Unit 1 : Introduction to Marketing

Evolution of marketing
The history of marketing started with simply selling of goods
and services. The concept of marketing started from 18th to 19th
centuries. In this production was distinct from consumption.
1. Production era :
The first phase of marketing is production era. The focus
was made more on production and distribution process
more at less cost. The concentration was towards
manufacturing of products.
2. Sales era:
The second phase of marketing is sales era. The focus of
marketing turned towards selling with proper
communication media, advertising and branding became
important. Marketing focused on distributions for
persuading customers.
3. Marketing era:
The third phase of marketing is marketing era. From 1960s
marketing started with intense competition for customers.
Now it has various modern marketing development.
4. Relationship era:
The fourth phase of marketing is relationship era. The focus
towards selling of products moved to next level where in the
concentration moved not only selling of products and services
but also maintaining customer relationship also important, where
in it tells in identifying the needs , wants of the customers.
Meaning:
It is planned process through which organization primarily
identify the needs of people and then recognize target customers
among the people, satisfy the needs of customer by selling
product and services and mainly to retain customers.

Definition:
According to American Marketing Association defines
marketing as " Marketing is the process of planning and
executing the conception pricing, promotion and distribution of
goods and services to create exchange that satisfy individual and
organizational goals".

According to The Chartered Institute of Marketing define

marketing as “The management process responsible for
identifying, anticipating and satisfying customer requirements
profitably”.

Nature of marketing:
1. It is a customer oriented process:
Marketing department helps in fulfilling customer needs.
They will identity the needs and wants of the customer will
there willingness to buy.
2. Market starts and ends with customer:
It is totally customer oriented. It is essential to see what
customer wants. The information is collected based on
 tastes, fashion, habit…. Based on their preference they
produce right type of goods.
3. Marketing is goal oriented process:
The basic aim of marketing to generate increase profits
through customer satisfaction. Increased sales, increased to
profit, increase growth .
4. Marketing is a process:
marketing is a process which involves various functions
which will be performed based on order. It should be
flexible in nature.

Scope of Marketing:
Marketing is concentrated on various aspects of business. It
primarily engaged in marketing of 10 elements, which include
goods, services, experiences, events, persons, places, properties,
organizations, information and ideas.
They are classified into primary and auxiliary elements.

Primary elements Auxiliary elements

 Goods Consumer behavior
 Services marketing research
 Experiences customer satisfaction
 Events 4Ps of marketing
 Persons
 Place
 Properties
 Organizations
 Information and ideas

 Goods:
Physical goods constitute the bulk of most countries
production and marketing exercise. The production of
goods is primarily determined by the earning capacity of
the people to buy and demand factor influenced. Therefore,
developed countries focused on luxuries products and
developing countries focus on basic facilities of goods.

 Services:
Services are usually intangible in nature. The economy is
focused majorly on production of services. Many countries
have shifted view from production to services sector. Many
services like banking, insurance, transportation, hotels,
maintanence, health. Many market offers this variable mix
of goods and services.

 Experiences:
Customer experience plays an important role in business
enterprises. Many tourism company have engaged various
recreational trips in order to attract the customers. Space
tourism is a space travel for recreational leisure or business
purposes.
 Persons:
Brand ambassadors play a vital role in marketing business
environment. Marketers helps in quantify and qualify the
use of celebrities in marketing campaigns by evaluating
appeal, awareness about buying behavior.
 Events:
Marketers promote duration specific events like sporting
events, music concerts, fashion shows, trade shows
promoting in an effective way simultaneously support in
advertising.
 Places:
Marketers seeks to it that place that includes socio
economic development, real estate, commercial banks,
local businesses, advertising and public agencies attract the
customers in tourism, investment and companies.
 Properties:
Properties majorly include intellectual rights such a patents,
copyrights, trademarks, shares, bonds, debentures,
agreements. Many assets building, machinery and land
marketing is required in order to have buying and selling
activities.
 Organization:
Organization should be strong, favorable in the minds of
target audience which should fulfill the needs of the
customer on a continuous basis. It should aim at building
brand loyalty among customer.
 Information and ideas:
 Information majorly constitute various product line,
services process and information. It requires issue to be
resolved, identifying the need customer, capturing
information through documentation, construct framework
easy access would be more benefit.
Ideas majorly ensures ideas of organization that are
sold to satisfy core need of the customer.

2. Auxiliary elements:
 Customer behavior:
Customer is the important person in the marketing
activities, to seek the likes and dislikes of the customer
based on the produced goods and services accordingly. It
studies the needs and wants of the customer in detail.
 Marketing research:
Marketer should define, identify opportunities, evaluate
actions, monitor the performance which fulfills the needs
and wants of the customer in the best possible way.
 Customer satisfaction:
Marketers usually make a survey or post purchase
feedbacks regarding the customer satisfaction. They make
sure all the everything is done in a best possible way based
on their spending habits.
Example: cadbury company has high level of customer
satisfaction.
 Marketing mix:
 It is a general phrase where they used to describe different
kinds of choice of product which bring together all the
product and services as a whole. The major marketing mix
are: product, place, promotion and place.

Approaches of Marketing:
1. Commodity approach
2. Functional approach
3. Institutional approach
4. Managerial approach
5. System approach

1. Commodity approach:
It is an approach where flow of certain commodity from
original producer right up to final consumer.
Example: marketing of agricultural products that is cotton
wheat jute..

2. Functional approach:
It is an approach where specialized services or functions or
activities performed by marketers. It involves buying,
selling, storage, transportation, risk bearing…..

3. Institutional approach:
It is an approach where marketing institutions or agencies
like wholesalers retailers transport banks insurance
 company they discharge the marketing responsibilities
during the distribution of goods.

4. Managerial for decision making approach:

It combines certain features of commodity, institution and
functional approaches. It gives the decision influencing
factor and alternate strategies which helps in problem
solving.

5. System approach:
It is an approach which is helpful to accomplish the
objectives like objective inputs processor output and
feedback. System approach helps in providing best model
for marketing activity. It takes input to the system and
gives output which is produced.

Differentiate between Marketing and Selling:

Basis Marketing Selling

Meaning satisfying needs and Only exchange of

wants through exchange money for goods and
process. services
Inception starts before decision starts after decision
making of products and making process of goods
services. and services

Subject matter To satisfy customer The needs of sellers.

wants.

Environment Both internal and external Only internal factors

factors

Basis Marketing Selling

Scope Wider term includes It is not

selling, advertising, comprehensive in
customer service nature

Dynamics achieve long-term Selling a short term

objectives. objectives
Marketing Environment:
It is majorly categorized into two types:
 Micro environment
 Macro environment

Micro environment involves

● Functional areas of business
● Suppliers
● Marketing intermediaries
● Customers
● Competitors
● Shareholders

Macro environment involves

● Political
● Legal
● Economic
● Sociocultural
● Technological
● Natural
● Demographical

Micro Environment:
It is an environment which includes internal factors of the
organization. It has control over the environment.

1. Functional areas of business:

1.Human resource function:
HR helps in recruiting, training, performance appraisal,
motivating, improve employee morale in the organization.
It helps in increasing employee’s job satisfaction and job
actualsation by assessing strengths and weakness of employee.
Impact on marketing function:
Marketing jobs helps in planning, training, improve employee
skills as well as motivating them. Effective recruitment and
compensation policies creates positive impact on sales.

2. Finance:
Finance is the life blood of the business. It is concerned
with raising funds allocating administrating of funds controlling
the funds. It helps in cost control.
Impact on marketing function:
Finance function helps in proper allocating resources effectively
and efficiently it creates an impact on cost of product and
pricing of product.

3.Research and development:

Marketing research and development helps in new product
development which aims at long and medium term profits in
order to stay with competitor. It helps in improving existing
products and new ways of producing them.

Impact on marketing function:

Research and development helps the marketer to analyze the
product life of the particular product improves its performance,
enhancing features, changing its appearance.

4. Production:
It is a scientific way of planning, organizing, directing,
controlling, process involved in production process. It helps in
converting raw materials into finished product. It includes men,
materials, money, machines, methods helps in satisfying
customer needs.
Impact on marketing function:
Marketing and production is directly related to each other. It
ensures that a business sells products that meet customer needs
and wants. All desired products produced at an economical
value.

2.Suppliers:
Suppliers are those who are related to supply chain management
which supplies resources which are needed by the firm. The
relationship enhances strong business have a mutual relation to
desired goal. Marketers expect timely credit, prompt payment,
pricing, transportation, customer feedback, expect prompt
communication. It enhances customer satisfaction, proper
communication and shares required information.

3. Market Intermediaries:
Market intermediaries helps the products from producers to final
user. It helps in creating time and place utility. The act as a
middleman and bridges a gap within them. It helps to promote,
sell and make available good or services. They provide
transportation ware housing finance facility.

4.Shareholders:
Shareholders are the owners of the company. They have high
decision making ability. They are the ones who helps for
financing activities, operations and governance have control
aspects of business, in turn they get high return on capital. They
help in boosting the sales of the company which fetches them a
good return increases the value of the shares.

5. Competitors:
Competitors analysis is done in designing the marketing
strategies which is helpful in assessing the strengths and
weakness of current and potential market analysis to improve its
product and marketing strategies. It helps in product comparison
and promotional decisions.

Macro Environment:
It includes all major external factors which majorly has no
control over the environment.
1. Political and legal environment: It includes laws government
agencies and lobbying groups that influences or restricts
individual or organization.
Examples ideologies of the political party.

Legal environment: It provides framework for laws and

regulations, policies to legal or regulatory setup.
Example wearing helmet made mandatory helps to open various
business organisation.

2. Economic environment:
It includes all economic factors, trade cycles, policies, nature of
economy, distribution of income and wealth. It keeps changing
from time to time based on the lifestyles government policies
and regulations.

3.Demographic environment:
It is the study of the population of the country, composition
level of income households and regional characteristics. The
major components involved is population growth, population
age, education level and house hold patterns, geographical shifts
to population.
Examples are study of educational level household patterns in
particular area.

4. Technological environment:
 Technological environment means the advancement in the field
of technology which influences business by new invention and
innovation of productions of business operations and product
development. It influences new inventions of productions and
other innovations of business operations and also product
development.
Example: before travel guide is used now GPS is used.

5.Natural environment:
It is a combination of natural resources which is used in
business as inputs and effects marketing activities. It includes
use of raw materials from nature for producing goods. Marketer
should be aware of threats occurs in nature.
Examples are raw materials taken from the natural resources in
order to produce goods.

6. Socio cultural environment:

It purely depends upon the set of beliefs customs practices
lifestyle that exist within a society which describes relationship
to themselves and others. It consists of their own values, beliefs,
influence and changes in customer behavior.

Recent trends in marketing:

● Electronic Business
● Tele marketing
● Mobile business
● Green Marketing
Electronic business (E - business):
It is a type of business which is generally referred as buying and
selling of goods or services takes place with the help of internet.
It is also called as internet business.

Advantages of electronic business

● Reduces cost and time
● Worldwide presence and 24/7 access
● Easy to start and manage business
● No need for physical store
● Eliminates market intermediaries

Disadvantages of electronic business:

● Lack of personal touch
● Not suitable for all products and services
● It consumes lot of time for delivering goods
● Security concern

Models of e-business or e-commerce

● Business to business
● Business to consumer
● Consumer to consumer
● Business to employee
● Business to government
● Peer-to-peer business
● Business to business model:
It is a type of model where in the producers and
the consumers activities takes place from one business
to another.
Examples are professional couriers.

● Business to consumer model: it is a type of model where

transaction takes place between consumer and business
takes place through an online business transaction.
Examples are Amazon Flipkart…

● Consumer to consumer model: it is a type of business

model where the transaction takes place between the
consumers itself. It is an online dealing of goods or services
which takes place among consumers
Example are olx.com, sulekha.com

● Business to employees model: it is a type of model which

takes place within the organisation with respect to intra
departments that provide products and services to their
employees.
Examples are salary slips income tax returns..

● Business to government model: it is a type of business

model that refers to businesses which sells the products and
services or information to government or government
agencies.
 Examples are providing technical support to the
government.

● Peer to peer model: it is a type of e business model in

which people share the related computer files and sources
without having any interaction through the help of web
server.
Example are rapid share, imesh

Telemarketing:
Telemarketing is a form of direct marketing where in the
marketer interact directly to the customers using telecom. It is a
process of proceeding prospective customers to buy products or
services using telecommunication technology.
Advantages:
● It facilitates personalised contact.
● It is less expensive.
● It is economical.
● It has direct interactions with customers.

Disadvantages:
● Nuisance will be created.
● Lack of customer focus.
● Hidden costs.
● Risk of exposing confidential data.

Mobile business:
 It is a branch of electronic commerce which includes
buying and selling of goods and services through wireless
handheld devices such as cellular telephone.
Examples are mobile ticketing, mobile banking, local maps,
traffic info, weather updates…..

Advantages
● It saves time and costs
● It has a wider reach.
● It helps in maintaining competitive edge.
● It has no geographical boundaries.

Disadvantages
● Expensive to setup infrastructure.
● User interface is not friendly.
● It has low bandwidth
● Security of data and transactions

Green marketing:
According to American Marketing Association, green
marketing is the marketing of products that are presumed to be
environmentally safe. It includes processing, packaging and
distribution.
Example are eco friendly products, eco tourism….

Advantages
● It has reducing costs on recycling
 ● For competitors it's one of the good strategy.
● They are biodegradable in nature.
● To fulfill social responsibility towards society.

Disadvantages:
● It will mislead the customers by giving false information.
● Educating the customers about the use and need of of green
products is difficult
● It requires huge capital investment.
● Environment policy is not uniform throughout the world.

Examples Tesco company brings the shoppers reusable bags

Walmart company uses renewable sources.

Relationship Marketing:
It is a set of activities and strategies aimed at developing
customer loyalty, interaction, managing trust and long term
engagement will all the stake of the holders of the business.

Importance of relationship marketing

● It builds loyalty and trust
● To regain lost customers.
● Builds reputation and brand value
● Creates business opportunities

1. Builds trust and loyalty:

 Acquiring new customer is one of the important aspect of
business at the same time retaining the existing customer is also
important. Making them feel recognised, known and appreciated
can go a long way towards gaining loyalty.

2. To regain lost customers:

Some customers will be lost due to various reasons.
Marketers responsibility to seek to that by bringing back the lost
customers by sending a message on their special occasion,
giving greeting card, offering special discounts, better services.

3. Builds reputation and brands value:

It helps in building relationship for long term basis by
fulfilling the needs wants of customer fulfilling their demands,
expectation which leads to enhance loyalty and brand image.

4. Create business opportunities:

Satisfied customer pay more if they are loyal in nature.
Later word of mouth also influences the customer to create
brand in buying product even though its high cost.
Recommended products from customer have a greater influence.

5. A tool to gain competitive edge:

Relationship marketing helps in retaining customers and it
creates goodwill for the company based on their improved
interactions. It gains competitive advantage in retaining
customer and customer retention.
Customer Relationship Management:
Customer Relationship Management is a business strategy
indented towards understand, interacting anticipate and respond
to the needs of the current and potential customers using
technology to organize, automate and synchronize business
processes.

Benefits:
1. CRM strategies helps in winning customer loyalty and
confidence.
2. Aids in providing personalized products and services.
3. Acquiring better knowledge of customers and their buying
habits.
4. Profiling of individual customers is possible and this helps
in segmentation
5. Developing better communication channels.
6. It can be used a s effective tool for global competition.
7. It helps in expanding business operations.
8. It helps in increasing sales and customers.

Need:
1. To facilitate increased sales and marketing.
2. To provide better customer service.
3. To attract new customers and increase revenue.
4. To sell products effectively.
 5. Understanding the needs wants of the customer and
maintain long term relation.

Objectives of customer relationship management:

● To provide better customer service
● To create a better and consistent customer experience.
● To understand customer needs better and maintains long
term relationship.
● To facilitate marketing and sales process.

Advantages:
● It Develops better communication channels.
● It wins Customer loyalty and confidence
● To have better knowledge about customers.
● It helps in expanding business operations.
● It maintains long term relationship.