Unit 4

Marketing
 Concepts of Marketing
Market: Normally people understand the term market as a
place where goods are bought and sold. But, in the
context of Marketing, it refers to a group of buyers for a
particular product or service.

Marketer: the person who organizes the various marketing

activities such as market research, product planning,
pricing, distribution etc.

Seller: the person or organization who is directly involved

in the process of exchange of goods and services for
money. This includes the wholesaler, retailer, etc.
Buyer: A buyer is one who is directly involved in the
process of purchase of goods and services. He/she is
one who selects the goods, makes payment and takes
the delivery.

Consumer: One who actually uses the product or service.

Customer: A customer usually refers to the person who

takes the buying decision.

Virtual Market: With advancement of technology, the

buyer and sellers can, now-a-days, interact with each
other by using Internet. This is called virtual market.
 Definition of Marketing
Marketing refers to the process of ascertaining
consumers’ needs and supplying various goods and
services to the final consumers or users to satisfy
those needs.

According to the American Marketing Association,

“marketing is an organizational function and set of
processes for creating, communicating and delivering
value to customers and for managing customer
relationships in ways that benefit the organization
and its stakeholders.”
TRADITIONAL CONCEPT OF MARKETING MODERN CONCEPT OF MARKETING

• Focus on - Product • Focus on - Customers’ need

• Means - Selling • Means - Coordinated
• Ends - Profits through marketing efforts
maximization of sales • Ends - Profits through
customers’ satisfaction
 Difference Between Marketing and Selling
Marketing Selling
• Marketing includes selling and • Selling is confined to persuasion
other activities like various of consumers to buy firm’s goods
promotional measures, marketing and services.
research, after sales service, etc.
• Selling starts after the
• It starts with research on
production process is over and
consumer needs, wants,
preference and continues even
ends with the handing over the
after the sales have taken place. money to the seller by the buyer.
• Focus is on earning profit through • Focus is on earning profit
customers’ satisfaction. through maximization of sales.
• Customer’s need is the central • All activities revolve around the
point. product that has been produced.
• It is an integrated approach. • Stresses on needs of the seller.
• Stresses on needs of buyer.
 Objectives of Marketing
• Provide satisfaction to customers
• Increase in demand
• Provide better quality product to the customers
• Create goodwill for the organization
• Generate profitable sales volume
 Importance of Marketing
• Marketing helps business to keep pace with the changing
tastes, fashions, preferences of the customers.
• It helps in making products available at all places and
throughout the year. Thus, marketing creates time and
place utilities.
• It plays an important role in the development of the
economy as its various functions and sub-functions like
advertising, personal selling, packaging, etc. generate
employment for a large number of people.
• Marketing helps the business in increasing its sales volume,
generating revenue and ensuring its success in the long run.
• It helps the business in meeting competition most
effectively.
 Functions of Marketing
• Marketing Research: Marketing research involves
collection and analysis of facts relevant to various
aspects of marketing. It is a process of collecting and
analyzing information regarding customer needs and
buying habits, the nature of competition in the
market, prevailing prices, distribution network,
effectiveness of advertising media, etc
• Product Planning and Development :The marketers
gather information regarding what are the needs of
the consumers and then decide upon what to
produce. So, the task of marketing begins with
planning and designing a product for the consumers.

• Buying and Assembling: Buying and assembling

activities as a part of marketing refer to buying and
collection of required goods for resale.

• Packaging: Packaging involves putting the goods in

attractive packets according to the convenience of
consumers.
• Standardization and Grading: Standardization refers to
development of standards for production of goods with
respect to shape, design, color and other characteristics.
If products are standardised, customers are able to
identify a product and its characteristics very well. So
goods can be sold by sample or description.
Standardization helps in promoting the sale of the
product by increasing consumers’ confidence in the
product quality.

Grading involves separating products into different

classes on the basis of certain predetermined standards
relating to size and quality. Grading is required in case of
agricultural, forest and mineral products such as cotton,
sugar cane, iron ore, coal, timber, etc.
• Branding: Branding means giving an attractive name,
symbol or identity mark to the product to make a
product different from others so that it is known by
that name or symbol or mark

• Pricing the Product: Pricing involves decisions

regarding fixation of product prices, keeping in view
the product costs, the capacity of customers to pay,
and the prices of the competitive products. It is an
important decision as it influences the sales and so
also the profits.
• Promotion of the Product: Promotional activities
include advertising, personal selling, sales promotion
and publicity. All promotional activities involve
communication with the existing and prospective
customers whereby they are made aware of the
product, its distinctive features, price, availability etc.
The objective of promotional activities is to motivate
the customers to buy the product.
• Distribution: Distribution refers to those activities that
are undertaken for sale of products to the customers
and the physical transfer thereof. The first aspect i.e.,
sale of product involves use of middlemen such as
wholesalers and retailers whose services are used for
making the products available at convenient points and
helping in their sale to the ultimate consumers. The
second aspect i.e., physical transfer involves
warehousing and transportation of goods from the point
of production to the point of sale or the consumer.

The objective of distribution activities is to ensure that

consumers get the goods and services at the place and
time most convenient to them and in the desired
quantity.
• Selling: Selling is an important function of marketing
whereby the ownership of goods and services is
transferred from the seller to the buyer for a
consideration known as price.

To initiate and complete the process of selling, the

seller has to inform the prospective buyer about
availability of goods, the nature and uses of
products, their prices and the needs of the
customers that may be effectively satisfied by the
product. In the process, he arouses customers’
interest in the product and persuades them to buy it.
• Storage and Warehousing: Storage refers to holding
and preserving goods from the time of their
procurement or production till the time of their sale.
In other words storage involves making suitable
arrangements for preserving the goods till they are
bought by the consumers and delivered to them.

• Warehousing is synonymous to storage but is

normally used for large-scale storage facility for
goods and commodities
• Transportation: Transportation refers to the physical
movement of goods from one place to another. In
marketing, transport as an activity refers to physical
movement of raw materials as well as finished goods
from the place of production to place of
consumption. Goods are transported through various
means like railways, roadways, waterways and
airways.

• For heavy and bulky goods, the railways and

waterways are the best. For other goods, it depends
upon the demand, cost involved, urgency, nature of
the goods etc. to decide about a suitable means of
transportation.
 Marketing The controllable variables in this
context refer to the 4 ‘P’s
Mix [product, price, place
(distribution) and promotion].
According to Philip
Kotler “Marketing Mix is
the set of controllable
variables that the firm
can use to influence the
buyer’s response”.
• Product : Product component of marketing mix
involves planning, developing and producing the
right type of product to be marketed by the firm. It
involves decisions about:
– Quality of the product
– Size of the product
– Design of the product
– Volume of production
– Packaging and branding
– Warranties and after sales services
– Product testing etc.
Price: Price is the amount charged for a product or
service. It is the second most important element in
the marketing mix. Fixing the price of the product is a
tricky job. Many factors like demand for a product,
cost involved, consumer’s ability to pay, prices
charged by competitors for similar products,
government restrictions etc. have to be kept in mind
while fixing the price. In fact, pricing is a very crucial
decision area as it has its effect on demand for the
product and also on the profitability of the firm.
Place: Goods are produced to be sold to the
consumers. They must be made available to the
consumers at a place where they can conveniently
make purchase. So, it is necessary that the product is
available at shops in your town. This involves a chain
of individuals and institutions like distributors,
wholesalers and retailers who constitute firm’s
distribution network (also called a channel of
distribution). The organization has to decide whether
to sell directly to the retailer or through the
distributors/wholesaler etc. It can even plan to sell it
directly to consumers.
Promotion: If the product is manufactured keeping the
consumer needs in mind, is rightly priced and made
available at outlets convenient to them but the
consumer is not made aware about its price,
features, availability etc, its marketing effort may not
be successful. Therefore promotion is an important
ingredient of marketing mix as it refers to a process
of informing, persuading and influencing a consumer
to make choice of the product to be bought.
Promotion is done through means of personal selling,
advertising, publicity and sales promotion.
 SALES PROMOTION
According to American Marketing Association “Sales
Promotion includes those marketing activities,
other than personal selling, advertising and publicity
that stimulate consumer purchasing and dealer
effectiveness such as displays, shows and exhibitions,
documentation and various non-recurrent selling
efforts not in the ordinary routine”.
 Objectives of Sales Promotion
• Information to Customers : Sales promotion activities
inform the potential buyer about the availability, features,
uses etc. of the product.
• Persuades Customers : Sales Promotion activities aim at
arousing customers’ interest in the product and
persuading them to buy.
• Increase in Sales Volume : It aims at increasing sales. It is
specially done during the periods when customer may not
buy the product because it may not have immediate use,
like a room cooler in winter, and a room heater in summer.
The sales promotion schemes are a big help in making off-
season sales and also in tempting the buyers to make
quick decisions to purchase.
• Incentive to Retailers : The main objective of sales
promotional activities is to offer promotional support
to retailers. Sales promotion schemes make sales
easier. Incentive schemes help in getting shelf space for
such products in new retail outlets.
• Create Product Identity : A number of brands of a
particular product are available in the market and it is
very difficult to distinguish one from the other as all
have similar
 Difference between Advertising and Sales
Promotion
Advertising Sales Promotion
• Objectives of advertising is • The objective of sales
to create a favorable promotion is to stimulate
consideration for the the consumers to buy the
product. product
• It has a long term effect. • It has a short term effect
• Advertising is recurring in and useful for increasing
nature immediate sales..
• It is non-recurring and
sometimes one time
communication process.
 Tools used in Sales Promotion
• Distribution of Free Samples
• Bonus Offer
• Price-off
• Exchange Offer
• Fairs and Exhibitions
• Free Offer
• Money Refund Offer
• Discount Coupon
• Deferred Payment Plan
• Contests
 Salesmanship
salesmanship simply means
selling through personal
communication. For successful
selling the salesperson usually
goes through a selling process
which involves the seven steps.
 Importance of Salesmanship
• Benefits to Consumers: A salesperson acts as a
friend and guide to the consumers. By making
conversation with salesperson, the customer gets
help in identifying the product of his need and the
price range that suits him.
• Benefits to the Business: Salesmanship helps a
business in increasing its sales. Identification of new
customers and persuading them to buy can be done
effectively through personal selling.
• Benefits to the Society: Salesmanship facilitates the
process of production, distribution and consumption.
Salespersons help in collecting market information,
credit information, delivering goods and collecting
payments. It helps in matching demand with supply
because they know what the consumers want. They
also inform the consumers about the introduction of
new products, if any. By increasing sales, they help in
the growth of business.
 Qualities of a Good Salesperson
• Good Personality : Personality is a mixture of many
traits like physical appearance, dressing-up, way of
talking, manners, pitch of voice, habits etc.
Personality of a salesperson should be such that the
moment he/she comes in contact with the customer,
he/she looks amiable with whom the customer is at
least ready to start a conversation.
• Good Behaviour : A salesperson should be a well
behaved person having ability to interact with people
comfortably.

• Knowledge : He/ she should know every detail

relating to the product and the company he/she is
representing. He/she should be able to explain the
various features of the product, the way it is to be
used and the precautions to be taken and so on.
Knowledge about competitors’ product is also a must
so that the salesperson can explain the superiority of
his/her product.
• Ability to communicate and persuade : If a salesperson
can communicate properly and effectively then he/she
will be able to clear the biggest hurdle of making the
prospective customer listen to him/her. The salesperson
must speak confidently, clearly and audibly. Good
communication ability coupled with good knowledge
about the product helps the salesperson in persuading
the customer to buy.

• Persistence : The salesperson must know the art of

persistence. It requires a sense of determination to
convince the customers to buy. He/she must not give up
easily. Without being offensive, he/she must persuade
the customer to finalize the purchase with a sense of
satisfaction.