MARKETING MANAGEMENT: CONCEPT AND OBJECTIVES

Marketing management might be defined as follows:

1. Marketing management is that specialised branch of general

management, which has developed with a view to providing maximum
consumer satisfaction and ensuring maximum enterprise profitability;
through- planning, organising, directing and controlling the marketing
activities and designing the entire organisational functioning with a
marketing orientation.
2. “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 organisational objectives.”

—Philip Kotler

Features of marketing management:

(i) Marketing management is a specialist branch of general

management.
(ii) The twin objectives of marketing management are-maximisation of
consumer satisfaction and maximisation of enterprise profitability.
(iii) Marketing management is the planning, organizing, directing and
controlling of marketing activities like marketing research, pricing,
sales promotion, warehousing, transportation, and host of other
functions.
(iv) Successful marketing management requires a designing of the entire
organisational functioning with a marketing orientation i.e. all
departments of the business enterprise are so designed as to
maximally aid the efforts of the marketing department.

Objectives of Marketing Management:

Objectives of marketing management could be divided into the following

three main categories:

(a) Basic objective

 (b) Auxiliary objectives
(c) Societal objectives

Let us briefly comment on each of the above categories of marketing

management objectives:

(a) Basic Objective:

The basic or fundamental objective of marketing management is to maximise

consumer satisfaction; and maximising enterprise profitability through
maximising consumer satisfaction. The twin aspects of this fundamental
objective seek to reconcile the objectives of consumers with those of the
organisation.

(b) Auxiliary Objectives:

Auxiliary objectives of marketing management which are helpful in the

attainment of its basic objective are as follow:

i. Creation of Demand:

By identifying consumers’ needs, tastes, preference etc. through conducting

marketing research and producing goods and services for the best fulfillment
of consumers’ needs; marketing management creates customers or demand
for its products. This function of demand creation is the basis of the
operational life the business enterprise.
 ii. Maximising Market Share:

For ensuring long-term profitability of the business enterprise; marketing

management has to pursue the objective of maximising market share. In order
to attain this objective, marketing management has to constantly monitor its
products according to changing consumer preferences and establish the
uniqueness of its products among items offered for sale by competitors.

iii. Building Goodwill:

Marketing management is supposed to build the goodwill of the enterprise, in

the market; by manufacturing and distributing quality goods at affordable
prices. Many leading industrial enterprises, in the world, have created
goodwill for themselves, in this manner.

In fact, consumers are reminded of the name of the manufacturer every time
and moment; whenever they consume or use quality goods manufactured by
that manufacturer – yielding them extra-ordinary satisfaction.

iv. Survival and Growth Amidst Intense Competition:

The marketing management must develop objectives, strategies and policies;

as would help ensure the survival and growth of the enterprise amidst
intensely competitive conditions. The survival of the business enterprise
among intense competition becomes imperative; as; otherwise, attainment of
any objectives of management would be in suspense.

In fact, all the worldly pleasures are of no use to a person; who is no more, in
this universe. So also with business enterprises, which can realise any of their
objectives, only when they manage to survive, in the competitive market.

v. Conducting Marketing Research:

Marketing research is the heart of marketing management. All marketing

management decisions are based on the outcomes of such research.
Therefore, marketing management must create and well maintain a
specialised ‘marketing research cell’ within the marketing department.
In fact, conducting marketing research is a constant or continuous job of the
marketing manager; as it provides latest data for solution to changing
marketing problems.

vi. Development of Marketing Mix:

Marketing mix-a unique combination of various marketing ingredients like

product, price, place and promotion is a practical instrument in the hands of
the marketing manager to realise the objective of sales and profit
maximisation. Development of an appropriate marketing mix is, therefore, a
significant auxiliary objective of marketing management.

(c) Societal Objectives:

The important societal objectives of marketing management could be

stated to comprise of the following:

i. Best Utilisation of Nation’s Precious Resources:

Attainment of this social objective is possible when marketing management

refrains from producing items whose consumption may be injurious to public
welfare e.g. liquors, cigarettes, vulgar movies, unnecessary luxurious items
etc.

ii. Undertaking quality production at most reasonable prices; so

as to enable the poorer sections of society to consumer the
essential goods needed by them.
iii. Minimising Costs of Distribution:

Marketing management should follow those marketing policies, which result

in the minimisation of distribution costs; so that the price payable by the
ultimate consumer is the lowest possible one.

iv. Avoiding Unfair Trade Practices:

Marketing management must be socially responsible and must avoid

indulging in unfair trade practices, like the following:

1. Undertaking false advertising

2. Resorting to profiteering through black-marketing.
 3. Aiming at driving the small industrialist or trader cut of market.
4. Having unfair dealings with customers and suppliers.
5. Producing defective packaging; so that the packet contains less goods
or inferior quality goods contrary to specifications on the packet-label.
v. Emphasis on After-Sales Service:

Marketing management must pay utmost attention to after-sales services-free

of cost; so that consumer does not feel being fleeced by the manufacturer or
trader.

Functions / Roles of Marketing

The ultimate aim of marketing is exchange of goods and services from

producers to consumers in a way that maximizes the satisfaction of
customer’s needs. Marketing functions start from identifying the consumer
needs and end with satisfying the consumer needs. The universal functions
of marketing involve buying, selling, transporting, storing, standardizing and
grading, financing, risk taking and securing marketing information. However,
modern marketing has some other functions such as gathering the market
info and analyzing that info. Market planning and strategy formation. To
assist in product designing and development also comes under the marketing
functions. The marketing functions are as follows:

• Market Information

• Market Planning

• Exchange Functions

• Product Designing and development

• Physical Distribution

• Standardization and Grading

• Financing

• Risk Taking

• Packaging, labeling and branding

 • Customer Support

Market Information

To identify the needs, wants and demands of the consumers and then
analyzing the identified information to arrive at various decisions for the
successful marketing of a firm’s products and services is one of the most
important functions of marketing. The analysis involves judging the internal
weaknesses and strengths of the organization as well politico-legal, social and
demographic data of the target market. This information is further used in
market segmentations.

Market Planning

Market-planning aims at achieving a firm’s marketing objectives. These

objectives may involve increasing market presence, dominate the market or
increase market share. The market planning function covers aspects of
production levels, promotions and other action programmes.

Exchange Functions

The buying and selling are the exchange functions of marketing. They ensure
that a firm’s offerings are available in sufficient quantities to meet customer
demands. The exchange functions are supported by advertising, personal
selling and sales promotions.

Product Designing and development

The product design helps in making the product attractive to the target
market. In today’s competitive market environment not only cost matters but
also the product design, suitability, shape, style etc. matter a lot in taking
production decisions.

Physical Distribution

The physical distribution functions of marketing involve transporting and

storing. The transporting function involve moving products from their points
of production to locations convenient for purchasers and storing function
involve the warehousing products until needed for sale.
Standardization and Grading

Standardization involves producing goods at predetermined specifications.

Standardization ensures that product offerings meet established quality and
quantity. It helps in achieving uniformity and consistency in the output
product. Grading is classification of goods in various groups based upon
certain predetermined characteristics. It involves the control standards of
size, weight etc. Grading helps in pricing decisions also. The higher quality
goods and services attract higher prices.

Financing

The financing functions of marketing involve providing credit for channel

members or consumers.

Risk Taking

Risk taking is one of the important marketing functions. Risk taking in

marketing refers to uncertainty about consumer purchases resulting from
creation and marketing of goods and services that consumers may purchase
in future.

Packaging, labelling and branding

Packaging involves designing package for the products, labeling means

putting information required / specified on a product’s covering. Packaging
and labelling serve as promotional tools now a days, Branding distinguishes
the generic commodity name to a brand name. For example, Wheat Flour is a
generic name of a commodity while “Ashirvad Aata” is a brand name. In
service industry, also branding matters a lot.

Customer Support

Customer support is a very important function of marketing. It involves pre

sales counseling, after sales service, handling the customer complaints and
adjustments, credit services, maintenance services, technical services and
consumer information. For example, water purifier comes with an onsite
service warranty of 7 years helps in marketing and is an important marketing
function as well.

Types of Marketing Environment

Marketing Environment is a wide scope which covers all the outside

factors, forces which affects marketing management’s decisions and their
relationship with target customers. Companies must constantly adopt and
change to the changing environment.

Marketing Environment is a study of all the external atmosphere of the

organization affecting all the internal factors within the organization which
ultimately requires attention of the Marketing management for sound decision
making in the long run as well as short period.

Marketing environment encompasses the marketing team within an

organization and includes all of the outside factors of marketing that affect
the team’s ability to develop and maintain successful customer relationships
with their targeted customer group.

Some of the types of marketing environment are:-

A. Micro Environment-

1. Company

2. Suppliers

3. Marketing Intermediaries

4. Competitors

5. Public

6. Customers

B. Macro Environment-

1. Demographic Environment

2. Economic Environment
 3. Natural Environment

4. Technological Environment

5. Political and Social Environment

6. Cultural Environment

7. Legal Environment.

Micro Environment

Definition: The micro environment includes all the actors close to the
company that affect, positively or negatively, its ability to create value for and
relationship with its customers

- Philip Kotler

The factors are as follows:

a. The Company:

The company is a hierarchical entity consists of different departments like

purchasing, production, top management, research and development, finance
etc. All these interrelated groups forms the internal environment of
organization.

Top management is responsible for companies’ mission, objectives, and broad

strategies, policies. Marketing management make decisions within the actions
and decisions of top management. Other departments also have impact on
marketing department. Harmony must be established with all the
departments.

b. Suppliers:

Suppliers are important part of the overall link of customer to company.

Suppliers supplies goods and resources needed to produce goods and services
to the company.

Their problems must be studied because they can seriously affect marketing.
Cost and supply availability must be checked by marketing department.
In current scenario marketers treat suppliers as their partners in creating and
delivering customer value.

Many suppliers provides valuable information on their web portals about their
marketers and give important feed back to them about customer responses.

Supply shortages, delays, labor strikes and other events can cost sales in the
short run and affect customer satisfaction in the long run.

c. Marketing Intermediaries:

Intermediaries helps the company to promote, sell and distribute its products
to final buyers. Marketing intermediaries includes resellers, physical
distribution firms, marketing services agencies and other intermediaries
including financial intermediaries.

Reseller includes distribution channel firms that help the company to find
customers or make sales to them.

In India it is a growing trend that in near future manufacturers will now be

facing competition of large and powerful intermediaries. Some resale
organizations in India have emerged and troubled the manufacturers. For
example Big Bazaar, Shoppers Stop. Pantaloons retail. Like suppliers,
intermediaries form an important component of the company’s overall
marketing strategic management.

For optimizing customer satisfaction company must become partner with

these intermediaries to balance the performance of whole system.

d. Competitors:

Marketing Management must takes into account the activities of its

competitors because of their similar aim of satisfying customer. Marketers
must take strategic advantage by performing more efficiency in this modern
age of cut throat competition.

Every organization must study its own nature and structure and implement
marketing strategy accordingly. All policies are not suitable for every
organization so choice must be made and policies must be planned
accordingly.

e. Public:

Public is any group that has an actual or potential interest in or impact on

organization’s ability to achieve its objectives.

Macro Environment:

The macro environment includes all the factors which are external to the firm
and which cannot be controlled by the organization. Macro environment
influence is not specific to any particular industry but influence all the firms
on a different level.

“The macro environment consists broader forces that affects the actors in the
micro environment.”

Following are the elements of macro environment:

i. Demographic Environment

ii. Economic Environment

iii. Natural Environment

iv. Technological Environment

v. Political and Social Environment

vi. Cultural Environment

i. Demographic Environment:

Changes in demography’s in the nature of human population means ultimate

changes in markets. Demographic environment is study of human population
in terms of size, density, location, age, gender, race, occupation and other
statistics. It is the study of people who are nothing but market. People are
responsible for demand for a product and some other people contribute
towards the supply of the product. So people and people mix are the most
important factor of macro environment.

Thus as a marketer, one must understand the demographics of the nation

and the also due to globalization, global population also influences the
marketing decisions.

a. Population Mix:

Population study is very important because it is very dynamic and rapidly

changing. Not only growth of population should be considered but also
composition of population is equally important.

In India where youth is the largest denominator, promotion must be made

accordingly.

b. Population Growth:

India is the second largest populated country after china. According to 2011
census report Indian population reached 1.21 billion constituting 17.5 % of
the world population. India is projected to be the World’s most populous
country by 2025, surpassing china. This provides an exceptional opportunity
for business. Many foreign companies got attracted with this market because
of its dynamism and power to increase sale with very high percentage.

c. Geographical Shift:

Very diversified culture is present on Indian soil with changes spotted every
100 kilometers including change languages and traditions. Marketer must
have this knowledge of different culture where he wants to sale his product.

d. A Changing Family System:

India had a tradition of joint family system in which all the parents,
grandparents and sometimes great grandparents would live together under
one shelter. The eldest man being the Head or Chief of the family and the able
bodied men would work for daily bread and butter and women were
responsible for kitchen and other household responsibilities.
Modern India parted with this traditional joint family system. In a present
world, both husband and wife work. They may not live with their parents. This
duel income source and single kid family has created a big dent in the social
fabric of our society.

Because of more regular income, demand and consumption increased which

resulted in a compulsion for increase in manufacturing and production.

e. Changing Role of Women in India:

Women in India were basically engaged in household activities and took

responsibility of kitchen and other work including maintenance, cleaning of
house, raising kids etc. Today more and more women, even from rural area,
are completing graduation and even post-graduation. Women are working
shoulder to shoulder with men in every sphere of activity, be it in education,
organization, hospital, or a science research Institute.

The entry of women into the corporate world has changed the economy in
many ways. Their earnings have increased the disposable income of the
family. Many products are developed specially for these women. They have
become an active member in a family.

f. Rural Population:

The MGI India consumer Demand Model forecasted that the population in
rural India will be 900 million by 2015. Which will result in rising demand at
a compounding rate. Such demographic factors affects marketing decisions.

g. Middle Class Factor:

India is showing tremendous growth in middle class with their own set of
nature, features, likes, dislikes and demands. It is a study subject for
marketing managers because it changes product requirements, demands for
services etc. It is predicted that middle class will dominate the urban
consumption in near future.
ii. Economic Environment:

The economic environment can offer both opportunities and threats. It

refers to the factors that affects consumer buying power and spending
patterns.

To attract the India’s growing middle class, Tata motors introduced the small,
affordable Tata Nano car designed to be the Indian model T- the car that puts
the developing nation on wheel.

Economic considerations includes, inflation, GDP, bank policies,

market trends, union budget. Fiscal policies, credit issues, financial crisis or
progress, and global economic situation.

All these environmental factors must be studied in depth because they affect
buyer’s demands and hence product’s demand. Consumer spending pattern
and income distribution must also be looked for so as to have a bulls eye view
about economic environment.

Credit availability and saving trends in economy has an influence on

the purchasing ability of the consumer. The availability of instalment schemes
and EMI options has boosted service sector, reality sector and consumer
durable products.

Following are some of the factors of economic environment:

a. Recession or Boom:

If the economy is going through a recession it is obvious that businesses

generally will not be doing well due to low aggregate demand in the economy.
On the other hand, a boom period will lead to higher business profits and
revenue for most of the businesses in the economy. Recent global recession
brought software industry in country to perform at very lower profit levels.

b. Inflation:

High rate of inflation leads to lower purchasing power for consumers resulting
in lower demand for goods and services. Moreover, a higher inflation rate will
make business uncompetitive in the international market leading to lower
sales for the business.

c. Tax Structure in Country:

High level of taxes will lead to low disposable income and contraction of
demand in the economy. Business will find it difficult to attract consumers.
Moreover, taxes affects overall spending pattern. Debit card swapping
sometimes attracts 2 percent tax hence many consumer purchase products
with cash only.

d. Unemployment:

High level of unemployment in the country can also adversely affect a

business. People will not have enough money to purchase a firm’s product.
With the rising per capita income in India as a result of increase in job
opportunities, spending increased rapidly in a last decade

e. Labor Costs:

High labor cost will result higher production costs. This will make a firm’s
product more expensive as compared to other firms affecting its sales and
profit margin.

f. Prevailing Rates of Interest:

Higher Interest rates will lead to a fall in the aggregate demand in the economy
thus leading to difficulty for business to find customers willing to buy its
product. Lower interest rates will lead to an increase in demand in the
economy.

g. Income Distribution:

High level of disposable income is good for business producing luxury goods.
A large disparity in income distribution will promote businesses dealing in
luxury goods as well as inferior goods.

With duel income sources per home, spending and distribution pattern have
changed significantly.
iii. Natural Environment:

Marketers need to be aware of the threats and opportunities associated

with the four trends associated in the natural environment which are
stated below:

a. Shortage of raw material

b. Increased cost of energy

c. Increase in pollution

d. Government policies

Natural environment consists of natural resources that are required as

inputs by marketers or that are affected by marketing activities. All corporates
are now looking for eco-friendly approach because of showing respect towards
Mother Nature and trying to act more pollution free in an effort to save
environment.

First cause of concern for marketer is the shortage of raw material is

growing because of increase in consumption. Second is government
intervention in natural resource management. So companies should accept
social responsibility and less expensive devices can be found to control and
reduce pollution.

It is a common practice in the scenario of pollution and social natural

awareness. Companies are making Eco- friendly strategies to deal with
problems of pollution and short resources. Many companies are using
handmade papers for internal use and promoting save paper campaign.

Idea launched this concept of paper saving on a broad scale. Aircel introduced
save tiger campaign for saving tigers all over the country.

iv. Technological Environment:

Technology is the most influential force that is shaping marketing

environment which includes forces that are the new technologies affecting
new product and market opportunities. Technology has created miracles in
the area of robotic surgery, antibiotics, laptop computers, which affect every
organization’s marketing environment.

The technology is a synonym for change. It changes rapidly with destroying

all the previous researches, like invention of handy sub devices demolished
floppy from the market. Android based smart phones have destroyed all the
other previous platforms like java based and Symbian based operating system
compelling mobile manufacturers to use new android based operating system.
Even school going kids are well aware of the latest smart phone product and
features of that.

Internet usage have increased very drastically, so because of increase in the

usage of smart phones with the availability of internet in a fingertip, number
of internet cafes have reduced. Such is a power of technology.

There are approximately 700 million mobile users in India in 2012 rising up
to 900 million in 2016 shows the technological advancement and factor needs
attention of marketers.

New technologies create new markets and opportunities. However every new
technology replaces an older technology. Thus marketers should watch the
technological environment closely. Companies that do not keep up will soon
find their products outdated.

v. Political and Social Environment:

Markets works best under some regulative forces. Well-conceived regulation

can encourage competition and ensue fair markets for goods and services.

Thus, governments set up public policies to guide businesses that also limit
business for the good of society as a whole. Almost every business activity
including marketing activities are subject to laws and regulations.

Every company operates under some obligation and without that chaos will
rule the corporate sector with competition running the top management.
Social sector is keeping corporate sector to work under some obligatory forces
which show some responsibility towards society and country.
Many organizations are now engaged in social work for showing their concern
for problems of economy and providing some assistance to the government
and other social agencies for overcoming them.

Many corporate sector companies are initiating Fund raising campaigns,

portals for child education, drought management, water purity education,
save girl child campaign etc. showing social responsibilities.

India’s top most software company’s CEO took project named ‘AADHAR’ to
give unique identification number to every citizen of the country. This project
got praised by government and corporate sector.

vi. Cultural Environment:

Cultural factors affect how people think and how they consume. So marketers
are keenly interested in the cultural environment.

The cultural environment generally includes people’s thinking about

following:

a. People’s view of themselves – It includes people view about themselves

which vary in their emphasis than their view of outer world

b. People’s view of others – People are becoming more and more introvert and
so their views of others are changing

c. People’s view of organization – People vary in their attitudes toward

corporations, government agencies, trade unions, universities and other
organization.

d. People’s view of society – People vary in their attitudes toward their society
based on their culture, opinions, character etc.

e. People’s view of nature – Recently people in general have recognized that

nature is fragile and can be destroyed by human activities.

f. People’s view of universe – Finally, people differ in their beliefs about the
origin of the universe and their place in it.
Religion plays an important role in every human being even if in life of a
staunch atheist.

The cultural environment includes institutions and other forces that affects
society’s basic values, perceptions, preferences and behaviours etc.

Cultural core beliefs are so strong that it affects buyers’ demands to that
respect greatly. So company must take that environment into consideration
before making marketing strategies. Because of software sector development
in India, sale of consumer durable goods increased widely. So marketing
department must have studied nature and culture of this software sector
employees before even their introduction in India.

Hence, cultural environment can affect production and marketing decisions

deeply which must be studied in depth.