CHAPTER 1

INTRODUCTION TO MARKETING

MEANING OF MARKET

The word ‘market’ is derived from the Latin word ‘Marctus' which means exchange activity .
Market is a place where goods and services are exchanged between buyers and sellers.

DEFINITION OF MARKET

• "A market is as aggregate demand of the potential buyers for a product or service"-
American Marketing Association

• "A market is an area of potential exchanges"- Philip Kotler

FEATURES OF MARKET

1. exchange of goods & services

2. buyers and sellers
3. physical or virtual
4. ownership and possession is transferred
5. money acts as a medium of exchange

TYPES OF MARKET

A) On the on the basis of geographical area or place

*Local market : local marketing refers to any marketing practice that targets a specific
community or area.
*Regional market: Regional market is populations in certain areas that share common
characteristics and are distinguishable from other regions.
*National market: the national market describes the supply and demand for all securities
that are traded in a country. Each national market is governed by the regulations of its own
country.
*International market: An international market is any geographical region where a
company conducts business that is outside the territorial boundaries of a company's home
country, while a domestic market is within the boundaries of its home country
B) On the basis of mode of transaction
*Spot market: in spot market payment or financial transaction is made immediately.
*Future market: in futures market delay payment and delivery to predetermined on a
future dates and time .
C) On the basis of volume of business
*Wholesale market: Wholesale is the activity of buying and selling goods in large
quantities. hence wholesale market deals with large quantity of goods.
*Retail market: retail market deals with small or lesser quantity of goods.
D) On the basis of regulation
*Regulated market: A regulated market is a market over which government bodies or, less
commonly, industry or labour groups, exert a level of oversight and control. i.e. which is have
control of government.
*Unregulated market: those market which is having less control or no control of
government of higher authorities.
E) On the basis of competition
*Perfect market: Perfect market are those market place with large number of buyer and
large number of seller transact with variety of products
*Imperfect market: Imperfect market are those with less or one seller a d large number of
buyers.

MEANING OF MARKETING :
Marketing is a social process which identifies the needs and wants of customer, develop
it, and exchange it to satisfy them. It comprises of all activities performed by firms to
direct and facilitate flow of goods and services from producers to buyers.
DEFINITION OF MARKETING
* "Marketing is a process of discovering and translating consumer needs and wants into
product and services specifications, creating demand for this product and services and
then in turn expanding the demand" - Hansen

*" marketing is analysing, organising, planning and coordinating of the firm customer
impinging resources, policies, activities with a view to satisfy the needs and wants of
chosen customer group at a profit" - Philip Kotler

FEATURES OF MARKETING
• Needs and wants of customer
• Exchanging the goods and services
• Customer oriented
• Customer satisfaction
• Customer value
• For money or Money's worth

IMPORTANCE OF MARKETING
1. Survival and growth of organisation
2. Provide employment
3. Increase standard of living
4. Economic growth
5. Effective production and utilisation of resources
6. Adapt changes according to condition
7. Increase profit and achieve Goal

➢ APPROACHES TO MARKETING
I. Traditional approach
A) Commodity approach: Commodity approach the study relates to the flow of a
certain commodity and its movement from the original producer right up to the
 ultimate customer.
B) Functional approach: This approach splits down the field of marketing into
separate functions. These specific functions are buying. selling, transportation,
storage, standardization, grading, financing, risk- talking and marketing research, etc.
We also concentrate on the specialized service or functions or activities performed by
marketers.
C) Institutional approach: In this method, description and analysis of the different
institutions engaged in marketing are undertaken. Here we study not the products it's
about the producers, wholesaler's, agents, retailers, transporters, storage institutions
etc. Different institutions serve as separate 'cells' of the marketing body.
D)Managerial approach: this approach the focus of marketing study is on the
decision' making process involved in the performance of marketing functions at
various levels of the firm. The study involves discussions of important concepts like
devising alternatives strategies, analyzing their relative importance, determining the
strength and weakness of the company, techniques and methods of problem solving.
E) System approach: This approach may be said to be an advancement of
management or decision making approach. Broadly defined, "As a body of
independent parts (sub systems) which has a separate identifiable areas of operators"
These sub-systems may further be split down into sub-parts, hence may be known as
sub-system of the total body. A system is a set of interacting or interdependent
components or groups coordinating to form unified whole and organized marketing
activities, to accomplish a set of objectives.

II. Modern approach

A) Production approach: This concept is the oldest of the concepts in business. The
focus of production orientation is to reduce costs through mass production.
Organisations focusing on this concept concentrate on achieving
high production efficiency, low costs, and mass distribution. They assume that
consumers are primarily interested in product availability and low prices.
B) Product Approach: This orientation holds that consumers will favour those
products that offer the most quality, performance, or innovative features. Companies
focusing on this concept concentrate on making superior products and improving
them over time. They assume that buyers admire
well-made products and can appraise quality and performance.
C) Sales approach: The companies following this orientation aim at selling what
they make rather than make what the market wants. Companies following this
orientation make the product, and then sell to the target market. The organization
must, therefore, undertake an aggressive selling and promotion effort. Companies
following this orientation believe that it has an effective selling and promotional tools
to stimulate more buying.
D) Marketing approach: A market orientated organisation attempts to understand
customer needs and wants. This is done with the help of market research. Marketing
strategy is formulated based on their market research. Once sales begin, further
research will be conducted to find out what consumers think about the product and
whether product improvements are required.
E) Societial approach: It is the use of marketing principles and techniques to
influence a target audience o voluntarily accept, reject, modify, or abandon a
behaviour for the benefit of individuals, groups
 or society as a whole. Social marketing is the use of commercial marketing principles
and techniques to improve the welfare of people and the physical, social and
economic environment
in which they live.

➢ CONCEPT OF MARKETING
▪ production concept: production concept states that customer will buy
products more cheap and easy available.
▪ product concept: in product concept customer wants quality, performance and
innovative products, good packaging etc. so company has to focus on
continuous improvement of product.
▪ sales concept: sales concept focuses on large scale of selling and promotion
activities. the main aim is to sell what they make rather than make what
market want.
▪ marketing concept : marketing concept deal on customer and their needs and
sell products
benefits of marketing concepts: a business enterprise following marketing
concept will have following benefits:
- long term success
- increase company image
-less risk and more market opportunities
- more effective and better performance
- achieve goal or profit
▪ societal concept: it deals with customer needs and wants along with the
society benefit

➢ GOAL OF MARKETING
▪ specific outcome: Every organisation will have their own specific goal or outcome.
The main aim of marketing is to achieve certain goals of organisation.
▪ brand loyalty : the tendency of some consumers to continue buying the same brand
of goods rather than competing brands.
▪ customer education : customer Education is the discipline of teaching customers
how to use and find value from product
▪ customer engagement : Customer engagement is the ongoing cultivation of a
relationship between the company and consumer that goes far beyond the transaction
▪ talent recruitment: It focuses on recruiting the best marketing employees and the
organisation so that the marketing process becomes easy.

➢ SELLING VERSUS MARKETING

Basis marketing Selling

1) definition Marketing is the process of selling is the process of
identifying customers exchanging goods and
needs and wants and services to customers
satisfy them
2)objective Profit with customer Increase profit by increase
satisfaction in sales
3) focus Focus on customers Focus on sellers
4) scope Wide scope as it includes Limit scope as it a part of
 selling marketing
5)start and end Starts before production Starts after production and
and continuous after sales ends with sale of product.
6) business planning Long term business plan Short term business plan
7) marketing mix Importance to all Importance only to
marketing mix(product, promotion in marketing
price, place, promotion) mix

MARKETING MANAGEMENT

MEANING:

Marketing management is the process of planning and executing the conception pricing.
motion, and distribution of goods services, and ideas to create exchanges with target groups
and satisfy customers and organizational objectives.

DEFINITION OF MARKETING MANAGEMENT

According to Philip Kotler, “Marketing Management is the art and science of choosing target
markets and building profitable relationship with them. Marketing management is a process
involving analysis, planning, implementing and control and it covers goods, services, ideas
and the goal is to produce satisfaction to the parties involved”.

IMPORTANCE OF MARKETING MANAGEMENT

1. Analysing Market Opportunities

2. Determination of Target Market
3. Planning and Decision Making
4. Creation of Customer
5. Helps in Increasing Profit
6. Improvement in Quality of Life
7. Employment Opportunities

MARKETING ENVIRONMENT

MEANING

Marketing Environment refers to the encompasses the marketing team within an organization
and includes all of the outside factors of marketing that affect the team's ability to develop
and Sustain successful customer relationships with their targeted customer group.

Definition of Marketing Environment

According to Philip Kotler, Marketing environment refers to the external factors and forces
that affect the company s ability to develop and maintain successful and relationships
with its target customers

IMPORTANCE OF MARKETING ENVIRONMENT

*Increased general awareness

*Greater effectiveness

*Marketing analysis

*Resource allocations

*Objective qualitative information

Components / factors influencing of Marketing Environment

I. INTERNAL ENVIRONMENT
• value system
• mission and objective of organisation
• organisational structure
• financial capacity
• human resource management

II. EXTERNAL ENVIRONMENT

A) MICRO ENVIRONMENT
• Competitors
• Suppliers
• Customers
• Intermediaries
• Shareholders
• Employees

B) MACRO ENVIRONMENT
• DEMOGRAPHIC ENVIRONMENT
• ECONOMIC ENVIRONMENT
• TECHNOLOGICAL ENVIRONMENT
• NATRUAL ENVIRONMENT
• POLITICAL ENVIRONMENT
• LEGAL ENVIRONMENT
• GLOBAL ENVIRONMENT
• SOCIO CULTURAL ENVIRONMENT

I. INTERNAL ENVIRONMENT
Internal Environment refers to environment within the organization. It
includes internal factors of the business which can be controlled by business.
Some of the internal environment components are as follows:
 • value system : The value system of the founders, Board of directors,
managers, workers of the organization has important bearing on the strategies
of the business
• mission and objective of organisation: organisations mission, vision and
objectives plays a major role in the decision of marketing decision. A vision
statement focuses on what an organization wants to ultimately become. The
mission statement is organization's reason for existence.
• organisational structure: Organizational hierarchy is the authority which
flows from top to bottom. Some management structures and styles delay
decision making and while others facilitate quick decision making.
• financial capacity: Financial factors like financial policies, financial position
and capital structure etc., affect corporate strategies and decisions
• human resource management: The characteristics of the human resources
like skill, quality, Morale, commitment, attitude, knowledge etc. also
contribute to marketing decision.

II. EXTERNAL ENVIRONMENT:

External l Environment refers to environment outside the organization. It includes all
the external factors of the business which cannot be controlled by business.
Some of the external environment components are as follows:

A) MICRO ENVIRONMENT:

Micro Environment refers to the company's immediate environment i.e., those

environmental factors that are in its proximity. These factors are:

• Competitors: Competitors are those who pays for the same product of
company. Competitive strategy, plans, offers etc plays important decisions.
• Suppliers: supplies issues raw materials. if the raw materials given by
them are not of good quality it will affect the final production and customer
satisfaction.
• Customers: The customers of a company may be of five kinds-ultimate
consumers, Industrial consumers, Government and other Non-Profit
Customers, International Customers. It must not be forgotten that the
satisfaction of customer and consumer is the main motto of every business
firm.
• Intermediaries: The intermediaries are middle men (Wholesalers, Retailers,
Agents etc.), distributing agencies, market service agencies and financial
institutions.
• Shareholders: Shareholders also plays an important role has the owners of
the organisation.
• Employees: Employees of an organisation consists of managers executive
supervisors etc can be controlled to greater extent. The employees are more
loyal makes a organisation better.
B) MACRO ENVIRONMENT

• DEMOGRAPHIC ENVIRONMENT: Demographic analysis deals with

quantitative elements such as age, sex, education, occupation, income,
geographic concentration and dispersion, urban and rural population, etc.
Thus, demography (study of population) offers consumer profile which 1s
very necessary in market segmentation and determination of target markets.
Quantitative aspect of consumer demand is provided by demography, e.g.
census of population, whereas qualitative aspect of consumer demand such as
personality, attitudes. motivation, perception, etc., is provided by behavioural
analysis.
• ECONOMIC ENVIRONMENT: Economic components are general
monetary value, investment rates, exchange rates, inflation rate, fiscal
strategies, balance of payments and so forth. An organization can effectively
offer its products just when individuals have enough cash to spend. The
financial environment influences a customer’s buying behaviour either by
expanding his disposable income or by decreasing it. Eg: During inflation, the
money value decreases.
• TECHNOLOGICAL ENVIRONMENT: Technological factors are those
variables rely on current, available and change in technology. These factors
may be technological products and process. The changing trends in the
advancement of technology are very rapid. These technological changes can
affect business negatively or positively, if not responded properly. These
changes can positively improve business productivity, cut costs and minimize
production and distribution cost.
• NATRUAL ENVIRONMENT: Natural environment involves the natural
resources that are needed as inputs by marketers or they are affected by
marketing activities. So marketers should be aware of several trends in the
natural environment.
• POLITICAL ENVIRONMENT : The political environment is the state,
government and its institutions and legislations and the public and private
stakeholders who operate and interact with or influence that system. The
stability of the political environment and government will impact on the
prioritization of mental health policy in relation to other policies, the funding
available to mental health and the time frames in which policies and
programmes can be realized.
• LEGAL ENVIRONMENT: the government, in every country; regulates the
business according to its defined priorities. Legal system of a country is
framed by the government. The laws which are passed by the government for
business operation is called legal environment
• GLOBAL ENVIRONMENT: Global environment helps the cause of
business by making the businessmen come out their shell ad see beyond
 physical boundaries of the country. It helps them to explore oversee markets in
a big way. It is the global environment that helps in integration with the two
economy through unification calls for removal of all the trade business among
countries.
• SOCIO CULTURAL ENVIRONMENT : The vast majority of us buy in
light of the impact of cultural & social elements. The lifestyle, qualities,
convictions, and so on is dead set besides everything else by the society in
which we live. Every society has its own culture. Culture is a blend of
different variables which are exchanged from more established eras & which
are gained. Our conduct is guided by our way of life, family, instructive
foundations, dialects, and so on. Social components are the cultural and social
viewpoints, which incorporate health cognizance, the growth rate of
population, age distribution, career approach and the importance of security.