OCM

CHAPTER 8 MARKETING
NOTES

Introduction

 It is a process which focuses on consumer’s satisfaction by producing a product which a

consumer need.

 It begins with identifying and anticipating consumers need then producing product
accordingly.

 It is an art as well as science

 Convincing somebody to do something or not to do something is a part of marketing.

 Marketing is a key function of modern management.

Concept of Market

1. Place concept of Market : The term market is commonly understood as the place where
transaction of buying and selling of goods and services takes place in exchange of money or
money's worth. In the age of information technology the term 'market' has wider meaning
than just a place.

2. Commodity Concept of Market : In this concept the process of buying and selling of goods or
services is important and not the place of exchange.

3. Exchange concept of Market Exchange concept of market has given emphasis on exchange of
goods or services between buyer and seller with free consent as well as mutual trust. There
should not be any Fraud during the exchange. The exchange should be voluntary between
buyer and seller.

4. Area concept of Market : This concept gives emphasis on free association between buyers
and sellers to fix the price of goods for buying and selling. It is not necessary for buyer and
seller to meet in person. For fixing the price buyers and sellers can regularly take the help of
different modern communication media.

5. Demand or Customer concept of Market : Customer is the king of the market. One of the
important perspectives of the market is to assess the need or demand of the customer.
Market can be studied from the perspective of demand or customer. According to this
concept, the aggregate demand by potential buyers for any product is market.

Types of Market

 On the basis of Area :

o Local Market :- within local geographical limits of a region

 o National Market

o International Market

 On the basis of Time :

o Very Short Period Market

o Short Period Market

o Long Period Market

 On the Basis of Volume of Transaction

o Wholesale Market

o Retail Market

 On the Basis of Importance

o Primary Market

o Secondary Market

 On the Basis of Nature of Goods

o Commodity Market

o Capital Markets

 On the Basis of Regulation

o Regulated Market

o Unregulated or Free Market

 On the Basis of Competition

o Perfect Market

o Imperfect Market

Importance of Marketing

1. Importance of Marketing to the Society

1. Increase in Standard of Living : The prime objective of marketing is to provide goods

and services to the customers to satisfy their needs. Marketing helps to identify the
needs of the customers and take an initiative to provide the quality goods at the
cheaper prices. This will help to increase and maintain the standard of living of the
customers

2. Provides Employment : Modern marketing is a total system which covers almost all
functions of organization such as buying, selling, warehousing etc. To run this system
there is a need of people. Thus, it gives job to the people.

3. Decreases Distribution Costs : Marketing activities help to provide cheap goods and
services to the society. Effective utilization of distribution can help in reducing the
cost prices of the products and services which will increase potential consumers.
 4. Consumer Awareness : Marketing helps consumers to know about new product and
service available in the market and its usefulness to the customer. Marketing
provides satisfaction to the society by supplying relevant information, goods, and
services to the people of society according to their demand and taste.

5. Increase in National Income : The scientifically organized marketing activities help in

the economic development of the country. Effective marketing of products and
services result into industrialization, more job and makes the economy stronger and
stable.

6. Managing Consumer Expectations : Marketing research helps the organizations to

understand the needs of the consumers. It helps in developing the products which
fulfills customer's expectations. Customers' review collected through different
sources can help the organizations to make necessary changes in the products.

2. Importance of Marketing to the Consumers

1. Promotes Product Awareness : Through different marketing activities companies

promote their products and services. This helps consumers to know about different
products and services available in the market. It creates awareness among the
consumers about different brands and features of the product available in the
market.

2. Provides Quality Products : There is increasing competition in the market. Consumers

are getting easy access to the information about the products and services available
in the market. Supplying defective products may create negative image of the
business which affects the consumer's loyalty.

3. Provides Variety of Products : Marketing creates awareness among the consumers

about the product. At the same time, it attracts the consumers to buy the same.
Businessman needs to provide variety of goods to cater to the needs of the different
market segments of the consumers. Variety may change according to the price, size
and quality of the product.

4. Helps in Selection : Variety of products with different brands are available in the
competitive markets. Marketing helps the consumer to choose the best products and
services from the different options available.

5. Consumer Satisfaction : The first and foremost objective of any sound marketing
policy is to satisfy the consumers by assurance of good quality product. When an
offering meets the customer's expectations, the customer is satisfied. Marketing
leads to consumer satisfaction through honest advertising, assurance of quality
products and availability of innovative products.

6. Regular supply of goods : Through efficient distribution channel of marketing regular

supply of goods is possible. It helps to maintain the balance between demand and
supply. It results into stable prices.

3. Importance of Marketing to the Firm

1. Increases Awareness : Marketing helps in creating awareness about the existing

products, new arrivals as well as the company which sells a particular product in the
 market. This raises awareness among the potential consumers. It creates brand
image among the consumers.

2. Increases Sales : Once marketing creates awareness about the products or services
among the consumers, it attracts them to purchase the same. Successful marketing
campaign helps to increase the sales of the organization. Increase in sale generates
profit for the organization.

3. Creates Trust : People want to buy from a business that has a trustworthy reputation.
Creating trust among the customers is a time consuming process and once created it
earns loyal customers.

4. Basis for Making Decisions : From inception of idea to delivering the final product to
the customer, businessman has to take several decisions. Businessman has to look
after many problems such as what, how, when. how much and for whom to
produce? , Marketing helps to take right decision at right time as these decisions
become more complex.

5. Source of New Ideas : Marketing helps business to understand the needs of the
consumers. Feedbacks from the consumers help in the improvement of the existing
products. There is rapid change in tastes and preference of people. Marketing helps
to understand new demand pattern emerged in the market. Research and
Development department develop products accordingly.

6. Tackling the Competition : It is difficult for any business to create monopoly for their
products and services in the competitive economy . The role of marketing is
important to create brand image in the minds of potential customers. Marketing not
only helps to communicate the products and services to the consumers but also
motivates them to buy the same.

Functions of Marketing

1. Marketing Research Effective marketing is possible when business takes initiative to identify
the needs and wants of the consumers in the market. To identify the needs of the
consumers, there is a need to collect information from the consumers and analyse the same
is known as Market Research.

2. Buying and Assembling: It involves collecting raw material from different sources at one
place for production. This function is important as quality and price of raw material
determine cost and quality of the final product.

3. Market Planning: After assessing the need of the marketing, business needs to chalk out the
marketing plan and strategies to achieve the desired objective. Market planning is the
process of organizing and defining the marketing objectives of the business and creating
strategies to achieve them.

4. Product Development: Product development and design play an important role in the selling
of the product. Product design includes decision related to quality, standards, shape, design,
packing, colour etc. of the product. This will match the needs of the consumers

5. Standardization and Grading: Standardization means to determine standards related to

process, size, quality, design, weight, colour etc. of the product. Grading is the process of
 classification of products according to similar characteristics and/or quality. Grading is done
on the basis of their features like size, shape quality etc.

6. Packaging and Labelling: Package and Label creates the first impression on the consumer
about the product. Attractive package and label can help to make product successful.
Packaging means designing the package for the product. Label is a slip which is found on the
product and provides all the information regarding the product and its producer.

7. Branding : Every businessman wants to have special identity in the market for his product.
Branding is a process of giving special identity to a product through unique brand name to
differentiate it from competitor's products.

8. Warehousing: There is a time-lag between the purchase or production of goods and their
sale. It is important to store the goods at a safe place during this time-lag. Warehouse helps
to maintain a smooth flow of goods. It is performed by retailers, wholesalers and
manufacturers. Warehousing creates time utility.

Marketing Mix

1. Product: Product refers to the goods or services that are offered to the customers for sale
and are capable of satisfying the need of the customer. The product can be intangible or
tangible, as it can be in the form of services or goods.

2. Price: The price of the product is basically the amount that a customer pays for the product.
Price plays an important role in creating demand for the product. The business needs to take
utmost care to decide the price of the product. Cost of the product and willingness of the
customer to pay for the product play an important role in pricing the product.

3. Place: Place is also known as distribution channel. Placement or distribution is a very

important part of the marketing. Making a right product at the right price is not enough.
Businessman needs to make the product available to potential customer and needs to
distribute the product at right place that is accessible to potential buyers.

4. Promotion: Promotion is an important element of marketing as it creates brand recognition

and sales. Promotion is a tool of marketing communication which helps to publicize the
product to the customer. It helps to convey product features to the potential buyer through
tools such as advertising, direct marketing, etc.

5. People: People inside and outside the business directly or indirectly influence the business.
The people include employees who help to deliver services to the customer. Right people at
right place add value to the business.

6. Process: Process refers to the steps involved in delivering quality products and services to the
customer. Good process helps to ensure same standard of service to the customer as well as
save time and money by increasing efficiency.

7. Physical Environment: Physical Environment refers to the marketing environment wherein

the interaction between customer and firm takes place. Since services are intangible in
nature service providers try to incorporate certain tangible elements into their offering to
enhance customer experience. In the service market, the physical evidence is important to
ensure that the service is successfully delivered.
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