Marketing:

Concept of marketing
Marketing is very much integral to market. Market is a place where the buyers and sellers assemble to
exchange their products for money and vice versa. Production precedes marketing. Production has
undergone changes from time to time with changing business environment. Accordingly, the concept of
marketing has also changed from one point of time to another. Accordingly, the marketing concepts are
broadly classified into five categories:

1. Production concept: This is probably the oldest concept of marketing. Under this concept
producers believe that customers want product at lower prices . They do not concern for
production attributes, i.e, product qualities. Hence the attention of the producer gets focused
on the production. This concept may be adopted in two situations. One,when the demand of a
product is higher than its supply and second when the company achieves economy of scale. In
nutshell, producer dictates the market under production concept.
2. Product concept: Product concept emphasis on quality of production rather than quantity of
production. The product concept holds that consumers appreciate quantity products even by
paying higher prices. The marketers or producers believe that all products cannot be sold in a
market . Instead , only those products can be sold in the market which are qualitative and satisfy
the consumer requirements.
3. Sales concept : With the passage of time it was realized that production is not a big problem as
sales are. It is sale only which converts goods and services into money and revenue and
loss/profit. Thus the focus of business firms diverts to the sale of products which can be
achieved through aggressive selling techniques such as advertising, personal selling and sales
promotion without giving any consideration to customers satisfaction. The main aim of selling is
to convert the goods into cash by using fair and unfair means. But the buyers cannot be
manipulated every time , hence selling can be successful for short period but not for long
period. In other words seller dictates the market or seller is the king.
4. Marketing concepts: According to this concept, customer satisfaction Is the key to organizational
success. This concept states that customers buy only those goods which satisfy their wants. It is
important for a producer to check the demand of a product with its demanding traits. Nowadays
business firms don’t sell what they can make, rather they make and sell what cUstomers want.
Thus the focus moves from production to product to selling and rest with the consumer. That is
why consumer is the boss or king who dictates the market.
5. Societal concept : The societal concept is an extension of the marketing concept that covers the
society at large in addition to the consumers. The marketing concept has been criticised by some
of the people because of the challenges posed by social problems like environmental pollution,
deforestation, inflation ETC. This is because any activity which results in customer satisfaction
but is harmful to the interest of the society at large cannot be justified. Therefore the firms
must perform the functions of marketing keeping in view the social welfare also. For example no
to plastic bags, recycled paper.
Marketing Management
Marketing management is a specialized branch of management which consists of planning, organizing,
directing and controlling the activities related to the marketing of goods and services to satisfy the
customer wants. It is that branch of managerial science which has developed with a view to provide
maximum consumer satisfaction and ensuring maximum enterprise profitability through planning,
organizing, directing and controlling the activities involved in the creation of demand for products and
creation of utilities for those products.

Objectives of marketing management

1. Creation of demand :- The Basic aim of marketing is to create demand for a product. This is
done by understanding what the customer wants and then carrying out the production
according to their wants. Apart from this, the customer are informed well in advance about the
users of the product. All these factors contribute in creating demand.
2. Customer satisfaction:- The main objective of marketing management is to take step for growth
and stability of the business through consumer satisfaction. Consumer satisfaction is the key to
the profit maximization as there is a direct correlation between these two variables.
3. Creation of goodwill :- Marketing helps a firm to build goodwill in the market over a period of
time. By selling quality products at a reasonable price, the firm tries to earn a name and build a
position for itself in the market.
4. Capturing market share:- Another objective of marketing management is to capture a
reasonable share of the market. This will be possible through advertisements and sale
promotion methods.

Difference between marketing and selling

1. Marketing starts before manufacturing of a product i.e, it identifies customer needs first and
continues after sales, whereas selling starts when product is manufactured and ends with the
sale of goods.
2. Marketing is customer oriented, whereas selling is product oriented. The main aim of marketing
is growth and stability of the business through customer satisfaction, whereas the main aim of
selling is to earn profit by increasing the volume of sales.
3. Marketing involves fair trade practice while dealing with the customer and suppliers, whereas
selling involves restrictive and unfair trade practice.
4. Marketing starts with customer and ends with customer whereas selling starts with product and
ends with product.
5. Marketing is proactive in nature, whereas selling is reactive in nature.
6. Marketing stresses on long term objective and selling stresses on short term objectives.

Functions of marketing
1. Marketing research: It may be defined as to know the taste, liking, disliking and purchasing
power of the customer. The success of marketing management is based on the manner in
which marketing research is conducted.
 2. Product planning and development :- Product planning means deciding in advance what sort of
product is to be produced and product development means giving practical shape to the
practical planning.
3. Assembling :- Assembling involves collection of goods bought from different places under one
roof.
4. Packaging:- It is the act of designing and producing a package of product . A package is wrapper
or container In which product is enclosed or sealed. packing is also called “ salesmanship”.
5. Labelling:- A label is A tag attached to a product and it is a part of packaging. The label describes
who made it, where it is made and when.
6. Storage:- It means the process of holding and preserving goods for the use in future. Generally
there is a time gap between the production and the sale of goods. During this period goods must
be stored properly to protect them from fire, theft, damage etc, storage creates utility by
bridging the gap between the time of production and consumption.
7. Transportation:- It refers to the physical movement of goods from the place of production to the
place of consumption, by carrying these goods to such places where they are needed. It creates
place utility.
8. Promotion:- It is a communication process by which a producer of the product or service draws
attention of the consumer towards their product and services. In simple words, it refers all those
activities to influence buyers behaviour. E.g advertising, sales promotion, personal selling,
public relations.
9. Branding:- Branding is a process of giving a separate identity to a product with the help of
brand. A brand is a name , sign, symbol, design or a combination thereof used to distinguish the
product of one enterprise from those of others. Tata Steel, Godrej refrigerator, Amul butter,
Micromax phone are the examples of brands.

Marketing Mix
Marketing mix Refers to the combination of four basic elements which constitutes the core of a
company’s marketing system. These four elements are product, price structure, promotional activities
and place (distribution system). These are also called the four P's of marketing and are closely
interrelated because decisions in one area influence in other.

Consumers differ in their income, education, habits and preferences. They may respond to the same
marketing mix in a different way .Therefore marketing mix should be decided to suit a particular market.
As the need of the consumer change, marketing mix may have to be changed from time to time.
Marketing mix is thus a dynamic concept.

Elements of marketing mix

1. Product mix :- Anything which satisfies the want of a consumer is called product. Product mix is
the total number of products and items which a particular marketer offers in the market. A firm
may start with one product in the beginning and may go on adding products related to quality,
design, packaging etc. The important components of product mix are branding, packaging and
labelling. A product is both what a seller sells and what a buyer buys.
2. Price mix:- The term price denotes the money value of a product or service. It is the amount of
money a seller is asking for the product or services he offers for sale. From buyers point of view ,
 price is what the product is worth and what he has to pay for a product. It is the crucial element
of marketing mix because the customer is very sensitive to it. A slight change in price may shift a
consumer to competitors product. A firm cannot succeed if it’s prices are too low or too high.
3. Place mix/distribution mix:- It is a process by which the goods are transferred from the place of
production to the place of consumption. Its purpose is to make the products available at the
right place and at the right time. Place mix involves two board functions. Physical distribution
and channel of distribution.
4. Promotion mix:- Promotion is a communication process by which a producer of the product or
service draws attention of the consumer towards their product and services. Promotion mix is
the combination of various promotional elements viz, advertising, personal selling, publicity,
sales promotion used by firms to create, necessary when a new product is introduced in the
market or an old product is to be improved.

What is price mix? What are the factors affecting pricing decision?
The term ‘price’ denotes the money value of a product or service. It is the amount of money a seller is
asking for the product or service he offers for sale. From buyers point of view, price is what the product
is worth and what he has to pay for a product. It is the crucial element of marketing mix because the
customer is very sensitive to it. A slight change in price may shift a consumer to competitors' product. A
firm cannot succeed if its prices are too low or too high. So it is very essential that pricing decisions are
taken with caution. Price may be called by different names, price for education may be called tuition fee.
Price for using transportability is called fare, price for a job is salary , price for a house is rent etc.

Factors affecting pricing decisions

1. Objective of organization:- if the objective of an organization is to maximize profits then it will

charge higher profits and on the other hand if the objective of an organization is to maximize
the market share then it will charge lower prices.
2. Cost factor:- No business can survive without covering it’s cost . The price should be fixed in
such a manner which cover all the costs and profit margin in order to survive in the market.
3. Demand:- The demand of a product or service also influences price. If the demand of a product
is high then higher prices will be charged. If the demand of a product is low, then lower prices
will be charged.
4. Competition:- Price charged by competitors often act as a guide in a pricing decision. A slight
change in the price may shift a consumer towards competitors. Neither we can afford to
increase nor we can pricing strategies.
5. Government policy:- There may be government regulations and guildelines for fixation of prices,
then prices will be fixed as per those guidelines. For example prices of LPG are fixed by the
government itself.
6. Buyers perception about quality:- An article may be sold at a price much above the costs if the
customer perceives the article is of exceptional quality. On the other hand the same article may
be sold at a low price if the customer perceives the quality of an article is poor.

PLACE/CHANNEL OF DISTRIBUTION
A Channel of distribution means a path or route along which the goods are moved from the producer to
its ultimate consumer. In other words channel of distribution refers to the people or middleman who
helps in distributing the goods. It consists of manufacturers, consumers and various intermediaries who
serve as a link between them.

Following are the channels of distribution

1. Zero level channel/ Direct channel:- It is a case when a manufacturer firm sells directly goods to
its customers. No middleman or intermediary is present between the producer and the
consumer. E.g Bata sells their shoes directly to the consumers.
2. ONE LEVEL CHANNEL:- In this Channel, only one intermediary is adopted i.e, retailer.
Manufacturer firm supplies goods to the retailer and who in turn sells to the ultimate consumer.
Manufacturer > retailer >customer.
3. TWO LEVEL CHANNEL:- In this channel two intermediaries is adopted that i.e, wholesaler and
retailer. Manufacturer firm supplies goods in bulk quantities to the wholesaler who supplies the
same to large number of retailers and retailers sell them to the ultimate consumers. This
channel is used in case of convenience goods like soap, salt, Tea, shampoo ETC
Manufacturer >Wholesaler> Retailer> Consumer.
4. THREE LEVEL CHANNEL:- In this channel three intermediaries are adopted i.e, agent, wholesaler
and retailer. In this channel manufacturer firm supplies its entire output to his seller agent who
supplies it to various wholesalers. Each wholesaler supplies to the retailers who sells the
products to the ultimate consumers. This channel is adopted when the producer a limited
product line and a large market. In case of clothes the this channel is widely used.
Manufacturer>Agent>Wholesaler>Retailer>Consumer.

FACTORS INFLUENCING IN SELECTION A CHANNEL OF DISTRIBUTION

 Product related factors:- The nature and type of product have an important bearing on
the choice of distribution. If the product is perishable for example( fruits, vegetables,
eggs) shorter channels are preferable because long channels of distribution would delay
the delivery and product may get spoiled. But durable product can be distributed
through long channels.
 Market related factors:- The nature and the size of a market have also an important
bearing on the channel of distribution. If the market is narrow direct channels can be
used and vice versa i.e, if the market is wider indirect channels are used.
 Company related factors:- The strength of a company have a direct impact on the
choice of distribution. If a company is financially sound, it can create its own channel of
distribution and on the other hand financially weak companies have to depend upon
intermediaries.
 Middleman consideration:- The availability and the Commission of intermediaries also
have an impact on the channel of distribution. If the Commission of the intermediaries
effect on the product price of the product largely then direct channels or creating own
channel is preferable. Otherwise it will adversely affect the competitiveness of the
product.
  Other factors:- Other factors like size of a product, monopoly, product line, also have an
important bearing on the choice of distribution.
It can be clearly judged from the other point that only that Channel should be used
which is effective and cost efficient.

PROMOTION MIX
Promotion is a communication process by which a producer of the product or service draws attention of
the consumer towards their product and services. Promotion mix is the combination of various
promotional elements viz, advertising, personal selling, publicity, sales promotion used by firm to
create, maintain and increase the demand of a product. Promotion becomes necessary when a new
product is introduced in the market or an old product is to be improved.

ELEMENTS OF PROMOTION MIX

The elements of promotion mix are as under:-

1. Personal selling :-It means face to face conversation between seller and buyer. It
involves oral presentation by sales person to one or more prospective buyers for the
purpose of making sales. It is an art of convincing the buyer to buy the product. The
person who does the job of selling through face to face conversation is called
salesperson. It is also known as salesmanship.
2. Sales Promotion:- It refers to the use of short term incentives or other promotional
activities that motivates the consumer to buy the product except advertising and
personal selling. It includes activities of like distribution of free samples, free coupons,
premium or bonus, demonstration , trade show, display show, contest etc .
3. Advertising:- It is a paid form of non personal presentation and promotion of ideas,
goods or services by an identified sponsor. It is a method whereby common message
regarding the merit, price and availability of products or services is given in order to
achieve higher sales. It has been rightly said that,I” in order to fly the aero plane of sales
the advertisement act as a fuel”.
4. Publicity:- It is a form of advertisement without incurring any cost. Publicity is not
backed by any identified sponsor. It is the news carried in the mass media about an
organization and/or its products / service and activities in order to inform the general
public. Publicity can be positive or negative. It is a very important tool of communication
as it can make or break a product or even a company.

DIFFERENCE BETWEEN ADVERTISEMENT AND PUBLICITY

1. advertisement is a paid communication. publicity is a non paid communication .
2. Advertising is sponsored. Publicity is not sponsored.
3. In advertisement the message originates from the advertiser. In publicity the message
originates from the media.
4. In advertisement the sponsor has control over the content and timing of the message. In
publicity media has control over the contents and timing.
 5. Advertisement is a persuasive message designed to persuade customers about the
product. Publicity is an informative message designed to inform public.

METHODS OF SALES PROMOTION:- following methods are used for sales promotion to
customers.

1. Rebate:-It refers to selling product at a special price which is lower than the original price in
order to clear the stock.
2. Discount:- A discount is a reduction of certain percentage of price from the list price which
is allowed to customer for a limited period. Sometimes higher discounts are offered for
higher volume of sales.
3. Sample:- A Sample is a part of population which represents whole universe. Business houses
provide samples to the targeted customers in order to acquaint the customers with the
product.
4. Free gift:- It refers to giving a free gift on the purchase of a particular product. A car dealer
may offer free stereo on the purchase of a car.
5. Contests :- Some companies organize contest and offers gifts of its products to the winners.
Contest help the company in popularizing their product.
6. Container premium:- Sometimes products are put in such container which may be later
used by the customer for other purposes. For example a detergent company may keep
detergent pack in a bucket in order to attract the customers.

Merits of sale promotion

Following are the merits of sale promotion:-

1. Increases sales volume:- Sales promotion measures help in increasing the sales volume. The
old stock maybe disposed off quickly.
2. Helpful in launching new product:- Sales promotion measures are helpful in launching new
products. By allowing reduced price, the firm may be able to attract new customers.
3. Information:- Sales promotion measures acquaints the product with the target market.
4. Out of date stock:- The Stock nearer to the expire date are offered as free samples and
disposes off.

Demerits of sales promotion

1. Following are the demerits of sale promo

tion

2. Adversely affects product image:- When goods are sold at lower price, the image of the
product goes down.
3. Customer always expect reductions:- If a firm indulges in sale promotion too often, then
customer keep on watching for such schemes to buy products. This adversely affect the
image of the firm.
4. Short-Term Orientation: Sales promotion is meant for short-term which boosts the sales
volume for a shorter period by offering distinct offers and benefits to customers. Short-term
sales volume is quite difficult to maintain and has a negative influence on the long-term
future of business.
5. Costly: Sales promotion raises the expenses of business organization which have adverse
impact on their profit margin. Techniques of sales promotion like free samples, discounts,
and coupons require huge costs on the part of company. It is uncertain whether all these
measures will provide equal returns that reduce the profitability of business.