MARKETING

UNIT – I

INTRODUCTION:

Marketing as a process (or) a function originated and developed along with human
civilization. Its application became quite common is a short static. It was changing rapidly as
the society itself. The growth from barter economy to money economy and to credit economy
did contribute some changes in the concept of marketing also. It assumed complexities and
became the central theme of business. Thus, the idea on the time, bringing in different concepts.
Marketing is thus concerned with the creation of four utilities. The traditional objective of
marketing had been to make the goods available at places where they are needed. This idea was
later on changed by shifting the emphasis from “exchange” to “satisfaction of human needs”

WHAT DO YOU MEANT BY MARKET (OR) WHAT IS A MARKET?

The word “Market” is derived from the Latin word ‘Marcatus’ meaning merchandise,
wares, traffic, trade or a place where business is conducted. The common usage of market
means a place where goods are bought (or) sold.

The common use of the term may imply any of the following:

 A place where market is held

 An assembly of people-buyers and sellers
 An area of operation
 A course of commercial activity.
DEFINE MARKET (OR) LIST OUT THE DEFINITIONS OF MARKET:

Clark & Clark defines it as “an area in which the forces leading to exchange of title to a
particular product operate, and towards which and from which the actual goods tend to travel.”

Market includes both place and region in which buyers and sellers are in free competition
with one another-Pyle

WHAT DO YOU MEANT BY MARKETING (OR) WHAT IS MARKETING?

The essence of marketing is an exchange (or) a transaction, intended to satisfy human

needs (or) wants. That is, marketing is a human activity directed at satisfying needs and wants,
through an exchange process. A demand is a want for which the consumer is prepared to pay a
price. A want is anything (or) a service the consumer desires (or) seeks. The aim of marketing
is to make sales in order to earn reasonable profit for the producer.
DEFINE MARKETING (OR) DEFINE THE TERM “MARKETING”?

“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, when they are needed, and possession utility, when they are transferred to
those who need them”.- Converse, Hugey and Mitchell

“Marketing is concerned with the people and the activities involved in the flow of goods
and services from the producer to the consumer” – American Marketing Association

WHAT ARE THE OBJECTS OF MARKETING (OR) BRING OUT THE OBJECTIVES
OF MARKETING:

Barker and Anshen say, “The end of all the marketing activities is the satisfaction of
human wants”. Through the satisfaction of human wants, profits are rewarded to the business
and the reward is inducement for marketing.The following are the aims of marketing:

 To develop an intelligent appreciation of modern marketing practices.

 To provide guiding policies regarding marketing procedures and their
implementation.
 To study marketing problems according to circumstances and to suggest solutions.
 To analyse the shortcomings in the existing pattern of marketing
 To enable successful distribution of agricultural products, our mineral wealth, and
manufactures goods; and
 To enable managers to assess and decide a particular course of action.
LIST OUT THE CHARACTERISTICS (OR) NATURE OF MODERN MARKETING
(OR) BRING OUT THE FEATURES OF MODERN MARKETING:

Modern marketing possesses special characteristics. It covers all business activities in

order to ascertain the demand, product planning, distribution and facilitating the entire marketing
process. The modern marketing emphasizes the need for integrated and well-coordinated
marketing programme. It aims to attract the customers.

(i) Customer Orientation: Modern marketing recognizes customer’s supremacy in marketing.

The managerial attention was focused on the market and the consumer. Customer orientation
(or) Market-orientation may be defined as the “Managerial state of mind concerned with
consumer satisfaction and profit, and not sales volume alone”.

In production-orientation, large-scale productions become the rule of day. Under sales

orientation stage, attention is focused on attaining maximum sales. But the production-
orientation stage continues, though with declined sales. In customer-orientation, the consumer
becomes the pivot around whom all business is developed. Creation of satisfied customers is the
main goal of modern marketing. Profit can be earned only by serving the customer’s need.
(ii) Modern Marketing Begins with the Customers: The producers of the last century had
little care for the consumers. Now, the production is carried on in large quantity. The
manufacturer produces more than what the society needs, Market has developed from national to
international. Competition is the order of the day. Businessmen have started realizing it.
Earning profit is possible only through the customer’s satisfaction. To satisfy a customer, his
needs are to be known. Under consumer-orientated marketing, it becomes essential to know
what the consumer needs. This is possible only when information is collected from the
consumers. Modern marketing begins with the consumers and ends with the consumers
marketing research starts at this stage. Through market research, information of current
consumer needs can be known “we must apply our creativeness more intelligently to people, and
their wants and needs, rather than toe products”.

(iii) Modern Marketing Begins Before Production: In early periods, there were less
competitions and as such sales were easily made. But now this stage has changed. The
consumer looks for the usefulness and acceptability of a product. As such it has become
essential to find out the needs and desires of consumers, through marketing research. The
information from the market (or) the consumer will decide the future of the product. Product
planning and development is undertaken before the actual production takes place. The pricing,
distribution etc. are secondary.

(iv) Modern Marketing is a Guiding element:

At present competition is more acute, because many entrepreneurs produce similar

commodities. The ability of the marketer depends on the ability of finding a consumer and to
satisfy him. Businessman has to understand the economic development of a country and must
aim the raise the standard of living. People may choose one among the products. They decide
what product to purchase and what product not to purchase.

WHAT ARE THE BENEFITS OF MARKETING (OR) MENTION THE IMPORTANCE

(OR) ADVANTAGES OF MARKETING:

Importance to the Study:Marketing is a connecting link between the consumer and the
producer. Marketing process brings new and new items to retail shops, from where the
consumers can have them.

 Marketing helps in increasing the living standard of people. Because of mass production,
costs of manufacturing and marketing have come down. This facilitates the fixing of
cheaper rates and are a boon to the study.
 Marketing helps to increase the nation’s income. Any increase in the efficiency of
marketing really results in a lower cost of distribution. Lower prices to consumers mean a
real increase in the national income.
 Marketing process increases employment opportunities. For continuous production,
continuous marketing is needed. Continous marketing invites numerous activities and
thus job opportunities are provided to many people.
  It is marketing which has converted “yesterday’s luxuries into today’s necessaries.”
 Marketing removes the imbalances of supply by transferring the surplus to deficit areas,
through better transport facilitates.
 Marketing includes all activities in the creation of utilities-form, place, time and
possession.
To the Individual Firms:

 Marketing generates revenue to firms. A firm fulfills its motive only through marketing.
When markets are widened, sales increase, and thus profit to the firm increases.
 Marketing and innovations are the two basic functions of all businesses. Changing a
business, on the basis of requirements of customers new products, new methods etc.

WHAT ARE THE DIFFERENT TYPES OF MARKET (OR) CLASSIFY THE MARKET
ON THE BASIS OF DIFFERENT APPROACHES?

A. On the Basis of Geographical Area:

(i) Family Market:

When exchanges are confined within a family (or) close members of the family such a
market can be called as family market.

(ii) Local Market:

When people-buyers and sellers, belong to a local area (or) areas, say a town or villages,
participate in market it is called local market. The demands are limited. For ex. perishable
goods like fruits.

(iii) National Market:

For a certain type of commodities, a country may be regarded as a market; through the
fast development of industrialization it is called a National Market.

(iv)World Market:

World (or) International market comes up when buyers and sellers of goods evolve on
world level.

B. On the Basis of Commodities/Goods:

COMMODITY MARKET:

Produced goods (or) consumption goods are bought and sold commodity markets are sub-
divided into:

(i) Product Exchange Market:

 This type of markets is found only in developed industrial centres (or) cities. One market
deals in one commodity only. Generally sellers and buyers of a particular set up such markets
and run them regulated and controlled by certain rules.

(ii) Manufactured Goods Market:

Such type of markets deals with manufactured goods. E.g. Leather goods.

(iii) Bullion Market:

This type of market deals with the purchase (or) sale of gold, silver etc.

CAPITAL MARKETS:

As such financial needs of concerns are met by capital markets. They are three types:

(i) Money Market:

It is a type of market where money is borrowed (or) lent. This type of market helps (or)
guides the public to invest their surplus fund in industrial concerns.

(ii) Foreign Exchange Market:

It is an international market. This type of market helps exporters and importers, in

converting their currencies into foreign currencies and vice versa.

(iii) The Stock Exchange Market:

This is a market where shares, debentures, bonds etc. of companies are dealt with-
purchased (or) sold. It is also known as security market.

C. On the Basis of Economics:

(i) Perfect Market:

A market is said to be a perfect market, if it satisfies the following conditions.

(a) Large numbers of buyers and sellers are there

(b) Prices should be uniform throughout the market.

(c) Goods can be moved from one place to another without restrictions.

(ii) Imperfect Market:

A market is said to be imperfect when

(a) Products are similar but not identical

(b) Prices are not uniform

© There are restrictions on the movement of goods.

D. On the Basis of Transaction:

(i) Spot Market: In such a market goods are exchanges and the physical delivery of goods
takes place immediately.

(ii) Future Market: In such a market contracts are made over the price for future delivery.
The dealing and settlement take place on different dates.

E. On the Basis of Regulation:

(i) Regulated Market:

These are types of markets which are organized. Controlled and regulated by statutory
measures. Ex. Stock exchanges of Bombay.

(ii) Unregulated Market:

This is a free market. There is no control with regard to price, quality, commission etc.
Demand and supply determine the price of goods.

F. On the Basis of Time:

(i) Very Short Period Market:

Markets which deal in perishable goods for a very short period. There is no change in the
supply of goods.

(ii) Short Period Market:

In certain goods, supply is adjusted to meet the demand. The demand is greater than
supply. Such markets are known as short period market.

(iii) Long Period Market:

This type of market deals in durable goods.

G. On the Basis of Volume of Business:

(i) Wholesale Market:

In wholesale market goods are supplied in bulk quantity to dealers.

(ii) Retail Market:
In retail market goods are sold in small quantities directly to the users or consumers-
consumers market.

H. On the Basis of Importance:

(i) Primary Market:

The primary producers of farm produce sell their output (or) products through this type of
markets to wholesalers (or) consumers.

(ii) Secondary Market:

The commodities arrive from other markets. The dealings are commonly between
wholesalers (or) between wholesalers and retailers.

(iii) Terminal Market:

The ultimate consumer gets the goods from such markets. Here the final disposal of
goods takes place.

WHAT ARE THE DIFFERENT TYPES OF GOODS (OR) EXPLAIN THE DIFFERENT
KINDS OF GOODS:

Goods may also be called as product. They are tangible. They are:

A. Consumer’s Goods:

These types of goods are purchased by ultimate users (or) consumers for their personal
use. For ex: Food, Biscuts, Toys etc.

(i) Convenience Goods:

Consumers get commodities at minimum effort and at low cost. E.g. soap

(ii) Shopping Goods:

Before making final selection the consumers make an enquiry. E.g. furniture.

(iii) Speciality Goods:

Certain products possess special attraction to the consumers. E.g. cars.

Kinds of Goods Compared

Convenience Goods Shopping Goods Speciality Goods

1. Frequent purchases Demand search efforts in central Goods have unique
markets
2. High replacement rate Purchases can be postponed Unusual shopping behaviour is
needed.
3. Purchase in small quantities Demand evaluation and Special purchasing effort is
comparison on the basis of required for preferred brands.
quality, style, price, suitability.
4. Demand minimum effort, Do not need numerous shops. They act as important life styles
time and shopping for purchase. and images.
5. Must be available at nearest Fashion and service goods. They are costly luxury goods.
store.
6. Branded low-priced goods. Available in speciality shops.

E.g.: Milk, Newspaper E.g.: Clothing, Jewellery E.g.: Refrigerators, Televisions.

B. Industrial Goods:

Goods which are used for production (or) used in producing other products are industrial
goods.

(i) Raw Materials:

Raw materials are the basic materials entering physically into the final products e.g:
Building stones, Raw cotton.

(ii) Fabricated Materials:

Materials of this category will enter physically into the final products, but some type of
processing is already undergone e.g. Bricks.

(iii) Component Parts:

Such Type of parts are already undergone some processing and more (or) less the parts
can be called as final products. Eg Batteries.

(iv) Installation:

Machines, buildings, etc., do not enter into final products and are durable for a long
period. For ex: gas, power installation etc. They need heavy expenses for installation.

(v) Accessories:

They are light machines (or) tools which are used for the operation of a business. E.g.
cash-register, calculators etc.
WRITE A SHORT NOTES ON EVOLUTION OF MARKETING CONCEPT (OR)
EXPLAIN THE DIFFERENT STAGES OF MARKETING CONCEPT?

The modern concept of marketing is not the result of a sudden change in the process of
thinking of the business managers. It is the result of the changing situation, which compelled the
business people to give an important place to the consumer and his wants. The change in the line
of thinking took place after passing several stages. Now we shall discuss the changes and stages
in the evolution of marketing concept.

(i) Self-Sufficient Stage:

In the earlier days of human history, each family was self-sufficient. It produced the
goods needed by itself and there was no need for exchange.

(ii) Exchange Oriented Stage:

With the people began to realize the importance and uses of division of labour and
specialization, the next stage (i.e.) exchange oriented stage came into being. The barter system
was prevalent in those days. Competition was totally absent in those days. With the invention of
money, many problems connected with the exchange of goods and services were solved to a
great extent.

(iii) Production Oriented Stage:

During the early days of business activities the emphasis was mainly on production.
Then the businessmen thought that they could produce anything and sell. To a certain extent
they were successful too. This later phase of this stage witnessed mass production by industrial
units. This has come to be called as ‘Industrial Revolution’.

(iv) Sales Oriented stage:

Only in this stage, the business managers began to realize the importance of marketing.
The place of the consumer was though accepted no serious steps were taken to satisfy his wants.
The consumer had no other alternative other than to accept only those goods produced by the
producers.

(v) Marketing Oriented Stage:

In the previous stage the strategy of the marketers was to “somehow sell” the goods
produced. When emphasis shifted from sales to marketing, the sellers realized the need for a
systematic approach towards the entire process. They decided to measure the needs of the
consumers. All marketing efforts right from production of goods, fixing the price, packing, sales
promotion to making sales would be in tune with the needs of the buyers.

(vi) Customer Oriented Stage:

It is an extension of the previous stage. The marketers felt that measurement of
consumers needs alone is not enough. Their needs must be fulfilled. This is mainly due to
competitive pressures. As there are many alternatives available in the market the consumer is
not dependent on any one seller. He can select the alternative that best fulfills his needs.
Therefore, every marketer now strives hard to satisfy the customer’s needs.

(vii) Management Oriented Stage:

The marketing function assumes a managerial role to co-ordinate all interacting business
activities with the objective of planning, promoting and disturbing want. Satisfying products and
services to the present and potential customers.
 UNIT II

[ Marketing Functions- Buying-Selling-Assembling- Transportation- Warehousing]

FUNCTIONS OF MARKETING:

The functional approach to the study of marketing had made it possible to divide the whole
process into a number of smaller activities. These activities are known as marketing functions. In
the words of “a marketing function is an act, operation or service by which the original producer
and the final consumer are linked together”.

Marketing Function

Function Of Function Of Facilitating

Functions
Exchange Physical Supply

Buying Transportation Financing

Selling Storage and Risk taking

Assembling Warehousing Standardisation

and Grading

Market Information

Explain various Functions of MarketingClassification of Marketing Functions

The authorities are not unanimous in the classification of marketing functions. They do
not even agree to a definite list of marketing functions. The list ranges from 5 to as 20 or 30
functions. Now let us analyses some of the widely accepted classifications.
Classification of J.F. Pyle:
Marketing Functions

Concentration Dispersion

1. Buying and Assembling 1. Selling

2. Transporting 2. Transporting
3. Storing 3. Storing
4. Grading 4. Grading
5. Financing 5. Financing
6. Risk-bearing 6. Risk-bearing
7. Dividing
This classification is repetitive in nature as the same functions are included under both main
divisions.

Classification of Converse and Mitchell:

Marketing Functions

Time & Place Utility Possession Utility Form

Utility

1. Transporting 1. Determination of needs 1.

Formulating
2. Storing 2. Creating demand 2. Financing
3. Packing 3. Finding buyers and sellers 3.
Supervising
4. Dividing 4. Negotiating 4.
Accounting
5. Grading 5. Transporting title 5. Securing
information
6. Order Assembly 6. Equalization 6. Risk
bearing

Classification of Cundiff and Still:

Cundiff and Still classified marketing activities into three categories containing nine functions in
all.
Marketing Functions

Merchandising Physical Distribution Auxiliary

Functions
1. Product Planning and development 1. Storage 1. Financing
2. Standardizing and grading 2. Transportation 2. Risk
bearing
3. Buying and assembling 3. Market Information
4. Selling

Classification of Clark & Clark:

Clark & Clark has given a most widely accepted classification of the Marketing functions:

Marketing Functions

Functions of Exchange Functions of Physical Supply Facilitating

Functions

1. Buying and Assembling 1. Transportation 1. Financing

2. Selling 2. Storage and warehousing 2.Risk bearing

3.Standardization
4. Market information
Functions of Marketing
I. Functions of Exchange
The category of functions includes buying and assembling and selling.
1. Buying and Assembling: Buying is the first step in the process of marketing. It may be done
directly or through middlemen. Manufacturers buy raw materials for converting them into
final products. Similarly, wholesalers and retailers buy goods for the purpose of resale.
Assembling starts after the goods have been purchased already. Assembling refers to the
bringing together a variety of goods of different quantities or of a large quantity of similar
items. It is primarily performed by middlemen. In most of the agricultural as well as
industrial raw materials, assembling is done by bringing together large quantities of similar
items. It is done by the middlemen and such assembled goods are sold to the manufacturers.
In case of retailers, assembling is done by buying different items, in different quantities from
different sources.
2. Selling: Selling is the crucial function in the process of marketing. It is the actual point
where transfer of ownership occurs. Now-a-days the selling activity involves the tackling of a
number of problems such as advertising, facing competition, creating demand for new
products, conducting market research, supply goods in the right time and place.
II. Functions of Physical Supply
The physical transfer of goods from the producer to consumer takes place by
means of transportation and storage.
1. Transportation: In modern days, since markets are geographically separated from
production areas, transportation is an essential marketing activity. Transportation involves
the movement of goods from the point of production to the place of consumptions.
 Large scale production has become possible now-a-days only because of the rapid
development in the means of transport. Transportation provides place utility to the product.
Land, Water and Air are the principal means of transport for transporting goods from one
place to another.
2. Storage and Ware housing: Most of the mass consumption goods are produced in
anticipation of demand. This factor requires storage for at least some time at the production
centre’s and also at the distribution point.
In fact, all middlemen engaged in the process of marketing should do some sort of
storage work because they should hold sufficient stock to meet the anticipated demand and to
ensure smooth supply of goods. Storage is also necessary for products with uneven demand
period and with seasonal demand. Further, in some cases storage increases the value of the
products.
However, storage involves certain risks and expenses such as storing expenses and
interest on capital. Therefore, the management should establish a balance between the
advantages and disadvantages of storing.
III. Facilitating Functions:
These functions are subsidiary in nature. But they have a direct relationship with the
marketing process and hence important. The functions grouped under this category are
discussed below:
1. Financing: Money is required at each stage in the process of marketing. Without adequate
finance even the very existence of the business concern shall be affected. Although
procurement of funds is the responsibility of the Finance Department of the business firm,
yet the amount of capital required for marketing division is considerably influenced by the
decisions of the marketing manager.

2. Risk Bearing: Risks are involved at almost all stages in the process of marketing. Right from
the product policy, risk is possible due to reasons like changes in demand and supply
conditions, loss in storage and transport and other natural hazards. Thus, risk, in fact is part
and parcel or every business as such.
The successful businessman is one who takes a calculated risk. By carefully anticipating
the risks that may arise in future, he can avoid or at least minimize the risk. The marketer
therefore should estimate the extent to which these risks can be transferred, borne and
insured against it.
3. Standardization and Grading: The term standardization refers to the establishment of
standards for products. A standard is a measure which is generally recognized as having a
fixed value. Standards are generally determined on the basis of weight, color, quality and
other special or specific features of a product.
Grading is a part of standardization. It refers to the application of certain qualities,
specification and size. Grading is usually necessary for goods over which the producers
cannot exercise control in terms of their physical properties. For example: food grains, fruits
etc.
Both standardization and grading make it possible for purchases by description. The
sellers can also get better sales value and volume by adopting price discrimination.
4. Market Information: For a rational formulation of marketing programmes, the marketing
executive must be adequately informed not only about the market for his firm’s product, but
also the attitude of the customers using the product etc. For this, information’s should be
 collected, analyzed and interpreted. In fact, the success in marketing largely depends on the
volume of information the management have.
Conclusion:
The functions classified above provide a bird’s eye view of the area of marketing so as to
provide elementary background knowledge before proceeding further for a deeper study. These
functions are essential for all marketing firms, but the importance of each function depends on
the peculiar circumstances of each individual case.

Functions of Exchange:

1. Buying:

Buying is the first step in the marketing functions. Buying is done by manufacturer,
wholesaler, retailer and consumer. When the buying function is over the buyer get the possession
and ownership of goods. Without buying there is no selling. Hence, buying is the foremost
function in the marketing process.

2. Assembling:

Assembling refers to the collection and concentration of similar product from different
sources for further distributing. A wholesaler buys and assembles similar goods from various
producers.

3. Selling:

Buying and selling are inseparable. They are complementary each other without selling
function in the market, buyer can’t satisfy their needs selling converts desire into demand. The
function of selling transfers, the title to a product to the buyer. Thus selling is the function on that
helps to market the product.

Functions of Physical Supply:

1. Transportation:

Marketing requires physical moment of goods or services from the place of production to
the place of consumption. Commodities are providing at one place but they are also demanded at
various places. Hence physical moment of products become necessary in the process of
marketing.
2. Storage:

All goods produced are not immediately consumed. There is a gap between the time of
production and the time of consumption. Production of some commodities is seasonal but
demand is regularly (i.e.) Apple, paddy, etc., on the other hand some goods are regularly
manufactured but the demand seasonal (i.e.) umbrella, Cracker etc., ware house undertakes to
store the goods.

FACILITATING FUNCTIONS:

1. Financing:

The wheel of marketing is set of motion only when adequate funds are available at right
time at right place. Here finance play major role in the field of marketing, commercial banks and
other financial institution provided required finance.

2. Risk Bearing:

Risk means the possibility of loss by unforeseen happenings all business transactions are
subjected to such risk. Goods may get damaged to fire, floods, cyclone, earthquake etc, price of a
commodity may also fall resulting in loss. Marketing process involves more risks. Risk bearing
is an important marketing function.

3. Promotion:

Promotion activity in the marketing involves the process of stimulating demand for
products. Promotion is wider term which includes advertising, salesmanship etc. It makes the
marketing function easily. Promotional programs are needed for both consumer and industrial
goods.

4. Standardisation:

Standardisation means division of commodities into different groups. A standard is the

specifications used in provide the certain basic qualities to the goods for their use. Standards are
fixed on the physical characteristics of a product. The standardized products possess some
uniform characteristics. For example shape, size, etc.
5. Grading:

Grading applies to certain quantitative specification like colour, taste etc (Fruit). Grading
work start, were standardisation ends. People select commodities based on the standards and
grades of goods. For example: BIS (Bureau of Indian Standards) and for financial service etc.

6. Market Information:

Marketing information include, size, location, characteristic of market, consumers habits,

wants purchasing power etc. Adequate and accurate information helps in the form of sales
policies. Decision making and success of marketing greatly depend upon the availability of
correct market information.

Buying:

Introduction:

Buying is the first step in the marketing functions. Buying is done by manufacturer,
wholesaler, retailer and consumer. When the buying function is over the buyer get the possession
and ownership of goods, without buying there is no selling. Hence, buying is the foremost
function in the marketing process.

Buying Objectives:

1. To support production schedules by maintaining by supply’s.

2. To avoid duplication and waste of materials.
3. To maintain standard of quality.
4. To buy materials at lower cost.
Factors to be considered during Buying:

I. Quality:Decision regarding quality of materials to be bought is of great importance. Because ,

a manufacturer needs quality materials for maintaining the quality of his product. Even for a
middlemen, he would prefer only quality goods as he has to satisfy his customer.

II. Quantity:Determination of proper quantities to be purchased basically depends upon quantity

of production or quantity of sales.
III. Timing:To decide when to buy. In the case of seasonal products timing of purchase is a
critical factor.

IV. Price:

The various aspects such as terms of credit and discounts are also to be considered
carefully, before the buying decision is made besides negotiation on prices.

V. Sources of Supply:

Supplier reputation their reliability in terms of quality delivery etc are factors to be
considered in this regard.

Elements of Buying (Buying Process/Steps):

I. Estimating the Demand:

This is also referred to as “quantity decision” in buying. The quantity to be bought is

depending on the purpose of being. According to two purposes may be noted.

1 Buying for consumption.

2 Buying for resale.
II. Assembling:

Assembling is the most important sub-function of buying. Assembling or concentration is

the collection of goods from different sources of supply and making them available at the time
they are needed and at the place they are wanted.

III. Locating Sources of Supply:

It is concerned with searching for determining the sources of supply establishing and
maintaining contacts with them. With the development of communication and the emergence of
trade magazines and locating the sources of supply of products is no longer difficult.

IV. Market News:

 The buyer must always have the knowledge of markets especially with regards to supply
position, demand position and the price variation. The past experience forms main guideline in
this matter.

V. Negotiation of Terms:

After considering the factors, the buyer has to finalize buying. Buying takes place
between two individuals who may or may not have a prior relationship. The buyer actually
invests his money when he is buying. The price agreed will be on different bases such as F.O.R.,
F.O.B., etc.

VI. Transfer of Title:The buying function ends when the seller transfer his title (ownership) the
goods to the buyer (after receiving the price).

VII. Merchandising: It has been defined earlier as ‘Product planning’. Merchandising is

closely related to several aspects of buying and stock management. It is the barometer of
efficiency in buying and selling.

Kinds of Buying:Hand To Mouth Buying:

It is kind of buying in small quantities house wife are preferable to adopts this method of
buying. Wholesaler and retailers of fashionable goods follow this method. It is also called current
need buying.

1. Forward Buying:
This is practically used by the retailers, when the price move up they try to accumulate
inventories to gain from the price increase. This kind of buying is usually adopted in commodity
exchanges. It is also called speculative buying.

2. Buying By Inspection:
This is the simplest method in buying before the buying decision is taken by the buyer he
should examine the whole lot of goods to be purchased. This method is adopted when goods are
purchased in local.

3. Buying By Samples:In certain cases goods may be uniform quality. In

certain other cases goods could be graded different qualities. This provides in buying
 eliminates the labour of examining the whole quantity of goods to be purchased. But
success of this method depends on the selection of a sample.
4. Buying By Description:
Where samples cannot be provided and where the seller cannot take with him the goods to
be sold to all the places, this is the most suitable method. For example, in the case of huge
machineries they cannot be easily sent to the buyer for inspection before selling. The description
is given by booklet or catalogue.

5. Contract Buying:
In this method of purchasing, goods are purchased under a contract for a long period with
fixed suppliers. The supplier supplies goods to the buyer at a fixed price. Investment of capital
on purchasing is less. As there is contract, there is record-keeping and store-keeping.
6. Scheduled Buying:
It is another variety of contract buying. The buyer does not enter into a long term
agreement but indicate the estimated quantity that would be needed over a period. This
agreement is done between two units where the end-product of one unit become the raw material
for the other.

7. Period Buying:
When buying is made at regular and fixed intervals, it is called period buying. Usually
month-to-month requirement are bought in a lot. This method adopted by retailers.

8. Buying By Requirement:
In certain firms their production has to be increased to meet the demands of special
seasons. This happens only occasionally for e.g.: Diwali

9. Open Market Buying:

When the price is reduced, the goods are purchased in the open market. Buyer are attracted
by the reduction in price. Buyers buy goods and stock them. Non-perishable commodities are
purchased and stocked.

10. Reciprocal Buying:

It is a method of buying as agreed upon by two parties to buy and sell mutually their own
products. For e.g.: ship and oil
 11. Concentrated Buying:
When sources of supply are limited to the minimum it is called concentrated buying. It is
described as “putting all eggs into one basket”. As a long range policy it is not suitable.

12. Scattered Buying:

This is just opposite to the concentrated buying method; it means buying from any source
that is profit and convenient buying is made quite a large number of sources.

Selling:

The process of transferring ownership of goods from seller to the buyer is known as
selling. Selling starts after production. The philosophy of selling is “profit maximization”.

Elements of selling:

Pre-planning is the most important activity in the field of sales. The elements of sales
function point out how complicated the selling mechanism is. These elements, for the sake of
convenience, are classified as follows:

1. Product (sales) Planning and Development.

2. Selection of Channels of Distribution.
3. Creation of Demand.
4. Customer Services.
I. Product (sales) Planning and Development:

This is the starting point. Before selling a product, one has to be sold. This is what was
earlier described as “marketing precedes physical production.” The exact nature of the product in
all its details is determined at this stage. This element comprises two sub-elements:

1. Product Planning.
2. Sales research and estimating sales potential.

Product Planning: A product is always a bundle of “attribute”. These attributes include physical
factors, e.g., colour, design, feature, performance and non-physical factors, e.g., utility, value,
quality.
Sales Research: Sales research is part of marketing research. The scope of marketing research is
wider and it includes, besides sales research, various kinds if researches such as, Product
research, Advertising research, Motivational research, etc.

II. Selection of Channels of Distribution:

Markets, today, are characterised by the heterogeneity on both demand and supply sides.
This means that on the one side there is wide variety of goods produced for sale, and on the
other, there are highly varied and complex desires of consumers. Moreover, all goods produced
are not consumed at the place of origin. Consequently, the goods and services available must be
matched against the wants and desires of users. Channels of distribution serve to achieve this
matching of goods and the desires of potential buyers. They serve as a bridge between the
producer and the user.

III. Creation of Demand:

Creation of demand is an art. It is a process by which latent demand is converted into

effective demand. A manufacturer has to deal with human beings with different temperaments.
But the products are common and their physical qualities cannot be changed to suit the
individual requirements. Hence some artistic way of dealing is essential to make the customer
‘believe’ that a product suit his needs. The problem is dealt with in a psychological manner by
experienced and trained salesmen. Methods like advertisement, sales promotion, etc., also used
for this purpose.

IV. Customer Services:

Such services are preferably required in the case of durable products. It has become a
usual practice (and of late accepted as a method of demand creation too) with the manufactures
to offer ‘after –sales services’. Customer service has become a major factor in choosing among
competing sellers. Such type of service creates confidence in the mind of the customers about the
product and the manufacturer. For the seller, it is an opportunity to establish a direct contact with
the consumer. This helps the seller to know what exactly the consumer wants and his
preferences.

Types of Selling:
 1. Sale by inspection: The seller gives an opportunity to the buyer to examine the
goods.
2. Sale by sample: The seller offers samples in certain cases.
3. Sale by description: The seller agrees to make certain goods as per the buyer’s
description and specification.
(a) Under cover method: This method is followed in commodity exchange and also in
certain unorganized markets. In such places, many brokers and commission agent
participate in buying and selling. The price is fixed by manipulating fingers covered with
cloth.
(b) Open Auction: In an auction sale goods are assembled at a particular place. The buyers
offer their prices individually. The goods are sold to the buyer who has offered the
highest price.
(c) Close Tender system: Under the system, the buyer are expected to quote their prices in
a sealed cover and forward it to the seller. The covers are then opened on the stipulated
date in the presence of all the buyers. The sale is then effected in favour of the highest
bidder.
(d) Dara sales or Sale at a flat rate: When a large quantity of articles is to be sold and that
too in a short period this method is adopted. The entire quantity is sold at a flat rate.
(e) Moghum sales or Gentlemen’s agreement: In the context of sale it is purely based on
oral understanding, between the seller and buyer, of the various terms of sale.
Assembling:
Assembling of goods is done only after they have been bought. Assembling refers to the
process of keeping the goods, purchased from different places, at a particular place. Certain
amount of assembling is done by the consumers also. For example, we may buy the goods
needed for household use from various sources and keep stock. A manufacturer may buy
different kinds of raw materials from different sources and keep these in his stores. A trader also
buys goods from different manufacturers and keeps it in his shop to be sold to consumers.
Advantages:

(i) For a manufacturer it ensures availability of raw materials and avoids shortage of
stock.
 (ii) A trader, who buys from different manufacturers, is able to offer choice to his
customers.
(iii) It results in savings in transportation costs and handling charges for a manufacturer as
the frequency of buying is reduced.
(iv) It also guards a manufacturer against scarcity of raw materials that may hamper
production.
(v) As consumers, we tend to buy and keep stock of certain goods that ay not be required
immediately. But these may be required in future.
(vi) The production of certain goods is seasonal but their consumption is perennial. For
example, Agricultural goods.
Transportation:

Introduction:Marketing requires physical moment of goods or services from the place

production to the place of conception. Commodities are providing at one place buy they are also
demanded at various other places. Hence physical moment of products becomes necessary in the
process of marketing.

1. Economic Benefits Of Transport (Functions)

The primary function of transport is to enable the physical distribution of goods at global
level. The distribution of goods must take place easily economically and seedily.

2. It Helps Specialization And Mass Production

Specialization needs the division of the complex process of production into a number of
separate processes. So that each person or group specialize in each process. By enabling mass
production, transport helps to reduce cost of production.

3. Transport Increase The Mobility Of Labour And Capital:

Transport facilities migration of people from region to region and country to country. The
settlement of Tamils in other parts India and abroad, says Srilanka, Burma, Malaysia and some
of the countries of the west or but a few examples in point. Transport also helps in the similar-
flow of capital and technical knowhow.
4. Transport Aids and Economic Growth:The improved means of transports are making
significant contribution towards economic growth. As an agency for the movement of raw
materials, field, labour and finished products and as an instrument for the mobility of capital.

5. Transport Helps Price Stability:

Transport helps to reduce variation in prices of goods not only between regions of a country,
but also to a considerable extent between nations.

Different Kinds of Transport/Classification/Kinds:

I. Land Transport: (i) Pack Animals:

In backward areas hilly four region and in desert lands, packs animals like horse, donkey,
elephant, camel etc are for carrying small loads. Generally the pack animals serve areas
inaccessible to modern means of transport.

Advantages:It is suitable for carry small loads

1. In rainy season when roads are muddy that time animals are used.
2. It is cheap means of transport.
Disadvantages:There is a very slow form of transport.

1. Their carrying capacity is very small

(ii)Bullock Carts:Bullock carts are the predominant form of rural road transport.

Advantages:

1. It is relatively cheap means of transport

2. It is suitable for rural roads and rainy season
Disadvantages:

1. Slowness
2. Limited carrying capacity
(iii) Motor Trucks and Cars (Road Transport)Road transport has been operating form of item
form the civilization, people have been to form roads and use vehicles to facilitate transport of
men and materials till motor trucks used by the people of various countries.
Advantages

(a) Flexibility
The greater merit of motor transport it is flexibility. It can reach the interior
and remote villages. It can change its route time and area of operations.

(b) Complete Service:

It provides a complete service to businessman. It loads the goods form the factory
or the form and delivery them at the doors of buyers.

(c) Suitability:
Road transport is very well suitable for short distance traffic. It is also suitable for
delivery of small loads to many consignees route.

(d) Economy:
Goods for lorry transport do not require elaborate packing. It is not uncommon for
owners of goods to travel in lovers with their goods to travel in order to personally attend
to loading unloading.

(e) Speed:
Motor transport is quicker than rail transport for transporting goods over short
distance.

Disadvantages:

(a) Undependability:
Road transport does not usually have scheduled of timings except passenger
buses. It is irregular and undependable.

(b) Unsuitability:
Road transport is not suitable for transporting goods over long distance. It is

also unsuitable and uneconomical.

(c) Break Downs And Accidents:

Motor transport is a frequent breakdowns and accidents.

 (d) Absence of Uniformity Rates:
Road transport is generally operated by different peoples and concerns. Different
operators charges different rates for the same kind of goods.

(e) Speed Limit

For consideration of public safety, speed limit is generally prescribed for road
transport.

(iv)TramwaysTramways made their appearance in the 19th century as a form transport suitable
for big cities. Tramways were initially horse-drawn later steam-powered and now electrically
operates it may be a news to young people that madras city also had tramways till 1953.

Advantages

1. Safety means of transport.

2. It is cheap form of transport.

Disadvantages

1. It is a very slow form of transport.

2. It is inflexible.
(v)Railway Transport:Railway need a huge capital outlay for laying tracks, constructions of
bridges, etc. they render an essential public service. Railways are among the biggest public
utilities of a country. A right of way has to be acquired by railway upon other properties.
Railways are the cheapest and quickest means of transport for carrying heavy goods over long
distance.

Advantages:

(a) Suitability:
Railways are well suited for carrying heavy and bulky goods over long distance.
With the advent of the diesel engine, the motors transport has, undoubtedly, become
cheaper and the carrying capacity of lorries increased.
 (b) Cheaper:Railway transport is cheaper than road transport for long distance
traffic.
(c) Dependability:
This method of transport is regular and dependable. It has regular scheduled of
timing and is available the throughout the year. Whether it rains railway transport will
operate.

(d) Speed:
Because of greater speed railway require less time then motor transport for
carrying goods over long distance.

(e) Safety:
Railways offer better protection and safety to the goods than road transport. In
railways, goods are generally carried in closed wagons and are as such not exposed to
sun, rain, etc.,

Disadvantages:

(a) Unsuitability For Short Distance:

Railway rates are higher than those charged by motors transport for transporting
light articles over short distance. Motor transport continues to be eminently suitable and
cheep for short distance and light loads.

(b) Inflexibility :
As railway is tied to a particular track, it cannot deviate from the set routes.
Railway transport is not flexible. It can apply only between certain fixed places.

(c) Rural Uneconomical For Areas:

Railways need heavy capital outlay for their construction. The recurring
expenditure on their maintenance is also enormous. They can operate economically, only
if they are able to attract adequate traffic on a regular basis.

(d) Greater Risk:In railway transport, the possibility of theft, breakage or

damage is much greater on account of intermediate loading. Further, movement of goods
to and from Railway station causes delays and additional expenses.
II. Water Transport:

(a) Inland Waterways:The term inland waterways refer natural and artificial
water ways. Rivers which are naturally available are called “natural waterways” canals
and canalized rivers to the category of “artificial waterways”.
(b) Ocean Transport:It has been playing an important role in developing
economic, social and cultural relations among countries in the world. International trades
ours its growth to ocean transport. It is divided into two categories.
 Coastal Shipping
 Overseas Shipping
Advantages

(a) Cheapness
Water transport is generally cheaper than railway transport. For the carriage of
large and bulky goods.

(b) Greater capacity:

It carriers goods smoothly due to absence of shaking and jolting during transits.
Hence it is eminently suitable for carriage of fragile goods like glassware, etc,.

(c)Facility operation:
It offers the advantages of easy loading and unloading at the waves of
businessman.

Disadvantages

(a)Slowness:

This form of transport is generally slower than motor or rail transport.

(b)Uncertainty:
In winter may be frozen and traffic may be blocked. During summer, water level
may drop and dispute traffic.

(c)Limited coverage:
This transport can serve only a few regions through which rivers and canal pass.
 (d)Unsuitability for shall traders:
As this form of transport is slow moving. It is unsuitable for all traders operating
which small stock of goods.

III Air Transport:

With the advent of airways distant are not measures in miles but in hours. It is very
helpful in times of emergency like floods and war.

Advantages:

(a) Rapid Speed:

Speed is the most important features of air transport. No other means of transport
can compare with air transport.

(b) Regular And Comfortable: Plans are regular and punctual. Plains fly
according to the time schedule. All the comforts are provided for the passengers.
(c) No Barriers:
Mountains and oceans would not affect the air transport. It is suitable for
perishable and valuable goods.

(d) Safety:
It is safer for goods to be transported by airways in emergency time.
Disadvantages:

(a) High Rate:

The flight rates are very high when compared to other means of transport.

(b) Low Carrying Capacity:

Bulky goods are outside the preview of air transport.

(c) Depended On Climatic Condition:

During seasons of heavy rain and storms air transport is ineffective.

(d) High Rate Of Accidents:

The frequency of the accident is quite high.
Storage:Storage refers to a function under which goods are preserved for the purpose of carrying
from periods of plenty to periods of scarcity. It can be defined as a marketing function that
involves holding of goods between the time of its production and its final consumption. In fact,
all commodities require some form of storage for distribution.

Situation Requires Storage:

i. Seasonal production but uniform consumption for e.g. Fruits, Vegetable etc.
ii. Uniform production but seasonal consumption for e.g. Refrigerator. AC, sweater etc.
iii. Protection of goods.
Warehousing: The meaning of the word ‘Ware’ is ‘article’. A warehouse is a place where
goods are stored. It is otherwise known as a ‘godown’. It is usually found away from the place of
business of a merchant.
Advantages:
(a) It protects the goods until they are moved to the factory or to the market.

(b) It provides place for goods that are received in bulk.

(c) It facilitates easy sale of goods that are received in bulk.
(d) It facilitates uninterrupted sale ‘Out of stock’ situation is avoided.

(e) It helps to equalize price by matching the demand and supply position.
(f) It provides employment opportunities to many.

(g) Cold storage provides longer life to certain easily perishable items like fish, diary
products, etc.

(h) It facilitates large-scale production of goods. The producer need not bother about
storage.

(i) It is necessary to perform certain marketing activities like grading, packing, etc.
(j) The ‘warehouse receipt’ issued to a merchant, who has stored his goods in a public
warehouse, also enables him to get financial assistance.

Kinds of Warehouses:
 Broadly, different kinds of warehouses can be divided into three groups on the basis of
place of necessity, ownership, and special provisions.
1. On the basis of place of necessity:
(a)In- plant warehousing: Most manufacturer have their own warehouses though the
size may be small. In case it is impossible for the manufacturers to ‘slug-load’ all the production.
(b)Field warehousing (custodian warehousing): These are centrally-located
warehouses from where distribution is done to wholesalers and retailers.
(c)Bonded warehouses: These warehouses are located near ports. They enable the
unloading of commodities from a ship safely in to place until the owner of the goods take
delivery of them. Such warehouses are also necessary for outward transportation, since a
manufacturer cannot wait until a ship reaches a port of loading.
2. On the basis of ownership:(a)Private warehouses: It is owned by private and large
business-houses, such as manufacturers, wholesalers, retailers etc. They own and operate for
their own use. This types of warehouse is rarely found because of the high cost on construction.
(b)Public warehouses: It is used by the public. The operation system and rates of rent
are regulated by the Government. In India, the warehouses are controlled by warehousing
corporation Act,1962. A Central Warehousing Corporation was established on march 2,1957.
(c)Co-operative warehouses: The ownership of these houses is vested in the hands of a
primary co-operative society. This has not been a popular method so far, but if properly
organized it will be boon to agriculturists in village.
(d)Speciality warehouses:
(i)General merchandised warehouses: This is the most common type. It provides
facility to all kinds of goods. No special facilities are required as all commodities are stored.
It is a place of store for manufactured, semi-manufactured and raw materials until they
required by manufacturers, distributors, retailers, consumers etc.
(ii)Special commodity warehouses: These warehouses are specially constructed to
house certain commodities, which require special treatment. For example, grains, wool,
cotton, etc.
(iii)Refrigerated warehouses (Cold Storage): This is latest contribution of
technology which made the storing function really capable of giving time utility to any
product.
 DIFFERENCE BETWEEN STORAGE AND WAREHOUSE:

Sl. No Storage Warehouse

I It is generally located near the factory It is always located near the market.

II It aim is for personal use Its aim is for commercial purpose

III Additional marketing function cannot Additional marketing functions such as

performed
grading etc are performed

IV
It gives facility for storing raw materials
It gives facility for store finished product

V
It is only a holding place
Holds the goods as a distribution centres
 UNIT-III

[Marketingfunctions-Financing-Riskbearing-Standardisation-GradingMIS- (Marketing
Information System)].

Marketing has been performed continuously to promote harmony and bring about
equilibrium between production and consumption. This is essential because of two reasons:

1. There exist various disparities in the equality and quantity of the products; and

2. There are gaps present in the marketing process caused by time and place elements.

Some functions, necessarily, are to be performed to resolve these problems. In a boarder

sense, these functions are closely related to economic progress of a country in addition to their,
contribution to an efficient marketing system. It has been pointed out earlier that efficiency of an
economy rests on the proper growth of marketing system itself.

I. Financing
Finance is the life-blood of any industrial or commercial undertaking and is an
essential element for every kind of business activity.
A business requires finance for many purposes. From the moment an organization
is born till its death, finance is required for varied purposes. One of such purposes is
marketing, a process which requires adequate and enough finance. (The process of
providing finance to a business as a whole is known as Business Finance.) The
process of arranging the necessary finance for marketing activity is a branch of
business finance and is termed “Marketing Finance”.
In marketing, finance has become a subject of special interest to the producer as
well as to the wholesaler and retailer. Like a manufacturing concern, a marketing
enterprise also requires fixed capital as well as working capital. But the need for fixed
capital is comparatively low than the need for working capital in marketing.
 Fixed Capital:

The finance required for acquiring fixed assets such as land, plant and machinery is
known as fixed capital. The investment made on these is a long-term investment and finance
needed for this purpose is not recurring in nature. In other words, fixed capital is meant for
satisfying the needs of fixed or permanent nature of a business.

Working Capital:
The requirement of working capital is recurring in nature. It is required for holding stock
of raw material, stores, finished and partly finished products, and for day-to-day expenditure in
the form of wages, salaries, rents rates, advertisement, etc. The capital temporarily raised to meet
this situation is denoted as working capital.
Kinds of Working Capital:
A. Regular or Permanent Working Capital: Regular or permanent working capital is of
two kinds: Primary working capital and Normal working capital.
(i) Primary Working Capital:It is the basic minimum working capital required for keeping raw
materials and making payments of expenses like wages, rents, etc. The regular credits allowed to
wholesalers and retailers, etc also need somewhat permanent funds.

(ii) Normal Working Capital: It is required to maintain the operations of a company at an

average normal level during a period in which business conditions are normal. The average
normal requirements may be different for different period.
B. Variable Working Capital: Money or credit has got a peculiar feature. In certain
seasons it is available easily and in certain other periods it becomes scarce. This change is
intimately connected with the change in business activity. When business become active
there will be need for more finance and at peak periods all the money available might be
used completely. This will create a shortage of finance. These periods are respectively
denoted as ‘busy period’ and ‘slack periods’.
(i) Seasonal Working Capital: If regular production and sales are certain and no
deviation is likely, there will not be any problem in the case of working capital.
But most products are sensitive to seasonal demand and manufacturer working for
profit cannot but meet this additional demand. This problem is made more
 complicated by the fact that most of the raw materials are available only in certain
seasons of the year, e.g., cotton, jute, sugarcane.
(ii) Cyclical Working Capital: Every business has a period of good activity
alternated by an inactive period. Expressed in economic language, there are
Booms and Depressions. These two situations are opposite in nature. Collectively
they are referred to as Trade or Business cycles.

(iii) Special or Emergency Working Capital: There may be unexpected financial

needs to meet certain situation arising from fire, flood, drought etc. This leads to
thrust on working capital all of a sudden special occasions, such as extensive
marketing campaign, emergency contracts for production severe competitions,
changes because of trade cycle, special jobs undertaken, introduction of new
products into the market etc., call for special working capital.
1. Risk Bearing
Risk is a universal function and is present in one form or the other in all
marketing transactions. Risk in marketing may be defined as ‘Uncertainty in regard to
cost, loss or damage’. The expression ‘market risk’ is used to signify uncertainty or the
damage or the loss arising on account of unforeseen causes such as fluctuations in prices,
changes in fashion, etc. This does not mean that the risk is present only in marketing
activities. It is a function to be assumed by one and all engaged in all business ventures.
In fact, it is a general function of all business activity, since it pervades every part of the
business enterprise.

There are various reasons responsible for causing risks. A few of them are:

1. Unexpected loss from fire, flood or storm. These are otherwise called ‘natural causes’.
The loss may be due to burglary, strike, forgery, war, etc.
2. Risk of deterioration in quality. This is either due to the perishable nature of the product or
due to improper packing and storage.
3. Loss at shipping and production ends due to improper handling of the products.
4. Risk due to accidents while goods are in transit.
5. Loss due to competition.
6. Loss is due to supply and demand and changes in prices.
7. Risk due to political causes.
 8.Risk due to new invention.

9. Risk is due interdependence.

10. Government interference, for example, imposition of customs and similar duties.
Kinds of Marketing Risks:
1. Economic risks: Such risks are usually caused by certain economic factors like fall in
demand, fall in price level, competitive pressures, change in purchasing power, etc.
2. Risks due to natural calamities: These include loss due to draught, floods cyclone, etc.
such risks have greater relevance in the production and marketing of agricultural
commodities.
3. Physical risks: Loss due to theft, fire accident, deterioration in quality, spoilage, etc will
come under this category.
4. Risks due to changes in buyer preference: The tastes and preferences of the buyers not
static. Such changes are unpredictable.
5. Risks due to technological development: The marketer has to adapt to technological
changes. He has to update his technology. Compact discs, photo copying in color, contact
lens, etc., are the outcome of technological development.
6. Political risks: Such risks are caused by the decisions of the Government. The recent
decision of the Tamil Nadu Government to ban sale tobacco products and lottery tickets can
be cited as an example.
Standardisation

Meaning:

Standardisation refers to the establishment of standard for different classes of products.In

other words, it involves setting up of standard during the period for which they are effective.

Definition of duddy and revzan:

“Standardisation is the process of determining of classes or grades of a product (or)

service that have fixed limits”.

Functions of Standardisation:
 According to Clark and Clark “Standardisation include the establishment of standards the
storing and grading of products to conform to those standards, repacking breaking up large
quantities into smaller units of desirable size and product inspection”.

1. Standardisation
2. Grading
3. Inspection
4. Labelling
Types of Standardisation:

Standards are determined on the basis of certain fundamental characteristics of the product
concerned-basis for standards. There are three types of standard:

1. Quantity Standard: Weights and measures are the standards usually used for the
determination of quality. Standardization of weights and measures and enforcement of them
are under the responsibility of Central and State Governments and local bodies. The standard
weight and measures are kilogram, metre, liter.

2. Standards of size and measurement: This is important as far as the manufactured goods are
concerned. The standards are determined on the basis of the size of the products. For
example, ready-made garments shoes, thread, nut, bolt, pipe etc. Such products are purchased
or sol on the basis of size and measurements.
3. Quality Standard: This is a standard, which is difficult to be established. This standard
depends on the prescription of consumers and users. However, branding, product
differentiations positive quality etc., are the basis for standardizing.
Standards may be positive or negative. Positive Standard refers to the presence of the
expressed qualities or specifications in the product. Negative Standard refers to the absence
of the expressed qualities in the product. Standards also classified as general standard and
private standard. General Standard refers to the standard found in the product no matter
who produces them. Private Standards are the standards prescribed by the individual firm.

Grading:
 Grading means the division of products into classes made up of units possessing similar
characteristics of size and quality, established standard are commonly known as “grade”.In other
words, it is a method of dividing products, into certain groups (or) lots in accordance with
predetermined standard (or) norms.

Types of Grading:

Fixed grading:

It is the storing out of goods on the basis of standards(size, quality etc.) Already set, to
be followed from year to year.

Variable grading:

It refers to varying standards for goods from year to year.

Benefits of Standardisation and Grading:

1. Simplified Sales: Sales by grade need no sample or description. But to sell ungraded
products, inspection of the product is essential. Thus the sale of standard products
becomes easy and simple. Standard products can be sold or bought by letters or
telegrams.
2. Reduced Marketing Cost: The expenses to be involved in sales by inspection or sample
can be avoided. Sales returns on standard products do not occur.
3. Future Sales Facilitated: When the goods are under graded system, future sales can
easily be affected because of the dealing in standard goods.
4. Simplifies Financing: The prices of graded goods can be fixed easily. Easy finance
lending can be availed of on the strength of the graded.
5. Satisfaction of the Consumers: Grading guarantees goods of standard quality to
consumers.
6. Wider Market: Sales by grade name can widen the markets for standard products and
standardization facilitates mass turnover.
7. Low Transport Cost: When grading is adopted, inferior goods can be discarded at the
producing place, and thereby transportation cost decreases.
 8. Buyer’s Satisfaction: When standard goods are available, it gives no place for
adulterated goods. Consumers can blindly purchase graded goods.
9. Consumers Pay Right Price: There is a disparity between the price charged by the
manufacturer and price paid the consumer in the case of ungraded goods. This will give
chance to earn extra profits by the middlemen at the cost of the manufacturer or buyer.
Standardization eliminates such margin.
10. Easy Realization of Claims: In the case of accident in store or in transit, claims can be
finalized without much displeasure. At the same time, the loss of ungraded goods can
only be settled with great difficulty. Simply the receipts of graded goods are enough to
calculate the loss.
11. Long Period Contracts: When buyers and sellers are assured, about the standards, they
can easily enter into contracts of long period.

Inspection:

To know the effectiveness of grading, it is necessary to have a check. Inspection or check

aims to test the goods “in order to determine the characteristics.” For example, oranges or apples
are stored according to standards fixed. In the case of wheat, rice, butter etc., a sample which is
representative of the group, is drawn and examined to determine the standard. In case of
manufactured goods, a sample of the finished product is inspected.

Labelling:

Some types of identification of goods in necessary for the buyer to know about the product. A
table may be a place of paper containing printed statement. It may be a part of package or
attached to it indicating the,

 Price
 Name
 Quality
 Ownership
The process of attaching the label is called labelling.

Types of Label
Brand Label:

It is the brand name applied to the product to the package. It carries information relating
to the brand. Through a brand label, a firm can be remembered.

Grade Label:

Grade label gives more important information to the quality of a product. By a letter,
number or word, the product identification is done. For example grapes may be labelled as
A,B,C, species may be labelled as No. 1,2,3; and other products may be labelled as better, best
etc.

Informative Label:

This type of label carries more information and distinguished from descriptive labelling.
Such a label may contain fuller details of the guidance to use and care to be taken of the
products.

Descriptive Label:

A detailed description of the product such as chemical analysis, size, colour, storing
methods, directions for the use of the products are given in the descriptive label. This type of
label is sometimes used for ungraded products, such as clothing, mechanical goods etc. The label
explains the use, for example, food products.

Difference between Standardisation and grading:

Standardisation Grading

It is fixed before grading. It follows Standardisation.

It is a process of fixing standards. It is a process of separation the goods on

the basis on quality.

It is a physical process.
It is a mental process.
 It is applicable to agricultural as well as It is applied only to agricultural products.
manufactured goods.

ISI standard for Standardisation.

AGMARK stands for grade.

Market Information System:

 Marketing information system (MIS) is a management information system.

 It is designed to support marketing decision making.
 It brings together different kinds of data, people, equipment and procedures to help in
decision making.
 It is a set of procedures and methods designed to store the information of marketing
decision .
 Information system can be used operationally, managerially and strategically for several
aspects of marketing.
NEED FOR MIS

Organised data collection- MIS helps in organising the database and improving the
productivity.

Broad perspective- It helps to know which steps can be taken to facilitate improvement by
establishing a broad perspective.

Storage of important data- With the help of MIS, storage of important data plays a crucial
role in execution.

Co-ordination- Consumer durables and FMCG companies depend completely on MIS for
the proper co-ordination of the organisation.

Analysis and Planning- For planning we need organisations capabilities, business

environment and competitor analysis. Thus MIS is very important for planning and analysis.

Control- MIS helps in the control of information of various processes and happenings of the
company.
FUNCTIONS OF MARKETING INFORMATION SYSTEM

 The marketing identification function: The determination of potential buyers is vital in

order to satisfy their needs and desires.
 The physical distribution function: The actual movement of goods from the point of
production to the point of consumption is considered in this function.
 The communication function: This function includes decisions on advertising, personal
selling, sales promotion, publicity, packaging issues etc.
 The transaction function: It includes transfer of title of ownership of goods/services
between the parties in a transaction.
 The post transaction function: In this function, feedback of the performance of the
product/service is obtained from the customer, so that customer satisfaction can be
ensured.
COMPONENTS OF MARKETING INFORMATION SYSTEM

It collects and analyses the information and supply the information to the marketing
manager through its subsystems. These subsystems are called components.

 Internal Records: These records provides current information about sales, costs,
inventories, cash flows and account receivable and payable. It helps the marketing
managers to gain faster access to reliable information.
 Marketing Intelligence: It collects information from external sources like
magazines, trade journals, commercial press to provide information about current
marketing environment and changing conditions in the market.
 Marketing Research: It solves specific marketing problems of the company and
the collected data is tabulated, analysed and conclusions are given for solving the
problem.
 Marketing Decision Support System: This tool helps the marketing managers to
analyse data and to take better marketing decision.

BENEFITS OF MARKETING INFORMATION SYSTEM

 Helps to recognise trends

  Facilitates marketing planning and control
 Quick supply of information
 Quality of decision making
 Tapping of business opportunities
 Provides marketing intelligence
 Helps managers to recognize change
 Integration of information
DEVEOPMENT OF MIS:All aspects of information including its collection, storage,
processing, retrieval and use must be managed. The marketing oriented firm needs a system
developed to the management of the entire information needs of the organisation. Such a system
is called MIS of which research is a component part. The marketing environment is changing at
an accelerating rate. Given the following changes. The need for marketing information is greater
than any time.

1. From buyer needs to buyer wants: As income improves, buyers become more sensitive
in their choice of goods. To predictbuyers’ response to different features, styles, and other
attributes, the sellers must turn to marketing research.
2. From Local to Global Market: As company expands their geographical market
coverage, their managers need more information more quickly to facilitate decision-
making.
3. From Price To Non-Price Competition: As sellers increase branding, product
differentiation, advertising and sales promotion, information on these marketing tools and
techniques.
Essential Requisites of a Good MIS:
The main purpose of marketing information system is to gather co-ordinate, systematic
and continuous flow of relevant information. MIS is an organized set of procedures and routine.
In brief, the requirements for a MIS are:
1. MIS makes available only the required information and is less time- consuming in
making decisions.
2. It is a system which excludes unwanted marketing information, thus saving the time
of decision-makers.
 3. The operation and design of the system is handled by specialists, who gather
information and deal with it to meet the desire objectives.
4. To the top executives, MIS provides fast and accurate marketing information.
5. It facilitates in taking suitable and quick decisions promptly.
6. It is a unified system.
7. It adopts the principle of selectivity in information.
8. It is economical.
9. It is conceived and used as a marketing decision support system.
10. It is an ongoing process. It operates continuously
Benefits of MIS

1. It helps marketing planning by making available correct information on the external

environment and the internal company realities.
2. The information if free from any bias towards the pre-conceived conclusion will have
more value than otherwise.
3. The information, if free from any error, will have more value than otherwise.
4. The quality of marketing decisions to a great extent by the quality of marketing
information available to the decision maker.
5. It facilitates the development of action programmes for achieving set goal.
6. It helps effective tapping of marketing opportunities and effective defense against
marketing threats.
7. It helps the firm to adjust its product and services to the needs and taste of customers.
8. It helps the controlling of marketing activities.
9. It provides market intelligence to the firm.
10. It helps rapid spotting of trends and facilitates the formulation of basic assumptions on
economic and business conditions.

UNIT-IV
Introduction to Product
The ultimate aim of marketing is selling. Marketing is defined as the managerial process
through which products are matched with markets. The success of business firms greatly depends
upon how best they serve and satisfy their customers. A business can prosper only by satisfying
the needs of customers. When a firm markets products or services, it should aim to enjoy
consumer satisfaction and profit minimization. Both these aims are attained through the
product exchange.

Anything that possesses utility is described as goods. Product of customers represents a

bundle of expectations of the consumers. The term product in the modern marketing includes
more than physical goods. The product may be intangible, services (or) an idea (or) an
amalgamation (or) all the three. Therefore the meaning of the term product is determined by the
needs and desires of the consumers.

WHAT DO YOU MEAN BY PRODUCT PLANNING (OR) EXPLAIN THE TERM

PRODUCT PLANNING:

The goal of every merchant is to make profits by offering goods and services the satisfy
the needs of the society. A product, that does not satisfy the needs of the buyers, cannot be sold
in the market even if the marketer puts in maximum promotional efforts. Thus it becomes clear
that the marketer has to carefully select the product, make it suit the tastes and preferences of the
buyers and only then he can hope to make profits. It is only this process which is termed as
“Product Planning”.

WHAT ARE THE IMPORTANCE OF PRODUCT (OR) MENTION THE

IMPORTANCE OF PRODUCT?

Product is the tool in the hands of the management through which it gives life to all
marketing programmes. The first commandment in marketing knows their customer; the second
knows their product. The following are the importance of the product:

(i) Product is the Central point for all Marketing:

Product is the pivot, and all marketing activities revolve around it. Marketing activities,
selling, purchasing, advertisement, distribution, sale promotions are all useless unless there is
product. It is a basic tool by which profitability of the firm is bargained.

(ii) Product is the starting point of planning:

No marketing programme will be prepared if there is no product because planning for all
marketing activities as a distribution, price, sales promotion, advertising etc. is done on the basis
of the nature, quality and the demand of the product. Product policies decide the other policies.
(iii) Product is an End:

The main objective of all marketing activities is to satisfy the customers. Various policy
decisions are techniques to provide the customers benefits, utilities and satisfaction through
product. Thus the product is an end and the producer, therefore must insist on the quality, size
etc. of the product so that it may satisfy the customers needs.

MENTION THE FEATURES OF PRODUCT (OR) BRIEFLY EXPLAIN THE

CHARACTERISTICS OF PRODUCTS?

(i) Formal Product:

Formal products are the physical objects and services such as newspapers, computers,
educational seminars and legal consultancy, that are offered to the target market. The market
recognizes an object as

One of five characteristics namely- a quality level, features, styling, a brand name and
packaging. A service has certain impersonal styling and formal name such as Life Insurance
Corporation of India and Indian Administrative Service.

(ii) Core Product:

Core products have a certain utility (or) benefit that is being offered to or bought by the
buyer. Customer buys product because it is capable of realizing some benefits to him. The aim
of marketer is to offer benefits, not features. He must find ways and means to emphasize the
benefits possessed by his product.

(iii) Augmented Product:

Augmented product embodies the totality of benefits which a buyer receives (or)
experiences in obtaining the formal product. In other words, a product is a bundle of physical,
service, and symbolic attributes designed to product consumer want satisfaction. The total
product is more than physical entity with the inclusion of services. It includes accessories and
service facilities available after the purchase like installation, guarantees, product information
and premises of a repair (or) maintenance.

(iv) Exchange Value:Whether the product is tangible (or) intangible, it should have exchange
value and must be capable of being exchanged between seller and buyer for mutually agreed
price.

(v) Consumer Satisfaction:

 Products should have the ability to offer value satisfaction to the consumer. The
satisfaction may be both real (or) and psychological. For instance, when we buy SNOW we also
buy beauty a product with bundle of utilities.

WHAT DO YOU MEAN BY PRODUCT ITEM AND PRODUCT LINE (OR) EXPLAIN
THE TERM PRODUCT ITEM AND PRODUCT LINE?

‘Product Item’ refers to a specific product, offered by a company that satisfies a specific
need of the buyer.

Ex: Wrist Watches of Titan

‘Product Line’ refers to a group of products, offered by a company that can be brought
under a particular category.

Ex: The bulbs, Tubelights, Ceiling fans etc. Offered by Crompton can be brought under the
category ‘Electrical Items’.

EXPLAIN THE MEANING AND DEFINITION OF PRODUCT POLICY?

The term policy refers to a principle of operation adopted by the management to guide
those who performs the functions of the management. Likewise, a policy made with respect to
the development of a new product (or) for retaining an existing product in the market is known
as ‘Product Policy’. Product policy covers the following areas:

 Product planning and Development

 Product line and product mix
 Product Identification (Branding)
 Product style
 Product Packaging.
Definition:

According to G.B.Giles “Product Policy is concerned with defining the type, volume and
timing of the product a company offers for sale”.

EXPLAIN THE TERM PRODUCT MIX (OR) WHAT DO YOU MEAN BY PRODUCT
MIX?

A product mix is the set of all products line and items that a particular seller offers for
sale to buyers.

Definition:
 According to Philip Kotler “Product Mix is the set of all product lines and items that a
particular seller offers for sale to buyers”.

According to William J.Stanton “The product mix is the full list of all products offered
for sale by a company”.

NARRATE THE DIFFERENT DIMENSIONS OF PRODUCT MIX (OR) BRIEFLY

EXPLAIN THE CHARACTERISTICS OF PRODUCT MIX?

The relationship between the items and lines that form a given mix may be described in
terms of three dimensions namely, width, depth, and consistency. Philip Kotler adds one more
dimension known as the Length.

(i) Length of the Product Mix:

The length of the product mix refers to the total number of items in its product mix.

(ii) Width of the Product Mix:

The width of the product mix refers to the number of different product lines the company
carries.

(iii) Depth of the Product Mix:

Depth refers to how many varieties are offered in each product line. In other words, the
depth is measured by assortment of sizes, colours, models, prices and quantity offered within
each product line.

(iv) Consistency of the Product Mix:

The consistency of product mix is a measure of how closely related its various product
lines are to be one another. The relationship may be due to the use, product requirements,
distribution channels, consumer behaviour and other characteristics.

BRIEFLY EXPLAIN THE MAJOR PRODUCT MIX STRAGIES (OR) WRITE A

SHORT NOTES ON PRODUCT MIX STRATEGIES?
A company has several major strategies at its disposal, with respect to the width, depth
and consistency of its product mix. The following strategies are generally employed by the
producer (or) wholesaler of the product.

 Expansion of product mix

 Contraction of product mix
 Alteration of existing products
 Positioning the product
 Trading up and Trading down
 Product differentiation and market segmentation
(i) Expansion of Product Mix:
 It is also referred to diversification. A firm may expand its present product mix by
increasing the number of product lines (or) increasing the number of product items within the
same line. New lines may be related or unrelated to the present products. For instance, a
provision stores may add drugs, cosmetics, baby foods, dry fruits etc.

(ii) Contraction of Product Mix:

In certain circumstances, the management has to drop the production of unprofitable

products. A firm may either eliminate an entire line (or) simplify the assortment within a line,
this is termed as contraction of product mix. This is also termed as simplification.

Simplification may be defined as deleting (or) eliminating those product items, which are
unsatisfactory from the product line, It is also termed as pruning, deletion, elimination,
contraction, dropping (or) abandonment.

(iii) Alteration of Existing Products:

As an alternative to developing a completely new product, management should take a

fresh look at the company’s existing products. Often, improving an established product can be
more profitable and less risky than developing a completely new one. Alterations may be made
in the designs, size, colour, packaging, quality etc.

(iv) Positioning the Product:

When a product can offer satisfaction in the manner the buyer gets, a strong position is
created in the market. The product’s position is the image which that product projects in relation
to rival products. A product’s features will attract the customers (or) prove attractive to the
customers. The positioning of the product is attained by (i) Product differentiation (ii) Market
segmentation and (iii) Market Aggregation. There is a match between product attributes and
consumer exceptions.

(v) Trading Up and Trading Down:

Both trading up and trading down involves bringing out changed versions of a product an
altering the nature and direction of promotion.

Trading up refers to adding of higher priced and more prestigious products to their
existing line, in the hope of increasing the sales of existing low priced products.

Trading down is the opposite of trading up. A company is said to be trading down, when
it adds a lower priced item to its line of prestige products in the hope that people who cannot
effort the original products, will want to buy the new one, because it carries some of the status of
the higher price product.

Example: (i) ‘T series’, a Delhi based company, was initially selling audio cassettes. It
undertook the production of TVS, Music systems & CD players (Trading Up).
 (ii) TATA group of companies has been basically engaged in the production of trucks,
buses, cares and so on. Over the years they have undertaken the production of low priced goods
like wrist-watches, salt, tea and coffee powder.

What is a Product and what are its features?

Anything that possesses utility is described as goods. A product is both what a seller has
to sell and what a buyer has to buy. Thus, any enterprise that has something to sell, as tangible
goods or not, is selling a product. People purchase products, because they are capable of
realizing some benefits to the purchaser. A product is one which satisfies the needs of customers.
Stanton defines, “A product is a set of tangible and intangible attributes, including
packaging, color, price, manufacturer’s prestige, retailer’s prestige, and manufacturer’s and
retailer’s services, which the buyer may accept as offering satisfaction or wants or needs.”
From these definitions, we realize the important features of a product, under modern
marketing:
1. Tangibility: It should be perceptible by the touch. An item to be called a product should
have a tangibility character-touch, seen or feeling. For instance, car, shirt, book etc.
2. Intangible Attributes: The product may be intangible, in the form of services, for
instance, banking insurance services, repairing etc. It is an associated feature. For
instance, scooter is a tangible product, and when free servicing is offered by the seller,
then the product is not only a tangible item but also an intangible one.
3. Associated Attributes: Such attributes may be brand, package, warranty etc. For
instance, Hindustan Lever’s vanaspati ghee has a brand name DALDA and with its
package it can be identified by the consumers. It has developed an image that all kinds of
vanaspati ghee sold are being referred to as DALDA ghee.
4. Exchange Value: Whether the product is tangible or intangible, it should have exchange
value and must be capable of being exchanged between seller and buyer for mutually
agreed price.
5. Consumer Satisfaction: Products should have the ability to offer value satisfaction to
the consumer. The satisfaction may be both real or/and psychological. For instance, when
we buy SNOW we also buy beauty-a product with a bundle of utilities.

Explain Classification of Goods or Products?

The nature and characteristics of the product affect the marketing programme to a larger
extent. Hence, the marketer should know his product well. The two major categories of goods are
consumer goods and industrial goods. Depending on the purpose for which it is primarily
intended to be used, any product may be classified as a consumer product or as an industrial
product. But all the goods cannot be classified as exclusively industrial goods or consumer
goods. The same product may under one set of circumstances be an industrial product and under
other conditions be a consumer product.
1. Consumer Goods: Consumer goods are those goods which are designed for final
consumption by individuals (ultimate consumers) and households. Television sets, Radio,
cigarettes, shoes etc., are examples of consumer goods. Consumer goods can again be classified
into three kind’s viz., 1.Convenience goods, and 2. Shopping goods, 3. Specialty goods.
  Convenience Goods: Goods which consumer buys frequently, immediately and with
minimum shopping effort are classified as convenience goods. Examples: Cigarettes,
newspapers, magazines, grocery products.
 Shopping Goods: Goods which consumer selects and buy only after making
comparisons on such bases as suitability, quality, price and style are called as shopping
goods. Examples: Furniture, readymade garments etc.
 Specialty Goods: Goods for which significant numbers of buyers are habitually willing
to make a special purchasing effort are known as specialty goods. They should possess
unique features or have a high degree of brand identification or both.
2. Industrial Goods: Goods which are for use in the commercial production or other goods
or for use in connection with carrying on of some business or institutional activity are known as
industrial goods. Industrial goods can again be classified into four categories viz., 1.Equipments
and physical facilities used in producing goods or services. 2. Materials entering into product. 3.
Manufacturing or service suppliers. 4. Management materials.
 Equipments and Physical Facilities: Major capital assets such as plant, machinery,
building etc., come under this category.
 Materials entering into the Product: This category of industrial goods includes raw
materials, semi-manufactured goods and fabricating parts.
 Manufacturing or Service Supplies: These are products that are essential to the
business operations of the industrial users but do not become part of the finished product.
Example: Fuel, oil, coal etc.
 Management Materials: This category covers both office equipments and office
supplies. Example: Stationery, typewriters, ribbons, calculators.

1. Explain importance of Product Policy?

Definition of Product Policies
According to G.B. Gilles, “Product policy is concerned with defining the type,
volume and timing of the product a company offers for sale”. It is sometimes suggested that
product policy is applicable only in cases where new products are introduced. Product
policies, in fact, are applicable to both new and existing products. Thus, product policy is
concerned with the objectives and guidelines that determine the nature and extent of the
product or services which a firm decides the market to its target consumers.

Areas covered by the Product Policy

Product policies cover a wide range of policies. The various areas covered by product
policies include the following:
1. Product planning and Development.
2. Product line and Product mix.
3. Product identification (Branding).
4. Product style.
Product packaging. Introduction to Product development
When a manufacturer or a distributor deals in more than one product, it is known as
product diversification. This diversification is also known as product line expansion.
Diversification or expansion includes, introducing an altogether new product or adding different
sizes of the existing product.
State the need for New Products?
The reasons for innovation of new products can be listed as follows:
 Increased Consumer Selectivity: The purchasing power of the consumers had doubly
increased and their wants also become more sophisticated. They have also become highly
critical in their appraisal of the new products. Therefore, a mere modification or
imitations of an existing product or a product which can offer only a few more
advantages are not suitable for them to satisfy their wants. They only cure is to develop
really new products to innovate and not just imitate.
 Product Life Cycle: Each product has a life cycle, it grows, then declines and finally
abandoned. Even products which are crossing maturity stage shall also yield lower
profits. Hence, new products should be added to balance the profit volume.
 Product is a Basic Profit Determinant: New products generally increase the volume of
turnover and consequently the volume of profit. Introduction of a new product at the
proper time alone will help to maintain the company’s desired level of profit.
 New Products are Essential to Growth: Peter Drucker has rightly remarked that any
business concern has to perform only these two basic functions such as marketing and
innovating. Thus, new products are essential for growth.

What is a New Product?

A product is said to be a new product, when the consumers consider it as new. Even if it is not a
genuine innovation and just an imitation or modification of an existing product, if the consumers
consider it new, then it shall be a new product to the company too. Here also the consumer is the
ultimate authority to decide whether a product is new or not.
Categories of New Products
 Product that is really innovative.
 Products that is significantly different from the existing products.
 Imitative products that is new to a particular company but not new to the market.

Explain the factors to be considered Before Introducing a New Product?

Several factors are to be considered before introducing a new product both by the
producers and the middlemen. Hence, we shall discuss the factors under two heads.
1. Manufacturer’s Criteria for New Products
A manufacturer should attempt a new product only when the following conditions
prevail:
 Enough Demand: There should be an adequate market demand. This is the first and
perhaps the most important criteria for a new product.
 Suitable for Current Environment: As stated by Date L. Varble, the product must
be compatible with the current environmental and social standards. The
manufacturing process should not pollute air or water. The final product should not be
harmful to the environment.
 Suitable to the Present Market Structure: The product should fit into the
company’s present market structure. The general marketing expense is important
here. The existing sales force should be sufficient to market the product. Likewise, it
does not require any special channel for distribution.
 Production Fit: The new product must fit in with the existing production facilities,
man power and management capabilities.
  Financial Considerations: The product should fit from the financial standpoint. An
attempt can be made only where the financial facilities are adequate. Similarly, there
should be enough profit possibilities.
 No Legal Objections: There should not be any legal objections. Patents must be
applied for, labeling and packaging must meet the existing regulations and so on.
 Managerial Consideration: The management must have enough time and ability to
deal with the new product.
 Company’s Image and Objectives: The product should be in keeping with the
company’s image and objectives. A firm which is dealing in low pricing goods should
not add an item that suggests prestige or status.

2. Middlemen’s Criteria for New Products

When retailers or wholesalers are considering whether to take on a new product or not,
they should use all the above criteria, except those related to production. In addition, they should
consider the following:
 Relationship with the Producer: The manufacturer’s reputation, the possibility of
getting exclusive sales right in a given area, the type of promotional help given by the
manufacturer etc., are to be examined in detail.
 In store Policies and Practices: What type of selling efforts is required for the new
product? How does the proposed product fit with the store policies regarding repairs,
service, alterations, credit and delivery?

Explain the Stages in the New Product Development

The following are the six stages involved in the product development:
1. Idea Search: New products are born from ideas. Ideas may originate from sources
outside the company or from within the company. New ideas may also come from
unexpected sources. The consumer can also suggest new ideas.
2. Screening of Ideas: All new ideas cannot be converted into products as it requires heavy
capital investments. They should be screened and all unworkable ideas should be deleted.
Only most feasible and promising one should be selected for further processing.
3. Business Analysis: In this stage, an attempt is made to predict the economic
consequences of the product for the company as a whole. Only during this stage, the new
product idea is expanded into a concrete business proposal. During this stage, the
management should perform the following:
 Identify product features.
 Estimate market demand and product profitability.
 Establish a programme to develop the product.
 Assign responsibility for further study of the product feasibility.
4. Product Development: Only in this stage, the idea in paper is converted into a physical
product. Pilot models of the product are produced in small quantities with certain
specifications.
5. Market Testing: During this stage, market tests, and other commercial experiments in
limited geographic areas are conducted to ascertain the feasibility of a full scale
marketing programme. In this stage, design and production factors may have to be
 readjusted as a result of test findings. At this point, the management must take a final
decision regarding whether to market a particular product or not.
6. Commercialization: Full scale production and marketing programmes are planned and
then the product is launched. Once the product is born and enters into its life cycle, the
management has little control over it. Only external environmental factors began to
control the product.

State the factors responsible for Failure of a Product

According to William Stanton, the factors responsible for the product failures can be
grouped under seven heads. They are as follows-
1. Inadequate Market Analysis.
2. Product Deficiencies.
3. Lack of Effective Marketing Effort.
4. Higher Costs than Anticipated.
5. Competitive Strength or Action.
6. Improper Timing of Introduction.
7. Technical or Production Problems.

Write a note on Modification & Elimination.

 Product Modification
Product modification consists of improvement in the existing quality, size, form or design
of the existing products so that it may look almost a new product. According to some authorities
like Stanton even a slightly changed product either in the color, design or quality of an existing
product is a completely new product. The purpose of product modification is either to stimulate
new sales or attract new users.
 Methods for Modification
There are countless ways to modify a product. Generally, modifications are grouped into
four categories viz.
1. Functional Changes.
2. Quality Changes.
3. Style Changes.
4. Environmental - Impact Changes.
1. Functional Changes: Functional changes are changes which make the product work
better or satisfy additional needs. The right change can produce a big jump in the product
sales.
2. Quality Changes: The quality of a product can be upgraded or downgraded either by
changing the materials from which it is constructed or by modifying the engineering
process.
3. Style Changes: Style plays an important role particularly in case of goods which the
consumers consider as extensions of their personality or symbols of their prestige. For
this reason the design and style of cars, suits and other luxuries are changed from year to
year. Style changes are difficult to evaluate.
4. Environmental – Impact Changes: Environmental – Impact Changes are generally
carried out because of consumer’s pressure or the company’s commitment to social
responsibility. These changes may be to improve a product’s safety or its impact on the
environment.
 Product Elimination
A Company must have a system for terminating products efficiently. Simply dropping a
product over night shall cause irreparable loss to the company. Therefore, utmost care is needed
while withdrawing a product.
 Symptoms of a Weak Product
According to Richard T. Hise and Thomas, the following symptoms are the warning
signals that a product is in trouble:
 Declining absolute volume of sales.
 Decreasing market share.
 Variable costs exceed the revenue.
 Return on investment below the minimum acceptable level.

 Guidelines for Product Elimination

Some of the important hints are given below:
 The company must decide how often to review its products. Sometimes, a periodic
assessment works efficiently. Other times, a continuous process of evaluation works
better.
 The product should be withdrawn only in the appropriate time. Otherwise, it will prove
costly and time consuming.
 The product withdrawal procedure itself should allow for gentle phasing out of the
product and if possible phasing in a new product at the same time.

Write a note on Brand, Brand Name and Brand Mark.

 Brand: “A Brand is a name, term, symbol or design or a combination of them, which is
intended to identify the goods or services of one seller or group of seller and to
differentiate them those of the competitors”.
 Brand Name: A brand name consists of words, letters and/or numbers which may be
vocalized and refers to products. E.g., Ambassador Cars, Usha Fans, Bata Shoes etc.
 Brand Mark: “A brand mark is that part of brand which appears in the form of a symbol
or design or distinctive coloring or lettering”. It is recognized by sight but is not
expressed when a person pronounces the brand name.

State reasons for Branding the Products

G.B. Giles enlists the following arguments in favor of branding:
o Memory recall is facilitated.
o Advertising can be directed more effectively.
o Branding leads to more ready acceptance or product.
o Self selection is facilitated.
o Brand loyalty may give a manufacturer greater control over marketing strategy and
channels of distribution.
o Other products may be introduced more readily.
o The amount of personal persuasive selling efforts may be reduced.
o Branding makes market segmentation easier.
 What are the characteristics of a Good Brand?
Little Field and Kirkpatrick suggest the following characteristics for a good brand
name.
 Distinctive.
 Suitability.
 Suggestive
 Easy to Master.
 Short.
 Family Suitability.

Explain Advantages of Branding.

 Advantages to the Producers
 It acts as a device by which the corporate image or goodwill can be established.
 It ensures greater stability of sales volume and price stability and thereby ensures
constant return.
 Introduction of new products is over simplified.
 Marketing cost and other promotional costs are minimized.
 The brand loyalty protects the producers from competition and gives them greater
control over the demand for the product.
 It is an insurance of merchandise comparability when the buyer uses more than one
sources of supply.
 Advantages to the Dealers
 Branded goods can be easily sold by the dealers. Therefore, they need not carry more
inventories.
 If the customers are satisfied with the quality of the product they will not only come
back to the dealer for subsequent and repeat purchases but also bring new customers.
This will enhance the volume of sales of the dealer.
 Dealing in branded goods adds prestige to the dealers. They can gain competitive
advantages over others who do not handle branded articles.
 Advantages to the Consumer
 Branded goods are generally of good quality because brand owners try to maintain the
quality in order to secure stronger market position.
 Since branded goods are produced on mass scale and are readily available, the customer
need not face any hardship in purchasing the products.
 Prices of branded goods are uniform throughout the country. This avoids exploitation of
the consumer in the hands of the retailer.
Explain Disadvantages of Branding.
 Disadvantages of Branding:
Branding however is not free from defects. The following are the defects of branding:
 Branding goods yields only lower gross margins and so the producers and dealers cannot
reap higher profits unless there is a larger turnover.
 Another severe criticism leveled against branding is that it leads to brand monopoly.
Brand monopoly enables the producers to exercise control over the demand for the
products. He can even dictate the prices for such products.
  Establishing a brand name involves huge expenditure on advertising and other sales
promotional measures. These costs have the effect of increasing the prices of such
products.
 Establishing a brand name involves huge expenditure on advertising and other sales
promotional measures. These costs have the effect of increasing the price.
 Quality is not assured under all circumstances. Under a glamorous brand name, dishonest
producers may place inferior goods in the markets.
What is packaging?
The Indian Institute of Packaging defines it as the “the embracing functions of package
selection, manufacture, filling and handling”.
Thus, the term packaging is very wide in its scope and involves a number of activities
beginning from the designing of the containers, their production and handling.
 Causes for the Growth and Importance of Packaging
Philip Kotler enlists the following important factors for the growing recognition of
packaging as an independent and potential selling tool:
 Self Service.
 Consumers Affluence.
 Integrated Marketing Concept.
 Innovation Opportunity.

State the Objectives of Packaging.

On the basis of the observation made by Philip Kotler, the important objectives of
packaging can be packaging can be outlined as follows:
 Protection: Packaging offers protection to the product while it is in transit or in the shelf
of the shop or in the house of the consumer.
 Common Identification: It supplies common identification of the company’s various
products particularly in case of family branding.
 Convenience: It provides greater economy and convenience in handling, opening and
storage of the products particularly in case of family branding.
 Product Differentiation: It enables to differentiate the product from those of other
producers. It also helps to build up brand image.
 Help in Selling: Attractive packaging induces the consumers to buy the product.

Explain characteristics of a Good Package.

I.B. Steel says that a package, to be effective and good, must possess the following
characteristics:
o It must attract attention.
o It must tell the product story – what is it? What size? How much?
o It must build confidence.
o It must look clean and sanitary.
o It must be convenient to handle to carry out of the store and to use.
o It must look like good value.
o It must look like a fast seller.
o It must deserve a preferred display.
o It must minimize the clerk’s time.
o It must be convenient to stock and display.
 o It must prevent spoilage during the selling period.
o It must resist soiling.

Explain types of Package.

 Packages can be classified into four kinds:
 Consumer Package: A consumer package is one which contains the required volume
of a product for ultimate consumption and is within the means of a buying household.
 Bulk Package: A bulk package is just opposite to consumer package. A bulk package
is one which contains a fairly large quantity of the product either for the use of the
industrial consumers or for retailing.
 Industrial Package: An industrial package can either describe a bulk package or the
package for durable consumer goods.
 Dual Use Package: A dual use package is one which has a secondary usefulness after
its contents have been consumed. It is also known as reuse packing. The aspect
increases the volume of sales largely.

Explain Packaging Decisions.

 Need for Protection: Firstly, the producer must decide whether there is actually a need
for protecting the product from deterioration or damage during the process of
distribution. A product which needs no protection need not be packed.

 Product Differentiation: If a product is packed for purpose of product identification or
brand differentiation, the product must remain in the package until the consumer buys it.
In such case, a consumer package is desirable.

 Additional Factors: Once a manufacturer decides to use packaging, he must take a
number of additional decisions on package design, size and cost.

 Package Design: Package design includes color, size, shape of the product etc. It
must also consider convenience in product handling both by middlemen and the
consumers.
 Package Size: The size of the package involves the consideration of a number of
factors such as the size of the consuming unit and the rate of consumption. When the
product is purchased for individual consumption, a small size is enough.
 Package Cost: Package cost is another factor which needs consideration in the
packaging decisions. Reusable packages are more expensive than throw-away
packages. Reusable packages are more effective in increasing the demand for the
product. Such packages must be used when packaging is more promotional than
productive.

Marketing Mix
Introduction:
The Concept of marketing mix is an important element in the field of marketing. The
steps taken by a business enterprise to improve sales is known as marketing effort. Therefore,
marketing effort is not a single function but a combination of many different activities
undertaken by a firm to market its products. To attain success in the marketing effort, the various
components, should be co-ordinated. The various components and instruments used in the
marketing process constitute the marketing mix.
Meaning and Definition of Marketing Mix:
Definition of Stanton:
“Marketing mix is the term used to describe the combination of the four inputs which
constitute the core of a company’s marketing system. The product, the price structure, the
promotional activities and the distribution system”. Thus marketing mix consists of four
elements mixed in such a way to suit the environment in the best possible way.
Elements of the Marketing Mix:
The definitions cited above clearly indicate the four components of marketing mix. They
are the Product, Pricing, Physical distribution or place and Promotion. They are popularly
denoted as marketing decision variables. They are popularly denoted as Four “Ps”.
1. Product: The first element is the product itself. The management should first decide the
product which the firm should produce. It should produce only those products which can be
marketed. It may offer a single product or several products. The management should also
revise the product design; make improvements in the products frequently so as to suit the
changing tastes and preference of the consumers. Decisions relating to packaging and
branding also come under this head.
2. Price: The price is another powerful element in the marketing mix and vitally affects the
volume of sales. The firm should take decisions with regard to the basis for fixing its prices
and the profit margin. It should also frame policies for allowing trade and other discounts and
allowances.
3. Promotion: The business enterprise should inform the customers about its products and
persuade them to buy. Advertising, personal selling and other sales promotional programmes
are the various promotional activities. All these activities increase the volume of sales by
expanding as well as retaining the market share for the product.
4. Physical Distribution or Place: Marketing channel policy is another integral part of the
marketing mix. The management should select the channels through which the product
should reach the target market at the right time. Other aspects such as physical handling,
transporting and their financial considerations should be taken into account.

Meaning and Definition of Product Mix

The expression product mix refers to the collection of products dealt with by a business
firm. The product mix is one of the elements in the product policy. The various definitions put
forth by scholars are given below.
Definition of Philip Kotler:”Product mix (also called as product assortment) is the set of all
product lines and items that a particular seller offers for sale to buyers”.
Meaning of Product Line and Item
At this stage, it is more appropriate to understand the meaning of the terms product line
and product item.
A product item is a specific product. In the words of Philip Kotler,”product item is a
distinct unit that is distinguishable by size, price, appearance or some other attribute”.
A product line, on the other, is a collective term. It refers to a group of products intended
for essentially similar uses and possessing reasonably similar physical characteristic.
 Product mix is a comprehensive term which covers the entire product lines and the
product items the company offers for sale.
Dimensions of Product Mix
The relationship between the items and lines that form a given product mix may be
described in terms of three dimensions namely, width, depth and consistency.
 Length of the Product Mix: The length of the product mix refers to the total number of
items in its product mix.
 Width of the Product Mix: The width of the product mix refers to the number of
different product lines the company carries.
 Depth of the Product Mix: Depth refers to how many varieties are offered in each
product line. In other words, the depth is measured by assortment of sizes, colors,
models, prices and quantity offered within each product line.
 Consistency of the Product Mix: The consistency of product mix is a measure of how
closely related its various product lines are to one another. The relationship may be due to
the use, production requirements, distribution channels, consumer behavior and other
characteristics.


PRODUCT LIFE CYCLE:

Each product, like a human being, has a certain length of life, during which they pass
through various stages. For some products, the life cycle may be very short while for some other
products their life may be sufficiently long. Consequently such products may not be purchased
by the consumers and go out of the market. The quick changes in the tastes and preferences of
the consumers, developments of science and technology, shall certainly compel the consumers to
switch over to some other products which can satisfy their wants more effectively.

Stages in the Product Life Cycle:

1. Introduction: Introduction stage begins when the new product is first distributed and
made available to the consumers. During this stage profits are negative or low because of
the low volume of sales and heavy expenses on distribution and sales, promotion
activities. Hence more money is required to attract the distribution and sales, promotion
activities.
2. Growth:Growth refers to a period of rapid market acceptance and increasing profits
because promotion costs are spread over a large volume. The main problem in this stage
is to produce the product in required quantities and market the output with minimum
delay. Competitors also enter into the field during this stage.
 3. Maturity Stage:During this stage, competition becomes more acute. Sales continue to
increase but at a decreasing rate. Therefore, the producers spend more on advertising and
other sales promotion measures to capture the market. Only firms with extremely
effective marketing programme shall withstand in this stage.
4. Saturation:This is known as the period of stability. The sales of the product reach at the
peak and there is no further possibility to increase it. During this stage other competitors
shall also become popular and invade the market.
5. Decline:During this stage, sales began of decline. The decline in sales may be due to
technological advances, consumer’s shifts in taste and increased competition, domestic
and foreign. As sales and profit decline.

PRODUCT DIVERSIFICATION
diversification is also known as product line expansion. Diversification or expansion includes,
introducing an altogether new product or adding different sizes of the existing product

The reasons for innovation of new products can be listed as follows:

 Increased Consumer Selectivity: The purchasing power of the consumers had doubly
increased and their wants also become more sophisticated. They have also become highly
critical in their appraisal of the new products. Therefore, a mere modification or
imitations of an existing product or a product which can offer only a few more
advantages are not suitable for them to satisfy their wants. They only cure is to develop
really new products to innovate and not just imitate.
 Product Life Cycle: Each product has a life cycle, it grows, then declines and finally
abandoned. Even products which are crossing maturity stage shall also yield lower
profits. Hence, new products should be added to balance the profit volume.
 Product is a Basic Profit Determinant: New products generally increase the volume of
turnover and consequently the volume of profit. Introduction of a new product at the
proper time alone will help to maintain the company’s desired level of profit.
 New Products are Essential to Growth: Peter Drucker has rightly remarked that any
business concern has to perform only these two basic functions such as marketing and
innovating. Thus, new products are essential for growth.

 Product that is really innovative.

 Products that is significantly different from the existing products.
 Imitative products that is new to a particular company but not new to the market.

UNIT-V
Global Marketing:Global marketing is “marketing on a worldwide scale reconciling or taking
commercial advantage of globaloperational differences, similarities and opportunities in order to
meet global objectives".

Advantages of Global Marketing:

 Economies of scale in production and distribution.

 Lower marketing costs.

 Power and scope.

 Consistency in brand image.

 Ability to leverage good ideas quickly and efficiently.

 Uniformity of marketing practices.

 Ability to leverage good ideas quickly and efficiently.

 It enables a company to leverage economies of scale.

 Economics of scale can save company money in labour, packaging

and marketing material costs.
Importance of Global Marketing:
Global marketing is, then, very important to internationalize a business, and preparing a good
strategy for it has obviously some importance:

 Reduction of cost inefficiencies and of duplication of efforts between national and

regional subsidiaries.
 Opportunities to the transfer products, brands and ideas to other subsidiaries.
 Appearance of global clients.
 Improvement of the ties between national infrastructures, leading to the development of a
global marketing infrastructure.

E-Marketing:E-Marketing (Electronic Marketing) are also known as Internet Marketing, Web

Marketing, Digital Marketing, or Online Marketing. E-marketing is the process of marketing a
product or service using the Internet. E marketing not only includes marketing on the Internet,
but also includes marketing done via e-mail and wireless media. It uses a range of technologies
to help connect businesses to their customers.

Advantages of E-Marketing:Certain advantages of e-marketing are discussed as below:

1. Much better return on investment from than that of traditional marketing

2. E-marketing means reduced marketing campaign cost as the marketing is done through
the internet
3. Fast result of the campaign
4. Easy monitoring through the web tracking capabilities help make e marketing highly
efficient.
5. Using e-marketing, viral content can be made, which helps in viral marketing.

Telemarketing:

 Telemarketing is a very common form of marketing companies use to connect with

potential customers of their products or services.
 Historically, telemarketing consisted of companies making telephone calls to existing or
potential customers.
 With new technology, telemarketing has expanded to include video conferencing calls as
well, although those are typically conducted with existing customers.
 Telemarketing is often used to try to sell a product or service, but it can also take the
form of surveys or information gathering. For instance, political campaigns use
telemarketing heavily prior to elections to inquire about voting preferences.
 When companies call new customers, the activity is referred to as cold calling. This
means the consumer has not purchased from the company before nor have they requested
a call from the company.
 Companies can buy a list of potential customers to call from a list service, which will
provide a list of consumers who have similar interests or purchasing histories who fit the
company's target market.
 There are many industries that rely heavily on telemarketing, such as:

 Cable and Internet services

 Home security systems
 Financial services
 Vacation and time share
 Charitable organizations

Advantages of Using Telemarketing:

The main benefit of using telemarketing to promote your business is that it allows you to
immediately gauge your customer's level of interest in your product or service. Additionally
it allows you to do the following:

 Provide a more interactive and personal sale service

 Create an immediate rapport with your customers
 Explain technical issues more clearly
 Generate leads and appointments
 Sell from a distance to increase your sales territory
 Reach more customers than with in-person sales calls
 Sell to both existing and new customers
 Achieve results that are measurable.

Disadvantages of Using Telemarketing:

There can be as many negatives using telemarketing as there are positives. In particular,
you need to consider that:

 Telemarketing can be resented - particularly when dealing with business-to-consumer

customers, and when calls are made in the evenings
 Customer lists may not always be clean and opted-in - this leaves you with a potential
risk of breaking the law
 Customer lists can be very costly
  Telemarketing has a negative image that could damage your business' reputation - if
carried out poorly
 Telemarketing has the potential to replace a sales team and this could lead to negative
feelings among employees
 Training staff can be time-consuming and costly
 You may need to prepare a script
 An outside service provider can result in your losing control over your sales processes
because the people doing the work aren't your employees
MARKETING ETHICS
Marketing ethics is characterized as the basic principles and values that govern the business
that is occupied with promoting products or services to customers .

PRINCIPLES OF ETHICAL MARKETING:

1. All marketing communications share the common parameter that is truth.
2. Marketing Professional is limited by the highest standard of personal ethics.
3. Advertisers ought to be highly transparent about individuals whom they pay to endorse
the products.
4. Consumers ought to be treated fairly based on the idea of the product and consumer.
5. The protection of the consumer ought not be compromised.

Ethical Values in Marketing: There are six marketing ethics

1. Honesty – Be forthright in dealings and offer value and integrity.
2. Responsibility – Accept consequences of marketing practices and serve the needs of
customers of various types, while being good stewards of the environment.
3. Fairness – Balance buyer needs and seller interest fairly, and dodge manipulation in
all forms while protecting the information of the consumers.
4. Respect – Acknowledge basic human dignity of the multitude of individuals involved through
efforts to impart, understand and address issues and appreciate contributions of others.
5. Transparency – Create a spirit of openness in the act of marketing through
communication, constructive criticism, action, and disclosure.
6. Citizenship – Fulfill all lawful, economic, altruistic and cultural responsibilities to all
partners just as giveback to the local area and secure the natural environment good corporate
conduct should be particularly cautious, notwithstanding, to market such conduct in a morally
acceptable fashion. In spite of the fact that advertisers ordinarily participate in mild deception or
take artistic license when marketing goods and services, these sorts of practices are undeniably
more morally troublesome when used to showcase good corporate conduct. I contend that albeit
mild deception is not considerably worrisome as for the marketing of most goods and
services, it is a far more prominent moral blunder to utilize such strategies in the marketing of
good corporate character.

Marketing Career Opportunities:There are many different career paths within marketing.
Most require a four-year degree in marketing, public relations, or even communications from an
accredited university. You'll also find plenty of English and journalism majors in the field, as
well people with other humanities and fine arts majors. The degree matters, but high creativity
and a desire to work with new products are even more important. The industry is roughly divided
in two: the client-oriented side and the agency-oriented side. Let's explore both in a little more
depth.

Job Opportunities for Marketing Management

 Marketing Manager.
 Marketing Research Analyst.
 Advertising or Promotions Manager.
 Social Media Manager.
 Product/Brand Manager.
 Media Planner.
 Sales Manager.
 Public Relations Specialist.

GREEN MARKETING:

Meaning: The term ‘green’ is indicative of purity. Green means pure in quality and fair or just in
dealing. For example, green advertising means advertising without adverse impact on society.
Green message means matured and neutral facts, free from exaggeration or ambiguity. Green
marketing is highly debated topic for lay people to highly professional group.

Green Marketing Objectives:

1. Avoiding waste: It’s creating biodegradable product packaging, cutting down on water
consumption, or reducing the amount of trash that goes in to landfills, green marketing is just
as concerned with avoiding waste as putting forward an eco-friendly face to the public.
2. Reinvestment products: Products themselves can be modified to lessen the impact on the
environment. For example, Method source its ingredients from many plant-derived
ingredients, which means its safer for human s, not toxic to family pets who might
accidentally ingest it; and more environmentally-friendly by being water soluble and
dispersing safely into the environment.
3. Making green while being green: The companies that promote green products want to not
only be good stewards of planet Earth, but make a profit while doing so. Green marketing
allows business to capitalize on the subset of the population willing to pay a little more to
lessen their foot print on the environment and protect the atmosphere.
4. Changing Processes: Consumers aren’t the only that need to be concerned with
environmental impact. Green marketing also encourages business to properly utilize
resources such as water consumption and electricity. Changing processes also means looking
for renewable materials, using alternative energy sources finding ways to deliver products in
a more fuel-efficient manner.
5. Creating Eco-Friendly Message: Green marketing’s biggest “marketing” accomplishment
might be in messaging. Green marketing works to help consumers understand a product’s
green benefits and a company’s commitment to the environment. It’s also an important
avenue in which to educate people about sustainability and the environment.

Impacts or Importance of Green Marketing:

Green marketing affects positively the health of people and the ecological environment.
People are aware of pure products and pure methods of producing, using, and disposing the
products. It encourages integrated efforts for purity in production and consumption as well.

1. Now, people are insisting pure products – edible items, fruits, and vegetables based
on organic farming. The number of people seeking vegetarian food is on rise.
2. Reducing use of plastic-based products.
3. Increased consumption of herbal products instead of processed products.
4. Recommending use of leaves instead of plastic pieces; jute and cloth bags instead of
plastic carrying bags.
5. Increasing use of bio-fertilizers instead of chemical fertilizers and minimum use of
pesticides.
6. Worldwide efforts to recycle waste of consumer and industrial products.
7. Increased use of herbal medicines, natural therapy and yoga.
8. Strict provision to protect forests, flora and fauna, protection of the rivers, lakes and
seas from pollutions.
9. Global restrictions on production and use of harmful weapons, atomic tests, etc.
Various organizations of several countries have formulated provisions for protecting
ecological balance.
 10. More emphasis on social and environmental accountability of producers.
11. Imposing strict norms for pollution control.
12. Declaration of 5th June as the World Environment Day.
13. Strict legal provisions for restricting duplication or adulteration.
14. Establishing several national and international agencies to monitor efforts and
activities of business firms in relation pollution control and production of eco-friendly
products.

ONLINE MARKETING:

Online marketing is the process by which customer relationship is maintained by facilitating

exchange of information and ideas about the products and services. It is a medium which helps to
satisfy the goals of the buyers and sellers.

Characteristics of Online Marketing:

1. Online marketing is a process consisting of inter-related steps. Setting corporate and

business unit strategy, framing the market opportunity, formulating the marketing
strategy designing the customer’s expectations, developing the marketing programme and
evaluating the results of the same.
2. Online marketing makes use of the web and related digital technologies. These
technologies consist of the internet media and digital media such as wireless, cable,
satellite.
3. The global online marketing aims at maintaining an everlasting relationship with
customers.
4. The effectiveness of online marketing programme depends upon the overall impact of
exchange. Marketing firms must be sensitive to cross channel effects of online and offline
marketing programmes.
5. Online marketing aims at securing the goals of both the seller and the buyer. Only when
the interests of both the parties are well served, exchange becomes complete.
Advantages of Online Marketing:
1. Any time Marketing: Online marketing allows a consumer to make enquries,
comparisons, etc., anytime of the day and throughout the year. Thus, it saves the
customer’s time and money which he/she would have otherwise spent, shopping
physically.
2. Wider Choice: Consumer can virtually see the complete range of products they wish to
buy products in electronic form. They can visit many websites as possible to have a wider
choice.
3. Enhances Consumer Satisfaction:A consumer gets vast information about a product, its
features, service net work, competitor’s offer, etc., by the click of a button. So, a
customer is well informed of the availability of various product online. Hence, his
decisions are quicker and far better.
4. Global Access: Online marketing has exposed a customer to the markets all over the
world through internet. So, a customer can buy the best product available in the world at
a competitive price from his home or office.

Methods of OnlineMarketing:

1. Article Marketing: To build links for your site, enhance your website search engine
ranking and getting traffic.
2. Forum Marketing: Forum is a place where people gather and discuss their problems,
strategies etc. Again a good traffic builder.
3. Search Engine Marketing: This involves search engine optimization of your website
design and content.
4. Pay per Click Advertising: This is a paid service where you pay the service provider
every time your link is clicked.
5. Link purchase: You can purchase placement of your website link on other website.
6. Link Exchange: In this a website places a link for other website in exchange for its
link on that site.
7. Classified Advertising: You can advertise you website on classified website on the
web link craigslist.com and usfreeads.com
8. E-zine Marketing: This refers to email marketing.
9. Lead Purchase: There are some paid services which will provide you with the names
and email addresses of the people or lead against a payment. This method is called
lead generation.
10. Viral Marketing: Here, you make a useful product like e-book or software, build
some humorous video or funny e-mail and allow people to pass it on freely.
11. Press Releases: You build a press release for your website and submit it to one or
more press release sites like prweb.com
12. Joint Ventures: Here two or more marketers come together and promote a product or
service in a way that it will benefit them all.
13. Affiliate program: You can launch your own affiliate program where people can
join.
14. Resell Right Marketing:You can offer resell right to your product where people
would be able to sell it and keep all the money.
15. RSS Marketing: Really Simple Syndication, people can subscribe to these RSS feeds
and can view the content of the website via their RSS readers.

NEURO MARKETING:

“Neuro marketing is the application of neuroscience to marketing. Neuro

marketing includes the direct use of brain imaging, scanning, or other brain activity
measurement technology to measure a subject’s response to specific products,
packaging, advertising, or other marketing elements.

In some cases, the brain responses measured by these techniques may not be
consciously perceived by the subject; hence, this data may be more revealing than
self-reporting on survey, in focus groups etc.”
Benefits of Neuro Marketing:

1. Fresh Viewpoints: Neuromarketing can give marketers a fresh perspective into many
marketing challenges. It offers a new explanatory framework that puts many existing
customer mind mapping in a new light.

2. Customer Behaviour: There re several instances when customers thinking and

behaviour are inconsistent. Neuro marketing helps to look into the gap between
customers mind and their action.

3. Emotional and Non-Conscious Insights:Feelings and emotions influence a lot in

customer buying behaviour. Neuro marketing methods can often help uncover the
triggers to these emotional responses

4. Customer Feeling’s Measurement: Customer level of emotional attachment is

difficult to measure. But then there is no way marketers can rate the feeling on a scale
of 1 to 10.

5. Priming Effects: A poster, logo, or package can active wide-ranging of associated in

a customer’s mind. This is called priming effects in neuroscience. With neuroscience
techniques, marketers can measure the feeling that an ad or brand logo may trigger in
a customer.