UNIT 11- MARKETING MANAGEMENT

Market:

● A place where the buyers and sellers meet and conduct buying and selling activities.
● In the traditional sense, the market means a place where buyers and sellers gather to enter into
transaction involving the exchange of goods and services but today business can be conducted
on telephone, through mail, internet etc.
● In modern marketing sense the term market has a broad meaning. It refers to a set of actual and
potential buyers of a product or service.
Marketer or seller:

● Customer is the seeker of satisfaction the marketer is the provider of satisfaction.

● Marketer can be a person or an organization that makes available the products or services and
offers them to the customer with an intention of satisfying the customer needs and wants.
Marketing:

● Marketing is a social process whereby people exchange goods & services for money or for
something of value to them.
Anything that is of value to the other can be marketed e.g.

1. Physical Products - T.V, Mobile phone etc.

2. Services - Insurance, education etc.
3. Person - Selection for different posts.
4. Place- visit - Agra, Taj Mahal, etc.
5. Events - Fashion show, Films, Festivals

Important features of Marketing:-

1. Needs and wants :

● Needs are the basic requirements like food, clothing and shelter
● Wants are the desires, the demand for specific goods like pizza, burger etc
● Marketing is satisfaction of the needs and wants of individuals and organizations
2. Creating a market offering :

● Complete offer for a product of service is developed.

● It is developed after analyzing needs of the buyer.
3. Customer value :

● Marketing is to create greatest benefit or value for the money.

● Marketer adds value to the product so that the customer decides to purchase it over the
competitor’s product.
4. Exchange mechanism :

● Marketing involves exchange of products / services for money / for something of value to them.
● Conditions to be satisfied for the exchange to take place are:
I. Involvement of 2 parties- buyer and seller
 II. Each of them is capable of offering something to other
III. Each of them has the ability to communicate with each other
IV. Each of them has the freedom to accept or reject each other’s offer.

Meaning and concept of Marketing management -

Marketing management means management of the marketing functions.-

It is the process of planning, organising, directing and controlling the activities related to marketing of
goods and services to satisfy customers' needs & achieve organisational goals.

Marketing management involves the following steps or activities:-

● Choosing a target market - e.g., a manufacturer may choose to make ready-made garments up to
the age of 5 years for children.
● Creating customers in target market - To increase the number of customers by analysing their
needs, wants etc.
● Creating superior value - To make the product better than competitor’s products for customers.
Functions of Marketing / Marketing activities

1. Gathering and analyzing market information:

● It is also called market research.
● A SWOT analysis of the organization is done.
● Decisions like what the customers want to buy, when they are likely to buy, in what
quantities do they buy, from where they buy etc. are decided.
2. Marketing planning :
● Marketing plans are developed to achieve the marketing objectives.
● Specific plan for increasing the level of production, promotion of the products etc and
specify the action programmes to achieve these objectives.
3. Product designing and development :
● Marketer must take decision like, what-product and which model / size to produce, to
decide the brand name, Packaging and the quality level so that customer needs are
satisfied.
● This is done to attract the target customers
4. Packaging / Labelling :
● It refers to designing the package for the product and putting label on the package.
● They both are the pillars of marketing.
● Packaging provides protection to the product and label describes the contents of the
product and other information required as per law.
5. Branding :
● Creating a distinct identity of the product from that of competitors e.g. Videocon
washing machine, Usha Fans, Lux Soap etc.
● Branding plays an important role in the success of the product
6. Customer support services:
 ● It relates to developing customer services like after sales service, handling customer
complaints etc.
● It helps to bring repeat sales and develop brand loyalty for the product
7. Pricing of product:
● It is the amount of money customers pay to purchase the product
● Factors like product cost, marketing strategies used etc are considered before deciding
the prices.
8. Promotion:
● It is creating an awareness/spreading information about the product, its features etc.
● Advertising, Sales Promotion, Personal Selling and Publicity are the methods of
promoting a product
9. Physical Distribution:
● It is distributing the product from place of production to place of consumption
● Decisions regarding channels of distribution to be used and physical movement of the
product are the two major decisions to be taken.
10. Transportation:
● It is physical movement of goods from one place to another.
● Nature of product, cost, reliability, speed of transport system is a few factors to be
considered before deciding an appropriate mode of transport.
11. Storage and warehousing:
● There is time gap between production and consumption of goods.
● In order to maintain a smooth flow of products in the market, there is a need for proper
storage of the products.
12. Standardization and grading:
● Standardization is producing goods with predetermined specifications of quality, price
etc.
● It ensures uniformity in the product.
● Grading is classifying the goods into groups on the basis of quality, size etc.
● It enables to charge higher price for high quality products.

Concepts & Philosophies of Marketing:-

1. Production concept :
● Profits could be maximized by producing products on a large scale, thereby reducing
average cost of production.
● Drawback: Customers do not always buy inexpensive products.
2. Product Concept :
● When the supply of products increases customers begin to prefer products of superior
quality and features.
● Therefore the focus shifted from quantity of production to quality of products.
3. Sales Concept :
 ● With the passage of time the marketing environment underwent future change of
quality and availability does not ensure survival and growth of the firm because of
competition to sell quality products.
● Therefore firms must undertake aggressive selling and promotion efforts to make
customer buy their products.
4. Marketing Concept :
● Implies that a firm can achieve its goals by identifying needs of the customer and
satisfying them better than the competitors.
● Customer satisfaction is the precondition for realising the firm's goal and objectives.
5. Societal Marketing Concept :
● Under this concept customer satisfaction is supplemented by social welfare.
● Some products bring harmful effect on environment so these should not be supplied.
● It pays attention to the social, ethical and ecological aspects of marketing.

Meaning and concept of Marketing Mix-

In orders to satisfy the needs and wants of its customer, every business firm must develop an
appropriate marketing mix.

Marketing Mix

Marketing mix refers to ingredients or the tools or the variables which the marketer mixes in order to
interact with a particular market.

Elements / 4 Ps of Marketing mix

1. Product mix: All the features of the product or service to be offered for sale.
2. Price Mix: Value (Money) in lieu of product / service received by seller from a buyer.
3. Promotion mix: Informing the customers about the products & persuading them to buy the
same.
4. Place Mix: Physical distribution: Various decisions regarding distribution of products.
● Channels of distribution: Whether wholesalers, retailers are to be used or not.
● Physical movement of the products from producer to consumers.
● Storage, transportation, managing inventory (stock) etc.

IP - PRODUCT MIX

Meaning and Concept of Product –

Product is anything that can be offered to a market to satisfy a want or need.

Product mix refers to a combination of various features relating to the product or service like quality,
size, range, package, warranty etc.
Product is bundle of utilities. It is purchased to provide satisfaction. There are 3 types of benefits a
customer looks for to satisfy from the purchase of the product. They are:

I. Functional benefit- the purpose for which it is produced

II. Psychological benefit- it should satisfy the prestige and esteem needs of the buyer
III. Social benefit- it is accepted by the society

PRODUCT MIX -Three components are - Branding, Packaging, Labelling

Branding – process of giving a name / a sign / a symbol etc to a product eg. : Pepsi Nike

● Brand- name, sign, symbol, and design used to identify the products
● Brand name- part of brand which is spoken eg: Pepsi, Nike
● Brand mark- part of brand which is recognized eg: tick mark of Nike
● Trade mark: brand which is registered in the eyes of law. No one in the country can use it.

Qualities of a good Brand Name:

● Simple and short: A brand name should be simple and short as Tata, Bata.
● Easily Pronounceable: A brand names should be easily pronounceable as Lux, Dalda.
● It must be suggestive. It should convey the products benefits and qualities e.g.
Hajmola-digestive etc
● It should be distinctive e.g. Ariel, Tide etc
● It should be adaptable to the packing or labeling requirements, to different advertising media
and different languages.
● It should be able to add new products to its line of products e.g. Maggie
● It should be able to get registered and protected legally.
● It should not get outdated.

Advantages of Branding:-

To Manufacturers:

1. Enables marking product differentiation:

● It helps a firm in distinguishing its product from its competitors.
2. Helps in Advertising and display programmes:
● It helps a firm to advertise and display its products and increase its sale.
3. Differential pricing:
● It enables a firm to charge different price for its products.
4. Ease in introduction of new product:
● A new product can get immediate and excellent sales if it is introduced under a known
brand name.
● E.g Maggie soups, tomato ketchup etc are popular because of brand name Maggie
already established.
To Customers:

1. Helps in product identification:

 ● It helps the customers to identify the product and also helps in repeat purchase of the
product.
2. Ensures quality:
● It helps to ensure a particular level of quality and helps to increase his satisfaction level
also.
3. Status symbol:
● Because of quality some brands become status symbol.
● It makes a customer feel proud and satisfied.

Packaging: Act of designing and producing the container or wrapper of a product. Good packaging often
helps in selling the product so it is called a silent salesman.

Levels of packaging

1. Primary package - refers to the product's immediate container e.g. toffee in a wrapper, a match
box.
2. Secondary package - refers to additional layers of protection that are kept till the product is
ready for use e.g. at Colgate toothpaste usually comes in a card board box.
3. Transportation package - refers to further packaging components necessary for storage,
identification and transportation e.g. package of toffees are put into corrugated boxes for storing
at a manufacturer's warehouse and for transportation.

Functions of Packaging:-

1. Product Identification :
● Packaging helps in identification of the product from that of the competitor.
2. Product Protection :
● It provides protection to the product from dirt, insects and breakage.
3. Convenience :
● It provides convenience in carriage, stocking and in consumption.
4. Product Promotion :
● Packaging simplifies the work of sales promotion.

Advantages of Packaging:-

1. Rising standards of Health and Sanitation :

● The people are becoming health conscious so they like to buy packed goods.
● The chances of adulteration in such goods are minimised.
2. Innovational Opportunity :
● With the increasing use of packaging more innovational opportunity becomes available
in this area for the researchers.
3. Product Differentiation :
● Packaging is helpful in creating product differentiation.
● The colour, material and size of the package makes differences in the quantity of the
product.
 4. Self Service Outlets:
● In self service outlets the promotion of the products is done through good packed
products itself. E.g. Spencers, Big Bazaar etc.

Labelling: A label is a carrier of information which is to be provided to the customers which describes the
product, its contents, the date and time of manufacturing etc.

Functions:

1. Identification of the product or Brand:

● It helps in identifying the product or brand from the various types’ available, say
deodorants, chocolates.
2. Grading of products :
● It helps in grading the products into different categories.
● E.g on the basis of features, quality tec.
3. Providing information required by law:
● It provides information required by law e.g. statutory warning on the package of
cigaratte.
4. Describes the product and specify its contents:
● Labelling helps in describing salient features of a product such as contents, price,
instructions for use etc.
5. Helps in promotion of products –
● Attractive labels increase sales volume by mentioning the promotional schemes
launched by companies.

II P - PRICE MIX:

Meaning and concept of Price: -

Price may be defined as the amount of money paid by a buyer (or received by a seller) in consideration
of the purchase of a product or a service.

A customer will buy a product only when he perceives that value or a product is at least equal to value
of money, which he has to pay in the form of price.

Before framing any pricing policy following factors should be considered:-

1. Pricing objectives -
● If objective is to maximise profits in the short term business should charge maximum
price.
● If it wants to obtain large share of the market i.e., by maximising sales it will charge
lower price.
● If it is operating in the competitive market it may charge low price for it.
2. Product cost-
 ● Cost of the product is the sum total of fixed costs, variable costs and semi variable costs
● Every firm tries to cover all their cost and a percentage of profit also.
● When the firm is launching a new product the price set does not cover all the costs but
in the long run it needs to set a price covering all its costs.
3. The utility and demand –
● Increase in price will lower demand and vice versa.
● If demand of the product is inelastic (does not change with price) the firm should charge
higher price
● If demand of the product is elastic (changes with price)then firm should charge low
prices
4. Extent of competition in the market –
● Less competition high price and high competition low price should be charged.
● Prices of competitors also need to be considered before fixing prices.
● Features and quality of the competitor’s products are also considered before setting the
price of the products.
5. Government and legal regulations-
● Government can declare a product essential or luxury product.
● Products need to be priced as per government policies.
6. Marketing methods used-
● Advertising, sales promotion techniques, type of packing etc affect the fixation of price
of a product.
● Giving free home delivery service gives flexibility to the organization in fixing the price.

III. P - Place Mix/ Physical Distribution Mix:

Covers all the activities required to physically move goods from manufacturers to the customer’s
important activities include.

Channels of Distribution:

It refers to the path taken by the goods in their movement to the customers.

1. Direct Channel: It is also called Zero level channel. It is when goods are sold directly to
consumers. No middlemen are involved. E.g. Mcdonalds, Bata

Producer Salesmen/Retailer/Outlet Customer

Indirect Channel:

1. One level Channel: It has only one intermediary. It is when producers supply goods directly to
retailers who further supply/sell to consumers.
E.g. Electrical appliances of a branded company.

Producer Retailer Customer

 2. Two levels Channel: It is when producers supply in bulk to wholesalers who further sell in small
quantities to retailers who in turn sell it to customers. E.g. soaps etc

Producer Wholesaler Retailer Customer

3. Three level Channel: The producers supply in bulk to agents/distributors who further sell to
wholesalers. Retailers buy from them in small quantities and sell to customers. E.g. Garments,
Food items etc.

Producer Agent/Distributor Wholesaler Retailer Customer

Components of Physical distribution:

1. Order Processing:
● When a customer places an order for a product, the order is placed with the salesman.
Then he places the order with the company.
● Customer creditability is checked, inventory checked, produced and shipped.
● Payment is received.
● If order takes a longer time to process, discomfort is caused to customer.
● To overcome this discomfort, information technology based systems are used to
enhance order processing and increasing customer service level.

2. Transportation:
● There are various modes of transport available e.g. road, rail, air, water etc.
● Speed, frequency, availability etc are kept in mind before deciding mode of transport has
to be used.
● The cost of transportation should be less than the value of products.
3. Warehousing:
● Goods have to be stored because of the time between production and consumption.
● A producer has to decide whether to own or rent a warehouse.
● A decision has to be made, as warehouses increases the cost.

4. Inventory control:
● Goods should never be out of stock but a lot of capital is blocked in keeping stock.
● A decision has to be made as at what level inventory to be kept after considering a few
factors:
I. Level of customer service to be offered.
II. Accuracy in forecasting of sales.
III. Time required to deliver goods when demanded in the market
IV. Cost of maintaining finished stock.

IV.P- Promotion Mix

It refers to combination of promotional tools used by an organisation to communicate and persuade

customers to buy its products.
Tools/ Elements of Promotion mix:-

Advertising:

● Most commonly used tool of promotion.

● It is an impersonal form to communication, paid by the marketers (sponsors) to promote goods
and services.
● Common mediums are newspaper, magazine, television & radio.
● It enhances satisfaction and confidence in the customers that they are buying quality products.
● It helps in increasing the demand of existing products.
● It is helpful to increase the market share of the product.
● It helps in generating more employment opportunities in the society.
● It helps in the economic development of the country.
● It helps in creating awareness of various products available in the market.
● It helps customers to decide after comparison with the various brands which one to purchase.

In today’s world advertising is considered as an important tool of marketing. It helps a firm in effectively
communicating with its target market, increasing the sale and thereby reducing the per unit cost of
production. It is not a social waste rather it adds value to the social cause by giving a boost to production
and generating employment.

Personal Selling:

Personal selling consists of contacting prospective buyers of product personally i.e. face to face
interaction between seller and buyer for the purpose of sale.

Features of the Personal Selling:

1. Personal contact is established between buyer and seller.

2. Helps in developing good relationship with the customers which may become important in
making sale
3. There is oral conversation between buyer and seller.
4. There is quick solution of queries of the buyer.
5. Sellers provide additional information about new products, usage of the product etc.

Sales Promotion: Short term incentives designed to encourage the buyers to make immediate purchase
of a product / service. It uses techniques like Rebate, discount, Product combination, Quantity gift etc .

PUBLIC RELATIONS
 “The Chartered Institute of Public Relations” defines Public Relations as ‘a strategic management
function that adds value to an organization by helping it to manage its reputation'
The public relations department controls and minimizes the damage to the company’s image.
Public Relation Tools include-
● News
● Speeches- by the corporate leaders
● Events-seminars contests,
● Publications-newsletter, annual reports
● Public service activities-maintenance of gardens etc
● Sponsorships-sports, cultural events

Functions of the Public Relations department:

1. Press relations:
● The public relations department is in contact with the media.
● It presents true facts and a correct picture about the company.
2. Product publicity:
● The company and the public relation department draw attention to new products.
● They arrange sports and cultural events.
3. Corporate Communication:
● Companies reach and influence their target markets.
● It is done with the help of brochures, speeches by the company’s executives or interviews with
TV channels.
4. Lobbying:
● The government seeks the opinion of associations of commerce and industry while formulating
industrial, telecom, taxation policies, etc.
● The public relations department becomes active in promoting these policies.
5. Counselling:
● The public relations department advises the management on issues which affect the public
and the company.
● This helps build goodwill by contributing to causes like environment, wildlife, children’s
rights, education, etc.
Marketing objectives:

● Building awareness: The department dramatise the product in the media which creates a
favourable impression on the target customer.
● Building credibility: News about a product comes in the media creates a belief of the people in
the product
● Stimulates sales force: It becomes easier for the sales force to deal with the retailers which
makes it easier to sell the product to the ultimate consumer.
● Lowers promotion costs: Maintaining good public relations costs much less than advertising.

Difference between Advertising and Personal Selling

BASIS ADVERTISING PERSONAL SELLING
Meaning Creates an interest of the consumer in Creates an awareness and help in
the product decision making
Form of communication Impersonal Personal
Flexibility Rigid Flexible
Coverage/Reach Covers a large mass of people Covers limited number of people
Cost low High
Time taken Short time to cover a market Lot of time taken to cover a market
Feedback No direct feedback Direct and immediate feedback