Chapter-3

Functions of marketing

Marketing management is the process of planning, executing, and tracking the marketing
strategy of an organization. This includes the marketing plan, campaigns and tactics used to
create and meet the demand of target customers to drive profitability.

To ensure you’re making the right decisions, market research is necessary to understand the
marketplace and determine what needs are not being met, or how to exploit opportunities that are
currently not being served. Market research includes competitive research, key demographics,
pricing and the best promotions for attracting customers.

Marketing as, "the action or business of promoting and selling products or services, including
market research and advertising."

What is Sales?

Sales refer to the exchange of goods and services in return for the money. It is a process to
transfer goods from manufacturer to distributor, distributor to wholesaler, wholesaler to retailer
and from retailer to the consumer. The primary object of sales is to increase revenue.

Generally, to promote sales of a product or services a special discount or offers are encouraged
to attract the consumer. Few activities involved in strengthening the sales are:

Demonstration of the product

 Establishing tie-up with various companies

 Customers satisfaction
 Building contacts

What is marketing?

Marketing is a process that involves research and analysing customer requirement, according to
which a company manufactures a product to satisfy their need. The marketing team regularly do
market research to examine the likes and dislikes of customers or a group with different tools. In
other words, marketing is all about discovering human needs and satisfying them with the
desired product, thus resulting in sufficient income.

Few activities that are involved in Marketing:

 Market research
 Manufacturing of product
 Promotion of product

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  Advertising of the product
 Selling the product
 After sell service
 Customer satisfaction

 Difference between Sales and Marketing

Sales Marketing

Definition

Sales is a transfer of product from the Marketing is understanding the customers

manufacturer to the customer in exchange for need and introducing a product
the money

Approach

Product oriented approach is followed Customer oriented approach is followed

Strategy adopted

Sales follows push strategy Marketing adopts pull strategy

Target audience

Individuals and companies Target audience for marketing is the public in

general

Tenure

Short-term Long-term

Primary Objective

Influence the target audience to become Identify customer requirements and make
buyers of the product products that fulfills their requirements

Scope

Scope of sales is limited only towards product Scope of marketing is varied and includes
selling. advertisement, customer support, after sales
service etc.

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 Essential skills required

Good communication and selling skills Good analytical skills

 Marketing Philosophies
There are five marketing concepts. A company should choose the right one according to their
and their customers’ needs.

1. Production Concept
2. Product Concept
3. Selling Concept
4. Marketing Concept
5. Social Marketing Concept

Production Concept

This concept works on an assumption that consumers prefer a product which is inexpensive and
widely available. This viewpoint was encapsulated in Says Law which states ‘Supply creates its
own demand’. Hence companies focus on producing more of the product and making sure that it
is available to the customer everywhere easily.

Increase in the production of the product makes the companies get the advantage of economies
of scale. This decreased production cost makes the product inexpensive and more attractive to
the customer.

A low price may attract new customers, but the focus is just on production and not on product
quality. This may result in a decrease in sales if the product is not up to the standards.

This philosophy only works when the demand is more than the supply. Moreover, a customer not
always prefers an inexpensive product over others. There are many other factors which influence
his purchase decision.

Production concept marketing management philosophies

Examples of Production Concept of Marketing Management Philosophies

Companies whose product market is spread all over the world may use this approach.

Companies having an advantage of monopoly.

Any other company whose product’s demand is more than its supply.

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Product Concept

This concept works on the assumption that customers prefer products of ‘greater quality’ and
‘price and availability’ doesn’t influence their purchase decision. Hence the company devotes
most of its time in developing a product of greater quality which usually turns out to be
expensive. Since the main focus of the marketers is the product quality, they often lose or fail to
appeal to customers whose demands are driven by other factors like price, availability, usability,
etc.

Product concept marketing management philosophies

Product Concept

Examples of Product Concept of Marketing Management Philosophies

Companies in the technology industry.

Companies having an advantage of monopoly.

Selling Concept

Production and product concept both focus on production but selling concept focuses on making
an actual sale of the product. Selling Concept focuses on making every possible sale of the
product, regardless of the quality of the product or the need of the customer. The main focus is to
make money. This philosophy doesn’t include building relations with customers. Hence repeated
sales are very less. Companies following this concept may even try to deceive the customers to
make them buy their product.

Companies which follow this philosophy have a short-sighted approach as they ‘try to sell what
they make rather than what market wants’.

SALES concept marketing management philosophies

Selling Concept

Examples of Selling Concept of Marketing Management Philosophies

Companies with short-sighted profit goals. This often leads to marketing myopia.

Fraudulent companies.

Marketing Concept

Selling Concept cannot let a company last long in the market. It’s a consumers market after all.
To succeed in the 21st century, one has to produce a product to fulfill the needs of their
customers. Hence, emerged the marketing concept. This concept works on an assumption that

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consumers buy products which fulfill their needs. Businesses following the marketing concept
conduct researches to know about customers’ needs and wants and come out with products to
fulfill the same better than the competitors. By doing so, the business establishes a relationship
with the customer and generates profits in the long run.

However, this isn’t the only philosophy that should be followed by all the businesses. Many
businesses still follow other concepts and make profits. It totally depends on the demand and
supply and the needs of the parties involved.

Marketing concept marketing management philosophies

Marketing Concept

Examples of Marketing Concept of Marketing Management Philosophies

Companies in perfect competition.

Companies who want to stay in the market for a long time.

Societal Marketing Concept

Adding to the marketing concept, this philosophy focuses on society’s well-being as well. The
business focuses on how to fulfill the needs of the customer without affecting the environment,
natural resources and focusing on society’s well-being. This philosophy believes that the
business is a part of the society and hence should take part in social services like the elimination
of poverty, illiteracy, and controlling explosive population growth etc.

Societal marketing concept marketing management philosophies

Societal Marketing Concept

Many of the big companies have included corporate social responsibility as a part of their
marketing activities.

Holistic Marketing Concept

Holistic marketing is a new addition to the business marketing management philosophies which
considers business and all its parts as one single entity and gives a shared purpose to every
activity and person related to that business. A business, like a human body, has different parts,
but it’s only able to function properly when all those parts work together towards the same
objective. Holistic marketing concept enforces this interrelatedness and believes that a broad and
integrated perspective is essential to attain the best results.

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  Marketing Mix & The 7 P’s Of Marketing
The classic marketing mix, as established by Professor of Marketing at Harvard University, Prof.
James Culliton in 1948 and expanded upon by Jerome McCarthy, incorporates Product, Price,
Placement, and Promotion into a theory of marketing that has been important to the industry
for more than 70 years. Since then, the theory has been expanded into the 7 P's of marketing.
Which are: Product, Price, Promotion, Place, People, Packaging, and Process?

Today, we refer to these interchangeably as the 7 P's or as the Marketing Mix. Here, we will
discuss this concept, its components, and answer some common questions about the marketing
mix and its applications.

What is a marketing mix?

Marketing mix is a selection of marketing tools that include several areas of focus that can be
combined to create a comprehensive plan. The term refers to a classification that began as the 4
P’s: product, price, placement, and promotion, and has been expanded to Product, Price,
Promotion, Place, People, Packaging, and Process.

What are the 7 Ps of Marketing?

The 4 P’s marketing mix concept (later known as the 7 P’s of marketing) was introduced by
Jerome McCarthy in his book: "Basic Marketing: A Managerial Approach". It refers to the
thoughtfully designed blend of strategies and practices a company uses to drive business and
successful product promotion. Initially 4, these elements were Product, Price, Place and
Promotion, which were later expanded by including People, Packaging and Process. These are
now considered to be the “7 P’s” mix elements.

It can be difficult for a small business owner or marketing manager to know how to establish a
unique selling proposition or to reach the right customers, especially on new platforms like the
internet, with digital marketing.

Fortunately, the 7 Ps of marketing give you a framework to use in your marketing planning and
essential strategy to effectively promote to your target market.

You can also take into consideration elements of the mix in your day to day marketing decision
making process with the goal to attract the right audience to successfully market to through your
marketing campaigns.

The 7 elements of the marketing mix include the following:

1. Product (or Service)

Your customer only cares about one thing: what your product or service can do for them.
Because of this, prioritize making your product the best it can be and optimize your product lines
accordingly. This approach is called “product-led marketing.” In a marketing mix, product
considerations involve every aspect of what you're trying to sell. This includes:

 Design

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  Quality
 Features
 Options
 Packaging
 Market positioning

There are five components to successful product-led marketing that are important for product
marketers to take into consideration:

 Get out of the way. Focus your marketing efforts on getting consumers to try what you
have to offer so they can learn its value for themselves.
 Be an expert (on your customers). Know your customer's needs and use that knowledge
to help communicate your product's value.
 Always be helping. Position yourself as an ally by creating informative content that meets
your target customers’ needs, and they'll be more likely to buy from you. (This is also
called content marketing.)
 Share authentic stories. Encourage happy customers to share their experiences and tell
others why they appreciate your brand.
 Grow a product mindset. Focus on your product before you consider how to sell it. Invest
in development, and the product quality will take care of the rest.

2. Price
Many factors go into a pricing model. Brands may:

 Price a product higher than competitors to create the impression of a higher-quality

offering.
 Price a product similar to competitors, and then draw attention to features or benefits
other brands lack.
 Price a product lower than competitors to break into a crowded market or attract value-
conscious consumers.
 Plan to raise the price after the brand is established or lower it to highlight the value of an
updated model.
 Set the base price higher to make bundling or promotions more appealing.

Consider what you're trying to achieve with your pricing strategy and how price will work with
the rest of your marketing strategy. Some questions to ask yourself when selling products:

 Will you be offering higher-end versions at an additional cost?

 Do you need to cover costs right away, or can you set a lower price and consider it an
investment in growth?
 Will you offer sales promotions?
 How low can you go without people questioning your quality?
 How high can you go before customers think you’re overpriced?
 Are you perceived as a value brand or a premium brand?

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3. Promotion
Promotion is the part of the marketing mix that the public notices most. It includes television and
print advertising, content marketing, coupons or scheduled discounts, social media
strategies, email marketing, display ads, digital strategies, marketing communication, search
engine marketing, public relations and more.

All these promotional channels tie the whole marketing mix together into an omnichannel
strategy that creates a unified experience for the customer base. For example:

 A customer sees an in-store promotion and uses their phone to check prices and read
reviews.
 They view the brand's website, which focuses on a unique feature of the product.
 The brand has solicited reviews addressing that feature. Those reviews appear on high-
ranking review sites.
 The customer buys the product and you’ve sent a thank you email using marketing
automation.

Here are the ways you can use these channels together:

 Make sure you know all the channels available and make the most of them to reach your
target audience.
 Embrace the move toward personalized marketing.
 Segment your promotional efforts based on your customers' behavior.
 Test responses to different promotions and adjust your marketing spend accordingly.
 Remember that promotion isn't a one-way street. Customers expect you to pay attention
to their interests and offer them solutions when they need them.

4. Place
Where will you sell your product? The same market research that informed your product and
price decisions will inform your placement as well, which goes beyond physical locations. Here
are some considerations when it comes to place:

 Where will people be looking for your product?

 Will they need to hold it in their hands?
 Will you get more sales by marketing directly to customers from your own e-
commerce website, or will buyers be looking for you on third-party marketplaces?
 Do you want to converse directly with your customers as they purchase, or do you want a
third party to solve customer service issues?

5. People
People refers to anyone who comes in contact with your customer, even indirectly, so make sure
you're recruiting the best talent at all levels—not just in customer service and sales force.

Here’s what you can do to ensure your people are making the right impact on your customers:

 Develop your marketers’ skills so they can carry out your marketing mix strategy

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  Think about company culture and brand personality.
 Hire professionals to design and develop your products or services.
 Focus on customer relationship management, or CRM, which creates genuine
connections and inspires loyalty on a personal level.

6. Packaging
A company's packaging catches the attention of new buyers in a crowded marketplace and
reinforces value to returning customers. Here are some ways to make your packaging work
harder for you:

 Design for differentiation. A good design helps people recognize your brand at a glance,
and can also highlight particular features of your product. For example, if you’re a
shampoo company, you can use different colors on the packaging to label different hair
types.
 Provide valuable information. Your packaging is the perfect place for product education
or brand reinforcement. Include clear instructions or an unexpected element to surprise
and delight your customers.
 Add more value. Exceed expectations for your customers and give them well-designed,
branded extras they can use, like a free toothbrush from their dentist, a free estimate from
a roofer, or a free styling guide from their hairdresser.

7. Process
Prioritize processes that overlap with the customer experience. The more specific and seamless
your processes are, the more smoothly your staff can carry them out. If your staff isn't focused on
navigating procedures, they have more attention available for customers—translating directly to
personal and exceptional customer experiences.

Some processes to consider:

 Are the logistics in your main distribution channel cost-efficient?

 How are your scheduling and delivery logistics?
 Will your third-party retailers run out of product at critical times?
 Do you have enough staff to cover busy times?
 Do items ship reliably from your website?

If you get more than one customer complaint about any process, pinpoint what's going wrong
and figure out how to fix it.

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