Unit-1

Marketing: Definition &

Importance
All activities involved in creation of time, place and possession
utilities.

The process of Planning & Executing the conception, pricing,

promotion and distribution of ideas, goods and services to create
exchanges that satisfy individual and organizational objectives.

(American Marketing Association)

The management process responsible for identifying, anticipating and

satisfying customer requirements profitably.

(Chartered Institute of Marketing)

- Market vs Marketing
Market is an arrangement to provide an opportunity to exchange
goods.

Marketing is sum total of all those activities that are related to flow of
goods from production to consumption.

- Marketing, Selling & Merchandizing

Marketing is a broader concept which is driven from customer’s
demand.

Selling is one part of marketing which deals with persuading

customers to buy products that are available with seller.

Merchandizing refers to the process offering a variety of products to a

retail consumer in a manner which stimulates demand.
Traditional View of Marketing
Performance of business activities that direct the flow of goods
and services from producers to consumers or users

Modern View of Marketing

A business process through which products are matched with the
markets and through which transfer of ownerships are effected

Scope of Marketing

• Channels of Distribution: Decision regarding selection of

most appropriate channel of distribution like wholesaling,
distribution and retailing is taken by the marketing manager and
sales manager.
• Pricing Policies: Marketer has to determine pricing policies for
their products.
Pricing policies differs form product to product. It depends on the
level of competition, product life cycle, marketing goals and
objectives, etc.
• Sales Management: Selling is a part of marketing. Marketing is
concerned about
all the selling activities like customer identification, finding
customer needs, persuading customer to buy products, customer
service, etc.
• Promotion: Promotion includes personal selling, sales
promotion, and advertising.
Right promotion mix is crucial in accomplishment of marketing
goals.
• Finance: Marketing is also concerned about the finance, as for
every marketing activity be it packaging, advertising, sales force
budget is fixed and all the activities have to be completed with in the
limit of that budget.
• After Sales services: Marketing covers after sales services given
to customers, maintaining good relationships with customers,
attending their queries and solving their problems.
What are Consumers’ Needs, Wants, and Demands?
Needs - state of felt deprivation including physical, social, and
individual needs i.e hunger

Wants - form that a human need takes as shaped by culture and

individual personality i.e. bread

Demands - human wants backed by buying power i.e. money

IMPORTANCE OF MARKETING
1. Marketing helps to achieve, maintain and raise the
standards of living

- Marketing is means through which production and purchasing

power are converted into consumption.
-Better marketing- Mass production
- Mass production -Low cost
-Low cost --More buying power-Higher standard of living

2. Marketing Increases employment opportunities

- Marketing involves various functions / sub functions (Buying,

Selling, Transport, Warehousing, Financing, Risk management etc)
- These functions create need for different specializations
- About 30-40% population depends directly or indirectly on
marketing
3. Marketing increases national income
-More purchasing power
-increase in national income

4. Helps maintain economic stability & development

-By maintaining demand supply balance

5. Link between producer & consumer

6. Removes imbalance of supply & demand by transferring

surpluses

7. Helps create utilities of time, place & possession

IMPORTANCE OF MARKETING – Business Firms

1.Marketing Generates Revenue, by generating sales & thereby

profits

2. Marketing helps decision making process (what, when & how

much to produce, store or transport)

3. Help change management & innovations

Features of Market

• One Area:- Denote to a area or a region in which no of buyers and

sellers are scattered. They are connected with one another via
brokers, agents Etc.
• Buyers and Sellers:- Buyers and Sellers are must for market. In
Transaction Physical Presence is not necessary.
• One Commodity:- For the existence of a market there should be at
least one commodity like Wheat, vegetables, etc and the market is
termed as wheat market, vegetables market and so on.
• Perfect Competition:- Acc to Prof. Coornot, market must posses
the characteristic of perfect competition where in buyers and sellers
are free to enter in the market.
• One Price:- In Perfect competition between buyers and sellers.
The market area should have one price only.
Factors Affecting the Size and Extent of Market.
The Size and extent of market is affected by the following
factors:- a. Characterics of commodity

b. Nature of Demand

c. Durability

d. Portability

e. Sampling and grading of goods.

f. Adequate Supply

g. Substitutes.

h. Multi Uses.
Types/Classification of Market
Area Function
1. Local 1.Mixed
2. Regional 2.Specialized
3.National 3.Sample
4.Internati 4.Grading
Onal

Time Commodity
1. Very 1.Product
Short 2.Stock
2. Short 3.Bullion
3. Long
4. Very long

Competition Legality
1.Perfect 1. Legal
2. Imperfect 2. Illegal
Core Concepts/ Philosophies of
Marketing
Exchange Concept holds that the exchange of a product between
seller & buyer is the central idea of marketing. Exchange is an
important part of marketing, but marketing is a much wider
concept.
• Production Concept is one of the oldest concepts in business. It
holds that consumers will prefer products that are widely available
& inexpensive. Manager of production oriented business
concentrate on achieving high production efficiency low cost &
mass distribution
Product Concept holds that consumers will prefer those products
that are high in quality, performance or innovative features.
Managers in these organization focus on making superior products
& improving them over time.
• Selling Concept holds that consumers, if left alone, will
ordinarily not buy enough of the organizations product and thus the
organization must undertake an aggressive selling promotion effort
for using its products.
• It implies selling what is made, rather than making what can sell.
• The Marketing concept emerged in the mid 1950’s.The
business generally shifted from a product – centered, make &
sell philosophy, to a customer centered, sense & respond
philosophy.
• The job is not to find the right customers for your product, but to
find right products for your customers.
• The marketing concept holds that the key to achieving
organizational goals consists in determining the needs and wants
of target markets and delivering the desired satisfaction more
effectively and efficiently than competitors.
• Every department & every worker should think customer & act
customer.
• Social or Societal Marketing Concept holds that the
organizations task is to determine the needs, wants and interests of
target markets and to deliver the desired satisfaction more
effectively and efficiently than competitors in a way that preserves
or enhances the customers’ and the society's well being.
• It involves understanding broader concerns & the ethical,
environmental & legal and social context of marketing activities &
programs.
• The Holistic Marketing Concept is based on the development,
design and implementation of marketing programs, processes and
activities that recognizes their breadth and inter-dependencies.
• Holistic marketing is a marketing philosophy that believes
‘everything matters’ and that a business cannot exist and excel in
vaccum.
• This is an approach which proposes that marketing should be
looked from a broad and integrated perspective and not as an
isolated management function.
Marketing Mix:
The 7P’s of Marketing
• The Marketing Mix, more popularly referred to as the 7Ps of
Marketing is a set of controllable and interrelated variables
composed of product, place, price and promotions, people,
process & physical environment that a company assembles to
satisfy a target group better than it’s competitor.

• Marketing Mix strategy is choosing and implementing the best

possible course of action to attain the organization’s long-term
objectives and gain competitive edge.