MODULE 1: INTRODUCTION TO MARKETING

CHAPTER 1 : MARKETING

“Good companies will meet needs; Great companies will create markets” – Philip
Kotler

Introduction
Today, the market is open for several organizations and thus the competition is cut-
throat. It is very important for any organization to influence the consumers. Consumers
are most important aspect of any business.

Gandhiji in one of the speech in South Africa in the year 1890, said:
“A customer is the most important visitor on our premises. He is not dependent on us.
We are dependent on him. He is not an interruption of our work. He is the purpose of
it. He is not an outsider of our business. He is part of it. We are not doing him a favour
by serving him. He is doing us a favour by giving us the opportunity to do so.”

A business organization with satisfied consumers will be able to sustain in long term.
Marketing is the business function which takes care of the same. Marketing helps in
market research, identifying target consumers, analyzing the requirements of the
consumers, after sale services, promotions, creating and maintaining brand image,
creating brand loyalty etc.

Let’s look at the marketing strategy of one of the most famous Indian brand –
Amul
Amul is the most popular and loved brand in India. It comprises of butter, cheese, ghee,
ice-creams, chocolates, paneer and various other products. Prior to 1946, a company
named Polson Dairy in a place called Anand, Gujarat producing dairy products was in
existence. Polson Dairy exploited farmers by procuring milk at very low prices. Amul
was started as a cooperative movement in 1946 against this company and to stop
exploitation. Instantly Amul gained attention of the public and also respect.

Dr. Verghese Kurien wanted to establish Amul as the brand of India. The name “AMUL”
(Anand Milk Union Federation Limited) means “Amulya” or priceless. Amul initially
started its ad campaigns with the song ‘Amul doodh peeta hai India’. This further
promoted Amul as the brand of India.
Amul has not only replaced other butter brands but butter itself. We don’t ask for
butter anymore, it’s always ‘Amul dena’. Amul expanded its market by competing not
only against butter brands but also ghee. Its ad campaign promoting ‘butter pav bhaji,
butter dosa, butter chole puri, butter paratha’ has helped Amul in replacing ghee and
home-made butter. The tag line for Amul is “Amul butter, Asli butter”.

As a new marketing strategy, Amul now publishes its views on various events occurring
in country by way of hoardings or in newspapers. E.g. When BJP won elections in 2014,
Amul came up with following comment:
“Accha din-ner aaya hai! Amul in all cabinets !”

DEFINITIONS OF MARKETING
1. Philip Kotler – The science and art of exploring, creating and delivering value to
satisfy the needs of a target market at a profit. Marketing identifies unfulfilled
needs and desires. It defines, measures and quantifies the size of the identified
market and the profit potential. It pinpoints which segments the company is
capable of serving best and it designs and promotes the appropriate products and
services.”

2. American Marketing Association – “Marketing is the activity, set of institutions,

and processes for creating, communicating, delivering, and exchanging offerings
that have value for customers, clients, partners, and society at large.”

Q1.What are the features of Marketing? Or Explain the Nature of Marketing

Ans: American Marketing Association has defined marketing as “Marketing is the
activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients,
partners, and society at large.”

Following are the features of marketing:

SMART CODE: [SIDBI COFI]
1. Social Concept
Marketing aims at identifying the needs and wants of its consumers. Its main aim is
to satisfy the needs of consumers. Besides, the business organization is dependent
on society and hence has certain responsibilities towards society. Hence, it is
important to strike a balance between consumer needs, organizational objectives
and public interest.
 E.g. Navneet uses recycled and eco-friendly paper for note-books.
Many stores have started giving recyclable carry bags instead of normal plastic
ones.

2. Inter-linked Management Function

Marketing function is inter-linked with other management functions like planning,
financing, production etc. For instance, in order to launch a new product in the
market, it is essential to conduct a market research, identify size of market, identify
the competitors, potential customers, funds required for advertising etc and plan
accordingly.

3. Dynamic Function
Marketing is mainly dependent on needs and wants of customers. The wants of
consumers are constantly changing. Therefore, marketing must constantly change
to meet those needs and wants. Besides, marketing is also influenced by
competition, technological advancement, political changes, innovations etc. All
these factors keep on changing. Hence, marketing is said to be dynamic function.

4. Brand Building
Marketing is the link between the organization and consumers. The consumers
usually get influenced by the promotional techniques used by organization. The
promotional technique of the organization will influence the perception of the
consumers.
Marketing helps in identifying the needs of consumers and satisfy their wants. They
help in building relations with the consumers. If the needs of consumers are
effectively satisfied, it creates brand loyalty.
E.g. ICICI bank promotes itself as a customer friendly bank. The tag line of ICICI is
“Hum Hai Na.”

5. Identification of Target Market and consumers

Market has widened and so has the scope of marketing. It is impossible to satisfy
the needs and wants of everyone. Thus a target market and consumers are
identified. The needs and wants of such consumers are identified accordingly. This
narrows down the requirements and helps to satisfy more specific needs of
consumers. Marketing strategy is also designed as per the target market.
 E.g. Cold drink companies like Pepsico target youth. Thus Ranbir Kapoor, Virat Kohli
and Anushka Sharma are a part of their ad campaigns.
Book-my-show website identified a need of online movie ticketing services. To
fulfill that need they developed the website and helped in satisfying want of
consumers.

6. Consumer Centric
Marketing starts and ends at consumers. The companies truly believe in the phrase
“Consumer is the king.” The organizations now concentrate on identifying
wants/needs of consumers and satisfying such wants. Infact, companies have
started providing additional services which help in attracting more consumers.
Consumers will opt for a brand that understands their needs and gives them
priority.
E.g. ICICI has introduced a tab banking system. Instead of a consumer visiting ICICI
branch to open account, ICICI sends its representatives at consumer’s place. This
feature was propagated by an advertisement featuring Mr. Amitabh Bachhan. It
helped ICICI in opening half million accounts in just eight months.
Following is the link of that advertisement or scan the QR code:
https://www.youtube.com/watch?v=Cmw8BFs0tqc

7. Organizational Goals
Every organization has its set goals and objectives. Marketing helps in attaining
goals like profit maximization, creating goodwill, brand loyalty, growth and
expansion, providing stability, increasing market share etc.
For instance, to promote loyalty stores like shoppers stop, lifestyle etc have started
points system. Every time a consumer makes a purchase, certain points get
deposited in his account. These points can then be utilized for availing higher
discounts. This marketing campaign has helped in promoting brand loyalty.

8. Facing competition
The market is open for all organizations and this has increased competition.
Marketing comprises of market research. Research helps in understanding the
needs of the consumers. The consumers will be attracted to the brand that caters to
their specific needs. If the organization can establish itself as a brand for the
consumers, it will gain a competitive edge.
 E.g. Parle-G is a brand which gives quality biscuits and very low prices, starting at
Rs. 2 only. Thus it is affordable for everyone. This has ensured that brands like Tiger
biscuits have not affected the market share of Parle-G.

9. Includes services and ideas

Marketing is no longer restricted to promotion of goods alone. It is also used for
promotion of ideas and services. Growing market for services and ideas has led to
an increasing need for marketing.
E.g. Promotion of goods like Coca-Cola, Pepsi, electronics etc.
Promotion of services by banks (Axis, SBI), insurance company etc.
Promotion of ideas like Cleanliness (“Swachh Bharat Abhiyaan”), Polio drive etc.

Q2. What is the importance of Marketing?

Ans. American Marketing Association has defined marketing as “Marketing is the
activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients,
partners, and society at large.”
Following is the importance of marketing:
1. Consumer Value
The market today is consumer oriented. It revolves around satisfying the wants of
consumers. Marketing helps to indentify the wants of consumers. Marketing not
only helps in satisfying these wants but also helps in increasing satisfaction by
providing additional services. Customer value can be increased by providing
additional services specific to their requirements.

E.g. ICICI bank has started providing Debit and Credit cards with the option of
customizing the card with an image of the card owner’s choice.
Following is the link of that advertisement or scan the QR code:
https://www.youtube.com/watch?v=L96PX2KbPs8

2. Competition
There is cut-throat competition in the market on account of large number of
organizations. The substitute products are now easily available (E.g. Pepsi and
Thums-up). Effective marketing strategy helps in gaining an edge over the
competitors.
E.g. There are various online shopping websites like flipkart, snapdeal, ebay,
amazon etc. Effective marketing strategy will help these companies in pulling the
 prospective customers. Flipkart had organized “Big Billion Day Sale” on 31st January,
2015 which attracted millions of consumers.

3. Objective Oriented
Every organization has its set goals and objectives. Marketing is a systematic, goal
oriented process. It helps in attaining goals like profit maximization, creating
goodwill, brand loyalty, growth and expansion, providing stability, increasing
market share etc.

4. Company Reputation
Marketing is the link between consumers and organization. Efficient marketing
strategy can help build a good company reputation. It helps in improving consumer
loyalty.
E.g. Amul Butter has a very good brand image. Infact, in restaurant menu cards, we
find items like “Amul Pav Bhaji.” Similarly, many of us still ask for “Xerox” instead of
photocopy. Xerox is a company which manufactures photocopy machines.

5. Expansion and Growth

Effective marketing techniques attract more consumers. This helps the business to
expand. Various marketing strategies are used for expansion of business. It helps in
increasing profitability, market share etc and thus helps a company to grow.
E.g. Good-knight has launched various products like Good Knight mosquito coils,
Good Knight Silver mats, Good Knight Advanced Activ Plus, Good Knight Mosquito
Spray etc.

6. Cost Effective
In order to succeed it is important for the organization to create an impact on its
market. This is done by way of marketing. Although marketing is an expensive
function, it is actually an investment. Market research, advertising, promotion and
other functions of marketing helps in attracting consumers. Marketing by way of
hoardings, radio advertisements, using social media etc are inexpensive.

7. Reduced Risks
Marketing effectively reduces business risks. This is because the organization has
complete knowledge of the requirements of consumers, market structure,
competition, target consumers, income groups, demand and supply etc due to
market research. Hence, an organization is aware of the challenges it may face.
8. Employment Generation
Marketing helps in generating direct as well as indirect employment. Marketing
function provides job opportunities directly for the marketing team of an
organization. There is an indirect generation of employment in those organizations
that provide marketing services.

9. Higher Efficiency
Good marketing research helps the organization in gathering information related to
needs of consumers, competition, pricing strategy etc. This information helps the
organization in taking informed decisions, generating demand, increase sales and
thereby profits of the company. The profits earned can further be reinvested to
improve the marketing strategies, conduct research and development etc.

10. Gaining Popularity / Creating Brand Awareness

These days it is very important to gain popularity. Consumers get attracted towards
the popular products. E.g. Cadbury has such efficient marketing history that the
term “chocolate” is often replaced by “Cadbury” (Bhaiya ek Cadbury dena). When
Cadbury Silk was launched in the market, the advertisements covered the entire
country with hoardings, advertisements etc.

Q3. What are the functions of marketing?

Ans. American Marketing Association has defined marketing as “Marketing is the
activity, set of institutions, and processes for creating, communicating, delivering, and
exchanging offerings that have value for customers, clients, partners, and society at
large.”

Following are the functions of marketing:

SMART CODE: [MBA & CS Develop Perfect PPT]
1. Marketing research
Marketing research is a systematic process of gathering data for analysis and
solving the marketing problems. Marketing research helps in gathering information
related to size of market, competitors, consumer preference, their requirement etc.
Marketing research may include research about the products, consumers,
competitors, requirement etc. The data gathered may help in solving various
marketing problems, designing effective marketing strategies, identifying needs of
consumers, taking important decisions etc.
2. Branding, Packaging and Labeling
Branding – Branding means establishing a unique identity of the brand. This can
be achieved by developing a brand name, a symbol or even a tag line. Branding
helps in creating an image in the market. E.g. Coca-cola has started a series of ad
campaigns with a tag line “Open Happiness”.
Following is the link of that advertisement or scan the QR code:
https://www.youtube.com/watch?v=aQ3uhnByS1k

Packaging and labeling – Packaging and labeling is also called as “silent

salesmen”. Packaging is important for protection of the product and the purpose of
labeling is to provide instructions to consumers. However, attractive packaging and
innovative labeling techniques attract consumers.
E.g. Kinderjoy has established itself as a brand for children. It’s packaging and
labeling is attractive for kids specially because of the unique egg shaped package
and the free toys inside.

3. Advertisement Strategy
Advertising is the marketing revolution. It is that aspect of marketing which has the
potential of maximum market coverage and creating brand awareness. Advertising
is a non-personal form of marketing. Apart from creating awareness, advertising
helps in enhancing brand image and customer loyalty, influencing the market,
developing an edge over the competitors, creating awareness etc.

E.g. Fevikwik launched its advertisement with a tag-line of “Todo nahin, jodo”
during India-Pakistan world cup match. The advertisement presented a humorous
way of presenting the message of human bonding.
Following is the link of that advertisement or scan the QR code:
https://www.youtube.com/watch?v=A4WZF74dAg4

4. Customer Care Services

Customer care or after sale services are the services offered by organizations after
the sale of product. The aim is to resolve customer grievances. It helps to establish
customer loyalty, build a good brand image and develop healthy relationship with
customers. The customers find it easier to rely on brands that provide services even
after sale.
 E.g. Nokia Care centers are set up at various places that provide repair services for
Nokia mobile phones. All the electronic companies provide services even after they
have sold the goods.

5. Sales Promotion Schemes

Sales promotion is an important tool of marketing. It effectively attracts consumers
with various incentives and schemes. These incentives include Buy1get1 Free, Free
Sampling, Discounts etc.
E.g. GOSF or “Great Online Shopping Festival” organized by Google in partnership
with websites like Jabong.com and Myntra, attracted a lot of customers. It
encouraged customers to shop online.

6. Developing the Design of the Product

Designing decisions comprise of decisions regarding the appearance aspect of the
product. The consumers tend to get attracted to appealing products. The package
design adds uniqueness to the product and also gives it an edge over its
competitors.
E.g. Apple has introduced its new phone Iphone 6 which is one of the slimmest
phones in the market. Alongwith features, the design of the cell phone is extremely
appealing.

7. Pricing Decisions
Price is one the most important factors that affect the success of any organization.
Price is the amount a consumer is willing to pay for the goods or services offered
by the organization. Similarly, it is also an amount which an organization expects
for the goods or services offered to consumer. The price should be set such that all
the costs of production, distribution, marketing etc are covered. An organization
should also be able to earn sufficient profits. However, prices should be set keeping
in mind the income levels in the market, the quality of the product and also the
competitive prices of other products.

8. Personal Selling
Personal selling is a tool of marketing that is used by organizations who want to
maintain a personal touch with its consumers. This technique is used usually for
new products or for technical / electronic products. Also for services like insurance,
it is important to explain the terms and conditions to the consumers and so
personal selling is important.
9. Physical Distribution
Physical distribution is the process of actual distribution of goods. It comprises of
warehousing, inventory management, decisions regarding selection of the
appropriate distribution channel etc.

10. Test Marketing

Test marketing, as the name suggests, is the process wherein the organizations
launch the product but in small segments only. After studying the market response,
decision is made whether the product should be launched on a large scale or
whether it requires to be further developed.
E.g. Pepsico recently launched an ad campaign for Slice called “Slice Aamsutra”
wherein 4 new flavors were launched but on a small scale. The consumers were
asked to vote for their choice of flavor.

Q4. Explain the Evolution of the Marketing Concept.

1. The Exchange Concept (Seller’s market)
When a product is sold or service is offered for a certain value, exchange takes
place. Exchange can be in the form of barter or for money. This concept revolves
around the exchange process only. It is a narrow concept of marketing. The motive
is profit maximization only. The sellers do not consider the requirements of the
consumers. They believe that as long as there are commodities in the market, the
consumer will buy them. This is a traditional concept. It is in practice only in certain
third world countries.

2. The Production Concept (Seller’s market)

The production concept revolves around the production process. It is based on the
concept that buyers will buy the product if it is available at a cheaper price. This
concept works on the idea that if the production is efficiently increased then per
unit cost of production will reduce. The motive is profit maximization only.
This concept is applicable only in a sellers’ market as it ignores quality of product,
consumer needs, customer relations, market research, competition etc. It can be
applicable for products whose features are not an important deciding factor for
purchase.
3. The Product Concept (Seller’s market)
The product concept was more advanced as compared to the initial concepts of
marketing. This concept is product centric. The idea is to improve the product
quality to increase the demand. Although the quality is improved, it does not
consider the requirements of the consumers. The motive is profit maximisation.

4. The Selling Concept (Buyer’s market)

The selling concept initiated the emphasis on the selling aspect of marketing. The
main idea of this concept is to use more aggressive promotional techniques. This
will help in pushing the product in the market and attract consumers. Publicity,
sales promotion and other selling techniques are put to use.
However this concept revolves around the seller and not the consumer. The motive
here is profit maximization only.

5. The Marketing Concept (Buyer’s market)

In this concept, the attention finally shifted to consumers. This concept is consumer
centric. The purpose is to identify wants of consumers and satisfying them as
efficiently as possible.
The organizations realized that it is important to earn consumer loyalty in order to
survive in the market. Although profit maximization is a motive, other aspects are
also taken into consideration. These include customer satisfaction, market research,
consumer relationship, target market etc. According to this concept, consumer
welfare and satisfaction is the key to success.

6. The Societal Concept (Buyer’s market)

This concept was developed when the organizations realized the importance of
social welfare. The focus is on three factors. Along with profit motive and consumer
welfare it is equally important to consider the aspect of societal welfare.
This concept encouraged the use of eco-friendly methods of production. Also, it
gave birth to various research and development projects in order to make goods
which are eco-friendly along with being consumer friendly.

7. The Relationship Marketing Concept (Buyer’s market)

The relationship marketing concept basically concentrates on building healthy and
long lasting relationships with all the stakeholders. The stakeholders include
employees, dealers, suppliers, distributors, financers, shareholders, society and also
consumers.
 The stakeholders of an organization are the main strength of the organization.
Without support of the stakeholders, the organization will collapse. For the success
and prosperity of an organization it is necessary to build strong relations with all
the stakeholders.

8. The Holistic Concept (Buyer’s market)

The Holistic
Concept

Integrated Relationship Internal Performance

Marketing Marketing Marketing Marketing

The Holistic Concept is a wider concept of marketing. Holistic means all-

encompassing. It comprises of four main factors:
1. Integrated Marketing – Integrated marketing means inter-linked marketing.
Marketing function is inter-linked with other functions like planning, financing,
production etc. For instance, in order to launch a new product in the market, it
is essential to conduct market research, identify the competitors and
understand the consumers.
E.g. Depending on the results of the research, the quantity to be produced
needs to be decided. This will affect production function. In order to produce
particular quantity, raw material will have to be purchased. This will result in
additional cash outflow and hence will affect finance function.

2. Relationship Marketing – Stakeholders include consumers, dealers, suppliers,

employees etc. They are the essence of an organization. Without support of the
stakeholders, the organization will collapse. For the success and prosperity of an
organization it is necessary to build strong relations with all the stakeholders.
E.g. If the employees are unhappy, they may not be able to work with same
efficiency and productivity. If the suppliers are unhappy, they may not extend
credit period or supply good quality product.

3. Internal Marketing – Employees are the most important pillars of any

organization. If the employees are satisfied, they will give excellent results. It is
important to have a well-trained and self-motivated workforce to increase
 efficiency. Optimum utilization of human resource is possible only if the
employees understand the objectives of their organization.

4. Performance Marketing – Performance Marketing comprises of improving the

performance. Performance can be achieved by reducing costs, increasing sales,
improving brand loyalty, quality of product, enhancing customer satisfaction
etc.

SMART RECAP
TYPE OF
CONCEPT MEANING FOCUS
MARKET
Exchange As long as there are Profit maximization by Seller’s
concept commodities in the market, making products available market
the consumer will buy them in the market for exchange.
Production Improved production will Profit maximization by Seller’s
concept reduce the production cost. increasing production. market
Thus the prices of goods will
reduce.
Product The quality of product is Profit maximization by Seller’s
concept improved. This should attract improving the quality of the market
more consumers. products.
Selling Aggressive promotional Profit maximization by Seller’s
concept techniques are used to push using promotional and market
the product in the market. other selling techniques.
Marketing Consumer oriented concept Consumer satisfaction by Buyer’s
concept aimed at satisfying the focusing on the needs and market
wants/needs of consumers. wants of consumers.
Societal Welfare of society is taken into Societal welfare by using Buyer’s
concept consideration while making environment friendly market
business decisions techniques.
Relationship Building healthy relationships Healthy stakeholder Buyer’s
marketing with the stakeholders of relationship. market
concept business.
Holistic It comprises of integrated All round development of Buyer’s
concept marketing, relationship the organization. market
marketing, internal marketing
and performance marketing.