for their offerings.

7. Supply Chain

The supply chain is a longer channel stretching from raw materials to components to finished products
carried to final buyers. Companies work on managing good relations with supply chain partners and flow
of information to get timely availability of product to end customer without increasing the total cost.

8. Competition

Competition includes all the actual and potential rival offerings and substitutes a buyer might consider
e.g. in India, a customer looking for a two wheeler automobile will find TVS, Baja, Hero etc. as a major
competitor, striving to satisfy their customers to overtake competitors.

9. Marketing Environment

The marketing environment consists of the task environment and the broad environment.

The task environment includes the actors engaged in producing, distributing, and promoting the
offering. These are the company, suppliers, distributors, dealers, and target customers. In the supplier
group are material suppliers and service suppliers, such as marketing research agencies, advertising
agencies, banking and insurance companies, transportation companies, and telecommunications
companies. Distributors and dealers include agents, brokers, manufacturer representatives, and others
who facilitate finding and selling to customers.

The broad environment consists of six components: demographic environment, economic environment,
social-cultural environment, natural environment, technological environment, and political-legal
environment. Marketers must pay close attention to the trends and developments in these and adjust
their marketing strategies as needed.
 Company (Marketer) Orientation/Philosophies toward the Market (Marketing
Concept/ Marketing Philosophies)
There are various philosophies which have been guiding marketer efforts toward market, but following
are main five philosophies.

1. Production Concept
2. Product Concept
3. Selling Concept
4. Marketing Concept (Modern Marketing Concept)
5. Societal Marketing Concept

1. Production Concept

The production concept is one of the oldest concepts in business. It holds that consumers prefer
products that are widely available and inexpensive. Managers of production-oriented businesses
concentrate on achieving high production efficiency, low costs, and mass distribution.

This orientation makes sense in developing countries, where consumers are more interested in
obtaining the product than in its features. It is also used when a company wants to expand the market.

2. Product Concept

The product concept proposes that consumers favor products offering the most quality, performance,
or innovative features.

Managers in these organizations focus on making superior products and improving them over time.
They assume that buyers admire well-made products and can appraise quality and performance. The
concept is widely applicable in electronics and mobile handsets.

3. Selling Concept

The selling concept proposes that customers, be individual or organizations will not buy enough of the
organization’s products unless they are persuaded to do so through selling effort.

This approach is applicable in the cases of unsought goods like life insurance, vacuum cleaner, fire
fighting equipments including fire extinguishers. These industries are seen having a strong network of
sales force. This concept is applicable for the firms having over capacity in which their goal is to sell
what they produce than what the customer really wants.

4. Marketing Concept

The marketing concept emerged in the mid-1950s as a customer-centered, sense-and-respond

philosophy. The job is to find not the right customers for your products, but the right products for your
customers.
Marketing concept focuses on to achieve customer satisfaction by fulfilling the need of customers. It
starts from need identification of customers, then marketer searches best ways to fulfill it, and finally it
ends at achievement of customer satisfaction.

In other words it can be said that, the marketing concept holds that the key to achieving organizational
goals is being more effective than competitors in creating, delivering, and communicating superior
customer value to your target markets.

5. Societal Marketing Concept

Society

(Human welfare)

Societal
Marketing
Concept
Consumers Company

(Need/Want (Profits)
satisfaction)

The societal marketing concept calls upon marketers to build social and ethical considerations into their
marketing practices. They must balance the often conflicting criteria of company profits, consumer want
satisfaction, and public interest.

The societal marketing concept holds that the organization’s task is to determine the needs, wants and
interests of target markets and to deliver the desired satisfactions more effectively and efficiently than
competitors in a way that preserves or enhances the consumer’s and the society’s well-being.
 Difference between Selling and Marketing

Selling Marketing

Marketing focuses on the needs of the

1 Selling focuses on the needs of the seller
customer
The firm makes a ‘total product offering’
The firm makes the product first and then
2 that will match and satisfy the identified
figures out how to sell it and make profit.
needs of the customer.
Seeks to quickly convert ‘products’ into Seeks to convert customer ‘needs’ into
3
‘cash’ ‘products’.

Puts efforts on creating, communicating,

4 Puts efforts on rigorous convincing
and delivering value to customer

5 Selling is push strategy Marketing is pull strategy

Difference between Traditional Marketing and Modern Marketing Concept

Traditional Marketing Modern Marketing

This concept starts with the product which This concept starts with finding the needs
1
is produced in the factories and wants of the target market

It stresses upon the product of the It stresses upon the needs and want of the
2
manufacturer customer

It focuses on the need and interest of the It focuses on the need and interest of the
3
producer customers

The objective is to maximize profit by The objective is profit but through

4
maximizing sales customer satisfaction
The objectives are achieved through
The objectives are achieved through
5 coordinated efforts for product, price,
selling and promotion generally
place and promotion
 Marketing Myopia
Marketing myopia was used in marketing by Theodore Levitt in his research paper published in 1960 in
the Harvard Business Review.

Marketing Myopia suggests that businesses will do better in the end if they concentrate on meeting
customers’ needs rather than on selling products.

The Myopic cultures, Levitt postulated, would pave the way for a business to fall, due to the short-sighted
mindset and illusion that a firm is in a so-called 'growth industry'. This belief leads to complacency and a
loss of sight of what customers want. It is said that these people focus more on the original product and
refuse to adapt directly to the needs and wants of the consumer.

To continue growing, companies must ascertain and act on their customers’ needs and desires, not bank
on the presumptive longevity of their products. In every case the reason growth is threatened, slowed or
stopped is not because the market is saturated. It is because there has been a failure of management. Some
commentators have suggested that its publication marked the beginning of the modern marketing
movement. Its theme is that the vision of most organizations is too constricted by a narrow understanding
of what business they are in.
One reason that short-sightedness is so common is that people feel they cannot accurately predict the
future. While this is a legitimate concern, it is also possible to use a whole range of business prediction
techniques currently available to estimate future circumstances as best as possible.
There is no such a thing as a growth industry. There are only companies organized and operated to create
and capitalize on growth opportunities. There are 4 conditions of the self-deceiving cycle:

1. The belief that growth is assured by an expanding and more affluent population.
2. The belief that there is no competitive substitute for the industry’s major product.
3. Too much faith in mass production and in the advantages of rapidly declining unit costs
as output rises.
4. Preoccupation with a product that lends itself to carefully controlled scientific
experimentation, improvement, and manufacturing cost reduction.