Unit 1

MARKETING MANAGEMENT

INTRODUCTION
Marketing is everywhere and it affects our day- to-day life in every possible manner.
Formally or informally people and organizations engage in a vast number of activities
that could be called as marketing. Good marketing is no accident, but a result of
careful planning and execution. It is both an art and science. Let’s discuss various
concepts and issues in marketing.

DEFINITION
Marketing management is the art and science of choosing target markets and getting,
keeping and growing customers through creating, delivering and communicating
superior customer value.
In short Marketing is “Meeting needs profitably”. Marketing has been defined by
different authors in different ways which can be broadly classified into three

Product Oriented Definition

The emphasis is given on products.

In1985 AMA redefined marketing as “Marketing is the process of planning and

executing the conception, pricing, promotion and distribution of ideas, goods and
services to create exchanges that satisfy individual and organizational goals.”

Customer- Oriented Definition

Here the emphasis is on customers and their satisfaction.

In the words of Philip Kotler “Marketing is the human activity directed at satisfying
needs and wants through an exchange process.”

Value Oriented Definition (Modern Definition)

In 2004 the American Marketing Association defined “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.”

SCOPE OF MARKETING
The scope of marketing can be understood by discussing what is marketing, how it
works, what is marketed and who doesthe marketing.
Peter Drucker, a leading management theorist, puts it this way, there will always, one
can assume, be need for some selling .But the aim of marketing is to make selling
superfluous. The aim of marketing is to know and understand the customer so well
that the product or services fits him and sells it. 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.

What is marketed?
Marketing people market 10 types of entities; let’s take a quick look at these;
GOODS physical goods constitute the bulk of most countries production and
marketing efforts.
SERVICES: Services include the work of airlines, hotels, cars rental firms, barber
and beauticians, maintenance and repair people, and accountants, bankers, lawyers,
engineers doctors, software programmers, and management consultants.

EVENTS: marketers promote time-based events, such as major trade shows, artistic
performances, and company anniversaries. Global sporting events such as the
Olympics and the World cup are promoted aggressively to both companies and fans.

EXPERIENCES: by orchestrating several services and goods, a firm can create,

stage and market experiences. Veega land, Black Thunder etc represents this kind of
experiential marketing.

PERSONS: celebrity marketing is a major business, Artists, Musicians, CEOs,

physicians, high- profile lawyers and financiers, and other professionals all get help
from celebrity marketers.

PLACES: cities, states, regions, and whole nations compete actively to attract
tourists, factories, company headquarters, and new residents. Place marketers include
economic development specialists, real estate agents, commercial banks, local
business associations, and advertising and public relations agencies.

PROPERTIES: properties are intangible rights of ownership of either real property

(real estate) or financial property (stocks and bonds). Properties are bought and sold,
and these exchanges require marketing.

ORGANIZATIONS: organizations actively work to build a strong, favorable, and

unique image in the minds of their target publics.

INFORMATION: information is essentially what books, schools, and universities

produce, market, and distribute at a price to parents, students, and communities.

IDEAS: Every market offering includes a basic idea. Social marketers are busy
promoting such ideas as “Friends Don’t Let Friends Drive Drunk” and “A Mind Is a
Terrible Thing to Waste.”

Who markets?
MARKETERS AND PROSPECTS
A marketer is someone who seeks a response- attention, a purchase, a vote, a donation
– from another party, called the prospect. If two parties are seeking to sell something
to each other, we call them both marketers.

IMPORTANCE OF MARKETING
Marketing is important not only for organizations but for individuals, society and
economy as a whole. Financial success often depends on marketing ability. Finance,
operations, and other business functions will not really matter if there isn’t sufficient
demand for products and services so the company can make a profit. There must be
top line for there to be a bottom line. Many companies have now created a Chief
Marketing Officer, or CMO, position to put marketing on a equal footing with other
C-level executives, such as the Chief Executive Officer (CEO) and Chief Financial
Officer (CFO). Also marketing steps its foot in every walk of life. Some of its
importance can be discussed as follows.

IMPORTANCE OFMARKETING TO COMPANIES

Sound marketing is critical to the success of the organisation in the following ways:
 Helps in income generation.
 Helps in planning and decision-making.
 Helps in distribution
 Helps in exchanging information.
 Helps to adapt to changing environment.
 Expands global presence.
 Helps to earn goodwill.

IMPORTANCE OFMARKETING TO CONSUMERS

 Provides quality products.
 Provides variety of products.
 Improves knowledge of consumers.
 Helps in selection.
 Consumer satisfaction.

IMPORTANCE OF MARKETING TO SOCIETY

Marketing bridges the gap between firm and society.
 Provides employment.
 Raises standard of living.
 Creates utilities.
 Reduces costs.
 Solves social problems.
 Makes life easier.
 Enriches society.

IMPORTANCE OF MARKETING TO ECONOMY

It stimulates research and innovation
 Saves the economy from depression.
 Increase in national income.
 Economic growth.
 Ploughing back of resources

EVOLUTION OF MARKETING CONCEPT

Marketing concept has undergone a drastic change over years. Earlier it was
production or later selling which was key to marketing idea but moving ahead now
these have given way to customer satisfaction rather delight developing a modern
marketing concept. Let’s review the evolution of earlier marketing ideas;

THE PRODUCTION CONCEPT

It is one of the oldest concepts in business. It holds that consumers will prefer
products that are widely available and inexpensive. Managers of production- oriented
business concentrate on achieving high production efficiency, low costs, and mass
distribution.
THE PRODUCT CONCEPT
It proposes that consumers favor products that offer the most quality, performance, or
innovative features. Managers in these organizations focus on making superior
products and improving them overtime.

THE SELLING CONCEPT

It holds that consumers and businesses, if left alone, won’t buy enough of the
organization’s product. The organization must therefore undertake an aggressive
selling and promotion effort.

THE MARKETING CONCEPT

It emerged in mid-1950s, instead of a product- centered, make- and –sell philosophy,

business shifted to a customer- centered, sense-and-respond philosophy.
The marketing concept holds that the key to achieving organizational goals is being
effective than competitors in creating, delivering, and communicating superior
customer value to your chosen target markets.
Theodore Levitt of Harward drew a perceptive contrast between the selling and
marketing concepts. Selling focuses on the needs of the seller, marketing on the needs
of the buyer. Selling is preoccupied with the seller’s need to convert his product into
cash, marketing with the idea of satisfying the needs of the customer by means of the
product and the whole cluster of things associated with creating , delivering, and
finally consuming it.
Several scholars have found that companies that embrace the marketing concept
achieve superior performance. This was first demonstrated by companies practicing a
reactive market orientation understanding and meeting customers’ expressed needs.

HOLISTICMARKETING CONCEPT
The trends and forces defining the 21st century are leading business firms to a new set
of beliefs and practices. Today’s best marketers recognize the need to have a more
complete, cohesive approach that goes beyond traditional applications of the
marketing concept.

This concept is based on the development, design, and implementation of marketing

programs, processes and activities that recognizes their breadth and
interdependencies. Holistic marketing recognizes that “everything matters” in
marketing- and that a broad, integrated perspective is often necessary. Holistic
marketing is thus an approach that attempts to recognize and reconcile the scope and
complexities of marketing activities.

MARKETING MIX

In the words of Philip Kotler, “Marketing Mix is the set of controllable variables and
their levels that the firm uses to influence the target market.” Marketing mix is a
combination of various elements, namely, Product, Price, Place (replaced by Physical
Distribution) and Promotion.
Components of Marketing Mix

The various important elements of marketing mix are briefly discussed as follows;
PRODUCT: It is the thing possessing utility. It is the bundle of value the marketer
offers to potential customers. Today manufacturers are realizing that customer expects
more than just the basic product. Therefore the product must satisfy the consumer’s
needs. The manufacturer first understands the consumer needs and then decides the
type, shape, design, brand, package etc. of the goods to be produced. The product is a
marketer’s primary vehicle for delivering customer satisfaction.
PRICE: it is the amount of money asked in exchange for product. It must be
reasonable so as to enable the consumer to pay for the product. While fixing the price
of a product, the management considers certain factors such as cost, ability of the
consumers, competition, discount, allowances, margin of profit etc.
PLACE (PHYSICAL DISTRIBUTION): It is the delivery of products at the right
time and at the right place. It is the combination of decision regarding channel of
distribution (wholesalers, retailers etc. ), transportation, warehousing and inventory
control.
PROMOTION: It consist of all activities aimed at inducing and motivating
customers to buy the product. The selection of alternatives determine the success of
marketing efforts. Some firms use advertising, some others personal selling or sales
promotion. Thus promotion includes advertising public relations, personal selling and
sales promotion.
Recently Packaging and People are two more elements of marketing mix that have
been emerged.
These are discussed as follows.
PACKAGING: Packaging is the art, science and technology of preparing goods for
transport, sale and exchange. A well designed pack is invaluable in building brand
loyalty with the customer. Packaging must be such that a customer is impressed at the
very moment he or she sees the product.
PEOPLE :It consists mainly of the people to whom goods are sold(consumer) and
the people through whom goods are sold(sales people, wholesalers, retailers etc.)
people include competitors also. This factor will be the reason as well as resources for
success in marketing.

MARKETING ENVIRONMENT
It includes all those factors which are external to a firm and which affect the
marketing process.
According to Philips Kotler, Marketing environment is constantly spinning out new
opportunities and new threats, and the firms find their marketing collapse. Therefore,
the company’s marketing executives must constantly monitor the changing Marketing
scene and observe the changing environment through marketing research. The
Marketing Environment includes non- controllable variables that effects the
company’s ability to serve its markets.

CONTROLLABLE FACTORS
The controllable factors are well within the grip of the firm and easy to adjust them to
suit the changes. These consist of Marketing policies and Marketing strategies.
Framing of marketing policies is the responsibility of top management and marketing
strategies are developed by middle level management. The selection of target
marketing, marketing objectives and Marketing control are the other controllable
factors which also helps in framing Marketing strategies.

UNCONROLLABLE FACTORS
Controllable variables will have to be filtered through various uncontrollable
environmental factors before they reach to the customers. The uncontrollable
environmental consist of two levels i.e., micro environment and macro environment.

MICRO - ENVIRONMENT VARIABLES

It consists of elements or forces that influence marketing directly. It includes Supplier,
Marketing Intermediaries, Costumers, Competitors and the General Public.

Micro- Environment Variables

SUPPLIER: One who supply the resources to a company. Any shortage of Supply
affects the Marketing function and thus, should avoid dependence on any single
supplier.
MARKETING INTERMEDIATES: They are the middlemen who create place
Utility, Time utility and Quantity utility. These includes Physical Distribution Firms,
Transport Companies, Marketing Consulting Firms, Marketing Services Agencies and
Assist the company in promoting the right products to the right markets.
CUSTOMERS: It refers to consumer markets, industrial markets, reseller markets,
international markets and govt. markets having its own characteristics.
PUBLIC: The marketing decisions considerably influenced by public relations, govt.
policies, the press, the legislatures and the general public.
MACRO- ENVIRONMENT VARIABLES
Macro-environment consists of forces affecting the entire society or economy at large.
Macro environment influences entire industry as a whole. The various variables of
Macro-environment are as under
 Demographic environment.
 Social-Cultural environment.
 Economic environment.
 Ethical environment.
 Political environment.
 Physical environment.
 Technological environment.

ECONOMIC ENVIRONMENT
It comprises of economic system of the country, affects the demand structure of any
industry/ product. Changes in economic conditions provides marketers with new
challenges and threats. Various economic factors which directly affect the Marketing
strategies are discussed below.
Role of Government: Marketing in greatly influenced by the role of govt.
through fiscal policies, industrial regulations, economic controls, import-export
policies etc. Monetary and Non-Monetary policies of the Govt. also determine the
tempo of economic development.
Consumers: Consumer welfare and interest should be taken into consideration
while preparing marketing programme. The marketer is to make available quality
products at reasonable prices, in sufficient qualities, at required time interval.
Competition: Healthy competition is always in the interest of customers whereas
unhealthy competition is harmful and leads toward increasing cost and waste.
Price: It is determinant of the fate of any business. If the Price is too high,
reduces the consumer and consumption and if too low, the producers and marketers
are left in the lurch.

ETHICAL ENVIRONMENT
In the race of earning more and more profits, business people disintegrate the ethical
values from the business. This leads to adulteration, limitation etc. resulting in socio-
economic pollution of minds and relations.
POLITICAL/ LEGALENVIRONMENT
The legal environment for marketing decision is characterized by various laws passed
by Central or State Govt. and even by local administration. Govt. agencies, political
parties, pressure groups and laws create tremendous pressure and constraints for
marketer. Marketing managers required full knowledge and understanding of political
philosophy and ideologies of major political groups and legal environment for
framing marketing strategies and growth of business.
PHYSICAL ENVIRONMENT
It refers to the physical distribution of goods and services. It needs the in depth study
of cost and convenience involved in the process of physical distribution of products
from producer to consumer end.
TECHNOLOGICALENVIRONMENT
It helps to shape changes in living style of the consumers. It has the responsibility of
relating changing life- style patterns, values and changing technology to market
opportunities for profitable sales to particular market segment.