Marketing management is a word that carries the compound meaning ‘marketing plus management’. Marketing is the total system of business activities while management is the art of getting things done in a coordinated and harmonious way. Management may be seen as an art of getting things done through and with the people towards the attainment of the objectives of the firm.
Thus, we can say that marketing management is a branch of total management and is concerned with the direction of those activities toward the attainment of marketing goals, i.e., satisfaction of customers’ needs, increase in sales volume, and increase in organisation’s profits. All activities directed towards attainment of these marketing goals may be characterised as marketing management.
Marketing management is the analysis, planning, implementation, and control of programs designed to create, build, and maintain mutually beneficial exchanges and relationships with target markets for the purpose of achieving organisational objectives.
It relies on a disciplined analysis of the need, wants, perceptions, and preferences of target and intermediary markets as the basis for effective product design, pricing, communication, and distribution.
Marketing management can occur in an organisation in connection with any of its markets. Consider an automobile manufacturer. The vice president of personnel deals in the labour market; the vice president of purchasing, the raw materials market; and the vice president of finance, the money market. They have to set objectives and develop strategies for producing satisfactory results in these markets.
Traditionally, however, these executives have not been called marketers or trained in marketing. Instead, marketing management is historically identified with tasks and personnel dealing with the customer market. We shall follow this convention, although what we shall say about marketing concepts and principles applies to all markets.
Marketing work in the customer market is carried out by sales managers, sales representatives, advertising and promotion managers, marketing researchers, customer service managers, product managers, market managers, and the marketing vice president. Each of these job positions goes along with well-defined missions and responsibilities.
Many of these job positions centre on the management of particular marketing resources, such as advertising, sales force, or marketing research. On the other hand, product managers, market managers, and the marketing vice president manage programs. Their job is to analyse, plan, and implement programs that will produce a desired level of transactions with specified target markets.
Marketing management is one component of total business management. It is a specialized area of management which deals with the marketing aspect of business. Marketing management means managing the marketing function efficiently. It represents a marketing concept in action.
Thus, marketing management is concerned with that area of total management which deals with the broad problem of sales. Marketing management may be defined as the process of management of marketing programmes in order to accomplish corporate objectives. The marketing management process is quite comprehensive. It is looked after by a manager called a marketing manager.
The basic functions of management (e.g., planning, organising, directing) are required to be conducted by all categories of managers. A marketing manager has to perform similar managerial functions while performing regular marketing operations and activities. A marketing manager needs capacity to perform all managerial functions in the field of marketing in an efficient and orderly manner.
What is Marketing Management?
Marketing Management by Philip Kotler
Philip Kotler defines it as, “Marketing management is the process of planning and executing the conception, pricing and promotion and distribution of goods, services and ideas to create exchanges with target groups that satisfy customer and organisational objectives.”
According to Philip Kotler, “Marketing management is the analysis, planning, implementation and control of programmes designed to create, build and maintain beneficial exchanges and relationships with target markets for the purpose of achieving organisational objectives”. Marketing management deals with planning, implementation and control of the entire marketing programmes of a firm. It includes various managerial functions such as – determining marketing objectives and so on.
The three kinds of goals are:
- Satisfaction of customer’s needs
- Increase in sales volume
- Increase in organisational profits
These goals are correlated. Therefore, marketing management is a functional area of business management which has to deal with the consumers’ needs and wants in the first place, followed by promotion and pricing to create specific demand for the goods or services or idea in question, and then flow of goods or services or ideas to the customer and finally information from the customers about expected satisfaction.
Marketing Management Definition
According to the American Marketing Association – “Marketing Management” is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and service to create exchanges that satisfy individual and organisational objectives.
According to Professor R.S. Dauar – “Marketing Management is the process of ascertaining consumer needs, converting them into products or services and then moving the products or services to the final consumer or user to satisfy such needs and wants to specific customer segment or segment with emphasis and profitability ensuring the optimum use of the services available to the organisation”.
According to Cundiff and Still – “Marketing management as a branch of a broad area of management. Marketing management is concerned with direction of purposeful activities towards the attainment of marketing goals.”
In the words of Cundiff and still “Marketing Management is concerned with the direction of purposeful activities, towards the attainment of marketing goals”
According to Philip Kotler – “Marketing Management is the analysis, planning, implementation and control of programmes designed to bring about desired exchanges with larger audiences for the purpose of personal or mutual gain It relies heavily on the adaptation and co-ordination of product-price-promotion and place for achieving effective response.”
The above definitions clearly bring out the substance of marketing management. Marketing management is the marketing concept in action. It is a process which involves analysis, planning, implementation and control and is concerned with the exchange of goods and services for producing satisfaction for both buyer and seller.
Marketing Management Meaning
Marketing management represents marketing concepts in action, i.e., management of demand under a customer-oriented marketing approach.
Marketing management may be defined as the process of management of marketing programmes to accomplish corporate objectives. It involves planning, implementation and control of marketing programmes or campaigns.
Marketing management represents an important functional area of business (other areas are production, finance, and administration). It is in charge of the marketing process, i.e. the flow of goods services from the producers to the consumers. It looks after the marketing system of the enterprise.
It performs managerial functions in the field of marketing. As an agency of demand management, marketing management is in charge of regulating the level, timing and character of market demand in such a manner that the enterprise will be able to realise the planned objectives, viz.,
- Productivity (higher rate of output and sales)
- Customer satisfaction and
- Social satisfaction. Profit is assured as a reward of customer/ social satisfaction
Concept of Marketing Management
Marketing concept means the philosophy, belief or attitude of the management of a firm which guides its marketing efforts. There are five marketing concepts of marketing management philosophies which dominated the marketing policies at different stages of their evolution.
- The Exchange Concept
- The Production Concept
- The Product Concept
- The Selling Concept
- The Marketing Concept
1. The Exchange Concept of Marketing:
The exchange concept of marketing, as the very name indicates, holds that the exchange of a product between the seller and the buyer is the central idea of marketing. Though exchange forms an important part of marketing, to consider marketing as a mere exchange process would definitely undermine the essence of marketing. A proper scrutiny of the marketing process obviously reveals that marketing is far wider than exchange.
In other words, the meaning of exchange is narrow whereas the meaning of marketing is wide. Exchange, at the most, covers distribution aspects and price mechanism involved in marketing but it does not include the other important aspects such as consumer care, generation of value satisfaction, creative selling and integrated action for serving the customer.
2. The Production Concept of Marketing:
The production concept of marketing holds that – (i) consumers will always be ready to respond to products which are made available easily and at affordable (i.e., lower) prices. Therefore, the major task of the producers is to strive constantly to improve production and distribution efficiently and bring down the prices.
This concept believes that marketing can be managed by managing production. It assumes that if the product is good and reasonably or fairly priced, consumer response is favourable and little marketing effort will be necessary to promote sales and achieve profit. It is based on the premise that consumers know the competing brands and therefore no promotion or sales efforts are necessary. This was the marketing philosophy till 1930.
However, this philosophy has been criticised on several grounds. Easy availability and low price are not the only parameters which govern the buying motives of the consumers. It should be noted that the consumers buy those goods which satisfy their wants even at high prices.
Secondly, this philosophy neglects the quality consideration which is an important factor in marketing. Thus, this concept fails to serve as the right marketing philosophy for the business firms.
3. The Product Concept of Marketing:
According to this concept, the management believes that consumers always favour products of superior quality, popular make and good performance. Therefore successful marketing calls for continuous product planning and development and improvement in quality standards. This concept encourages product innovation, quality assurance and research and development.
However, this concept suffers from marketing myopia (i.e. short-sighted and crooked perception), because many business firms do not bother to study the market and the consumer in depth. They get themselves totally engrossed with the product and almost forget the consumer for whom the product is really needed.
Further, they fail to find out what the consumers actually need and what they would gladly accept. Prof. Theodore Levitt was right when he eloquently describes business firms’ obsession with the product and their negligence of the customers and says, “They don’t get as excited about their customers in their own backyard as about the oil in the distant Sahara desert”.
4. The Selling Concept of Marketing:
This concept assumes that consumers will not buy enough of the firm’s products unless they are approached through intensive sales promotion, advertising and salesmanship efforts and effective communication with the market. It emphasises the need for intensive sales efforts and aggressive selling.
It contends that the consumers voluntarily do not buy on their own account, unless and until they are induced by effective sales efforts. Even the best products cannot be sold without the help of sales promotion and aggressive salesmanship. Thus this concept emphasises the prominence of advertising and salesmanship, publicity campaigns and sales promotion techniques in the marketing process.
However, this concept has been criticised on the ground that it lays greater emphasis on increasing the sales and not on the consumer satisfaction. Further, it attempts to narrow down the marketing to the function of selling.
But it should be noted that selling is only a part of marketing and not the whole of it. As Philip Kotler points out, “the aim of marketing is to make selling superfluous”. Again, the selling concept leads to heavy sales expenditure for recruiting, training and motivating the sales force, which may prove sometimes unfruitful.
5. The Marketing Concept or Consumer-Oriented Concept:
This is the modern concept of marketing which was introduced in marketing philosophy and objectives after 1950. This concept holds that the primary task of a business firm is to study the needs, desires and preferences of the potential consumers and on the basis of the latest and accurate information about the market demand, the firm should produce and offer those products and services which are actually needed by the consumers and which satisfy their needs, much better than those of its competitors.
The essence of the marketing concept is that the customer and not the seller or the product should be the centre or the heart of the entire business system. It emphasises the customer-oriented marketing process. It upholds ‘consumer sovereignty’ (i.e., the fact that the consumer is the king) which is always honoured in economic theory.
Therefore all business activities revolve around consumer-satisfaction and service. The marketing plans, policies and programmes should be so formulated as to serve efficient customer demand. The entire marketing system, in fact, the entire business system, must aim at consumer-satisfaction.
In order to draw a clear-cut distinction between selling and marketing concepts, Peter Drucker lists the aims of marketing in the following words – “Indeed, selling and marketing are antithetical rather than synonymous or even complementary. There will always, one can assume, be a need for some selling. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then is to make the product or service available i.e., logistics rather than salesmanship, and statistical distribution rather than promotion”.
Thus, the marketing concept emphasises that the business firms should aim at producing what the consumers (i.e., customers) want so as to maximise consumer satisfaction, which, in turn, enhances profits.
Though the marketing concept appears to be appealing and sound at the outset, it is argued that the business firms just talk about it but do not practise it in the true sense of the term. Many have argued that establishing the marketing concept in any enterprise is an extremely difficult task, and it requires considerable planning, persuasion, education and reorganisation.
According to Kotler, it is claimed that this concept would sidestep the conflict between consumer wants, consumer interests and long-term social welfare.
In an attempt to suggest a new marketing concept to replace the dilemma which has crept in, Kotler introduces a new concept ‘Societal Marketing Concept’ as the possible remedy.
Principles of Marketing Management
Principles of marketing management are as follows:
1. Principle of Direction:
The management executive issues necessary directions to his subordinates and coordinates all the activities under marketing divisions. He should also direct and co-ordinate the activities of other departments. Like personnel, finance and production, etc., so far as they are helpful in achieving the marketing goals.
2. Principle of Objectivity:
All the activities of the marketing division are directed towards achieving the overall goals of the management. With a view to this end the marketing expert takes decisions objectively from time to time.
3. Principle of Sales Promotion:
The ultimate objective of all the enterprises is to maximise sales. This aim should not be over-looked by the marketing executive and he should make all possible efforts to promote the sales of the company. For this purpose, he should employ all the new techniques and methods.
4. Principle of Planning:
Proper planning is essential to achieve the three underlying objectives of marketing—(a) Increase in sales volume; (b) Increase in net profits; and (c) Growth of the enterprise. The success of the company hangs on proper planning.
Basic reasons for constant attention to proper planning arise from the instability of consumer’s preferences and purchasing power on the one hand and the instability of competitive position on the other.
5. Principle of Organisation:
To achieve the various objectives and goals, the marketing manager has to organise its division on the basis of sound modern principles of organisation. There should be a clear-cut understanding of the duties and functions of the personnel engaged in the responsible task.
As far as possible there should not be overlapping of responsibilities and obligations of the persons as it breeds confusion and slackness. Each individual should know exactly what responsibility is given to him.
6. Principle of Motivation:
The success of the management executive can well be judged by how far he is able to motivate the staff under him to maximise its effort to achieve the targets of the enterprises, i.e., maximum sales and profits with maximum customer satisfaction.
7. Principle of Control:
Marketing management objectives can only be achieved if the various marketing activities are properly controlled. For this purpose various steps to be taken are-(a) establishing the standards, (b) evaluating the actual performance, (c) comparing the actual results with the standards fixed and not the deviation if any, and (d) taking the corrective action for achieving the standards. Control on various activities is necessary to keep the marketing costs within admissible limits.
8. Principle of Research and Development:
Changes in the habits, tastes, and preferences of the consumers are taking place all the time. It is the duty of the marketing manager to study and carry on research and to adopt the product in conformity to the preferences of the final consumers. Any slackness in the research and development of the products might cause adverse effects on the total sales of the product or products.
9. Principle of Consumer’s Satisfaction:
Modern marketing management concept stands for full satisfaction of the consumers. It should always be kept in mind that the chief objective of the company to earn maximum net profit ultimately depends on the total volume of sales which in turn depends on the consumer’s satisfaction.
Scope of Marketing Management
Marketing Management bridges the gap between inefficiency in working to the most advanced and efficient level of working. Organization is bound to perform search, for the need of implementation of marketing management in every hierarchical level from shop floor to top management.
The CEO of Multimillion Corporation once stated that, “our product is reasonably good but our marketing is excellent so it attracts huge customer support.”
Every good management always thinks about the right marketing mix before even thinking about production. It is applicable in every sector of industry and even for service industry, in which service marketing mix is decided by top management for optimum results.
Scope of marketing management is highlighted with following key points:
- Product satisfaction
- Pricing decisions
- Service sector
- Relationship management
- Agriculture sector
- Profit maximisation
- Research and education
- Distribution channels and logistics
Nature of Marketing Management
The nature of marketing management is clarified by the following features:
1. Functional Area of Management:
Marketing management is a functional area of management. As a managerial function, it includes analysis, planning, implementation and control of the activities concerned with distribution of goods for satisfying the needs of the customers.
Marketing management is goal-directed. It attempts to satisfy the needs of customers by offering them satisfying products and generating revenue for the business.
3. Customer Focused:
Marketing management is the marketing concept in action. It includes all activities which are necessary to understand the needs of customers and supply goods and services to satisfy their needs. The marketing concept is based on the philosophy that all activities of the business enterprise should be oriented towards the satisfaction of the requirements or needs of the customers.
4. Wide Scope:
Marketing management includes all activities that identify and satisfy the needs of the customers. Product design, promotion, pricing and distribution are properly harmonised so as to satisfy the needs and expectations of the customers. Thus, marketing management is integrative in nature.
Features of Marketing Management
The main features of marketing management are as follows:
1. Goal Oriented:
The ultimate goal of marketing management is to generate profits for the firm through the satisfaction of the customer.
2. Customer Satisfaction:
The main objective of marketing management is to find out the consumers’ needs and wants and produce goods and services to fulfil these needs. All the activities of the business enterprise are directed towards the satisfaction of the needs and requirements of the customers.
3. Marketing Management is a Managerial Function:
Marketing management is one of the functional areas of management. It includes analysis, planning, implementation and control of the activities related to production and distribution of goods for satisfying the needs of the customers.
4. Integrated Approach:
The marketing management advocates integrated approach to marketing. The various elements of the marketing mix like production, price, distribution and promotion should be properly co-ordinated to satisfy the needs and requirements of the customers.
5. Wider Scope:
Marketing Management has a wider scope than sales management. It includes all the activities that are necessary to identify and satisfy the needs of the customers.
Aims of Marketing Management
Marketing management aims to provide:
1. Maximum Consumption:
One of the goals of the marketing is to achieve the maximum consumption in terms of maximum sales, maximum production, maximum employment, maximum profits, etc.
2. Maximum Consumer Satisfaction:
Another goal of marketing is to provide maximum satisfaction to the consumers. Now a day’s delightedness, rather than satisfaction, is important, i.e., endeavouring to have more than satisfied customers.
3. Maximum Choice:
Nowadays just because of marketing, customers have benefited a lot. There is an increase in the choice of products. Now customers are more aware as compared to the past. Now he has more varieties to choose from.
4. Better Quality:
As the consumer is very much aware and has many choices so the company itself provides the best quality to the customers.
Goal of Marketing Management
The basic goals of marketing management are satisfaction of the needs of customers, and the generation of profits for the business.
The specific goal of marketing management are:
1. Determination of Customers’ Needs:
As marketing management is concerned with the determination and satisfaction of the customers’ needs, determination or ascertainment of the customers’ needs is one of the important objectives of marketing management.
2. Creation of Demand:
Creation of demand for the goods is another important objective of marketing management. Demand can be created through various means. For instance, demand can be created by ascertaining the preferences and tastes (i.e., the needs) of the customers and producing goods to satisfy the needs of the customers. Demand can be created through advertising, i.e., by informing the customers the utility of the goods and services offered.
Marketing aims to create demand for a firm’s products and services through various means. A conscious attempt is made to find out what customers want and expect. It ensures the regular availability of such products and services at reasonable prices and at various outlets. Various advertising and sales promotion techniques are also adopted to make consumers aware of the various products and services being offered.
3. Customer Satisfaction:
Satisfaction of the customers’ needs is one of the important objectives of management. The needs of the customers can be best satisfied by studying the demands of the customers beforehand, and producing and offering only those goods which the customers demand. It may be noted that selling goods is not as important as the satisfaction of the needs of the customers.
4. Generation of Profits:
Generation of sufficient profits for the business is another important objective of marketing management. Earning of profits is necessary for the growth and diversification of the business. In fact, earning profits is necessary for the very survival of the business firm in the market.
5. Contribution to National Development:
Contribution to national development is one of the objectives of marketing management. Marketing management contributes to large- scale production which, in turn, contributes to fuller and wiser utilisation of national resources and increase in employment facilities and economic growth.
6. Raising the Standard of Living of the People:
Raising the standard of living of the people is yet another important objective of marketing management. By ensuring that many varieties of goods are available for consumption, marketing management aims at raising the standard of living of the community.
Every business enterprise tries to capture a reasonable share in the market in order to survive in a competitive world. Consumer-oriented marketing management emphasises aggressive marketing strategies, effective promotional techniques and innovations with the aim of helping a business firm popularise its products and services and thus, secure and sustain a reasonable market share.
8. Creation of Goodwill:
Marketing aims to build the goodwill of a business over a period of time through various image building activities like high quality, reasonable prices, convenient outlets, after sales services, etc. An increase in goodwill helps to develop brand loyalty ensuring that consumers accept the firm’s existing and new products more easily.
9. Profits through Customer Satisfaction:
Marketing aims at ensuring growth and profitability by satisfying the needs and wants of customers. Its motto is ‘Find wants and fulfil them.’ All activities of a business, i.e. production, finance, marketing, etc. are coordinated to increase the volume of sales by ensuring customer satisfaction.
Objectives of Marketing Management
According to Peter Drucker, the well-known American Professor, it is the marketing management which distinguishes business from other forms of organisation. This statement is based on his view that the purpose of a business is to create customers. It is possible only when a business firm is successful in matching the ‘Consumers needs’ and ‘Customer’s satisfaction’.
According to Cundiff and Still, there are three main objectives of marketing management:
- Increase in Sales Volume.
- Increase is Net Profit.
- Growth of Enterprise.
1. Increase is Sales Volume:
Marketing management is something more than selling. Marketing management includes knowing about the needs of the future customers, their purchasing power, tastes, educational qualification and social background, finding and deciding what they want, when they want, at what price they want.
If we come to know about all these and frame a suitable forecast it will increase the sales and profitability of the organisation. If goods are in conformity with as desired by the customers, you can change much more. Therefore, marketing management is not only the satisfaction of consumer’s needs but increase in sales volume of the concern also. An increase in sales volume will increase the profits of the concern as well as its future growth potentiality.
2. Increase in Net Profits:
Profits are the residual of sales minus costs. When sales are increasing but costs are somewhat constant. The result will be an increase in net profits. Profit structure is determined by the cost and demand and supply position of the product. It is through marketing that proper consumer’s needs are sorted out and satisfied which in turn increase the net profits of the organisation. So, a number of marketing experts suggest the maximisation of profits as a goal of marketing management.
3. Growth of Enterprise:
The object of an organisation in stability with growth and profitability. Marketing management contributes by knowing all about the customers and providing them what they demand. It will increase the goodwill of the enterprise sales and profits of the enterprise.
When an organisation has sufficient profits, the organisation can grow. So marketing management contributes to the growth of the enterprise. Thus, a thorough view point of marketing management objectives is the growth of enterprise
Importance of Marketing Management
Marketing management is of great importance for any business organisation.
The importance of marketing management can be understood from the following facts:
1. Marketing management occupies the most important place in any business organisation, because the ultimate aim of a business organisation is to maximise profits, and marketing management opens up the way through which profits can be maximised by the business organisation.
2. Marketing management helps in-matching the markets with the products. That is, marketing management helps in determining the needs and wants of consumers and in supplying the goods and services which meet the demands of consumers. That means, marketing management helps not only the producers but also the consumers and the society.
3. Marketing management is entrusted with the function of demand management. As an agency of demand management, it is engaged in the regulation of the level, timing and character of market demand, keeping in mind the attainment of the objectives of productivity, customer satisfaction and profit maximisation.
4. It is not only concerned with the demand management, but is also indirectly concerned with supply management. It ensures the flow of goods and services, regulates prices, looks after the marketing system and serves the producers as well as the consumers.
5. The importance of marketing management is self-evident. It looks after the marketing work of the enterprise. It performs all managerial functions in the field of marketing. It plans and develops the products on the basis of consumer demand. It builds up appropriate marketing plans and develops appropriate marketing mix. It formulates special marketing policies and programmes.
Functions of Marketing Management
Marketing management is made up of a number of activities known as marketing functions. These activities and operations are primarily concerned with taking the goods from producer to ultimate consumer.
1. Marketing Research:
Marketing research is the systematic gathering, recording, and analysis of data about issues relating to marketing products and services. Due to increase in competition and ever-increasing costs attributed to poor decision-making, the marketing research should provide sound information.
2. Sales Forecasting:
Sales forecasting is the process of organising and analysing information in a way that makes it possible to estimate what an organisation’s sales will be. It is a prediction based on past sales performance and an analysis of expected market conditions. Sales forecasting is a self-assessment tool for a company. It can make the difference between just surviving and being highly successful in business. The future direction of the company may rest on the accuracy of sales forecasting.
Advertising is a way of conveying critical information about price, quality and availability of the product to customers. This information enables customers to compare and choose from the products or services available. Advertising has become an essential element of the organization as organizations allot a considerable amount of revenues as their advertising budget.
Advertising helps the manufacturer sell their products. The relation between wholesalers and retailers is improved through advertising.
4. Sales Promotion:
Sales promotion is the process of persuading a potential customer to buy the product. Sales promotion is any initiative undertaken by an organisation to promote an increase in sales, usage or trial of a product or service. Some of the popular sales promotions activities are buy-one-get-one-free, free gifts, discounted prices, free samples, vouchers and coupons, competitions, prize draws etc.
The price of an item determines the value of sales made. Price is simply the amount of money that customers are willing to pay for a product or service. Pricing new products and pricing existing products require the use of different strategies.
Pricing is determined by a number of factors including market share, competition, material costs, product identity etc. The organization may increase or decrease the price of a product based on the same products in the market.
Packing is recognized as an integral part of modem marketing operation, which includes all phases of activities involved in the transfer of goods and services from the manufacturer to the consumer. Most consumers judge a product by its packaging before buying. Packaging 4S is an important part of the branding process as it plays a role in communicating the image and identity of a company.
Packaging can be defined as the outer wrapping of a product in order to keep it clean. Packaging makes a product more attractive and appealing to customers. When something is attractive and appealing, it is easier to market and sell.
As a result of this, delivery of products through mailing boxes has gained importance as it is seen as the most durable and safe way of packaging. Packaging is not only for protection of the products, but also for ease of handling in distribution, storage and display.
Goods are produced for the purpose of selling to the ultimate consumer. It is a process whereby ownership of goods is transferred from seller to buyer. Selling in its broad sense, is not just at making sales but also at finding buyers, stimulating demand, and providing advice and service to buyers.
Selling plays an important role in the marketing functions. Selling brings buyers and sellers together. Sales are the source of income for manufacturers, wholesalers and retailers.
Stages of Marketing Management Process
The stages of the marketing management process are exhibited below:
1. Analysing Marketing Opportunities:
This involves analysis of opportunities in the light of company strengths and weaknesses—both internal and external. The task may be to analyse long run opportunities or short run opportunities or even medium term.
To identify and evaluate its opportunities there are the requirements of a reliable market information system. This helps the companies know the needs and wants of their customer, their locations, buying and social practices and so on.
This gives an idea of the relevant marketing environment, i.e., the environment in which the marketing will take place, the understanding of different markets—consumer and organisation, and also helps in paying attention to identify and monitor the company’s competitors.
2. Researching and Selecting Target Markets:
Now the firm is ready to research the select markets. It needs to know how to measure the attractiveness of any given market. Marketing people must understand the major techniques for measuring market potential and forecasting future demand.
These become the key inputs in deciding which markets and new products to focus on. Modern marketing concept cares for dividing the markets into smaller segments, evaluating them, selecting and targeting certain ones and deciding on the company’s positioning on each market.
The company requires taking a decision whether it should enter a certain market. If it enters what positions will it take in respect of the competitors? This positioning can be done in a product positioning map to describe the product to the competitors currently selling in the market.
With the competitors on a map the company can now decide where to enter the market form. Normally, most market-oriented companies prefer not to attack an existing competitor (unless it is a weak one but to find some customer needs that are not filling.
3. Designing Marketing Strategies:
The marketing strategy spells out the game plan for attaining the business’s objectives or product/market objective. Marketing strategy may be defined as – “Marketing strategy defines the broad principles by which the business unit expects to achieve its marketing objectives in a target market. It consists of basic decisions on total marketing expenditure, marketing mix and marketing allocation”.
The four P’s of marketing management—product, price, promotion and place and these are decided and directed at the consumers on the basis of proper diagnosis of the firm-market system arrived at through the process of marketing research.
The company has also to decide how to divide the total marketing budget among the various tools of the marketing mix.
The complicate matters further, marketing mix decisions must be made for both the buyers and final consumers. It prepares an offer mix of products, services and prices, and utilises a promotion mix of sales promotion, advertising, sales force, public relation, etc. to successfully sell to its target customers.
Further, marketers should decide on the allocation of marketing resources (money) to the various products, channels, promotion media and sales areas. To make these strategic allocations marketers use sales- response functions.
4. Planning Marketing Programmes:
!t is not enough to formulate only the broad strategies by which the business expects to achieve its marketing objective but also plan the supporting marketing mix programmes. Without such programmes even the best conceived marketing strategies may fail.
Decisions have to be take regarding the features, packaging, branding, servicing policies, etc. of the product, the wholesale and retail prices, discounts, allowances and credit terms, the identification, recruitment and linking of various marketing facilitators so that its products and services are efficiently supplied to the target market; advertising, sales promotion, publicity, etc.
5. Organising, Implementing and Controlling the Marketing Effort:
The final stage in the marketing management process is organising the marketing resources and implanting and controlling the marketing plan. The company is required to design a marketing organisation that will be able to degenerate the marketing plan up to work, i.e., implementing it. Marketing organisation is typically headed by a marketing Vice-president, who performs two tasks.
First he/she coordinates the work of marketing personnel and secondly, he/she has to work closely with the Vice-presidents of finance, production, R&D, purchasing, personnel to co-ordinate company efforts to satisfy customers. The marketing Vice-president’s job is to make sure that all the company departments collaborate to fulfill the company’s marketing promise to the customers.
Role of a Marketing Manager
There are different people working at different elements of marketing at different levels.
The role of a marketing manager at the senior level are as follows:
1. Conducting Market Research:
Marketing managers carry out market research to gain a clear understanding of what an organization’s customers really want. Marketing research enables these managers to identify new market opportunities. Market research also involves studying the organization’s competitors so as to develop superior products and employ efficient marketing techniques. Companies conduct market research using questionnaires, face-to-face interviews or analyzing the buying habits of consumers.
2. Developing the Marketing Strategies and Plan:
Marketing managers are responsible for developing marketing strategies for their organizations. These strategies outline the decisions related to the target market, production, pricing, distribution, promotion and other marketing activities.
3. Demand Management:
Marketing managers are primarily responsible for the demand management. They are responsible for influencing the level, timing and composition of the demand.
4. Management of the Marketing Mix:
Marketing mix is a set of tools that enables to manage the marketing activities effectively. Marketing manager is responsible for taking and implementing all the decisions related to the elements of the marketing mix (i.e., Product, Price, Place and Promotion).
5. Customer Relationship Management:
One of the most important functions performed by a marketing manager is customer relationship management. The main aim of marketing is to build and maintain good long term relationships with the customers. Marketing managers conduct customer satisfaction surveys to understand the level of their satisfaction and take action accordingly.
6. Human Resource Management:
Marketing managers are in charge of the marketing department and therefore are responsible for employees within their department. They assign duties and set targets for departmental staff. It is also the function of marketing managers to perform periodic performance evaluations of the staff working for them.
Marketing managers are responsible for controlling the marketing activities as well. The expected results have to be compared with the actual performance level to maintain the efficiency of the organization. Corrective measures should be taken in case of any gap in performance. They are also responsible to comply with all the rules and regulations.
Marketing Manager Responsibilities
Marketing manager is responsible to the Society. He serves as a link between the organisation and the society. He puts the demand of the people in society before the concern and brings the company’s product to the people in society. He owes great responsibility to the society at large.
His main responsibilities are as follows:
1. Providing Employment:
A large number of persons are engaged in the marketing activities such as – wholesalers, retailers, advertisers, insurance agents, transporters, bankers, clerks, salesmen, etc. Thus marketing activities provide employment to a large number of people.
2. Reducing Product Costs:
Reducing product cost is another obligation of the marketing manager towards the society. By making the various marketing activities efficient, economical and effective, he can reduce the costs of the products per unit. It will help the consumers to get goods at reasonable prices.
If the company does not transfer the benefits of the reduced cost to the customers, and retains the whole of the profits itself, the society is still benefited. In that case, the retained earnings are invested in the development of new products or they will be distributed to the shareholders as dividend. In both the cases, society will gain.
3. Providing Information:
One of the obligations of the marketing manager is to provide information about the qualities of the products of the company in a way the consumers may make up their minds to purchase the company’s products. It helps make the image of the company and its products.
4. Marketing Social Needs:
He studies the actual wants of the people and organises production accordingly. Goods are produced on a large scale at one place. He undertakes the important task of distribution of goods and looks to the total satisfaction of the consumers.
5. Consumer Satisfaction:
Consumer satisfaction is the fundamental principle of the modern marketing concept. The marketing manager studies the consumer’s behaviours, their preferences, tastes, and fashions in relation to the products. He endeavours to modify the products according to the needs of the actual users.
Thus, it is evident from the above discussion that the marketing manager is responsible to the society in many respects which he should execute sincerely.
4 P’s of Marketing Management
The foundation of modern marketing management is put on the concept of marketing mix. It was McCarthy who identified the four inputs that make up an organisation’s marketing system. They are the product, the price, the place (or distribution) and the promotion. They are called the four Ps. Marketing mix is a combination of these four Ps. Mostly, these four Ps are within the control of the organisation, but they are subject to the external environmental forces.
The four Ps are inter-related. Any decision pertaining to one variable affects the other variables. Management seeks a mix that will lead to optimal synergistic results.
It involves planning and development of the right products. Strategies for existing products and new products are needed. There are decisions regarding branding, packaging and product features.
Here the right price for a product is determined, then there are decisions regarding discounts, transportation charges and credit terms.
3. Place (Distribution):
Here trade channels are selected for distributing the product. The firm must understand the different types of wholesalers, retailers and distribution firms.
Here the product is brought to the notice of the target market favourably. It not only informs but also persuades. Advertising, personal selling, sales promotion, direct marketing and public relations are the major promotional activities.
The concept of marketing mix is applicable to non-business organisations, too. For a university, the products are the various courses, which are offered at a price (fee) and are distributed in the classrooms or by post and are promoted by media advertisements and counsellors.
The mix is both influenced and supported by a company’s non-marketing activities like production, finance, personnel and by non-market resources like location, public image etc.
Four C’s of Marketing:
According to Kotler, though four Ps remain a useful organising framework for planning, these Ps could be further translated into the four Cs which take a customer-based rather than a seller-based view. Product becomes Customer Value, Price becomes Customer Costs, Place becomes Customer Convenience and Promotion becomes Customer Communication.
Buyers, according to Kotler, want customer value, lower total costs, more convenience and honest communication. The starting point is not the 4 Ps but Segmentation, Targeting and Positioning (STP). STP is strategic marketing and the 4 Ps are tactical marketing.
Difference Between Sales Management and Marketing Management
- It follows the philosophy of ‘Make and sell’
- It is part of the integrated marketing concept.
- It focuses on the seller’s needs.
- It is done towards the end of the business activity.
- Its objective is profit maximisation.
- It involves selling and promotional efforts.
- It follows the philosophy of ‘Sense and respond’
- It includes sales management.
- It focuses on the buyer’s needs.
- It is the beginning of the business activity.
- Its objective is customer satisfaction.
- It involves several components like product development, market information, brand management, pricing, distribution management, etc.
Significance of Marketing Management
Significance of marketing management can be explained with four different perspective:
1. Global Perspective:
Globalization changed the traditional formulae of marketing and therefore is a key perspective of marketing management.
International trade agreements are also changing its nature with changes in global corporate structure. Trade agreements can create a competitive environment for firms and thus enable growth of a country’s industrial development.
Profits now are considered on both domestic and international level rather than solely on domestic level.
2. Domestic Perspective:
The efficiency of mass marketing has improved significantly and extensive, speedy communication to the large number of target audiences has become very simple. This market has lifted the per capita income of people resulting in higher standard of living. It has already resulted in huge job vacancies all over the country which again resulted in increase in demand for products and ultimately increase in sales.
3. Organization Perspective:
Marketing is an integral part of the companies’ short term and long term plans.
The success of the organization lies in satisfaction of customer’s needs and demands which is the social and economic basis of all organizations existence.
Although all activities are essential for management, only marketing management generates revenue directly.
4. Individual Perspective:
Study of marketing management will make individual informed customers, which shows the difference between success and failure of firms producing the same products.
Role of ‘Public Relations’ in Marketing Management
Role of public relations in marketing management is as follows:
1. Improves Public Image
By maintaining good relations with the public, it helps in creating a better image of a business firm. This helps in promoting its products.
2. Creates Public Loyalty
By disseminating appropriate information to the public, it creates public loyalty towards the organisation.
3. Understands Public Opinion
It collects public opinion about the organisation, its top management and its activities. This helps an organisation to chalk out its actions which are relevant to the public.
4. Overcomes misunderstanding/Frictions
It overcomes people’s suspicions, misunderstandings, confusions and dislikes about the organisation.
5. Conveys Information
It conveys information about the company products or services to potential customers. For example, the launching of new car models by the company.
Marketing Management Chapters
Marketing is the creation and delivery of standard of living to the society.
Marketing is determining the needs and wants of the target customers and delivering the desired satisfactions more efficiently and effectively than the competitors.
Marketing is the business function that identifies unfulfilled needs and wants, defines and measures their magnitude, determines which target markets the organization can best serve, decides on appropriate products, services and programs to serve these markets and calls upon everyone in the organization to think and serve the customer.
Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
Marketing starts and ends with the consumer, with information flowing from the consumer to the producer and goods flowing back from the producer to the consumer. Thus, marketing is the whole business seen from the point of view of its final or end result (i.e.,) customer satisfaction.
Therefore, marketing involves:
- Creating marketing mix – 4P’s (Product, price, place, and promotion).
- Creating an exchange process (Process of obtaining something from someone by offering something in return).
What is Marketing?
The word marketing may be traced from the combination of the two terms “market” and “to market”. “Market”- referring to the place where buyers and sellers meet and execute the buying and selling process and “to market”- meaning to create demand for the product and to make the product available to the customers. Market comprises actual and potential buyers, whose needs and wants are identified by the seller and fulfilled through delivery of appropriate goods and services.
All activities that relate to buying and selling of goods and services come under the purview of marketing. The scope of marketing is vast and encompasses different aspects of buying and selling of goods and services. The traditional concept of marketing referred to the process of buying and selling. However with the passage of time, the concept of marketing has broadened.
Marketing is not confined to just offering a product to customers but extends to delivering product to customer that provides immense value and satisfaction to customer. Increased competition, complex nature of market and widened market increased the importance of marketing. Marketing is often viewed as an art of selling and how well an organization can sell its product defines the success of marketing.
But in reality, the success of marketing lies in how well the marketer understands the customer’s needs and wants and makes products accordingly and how well the product or services can satisfy consumer’s needs and wants.
Delivering satisfaction to consumers means to meet the expectation of the consumer about the product. Marketing is not a one-time act of selling the product to the customer. Marketers need to build a long term relationship with the customer so as to retain the customers for life time.
Marketing occupies an important functional area of any business undertaking that determines the future prospect of the organisation and defines activities of the other functional areas of the undertaking like production, finance.
Marketing refers to all the activities that pertain to movement of goods and services from the producer to the consumer. The function of marketing begins much before the actual sale of goods takes place and marketing activities continue even after the sale of goods.
The process of marketing begins with identifying customer needs and wants for a particular service or product, followed by producing the product as per the needs of customer, determining the price, promoting the product and stocking the product for sale, delivering the product to customers and continues with after sale service and tracking the customer’s level of satisfaction with the product.
The marketer has to perform the complex function of balancing between the firm’s objective of profit maximization and delivering maximum customer satisfaction and fulfillment of social objectives.
The scope of marketing is not limited to selling of goods and material objects but extends to different kinds of services as well, like an educational institute sells education; a doctor sells his treatment for disease and illness, a politician sells promises, a travel guide sells places of attraction and so on.
Marketing is dynamic in nature and takes a new form every day. The changing environmental forces have an impact on the marketing activities, like the development of the digital age, internet, improved information and communication technology and changed the marketing concepts, process and strategies immensely.
Marketing Mix refers to a set of actions or tactics that a firm uses to promote its brand or product in the market. The term ‘Marketing Mix’ was first used by Prof. Neil H. Borden of the Harvard Business School, U.S.A in 1953. Today it is increasingly used to make important decisions that lead to the execution of a marketing plan.
It is the combination of four inputs which constitute the core of a firm’s marketing strategy i.e., the product, the distribution system, the price structure and the promotional activities. In a virtual sense, the marketing mix is a fair combination of the different policy initiatives which pertain to product, price, promotion and place, so as to get success in the sales activities.
According to William J. Stanton, “Marketing mix is the term used to describe the combination of four inputs which constitute the core of a company’s marketing system; the product, the price structure, the promotional activities, and the distribution system.”
Every business enterprise has to determine its marketing mix for the satisfaction of the needs of its customers. Thus, marketing mix represents a blending of decisions in four areas – product, pricing, promotion and physical distribution. These elements are interrelated because decisions in one area usually affect actions in the other.
It can therefore be said that a marketing mix is a planned mix of controllable elements of a products marketing plan commonly termed as product, price, promotion and place. These four elements are adjusted until the right combination is found that serves the needs of the customers, while generating optimum income.
While marketing their products, firms need to create a successful mix of:
- The right product
- Sold at right price
- In the right place
- Using the most suitable promotion
In the face of the above explanation we can come to the conclusion that marketing mix consists of a good number of ingredients as detailed below:
- The Price Mix – It includes the basic price, allowances, credit terms and transport terms.
- The Product Mix – It includes product line and quality, brand, packaging and services.
- The Promotion Mix – It consists of personal selling, advertising, publicity and sales promotion.
- The Place Mix – It includes the distribution channels and physical distribution.
Thus, the marketing mix is a fair match of the aforesaid sub-mixes. The ultimate goal of all these mixes is to get the optimum production and balanced satisfaction. All the sub-mixes are co-related and essential. But the whole thing is to get a fair blending or mixing of the sub- mixes.
4 P’s of Marketing
Product refers to the goods and services offered by the organisation. A pair of shoes, a plate of dahi-vada, and a lipstick, all are products. All these are purchased because they satisfy one or more of our needs. We are paying not for the tangible product but for the benefit it will provide. So, in simple words, a product can be described as a bundle of benefits which a marketeer offers to the consumer for a price.
Price is the amount charged for a product or service. It is the second most important element in the marketing mix. Fixing the price of the product is a tricky job. Many factors like demand for a product, cost involved, consumer’s ability to pay, prices charged by competitors for similar products, government restrictions etc., have to be kept in mind while fixing the price. In fact, pricing is a very crucial decision area as it has its effect on demand for the product and also on the profitability of the firm.
Goods are produced to be sold to the consumers. They must be made available to the consumers at a place where they can conveniently make purchases. Woolens are manufactured on a large scale in Ludhiana and we purchase them at a store from the nearby market in our town.
So, it is necessary that the product is available at shops in our town. This involves a chain of individuals and institutions like distributors, wholesalers and retailers who constitute the firm’s distribution network (also called a channel of distribution).
If the product is manufactured keeping the consumer needs in mind, is rightly priced and made available at outlets convenient to them but the consumer is not made aware about its price, features, availability etc., its marketing effort may not be successful.
Therefore promotion is an important ingredient of marketing mix as it refers to a process of informing, persuading and influencing a consumer to make a choice of the product to be bought. Promotion is done through means of personal selling, advertising, publicity and sales promotion.
7 P’s of Marketing
The 7 Ps are a set of recognised marketing tactics, which you can use in any combination to satisfy customers in your target market. The 7 Ps are controllable, but subject to your internal and external marketing environments. Combining these different marketing tactics to meet your customers’ needs and wants is known as using a ‘tactical marketing mix’.
Product refers to what you are selling, including all of the features, advantages and benefits that your customers can enjoy from buying your goods or services. When marketing your product, you need to think about the key features and benefits your customers want or need, Including (but not limited to) styling, quality, repairs, and accessories.
This refers to your pricing strategy for your products and services and how it will affect your customers. You should identify how much your customers are prepared to pay, how much mark-up you need to cater for overheads, your profit margins and payment methods, and other costs.
These are the promotional activities you use to make your customers aware of your products and services, including advertising, sales tactics, promotions and direct marketing. Generally these are referred to as marketing tactics.
Place is where your products and services are seen, made, sold or distributed. Access for customers to your products is key and it is important to ensure that customers can find you. If you are starting a new business, finding the right business location will be a key marketing tactic.
People refer to the staff and sales people who work for your business, including yourself. When excellent service is provided to the customers, they experience a positive experience. In doing so, branded goods will be made closer to them. In turn, existing customers may spread everywhere.
By doing so a number of references may be received. Develop the business in a competitive advantageous manner by recruiting the right people, training the staff to develop their skills and retaining the good staff.
Process refers to the processes involved in delivering your products and services to the customer. It is also about being ‘easy to do business with’.
Having a good process in a place ensures that you:
- Repeatedly deliver the same standard of service to your customers
- Save time and money by increasing efficiency
7. Physical Evidence:
Physical evidence refers to everything your customers see when interacting with your business.
- The physical environment where you provide the product or service
- The layout or interior design
- Your packaging
- Your branding
Physical evidence can also refer to your staff and how they dress and act.
The marketing audit is a tool that can be of tremendous value not only to the less successful, crisis-ridden company but also to the highly successful and profitable industry leader.
Even the best can be made better, In fact, even the best must be better, for few if any marketing operations can remain successful over the years by maintaining status quo”. It appears that marketing audit is more important in successful companies simply because they have a tendency to breed complacency.
Webster defines an audit as “a formal or official examination and verification of an account, a methodical examination and review”. This is the concept of accounting audit which is carried out according to a fixed time table and under highly standardised procedures. In marketing audit there is no such clear-cut procedure.
The accounting audit is directed towards the outsiders (shareholders, creditors, public etc.) whereas in marketing audit it is intended to deal with a specific marketing problem or assessment of components of marketing effectiveness, exclusively for internal uses.
In fact, the term “audit” assumes much broader connotation and import when used in the context of Management Audit as well as Marketing Audit.
The word ‘communication’ is derived from the Latin word ‘communis’ which means ‘common’. We attempt to communicate, that is, to establish a ‘commonness’ with another person. There are three essential parts of communication, viz. the source, the message and the receiver. True communication takes place only when the message means the same thing (in common) to both the parties, i.e., the sender of the message and its receiver.
Marketing communication involves sharing of meaning, information, and concepts by the source and the receiver about products and services and about the firm selling them. Marketing communication is undertaken by marketers through the devices of promotion viz., advertising, publicity, salesmanship and sales promotion. We also have word-of-mouth communication to accelerate the spreading of marketing communication.
The effective communication occurs when a sender (source) sends a message and receiver responds to the message in a manner which satisfies the sender. Both must have identical meaning to the message.
Effective communication is equal to- receipt of the message plus understanding plus acceptance plus action. In marketing action means a decision to purchase.
The buying behavior of consumers is heterogeneous in character and it demands the marketer to divide the market and group each sub-division which will have homogeneous demand for the product. This helps the enterprise to offer tailor-made Market-mix for each market sub-division. Dividing the market according to taste and preference of the buyers is called “Market Segmentation”.
Market segmentation is the process of sub-dividing a market into distinct groups of customers with similar needs, such that a subset of the market (a segment) can be selected as a target market and can be reached with a distinct Market mix. The purpose is to prioritize segments of the market to improve profitability and to provide a means to choose the most appropriate communication media and messages for each unique market segment.
Market segmentation is a Market strategy. This identifies the real customer demand, makes the marketer deliver such goods and develop the market accordingly. It enables the marketers to give better attention to the selection of customers and offer an appropriate Market mix for each chosen segment or a group of buyers having homogeneous demand.
Benefits derived from market segmentation are – (i) Markets can be properly understood in terms of customer needs, by locating and comparing Market opportunities (ii) Effective formulation and implementation of Market programmes as per market demand (iii) products and Market communication can be finely adjusted (iv) Competitive strengths and weaknesses can be assessed effectively and (v) Market resources are effectively utilized.
The success of market segmentation depends upon (i) dividing the market according to market characteristics which are measurable (ii) accessibility of segmented market (iii) segmented market should respond to Market effort and communication and (iv) it should be worthwhile exploiting it, which means the segment market should provide benefit to the marketer.
Advertising refers to the activity of attracting public attention to a product or business, as by paid announcements in the print, broadcast or electronic media.
Advertising is the form of non-personal communication of product, services or ideas by an identified sponsor. It includes attracting public attention. It provides information concerning products, services, ideas or business to the targeted customers. It is paid for and is persuasive in nature. The print media, electronic media and outdoor media acts as a medium between the advertiser and customers.
Advertising includes those activities by which visual or oral messages are addressed to the public for the purposes of informing them and influencing them either to buy merchandise or services or to act or be inclined favourably toward ideas, institutions, or persons featured.
As contrasted with publicity and other forms of propaganda, advertising messages are identified with the advertiser either by signature or by oral statement. In further contrast to publicity, advertising is a commercial transaction involving payment to publishers or broadcasters and others whose media are employed.
This definition excludes such activities as exhibiting at trade shows, use of premiums, samples, and free goods, and many miscellaneous activities, and regards these activities as constituting sales promotional effort rather than advertising proper.
Sales promotion commonly includes such functions as the preparation of direct mail pieces for distributors and dealers, point of purchase display materials, promotional aids, and sales portfolios for salesmen.
Advertisement plays a vital role in modern business communication. Every business organization takes the help of such magic tools for their business. It is the most exciting, colourful presentation of facts in written form.
There is no doubt good advertisements carry attention and mass appeal. On the basis of target audience, the advertisement is presented in TV or radio or paper etc.
However while considering advertising, the organization has to think regarding its usefulness and the related cost involved. Today TV advertisement has created a popular approach among the viewer and has proved a strong media for this sector.
In the present scenario, the growth of technology and use of computers with the internet has widened this advertisement communication system with a great force.
In order to make advertisement more effective, creativity and expertise is highly required. This is the reason for assigning this very important task to some trained organization for making the project less costly with high quality. Effective advertising always requires specialized communication skills.
Advertisements are basically two types. Informative and persuasive. Informative advertisements have education value, whereas persuasive advertisements have convincing value.
Broadly speaking, advertisement is a form of communication intended to promote the sales of products or service or to provide mass information on a particular cause or to fulfill the objective of the advertiser in general.
The advertisement should have AIDCA. That is attention, interest, desire, convincing and action. From a technical point of view, advertising is a means of communication with the purpose of delivering a worthwhile message to a specific audience.
Brands have the power and value in the marketplace. There are brands in the market which people have not heard about. Certain other brands are fairly well recognised, showing a high degree of brand awareness. However, brand awareness is just the first step. As a brand climbs up further, we find people ready to buy it, giving it brand acceptability.
Brand equity is the intrinsic worth or value of the brand in terms of the kind of money a consumer is willing to pay for it in preference to its competitors. These brands are said to have a high degree of brand preference. Then ultimately comes what is called an acid test of a brand — brand loyalty. The consumer’s reluctance to settle for an alternative product is the true indicator of brand loyalty.
Brand equity can be measured against brand loyalty, brand acceptability, brand awareness. Brand equity can be described in terms of its perceived quality, brand associations, channel relations, patents and trademarks. Brand viewed in this manner becomes an asset which can be sold or bought for a price.
A good example of brand equity is Wills Filter Cigarettes which has a 30-year heritage, and which has taken into its stride no less than 28 price increases. It has also faced severe competitive pressures from king-size entries. And yet Wills Filter still holds its own, enjoying immense loyalty and showing sound brand equity.
The brand has consistently consolidated its position. The Wills Filter “made for each other” campaign has been nurtured, nourished and continually freshened. Another example of brand equity is Lux, which has consistently followed a strategy of “beauty soap of the film stars” position.
For any organisation and its sales and marketing professionals, the customer is the most important entity. The primary objective is to satisfy the needs of the customers. Therefore, it is important to understand their behaviour to satisfy their needs.
Consumer behaviour means “buying behaviour of final consumers-individuals and households who buy goods and services for personal consumption.” Together, all consumers make the consumer market.
Marketers must have information about consumers’ actions in markets. Information about consumers helps in making important decisions about what to sell, when to sell, where to sell, how to sell and at what price to sell.
Study of consumer behaviour is the study of how individuals make decisions to spend their resources (time, money, effort) on consumption related items. It includes study of what to buy, when to buy, why to buy, where to buy, how often they buy, how often they use, what they buy.
For example, for a simple product like soap:
- What types of soap do consumers buy (cosmetic, herbal, medicated)?
- What brand (national, international brand)?
- Why do they buy (for fragrance, freshness, it is a basic necessity)?
- Where do they buy (retail shop, super bazaar, chemist shop, department store)?
- How often do they use it (once a day, twice a day)?
- How often do they buy (weekly, biweekly, monthly)?
Answers to these questions can be found through consumer research which provides important impetus to the marketer and makes his job easy. Consumer buying behaviour refers to buying behavior of the ultimate consumer.
Any individual who purchases goods and services from the market for his/her end-use is called a consumer. In simpler words a consumer is one who consumes goods and services available in the market. Every customer shows inclination towards particular products and services. Consumer interest is nothing but willingness of consumers to purchase products and services as per their taste, need and of course pocket.
The consumer is the one who pays to consume the goods and services produced. As such, consumers play a vital role in the economic system of a nation. In the absence of effective consumer demand, producers would lack one of the key motivations to produce: to sell to consumers.
Consumer Decision Making
Consumer decision-making pertains to making decisions regarding purchase of goods and service offerings. It may be defined as a process of gathering and processing information about goods and service offerings and/or brands, evaluating the alternatives, and selecting the best possible option so as to reach a brand choice, which would help solve the problem through satisfaction of the need and want.
In other words, when a consumer makes a purchase of a good or service, he/she is actually responding to a problem, which has arisen because of a state of deficiency. This state of deficiency transforms itself into a need/want. The purchase and eventual consumption of the good or service lead to the end goal, that is, satisfaction of the need and want.
Customer service can be defined as “a process which takes place between the buyer, seller and third party.” The process results in a value addition to the product or service exchanged. The value added might be short-term as in a single transaction or long-term in a contractual relationship.
The benefits of value addition are shared by each of the partners to the transaction or contract and they are better off after the completion of the transaction’. Thus, in a process view, customer service is a process of providing significant value added benefits to the supply chain in a cost-effective way.
Customer service is really the fuel that drives the logistics supply chain. Having the right product, at the right time, in the right quantity, without damage or loss to the right customer is an underlying principle of logistics systems that recognises the importance of customer service.
Another aspect of customer service worth mentioning is the growing consumer awareness of price/quality ratio and the special needs of today’s consumers who are time conscious and who demand flexibility. Today’s consumers have high standards for quality and they are not highly brand loyal.
Consumers want products at the best price, with the best level of service and at times convenient to their schedules. Successful companies have adopted customer service approaches which recognise the importance of speed, flexibility, customisation and reliability.
Customer Relationship Management (CRM) is a core business tool that an organization uses to integrate its internal processes and functions with external networks. This helps an organization to create and deliver value to its customers. In today’s competitive scenario, it is important for every organization to create value for its customers.
Customer value can be defined as a sum of advantages that an organization promises to provide to its customers on purchase of a product. It helps an organization to differentiate its products or services from that of its competitors. Not only this, it provides a roadmap to an organization for acquiring, developing, and retaining its most valuable customers.
Organizations use a number of strategies to create value for their customers. According to Michael Treacey and Fred Wiersema, there are three fundamental ways to create customer value, namely by achieving operational excellence, product leadership, and customer intimacy. Apart from this, an organization can also create customer value by providing excellent customer service and maintaining effective communication with customers.
Customer Relationship Management
Customer relationship management (CRM) is a comprehensive sales marketing approach to build long-term customer relationships and improve business performance. A framework is designing a strategy for effective customer relationship management, developing customer insight, use of technology in CRM customer contact, personalizing customer interaction and achieving superior customer experience.
It describes improved and increased communication between an organization and its clients by creating and enhancing customer interaction through innovative technology.
It is a collection of tools that enables a business to meet and exceed customer expectations. This is affected by identifying buying trends, simplifying online transactions, and creating better means for understanding customers.
CRM is defined as the aligning of business strategy with a corporate culture of the organization, along with customer information and a supporting information technology of the customer interaction so that it promotes a mutually beneficial relationship between customer and the enterprise.
E-CRM is not just customer service, self-service web applications, sales force automation tools or the analysis of consumer buying behaviour on the internet. E-CRM is a combination of all of these initiatives working together to enable an organization to more effectively respond to its customers’ needs and to market to them on a one-to-one basis.
Personal selling is an interpersonal communication process by which the seller satisfies needs of the buyer to the mutual, long term benefit of both the parties. This definition stresses that selling is more than making a sale and getting an order.
The objective is to build a relationship — a partnership — by providing long-term benefits to both the seller and the customer. Thus, selling involves identifying customers’ problems, offering solutions and providing after-sale service to ensure long-term satisfaction. Influence and persuasion are important parts of selling.
Personal selling is direct, oral communication that explains how an individual’s or firm’s goods, services or ideas fit the needs of one or more prospective customers. It is an important method of selling. It is the process of assisting and persuading a prospective buyer to buy a product in a face-to- face situation.
It is direct and personal. Personal selling is laid to be the backbone of marketing. Personal selling is contacting prospective buyers personally, showing them a variety of goods, explaining the features and demonstrating functions of the goods.
The responsibility of the salesperson is successful understanding of customers’ goals and creation of a valuable solution by communicating necessary information that encourages the buyer to achieve his goal at economic cost.
The increasing complexity of products has increased the importance of personal selling. Manufacturers of highly technical products such as computers, electronic typewriters, digital phones, microwave kitchen appliances, remote control instruments etc. depend more heavily on personal selling than the manufacturers of grocery products.
Growing competition from domestic and foreign sources has also increased the importance of salespeople in marketing efforts. Sales person’s role is dynamic and versatile in nature. He acts as an educator, consultant, persuader, guide of a consumer and convincer.
Sales efforts stimulate the consumption process by reducing people’s reluctance to make purchase decisions. Sales person acts as a catalyst in the market, when the nature of the product is such that the buyer needs special information to use it properly.
Sales representative acts as a consultant to consumers to apprise them of product’s technicalities and usage.He also works out the details of manner and timing of transferring physical possession.
In industrial products, personal selling is very important. Being high value and complex products, personal contact with the consumer is essential to convince him of product quality and quantity.
Consumer product companies use personal selling together with advertising to influence prospects to buy their brand. But personal selling cannot substitute advertising. It can only intensify marketing efforts because it is more expensive than advertising.
Personal selling is most effective in:
- Marketing industrial products
- Product launching stage
- Eureka Forbes adopted personal selling for its premium product vacuum cleaner.
- Johnson and Johnson used personal selling successfully for its medicated products.
- In the product launching stage, companies selling products like richbru coffee, surf, dalda utilised personal selling effort.
Physical distribution relates to the activities involved in handling and movement of goods. It is, in fact, a set of activities concerned with the physical flow of materials, components and physical goods to channel institution and end-consumer.
It can also be defined as “the set of activities concerned with efficient movement of finished goods from the end of the production operation to the consumer”.
Physical distribution can also be defined as the group of activities associated with the supply of finished product from the production line to the consumers. The physical distribution considers many sales distribution channels, such as wholesale and retail, and includes critical decision areas like customer service, inventory, materials, packaging, order processing, and transportation and logistics.
Out of nearly half of the entire marketing budget of products, the physical distribution process accounts for most of it. These activities are often the focus of process improvement and cost-saving initiatives in many companies.
Physical distribution takes place within numerous wholesaling and retailing distribution channels, and includes important decision areas such as the following:
- Customer service
- Inventory control
- Materials handling
- Protective packaging
- Order procession
- Warehouse site selection
Product positioning is a marketing technique adapted by marketers to present the product to target customers. Being a function/strategy of market segmentation, the positioning serves as a major marketing campaign to identify the core market in which the buyers buy a product.
A message will be created which will have a powerful impact on buyers of this core market and selling becomes easy. Positioning involves symbol and message manipulation including displays and packaging.
Positioning is not doing something to the product. It is doing something to fix the product concept in the mind of the prospect through change in name, the price and packaging and through attractive messages in target markets.
For example, a cosmetic product announces a message “The application of this cream on your face, removes our worries”. The teenagers having pimples on their faces will be attracted by such a message and the product will be fixed in their mind, which prompts them to purchase that product. This means that the product is positioned in their minds.
Product positioning can be an expensive activity. But if market segmentation is effectively done, if target markets are properly identified, marketers can channel the money to the most cost-effective points in the communication network. Marketing research will help the marketers to identify target markets and position the product through different channels in such markets.
Product Life Cycle
All products have a certain length of life during which they pass through certain identifiable stages through the conception of the product, during its development and up to the market introduction, then goes through a period during which its market grows rapidly, eventually, it reaches maturity and then stands saturated. Afterwards its market declines and finally its life comes to an end.
“The product life cycle is an attempt to recognize distinct stages in the sales history of the product”. – Philip Kotler
“The concept of life cycle of a product as from its birth to death, a product exists in different stages and in different competitive environments. Its adjustment to these circumstances determines to a great degree how successful its life will be.” – William. J. Stanton.
New Product Development
Development of product is an attempt to devise (design) product to meet the needs of customers. It is a complex process which involves activities such as generation of product ideas, product design and engineering (creation) of the product. The whole process of product development operates on the basis of detailed market analysis and research.
Simply product development means manufacturing of a product best suited to satisfy the needs of the target market. Product development deals with formulation of a new product and modification of the existing product so as to offer new or additional benefits to the targeted customers.
Product development is defined as the science and art of developing new products and improving existing products to their fullest potential in the target market. Product development is the overall process of conceptualization (idea generation), development strategies, design, creation, testing and introduction of products and services best suited to address the needs of the target market.
There are two aspects of product development; one is modification of the existing product and another is New Product Development (NPD). A firm has to develop and introduce products and services to cater to the needs of the target market. New product development or NPD is a process to design, develop, test and introduce new products in the market so as to ensure the growth and survival of a firm. There are different interpretations or definitions for a new product.
Some of them are as follows:
1. New product is one which gives rise to a new market. A product which is totally different from the existing products in its style, shape, features and benefits offered.
2. It may be an existing product introduced in a new market.
3. It may be an existing product offered in a new package (old wine in new bottle strategy).
4. It may be an existing product marketed in a different way (new marketing strategy, product remains the same).
Every company must develop new products which shape the company’s future. As the customers’ tastes and preferences are ever changing, new product development becomes a necessity for an organisation. R&D, spurred on by technological innovations/break-through, are a sine qua non for product development.
The word retail is derived from the French word “Retailer”, which means “to cut a piece off” or to “break bulk”. Thus, a retailer is a person who breaks up a big amount into small pieces, or buys in bulk and sells in small amounts. Retailing may be understood as the final step in the distribution of merchandise for consumption by the end consumers. Any firm that sells products to the final consumer is performing the function of retailing.
According to Philip Kotler, “Retailing includes all the activities involved in selling goods or services to the final consumer for personal, non-business use”.
Thus retailing is a marketing activity involved in the sale of products to the final consumer. It consists of all activities involved in the marketing of goods and services directly to the consumers for their personal, family or household use.
Any organisation selling to the final consumers whether it is a manufacturer, wholesaler or retailer, is doing retailing. It does not matter how the goods or services are sold or where they are sold. The goods and services could be sold by person, mail, telephone, vending machine or internet. If they are sold to the final consumer it is retailing. The goods and services could be sold in a store, on a street or in the consumer’s home. If they are sold to the final consumer it is retailing.
Product is a commodity that constitutes value and needs satisfying capability. The tangible goods are termed as products and the intangible goods are termed as services. A home computer is a product and the Internet is a service.
In the words of Philip Kotler, “a product is anything that can be offered to a market to satisfy a want or need. Products that are marketed include physical goods, services, experiences, events, persons, places, properties, organizations, information, and ideas.”
A particular thing can be a product and service as well depending upon the nature of the product. E.g. An Internet connection package is a service for the customer whereas it is simply a product for the company. Company sells it as their product though they are directly selling a service.
The best product is that in which we have a good combination of the tangible and intangible nature i.e. a balance of product (physical features) and services. It means the responsibility of the organization does not end after selling product or services to the customers but it also includes after sales services, customer satisfaction etc. like sale of a TV. Set also includes after sales service.
- Product variety – Desktop, Laptop, Palm top etc.
- Features – Peripherals, colored cabinets, Hard Disc Capacity.
- Brand name – Microsoft, Compaq, HP, Wipro, HCL etc.
- Packaging – Cartons with instructions, price etc.
- Sizes – Monitor sizes etc.
- Services (pre-sale, after sale) – Online support.
- Warranties – AMCs.
- New products – updates of software.
- Merchandising (buying and assembling, selling) – Assembling of computers.
Products that are marketed include:
- Physical goods
Frequently Asked Questions on Marketing Management
What do you mean by Marketing Management?
Marketing Management acts as an important item (sub-system) of the marketing system. Marketing management is an important functional area of business management. It deals with the marketing system of enterprise. It performs all managerial functions in the field of marketing. It is responsible for the development and use of an appropriate marketing mix for achieving the objectives of business. Marketing management involves the planning, organizing, directing and controlling of marketing activities. Marketing activities are concerned with the distribution of goods and services to satisfy customers’ needs.
Marketing management is wider than sales force management which includes recruitment, training, compensation, appraisal and development of sales force. In the words of Philip Kotler, “Marketing management is the analysis, planning, implementation and control of programmes designed to create, build, and maintain mutually beneficial exchanges and relationships with target markets for the purpose of achieving organizational objectives.” Under the marketing concept, marketing management is a crucial operative function of management.
It includes all the activities which are required to determine and satisfy the needs of customers so as to achieve the objectives of business. Big business enterprises generally organize the marketing activities into a separate marketing department. Marketing manager is in charge of this department. He looks after all the marketing activities of the firm starting from the formulation of marketing plans upto the evaluation and control of marketing performance of the enterprise. Thus, marketing management is the marketing concept in action.
What is the Full Meaning of Marketing?
Marketing deals with identifying and meeting human and social needs. A simple definition of marketing is “meeting needs profitably”. Philip Kotler defines marketing as “the set of human activities directed at facilitating and consuming exchanges”.
Three elements must be present to define a marketing situation:
- Two or more parties who are potentially interested in exchange
- Each possessing things of value to the other
- Each capable of communication and delivery
In other words, according to him, marketing is a human activity directed at satisfying needs and wants through exchange processes.
The important features of an exchange process are as follows:
- There are two parties
- Each party has something that could be of value to the other
- Each party is capable of communication and delivery
- Each party is free to accept or reject the offer
According to Hugey and Mitchell “marketing includes all activities involved in the creation of place, time and possession utilities. Place utility is created when goods and services are available at the places they are needed. Time utility is when they are needed and possession utility is when they are transferred to those who need them.”
The American Marketing Association defines marketing as- “marketing is concerned with people and the activities involved in the flow of goods and services from producers to consumers”.
Another definition given by Hugey and Mitcell is that “Marketing includes those business activities which are involved in the flow of goods and services from production to consumption”.
In the words of Duddy and Reizan “marketing is the economic process by which goods and services are exchanged and their values determine in terms of money prices.”
What are the 5 Marketing Concepts?
From mass production to mass customization, marketing has changed with the changing market environment.
Marketing activities are conducted under these five competing concepts:
- Production concept
- Product concept
- Selling concept
- Marketing concept
- Societal marketing concept
1. Production Concept:
The basic premise of production concept is that a buyer will buy those products which are widely available and sellers are engaged in bulk production of those products. In production oriented business customers likes and dislikes comes second compared to the need for high production rate.
The sole objective here is to concentrate on producing maximum volumes to have economies of scale. To maximize the profit, sellers try to achieve higher volume at low cost and intensive distribution strategy.
But with the customer’s empowerment in terms of money and knowledge this concept became outdated in the market. Because with the empowerment, customers want better quality of products. To produce in bulk quantity and to maintain quality, at the same time becomes very tough for manufacturers.
2. The Product Concept:
When customers started questioning the quality of the product, the era of product concept came into existence. Product concept proposes that a customer will prefer a product that has better quality. Understanding the pulse of the market, manufacturers started focusing on making good quality products. Apple Inc. is the best example of a company that focuses on product.
The problem with this concept is that the manufacturer focuses more on innovating the product and less on customers’ needs. Apart from Apple Inc. there are very few examples of the companies who have survived on just focusing on product. A manufacturer here has to build a bridge between innovation and needs, then only the company can be profitable.
3. The Selling Concept:
With the growth of industrialization, supply out-paced demand, as a result of which the concentration on the ways of selling the products became more important for manufacturers. This concept states that customers will buy products and services only when they are coaxed by selling gimmicks.
The premise on which this concept works is that a customer typically doesn’t know about a product so they should be informed and motivated to buy the product.
This concept is still used to sell unsought goods such as fire extinguishers and services such as insurance policies. This concept is appropriate for the companies having over capacity in which they want to sell aggressively irrespective of the need of the customers
In today’s market a customer has more than one option in almost all the product and service segments. As a consequence, the selling efforts of the companies should be very efficient and effective, and it should be preceded by a host of marketing initiatives such as needs assessment, marketing research, product development, pricing, and distribution.
A product will sell well, if the marketer does a good job of finding consumer needs, creating appropriate products that satisfy consumers’ needs, pricing them appropriately, distributing them so that they are well available in the market and finally promoting them effectively and creatively.
The problem with this concept is that many companies have a misconception that marketing is all about selling. In such scenarios customers who are coaxed into buying the product will either like the product or they don’t. If they like the product its win-win for both buyer and seller and if they don’t they will talk bad about the product.
Studies have shown that customers who are disappointed with a product or service bad-mouth the product to eleven acquaintances, on the other hand satisfied customers good-mouth the product to three potential acquaintances.
4. The Marketing Concept:
Marketing concept focuses on increasing the value proposition of a product as compared to its rival product. It is a strategic decision made by a company keeping customers’ needs and demands in mind. Let us take the example of two rivals Samsung and Nokia. Both the companies have a very strong market base in India having almost similar products. However the value propositions presented by both the companies are different. Where Samsung smartphones focus on youngsters, Nokia is having a holistic approach.
With the rise of the economy, customers became more knowledgeable and as a result companies have to concentrate on what customers want, not on what they can manufacture. American economist Theodore Levitt brought out a contrast between the selling and marketing concepts.
He said that selling is an activity that focuses on the needs of the seller; on the other hand, marketing focuses on the needs of the buyer. While selling is focused on the seller’s primary need to convert his product or service in to monetary means; the idea of marketing is all about satisfying the needs of the customer by means of using the product or service and the whole mix of activities associated with creating a product to customers’ needs, delivering it and finally consuming it.
i. Market Focus:
Companies should not focus on satisfying each and every customer in the market. Focus should be coming up with an innovative product which satisfies the larger segment. Great companies such as Fly Emirates cannot offer the best customer service every time.
ii. Customer Orientation:
Customers should be the focal point of all the activities and strategies of marketing. Every move made by a company in the market should be customer oriented. Tradeoffs are involved in every product, and it is highly impossible for every management to know what these tradeoffs are without either talking to or researching customers.
For example, in the case of a car buyer, he might want a high-performance car that is also safe and stylish yet cheap. Since all these attributes cannot be easily combined in one product, car designers will have to make hard choices not about what pleases them but also about what customers prefer or expect. After all, the final objective is to make a product’s sale by meeting the needs of the customer.
iii. Coordinated Marketing:
Marketing efforts should be well planned, controlled and coordinated within the organisation. A well coordinated marketing effort results in a high level of customer’s satisfaction. Coordination can be achieved when all the functions of marketing such as selling, advertising, product management, marketing research, and so on- must be coordinated among themselves.
If the departments are not interlinked then often it is found that sales forces are dissatisfied with the management for setting the bar too high or salesmen commit a date to customers without consulting with the production manager and many such problems. That is why marketing functions must be coordinated from the customer point of view.
The motive for marketing a product is to inform, attract and pursue prospective customers to buy a product and to achieve the company’s goal to make profit. Profit is not the sole reason but it is the prime reason for marketing a product. A company which only focuses on profit does not survive in the long run. Profits should be seen as by product.
It has often been found that companies which focus on customer satisfaction and invest in brand loyalty are always profitable and market leaders in the long run. This is not to say that marketers are unconcerned with profits.
5. The Societal Marketing Concept:
The societal marketing is an extension of marketing concepts. Societal marketing is about producing better quality products for the welfare and development of society. The societal marketing concept calls upon marketers to build social and ethical aspects into their marketing practices.
In the past, marketing decisions were largely based upon immediate company calculations. Over a period of time, companies began to realize the criticality and importance of long-term satisfaction of consumer wants, and this in turn brought about the marketing concept.
Societal marketing concepts determine the needs, wants, and interests of the target market and deliver the desired satisfaction more effectively and efficiently in a way that preserves and enhances the society’s well-being. A number of companies have achieved notable sales and profit gains through adopting and practicing the societal marketing concept.
Societal marketing concept also helps in enhancing corporate reputation, increasing brand awareness, brand loyalty, strengthening presence in the eyes of all the stakeholders.
Critics, however, complain that cause related marketing might make consumers feel they have fulfilled their philanthropic duties by buying products instead of donating to causes directly. Thus societal marketing concept as related to cause related marketing differs mainly because here, the company makes a proactive effort to give back to the society.
What are the Objectives of Marketing?
The basic objectives of marketing are shared below:
1. Customer Satisfaction:
This is the first and foremost objective of marketing. The marketer seeks to satisfy consumer needs and wants at the right time with the right goods or service and at the right price. In fact, this is the secret of business success. A product only sells if it satisfies the needs and requirements of the consumer.
The firm aims at profitability by creating demand and then fulfilling that demand at a price that gives it profitability. It balances the profitability and price in such a way that it wins consumer loyalty.
3. Coordination and Integration:
The aim of marketing is to bring about a careful balance among all its elements, like the product, the price, the promotion, and the methods of physical distribution and to integrate them in such a way that it results in the maximum satisfaction for consumers and also gives acceptable profit to the producer.
4. Service to Society:
Marketing seeks to contribute to the betterment of the society by preserving the environment and by sustainable development. Conserving the natural environment and keeping the society’s welfare at the core, while simultaneously creating employment is the business’s commitment towards society.
What are the 2 Roles of Marketing?
Organisations perform marketing functions either to earn profit or to fulfill social responsibilities. Business through its marketing function makes goods and services available to satisfy the needs and wants of consumers. It raises the standard of living of consumers and helps in economic development of a nation.
1. Role of Marketing ‘in a Firm’:
Survival and growth is every organisation’s main objective. This objective can be achieved only if it has a satisfied and loyal customer base. Marketing as a business philosophy helps in serving the customers by satisfying their needs and thus play a significant role in achieving the business objectives.
- Marketing helps business to focus its activities on the needs and wants of its customers.
- It helps businesses to decide what to produce and sell.
- It helps business to design its products as per the needs of the potential buyers.
- It helps businesses to fix prices for its products at a level which its target customers can afford.
- It helps businesses to make its products available in the outlets convenient to its target customers.
2. Role of Marketing ‘in the Economy’:
Marketing plays a significant role in the development of an economy:
- It acts as a catalyst in the economic development of a country.
- It helps in raising the standard of living of the people.
- It helps to increase per capita income and thus reduces poverty, scarcity of goods and services etc.
- It inspires people to set up enterprises and pursue new activities to satisfy the needs and wants of consumers.
- The effective physical distribution function of marketing ensures smooth flow of goods and services from manufacturer to consumer.
- It links business and consumption centers leading to higher incomes, more consumption and increased savings and investment.
Why is Marketing Important?
1. Marketing helps in making products available at all places and throughout the year. We are able to get Kashmiri shawls and Assam tea all over India and get seasonal fruits like apples and oranges round the year due to proper warehousing or proper packaging. Thus, marketing creates time and place utilities.
2. Marketing plays an important role in the development of the economy. Various functions and sub-functions of marketing like advertising, personal selling, packaging, transportation etc., generate employment for a large number of people and accelerate growth of business.
3. Marketing helps the business in increasing its sales volume, generating revenue and ensuring its success in the long run.
4. Marketing also helps the business in meeting competition most effectively.
The terms ‘marketing’ and ‘selling” are related but not synonymous. ‘Marketing’ emphasises on earning profits through customer satisfaction. In marketing, the focus is on the consumer’s needs and their satisfaction. ‘Selling’ on the other hand focuses on product and emphasises on selling what has been produced.
In fact it is a small part of the wide process of marketing wherein emphasis is initially on promotion of goods and services and eventually on increase in sales volume.
Marketing has a long-term perspective of winning over consumer loyalty to the product by providing him maximum satisfaction. However, selling has a short-term perspective of only increasing the sales volume.
Marketing starts before production and continues even after the exchange of goods and services has taken place. Selling starts after the production and ends as soon as the exchange of goods and services has taken place.
What are the 4 Functions of Marketing?
Some of the major functions of marketing are:
- Marketing Research.
Standardisation refers to setting up of standards that the products must adhere to. They do not describe the product as the best, but assure of a reasonable quantity and features described in terms of their weight, design, colour, shape etc. In India products bearing an ISI mark are assured of their quantity by the Indian Standard Institute.
Grading is the process that begins when standardisation ends. It refers to the ranking of products according to specified standards. Manufactured goods which are of uniform quantity are not graded but agricultural goods which normally differ in quantity are graded into different lots. Thus, different grades represent goods classified on the basis of commonality of features like colour, size, design, quality etc.
Packaging involves putting the goods in attractive packets according to the convenience of consumers. Important considerations to be kept in view in this connection are the size of package and the type of packaging material used. Goods may be packaged in bottles, boxes, canes or bags. Packaging is used as a promotional tool as suitable and attractive packages influence the demand of the product.
4. Marketing Research:
Marketing research involves collection and analysis of facts relevant to various aspects of marketing. It is a process of collecting and analysing information regarding customers’ need and buying habits, nature of competition in the market, prevailing prices and distribution network etc
Marketing Management MCQ With Answers
1. What is the main function performed by the marketing management?
- All of the above
2. Which of the following is not a stage of the marketing management process?
- Assessment of business opportunity
- Organising research market surveys
- Strategy formulation
- Accounting Information System
- 1, 2 and 4 only
- 2 and 4 only
- Only 4
- ( None of these
3. The marketing manager have to carry out their responsibilities integrating all these factors in the management –
4. Relationship marketing is a form of marketing developed from —
- Production style
- Direct response marketing
5. The effectiveness of marketing communication has to be measured on-
- Cognitive Levels
- Conative Levels
- Behavioural Levels
- All of these
6. The promotion mix involves to –
- Personal Selling
- Public relation
- All of these
7. The marketing concept is a way of thinking or a management philosophy that affects:
- only marketing activities
- most efforts of the organisation
- mainly the efforts of sales personnel
- mainly customer relations
8. Which factor is/are responsible for effective market segmentation?
- Easy Accessibility
- All of these
- None of these
9. Consumer behaviour consists of all human ____________ that go in marketing purchase decisions?
- Codes of Conduct
10. The distribution planning may invariably be based on the market survey carried out at the time of preparing the –
- Business Plan
- Distribution Channel
- Product Distribution
- Demand Concentration
11. Marketing is the management function which organises and directs all those activities involved in assessing and converting customer purchasing power into effective demand for specific product or service and in moving the product or service to the final consumer or use so as to active the _____ or other objective set by a company.
- Profit Target
- Sales Target
- None of these
12. Marketing segmentation should be followed by the targeting and product positioning activities for effective planning and implementation of the –
- Marketing Plans
- Business Control
- Marketing Process
- All of these
13. A marketing plan usually begins with an
- executive summary.
- introduction to the company’s marketing objectives.
- summary of current performance as compared with past performance.
- situation analysis.
- opportunity and threat analysis.
14. The Market environment consists?
- All of these
15. Which is not a part of the brand concept?
- Product Mix
- Brand Recognition
- Brand Franchise
- Brand experience
16. Marketing efforts are specifically aimed at:
- distributing “something of value” to buyers and sellers.
- facilitating satisfying exchange relationships.
- developing new products for target markets.
- understanding buyer behaviour to meet buyer needs.
17. _________is NOT a part of the marketing mix.
- All of the above
- None of the above
18. To effectively monitor changes in the marketing environment, marketers must engage in:
- use of the marketing concept
- environmental scanning and analysis
- information collection
- marketing research
- environmental management
19. Firms that use__________ are less likely to damage their reputations if a new product fails.
- individual branding
- overall family branding
- line family branding
- brand extension branding
20. Which of the following is not a desirable feature for a brand name?
- it can facilitate the introduction of new products
- it can become used as the generic name for all products in the category
- it can make it possible for the firm to engage in non-price competition
- it can help develop brand loyalty amongst buyers
21. Two components of marketing strategy are:
- Marketing objective and promotion
- Marketing mix and marketing objectives
- Target market and marketing mix
- Target markets and promotions
- None of these
22. Which of the following terms is related to the Service market?
- Product Designing
- Price mix
- All of the above
- None of the above
23. Which of the following is a part of personal selling?
24. Marketing decisions are very critical because _________?
- Helps in achievement of marketing objective
- Success of enterprise depends on it
- Purchase depends on it
- All the activities depend on it
- Only land 2
25. Which of the following is the factor determining consumer behaviour?
- Economic factor
- Social factor
- Informational factor
- Psychological factor
- All of the above
26. Rural marketing involves
- Selling to rural banks
- Selling by rural banks
- Selling to rural customers
- Arranging industrial exhibitions
- All of the above
27. Direct marketing is necessary for
- Having a focused approach to marketing
- Boosting sales
- Better customer contacts
- All of the above
- None of these
28. Indirect marketing is the same as
- Onsite selling
- Using a smart-phone
- Viral marketing
- Online marketing
29. Digital marketing means- (Find the correct option)
- Selling with calculators
- Marketing of digital instruments
- Marketing through Internet and Telephone
- Export finance
- None of these
30. Advertisement is a type of
- Direct marketing
- Service marketing
- Indirect marketing
- Internet banking
- Internal marketing
31. Marketing –
- Is the management process which identifies, anticipates and supplies customer requirements efficiently and profitably?
- Is the integrated analysis, planning and control of product, price, promotion and distribution to create exchanges and satisfy customer and organizational needs?
- Marketing is the part of Marketing Management
- All of these
32. CRM stand for –
- Customer Rate Money
- Cost Rate Money
- Customer Relationship Management
33. Pricing policies and methods
- help direct and structure the selection of a final price.
- are the last decisions made for a new product.
- are the same for all of a company’s products.
- are the most important decisions made for a product.
34. A marketing audit’s primary purpose is to
- check on the firm’s current marketing position for financial and legal reasons.
- identify weaknesses in ongoing marketing operations and plan the necessary improvements to correct these weaknesses.
- focus on a few of the most important marketing activities and plan the methods to improve them.
- aid evaluation and reallocate the firm’s marketing efforts and marketing opportunities.
35. Evaluating marketing performance by comparing it to established standards is part of:
- marketing planning
- organising marketing activities
- coordinating marketing activities
- marketing control
36. _________ refers to the specific development, pricing, promotion, and distribution of products that do not harm the environment.
- Marketing ethics
- Social responsibility
- Environmental marketing
- Green marketing
37. Which of the following is NOT a work of marketing?
38. Marketing is NOT required for one of the following products:
- Credit Card Business
- Export Business
- Corporate Loan
- Import Business
- None of these
39. Internal Marketing means_________.
- Selling to the employees
- Selling to oneself
- Selling of samples
- Selling to foreign markets
- None of these
40. Effective Marketing helps in:
- Boosting the sales
- Boosting the purchases
- Diversified Business
- Realization of Dreams
- All of these
41. A “Buyer’s Market” means:
- Buyers are also sellers
- Demand exceeds supply
- Sellers are also buyers
- There are not sellers
- Supply exceeds demand
42. Marketing should be resorted to:
- Depends on Product
- Only among rich persons
- Only among Poor
- Only in Crowded areas
- Depends on bank
43. Modern method of marketing includes –
- Publicity on internet
- Advertise on internet
- Soliciting business through e-mail
- All of these
- None of these
44. A business that adopts the proactive strategy to social responsibility:
- Assumes responsibility for its actions and responds to accusations without outside pressure
- Tries to minimise or avoid additional obligations linked to a problem or problems
- Allows a condition or potential problem to go unresolved until the public learns about it
45. Which one of the promotion elements is probably the most powerful for services?
- Personal selling
- Sales promotion
46. Marketing would result in a person who is ready to buy- such person is termed as:
47. Which of the following are elements of marketing planning?
- Marketing planning is managerial function
- It envisages determination of the future course of marketing action
- It involves an analysis of part events and projection of future events
- All of these
48. Which one of the following is not a controllable variable of marketing management?
- Cultural Environment
- Social Environment
- Competitive Environment
- Psychological Environment
49. Which of the following is not a controllable variable of marketing management?
- Science Environment
- Technological Environment
- Competitive Environment
- Economic Environment
50. Which one of the following is a controllable variable of marketing management?
- Political Environment
- Legal Environment