F.Y.bms Principle of Marketing

Prof. Mahesh Gala’s Siddhi Classes F.Y.
BMS Principles of Marketing 1
1.Introduction to marketing
Q.1) Define Marketing and explain its features
Ans: Definition: According to Philip Kotler, “Marketing is human activity directed towards at
satisfying needs and wants through exchange process.”
Features/ Nature of Marketing:
1) Regular and continuous economic activity: marketing is a continuous process/ activity in which
goods and services are manufactured and distributed to consumers. Assembling, grading,
transportation, warehousing, etc. are economic activities which are supplementary to marketing but are
useful for smooth and orderly conduct of marketing rations/activities. Marketing includes selling but it
is much larger than selling, a far more vital function than selling. Marketing is a system. It is an
organized activity with several sub-systems within its fold.
2) Facilitates satisfaction of human wants: Marketing activities are basically for satisfying the needs
of consumers and also for raising social welfare. Marketing activities are those activities which are
devoted to finding out what the customers want and then satisfying those wants. Marketing is
particularly useful for satisfying physiological needs. Identification of consumer needs should be the
starting point of marketing activity. This is natural as marketing is for meeting such needs and wants.
Goods and services are useful for the satisfaction of wants. In this sense, marketing begins before a
product is launched. In addition, marketing is consumer-oriented. It starts and ends with consumers
and their satisfaction and pleasure.
3) Relates to goods and services: Marketing mainly relates to goods and services. Other entities like
events, experiences, properties, information, ideas, etc. are also covered by marketing. It is concerned
with the exchange of goods and services with the medium of money. The essence of marketing is a
transaction an exchange intended to satisfy human needs or wants. Trade transactions are between
sellers and buyers of goods. Thus, goods and service constitute the basic and the most lively element
in marketing.
4) Brings transfer of ownership: Marketing activity brings transfer of ownership of goods and
services and facilitates physical distribution. Production (goods and services) acts as a base of
marketing as marketing relates to the goods produced or manufactured. The essence of marketing is a
transaction on exchange.
5) Creates utility: Marketing activities creates utility ( time, place and possession) through which
human wants are satisfied.
6) Wider socioeconomic significance: marketing activity has wider socio-economic significance as
it facilitates large-scale production, creates massive employment and promotes social welfare. Even
industrial development and cultural exchange are through marketingactivities. Paul Mazur defines
marketing as “ the delivery of a standard of living to society.
7) Importance of 4ps: marketing is the sum total of 4ps. These are: product, price, promotion and
physical distribution. Large scale marketing is possible through the combination of 4ps called
Prof. Mahesh Gala’s Siddhi Classes F.Y.BMS Principles of Marketing 2
marketing mix variables. Market segmentation is followed by 4ps of marketing. They are useful for
sales promotion, consumer satisfaction and promotion of large scale marketing.
8) Core aspect of business: Marketing is core aspect of business. It is within the scope of the term
business and is also linked with other functional areas of business which includes production, finance,
personnel and so on. Marketing is a managerial function. It involves analysis, planning and control of
marketing activities in an organisation.
9) Evolutionary concept: The concept of marketing has undergone significant changes. It is not
merely an activity for profit maximization. It has wider social significance. It is for the satisfaction of
human wants and for raising social welfare. Marketing is an evolutionary concept.
10) Precedes and follows production: production and marketing are closely related. Goods are
produced for marketing. Here, marketing follows production. In addition marketing suggest what
consumer wants and production is conducted accordingly. Here, marketing, production is adjusted as
per the needs and expectations of consumers. Thereafter, commercial production is undertaken and the
product support as it is as per the need and requirement of consumers. Thus, it precedes and follows
production. This is one feature of modern marketing.
11) Wide in scope: The concept of marketing is wide/ comprehensive. It is not concerned merely with
selling of goods. It is connected with other functional areas of business such as production, finance
and personnel. Marketing will be effective only when it is closely linked with other functional areas of
the organisation. Coordination of marketing with other managerial functions is essential.
12) Miscellaneous Features of Marketing:
a) Exchange/Transfer of ownership is the essence of Marketing. Goods are exchanged for money
which acts as a medium of exchange.
b) Marketing is a Science and an Art. It is inter-disciplinary in character and closely related to other
disciplines such as economics, sociology, psychology, law and environment. It has its basic principles
and is an art of selling goods with profit to sellers and satisfaction and pleasure to buyers.
c) Marketing is objective-oriented economic activity. Its objective is to earn profit through fair means
and to satisfy the needs of consumers and to raise social welfare.
Q.2) What is marketing? Explain its importance.
Ans: 1) Satisfies consumer wants: Marketing plays an important role in the satisfaction of consumer
wants by maintaining regular supply of goods to consumers. It provides better life and welfare to
people by satisfying their wants and also by providing them useful goods and services which can make
their life happy and enjoyable. Marketing satisfies the needs/wants of people. It is a need satisfying
agency. In addition, marketing also creates new needs for its expansion. Attractive advertising, sales
promotion techniques and new product development are some measures useful for creating new needs
among consumers.
2) Provides profit and goodwill to marketing enterprises: Marketing is important to marketing

firms as they earn profit through marketing activities. Marketing enables a firm to expand business
activities. It can achieve its socioeconomic objectives through successful conduct of marketing
activities. Even new product can be introduced for consumer satisfaction and sales promotion.
Marketing creates needs and demands. This function of marketing has wider social importance.
3) Facilitates specialisation and division of labour: Marketing function, if performed successfully,

leads to specialisation, division of labour and efficient performance of production function climaxing
in economic stability.
4) Widens market: Marketing widens markets through large scale movement of goods throughout the
country. Even advertising and sales promotion techniques are useful for widening markets. Such
markets provide convenience to consumers and profit to manufacturers and traders
5) Improves standard of living of the society: Continuous production and marketing improve the
skills of the workers. In addition, marketing process provides new varieties of quality goods to
customers. It facilitates production as per the needs of consumers and supplies such production to
consumers. This raises the standard of living of the people. It is the marketing which converted
“Yesterday’s luxuries into today’s necessaries”.
6) Brings economic growth: Marketing brings economic growth. It facilitates full utilisation of
available natural and human resources. Marketing creates new demand for goods and thereby
encourages production activities. This leads to the creation of massive employment opportunities.
Thus, marketing is the kingpin that sets revolving the whole economy.
7) Creates new norms of socio-economic behaviour: Marketing develops new ways of life in the
society. It makes the society progressive and dynamic. National economic policy is successfully
implemented through marketing.
8) Provides channels of communication to business firms: The Marketing firms receive continuous
feedback about demand for products and services through marketing. The three main elements of
marketing, namely, concentration, equalization and dispersion with their sub-processes such as
buying, assembling, transport, storage, standardisation, grading, insurance, etc., facilitate quick
communication between traders and consumers. It is beneficial to producers and consumers.
Consumers get goods as per their needs and manufacturers get more profit and consumer support.
9) Facilitates price control: Marketing facilitates price control by the manufacturers. It brings proper
balance between demand and supply and this brings price stability.
10) Creates utility: Marketing is important as it creates form, time, place and possession utilities.
Such utility creation gives satisfaction and pleasure to consumers. In addition, it is useful for large-
scale marketing.
11) Facilitates introduction of new items: A firm marketing one or more lines of products can add a
new item easily. This is because successful marketing increases the prestige and reputation of the
organisation. Business planning and decision-making are also based on marketing considerations.
Marketing facilitates innovation of existing products and introduction of new products.
12) Develops social significance: International marketing enriches the culture of a nation. Marketing is
not the end in itself. Its goal is economic development. International marketing facilitates international
movement of capital, machinery and technical know-how. Even domestic marketing gives various
benefits to consumers, businessman and the society at large. This indicates its social significance.
13) Facilitates stability to marketing firm: Marketing is one major revenue generating source of a
firm. It raises the turnover and profit of a business unit. A firm’s survival, growth and stability are
dependent on its ability to market the products efficiently. Marketing is thus one challenging function
of management. Marketing enables a firm to develop and enhance its corporate image. Effective
marketing creates demand for company’s products and develops competitive capacity.
14) Brings success in business: Marketing a major activity of a business enterprise. If it is not
efficient, there will be losses and the firm will come in danger. Thissuggests that marketing is a risky
activity with equal chances of getting profit and incurring losses. It is the successful marketing which
supports other activities of a business unit.
Q.3) Explain the scope of marketing.
Ans: The scope of marketing also indicates its functions.
Broad areas within the scope of marketing are as briefly explained below:
1) Marketing Research (MR): It is one important area within the scope of marketing. MR is in-depth
study of different aspects of marketing. It also covers the study of marketing problems faced by the
organisation Detailed/reliable information on different aspects of marketing is available through
research work. It is useful for planning and decision making in regard to marketing activities.
Consumer research, product research, sales research\ promotion research are some important branches
of MR
2) Product Planning and Development: Product is the base of entire marketing activity. It must be as
per the needs and expectations of consumers. Similarly, it must be attractive and agreeable to them. A
marketing company has to bring suitable modifications in its existing products from time to time. New
products need to be added in the existing product line. For this product planning and development
activities are necessary.
3) Pricing: Pricing is one element in the marketing mix. Marketing depends on the pricing policies of
a firm. Price fixing is a delicate and responsible function. Too high prices affect market demand
adversely. Similarly, profit margin goes down when prices fixed are too low. Market competition,
market demand, consumers psychology, availability of substitutes are some factors which need careful
consideration while fixing market price. Price fixed should be fair and within the lines of competitors.
Pricing is an important area within the scope of marketing management
4) Advertising and Publicity: A marketing company has to give publicity to its products through
suitable advertising and public relations. It is also necessary due to market competition and aggressive
marketing policies of competitors. Advertising is a specialized activity and needs the services of
experts. Advertising supports personal selling, and sales promotion programmes. It educates the
buyers/ consumers, develops competitive capacity and builds favourable corporate image.
5) Sales Promotion: Along with advertising, sales promotion techniques need to be used effectively
for promoting sales in the existing and new markets. Such measures can be introduced at the dealer
level and also at the consumer level. Usual sales promotion measures include discounts, buy-bad
offers, branded products, free gifts and so on. Attention to Sales promotion is necessary due to market
competition. It is one important area within the scope of marketing. Personal selling methods are
within the scope of sales promotion.
6) Packaging: Products need attractive and durable package. It must be attractive and also agreeable
to consumers. It also acts as a sales promotion measure. Periodical changes in the package design,
colour combination, size, etc. are necessary in order to maintain interest of consumers in the product.
Packaging is within the scope of marketing.
7) Branding and Labeling: Branding means giving suitable name or symbol to the product. Label is
attached to a product and gives useful information to purchasers. Packaging, branding and labeling are
useful for sales promotion. Consumers know many products by brand name. It makes product popular
and promotes sales. It also creates brand loyalty.
8) After Sales Services: Such services are in the form of repairs, maintenance and replacement of
defective components. Such services are required in the case of consumer durables and costly
machinery. Consumers prefer such services and the sellers (manufacturer or dealer) have to offer them
due to market competition. After-sale services should be provided promptly and should be satisfactory
to buyers of products. After sales services constitute o e functional area within the scope of marketing
management.
9) Test Marketing: Test marketing refers to introducing a new product or service in a small segment
of the market on trial basis. It is an attempt to find out whether or not the consumers accept that new
product or service. If it is found that the consumers have accepted the product or service, hereafter it is
marketed on a larger Scale. This called test marketing which plays the role of safety measure.
Q.4) Explain 4ps of marketing in full.
Ans: Marketing mix is an attempt to satisfy the needs of its customers. Marketing mix indicates the
total market programme of the business. It involves decisions relating to product, price, place and
promotion. Marketing mix bridges the gap between the business and its customers. Marketing mix is a
dynamic concept. It does on changing with changes in the marketing conditions.
Details of 4ps marketing:
1) Product: Product is any article which a manufacturer desires o sell m the open market. A product
has capacity to satisfy .human want. This creates demand and facilitates marketing. The product mix
includes the following variables:
(a) Product line and range,
(b) Style, shape, design, colour, quality and other physical features of a product,
(c) Packaging and labeling of a product,
(d) Branding and trade mark given to the product,
(e) Product innovation,
(f) Guarantees and Warranties of the product,

(g) Special attractive features of the product, and
(h) Product servicing.
Managing product component involves product planning and development. Product is the most
powerful competing instrument in the hands of the marketing manager.
Neglecting product component in the marketing mix is as good as neglecting heart in the human body.
2) Price: Price is one more critical component of marketing mix. It is the valuation of the product
mentioned on the product. It is the amount at which the seller is willing to sell and the buyer is willing
to buy. Price mix includes the following variables:
a) Pricing policies,
b) Discounts and other concessions offered for capturing market,
c) Terms of credit sale,
d) Terms of delivery, and
e) Pricing strategy.
Pricing has an important bearing on the competitive position of a product. Moreover, consumer
support directly depends on the price fixed. The marketing manager may use pricing as a tool for
achieving the targeted market share or sales volume. Market price also needs periodical review and
adjustments.
3) Place or Distribution channel: Physical distribution is the delivery of goods at the right time and at
the right place to:
a) Types of intermediaries available or distribution,
b) Marketing channels available for distribution, and
c) Transportation, warehousing and inventory control for making the product available to consumers
easily and economically.
For large scale distribution, the services of wholesalers and retailers are required. A marketing
manager has to select a channel which is convenient, economical and suitable for the distribution of
specific product. For instance, large number of outlets are required for the distribution of products of
mass consumption such as soaps and cold drinks. On the other hand, for marketing of a specialty
product like refrigerator, active distribution through authorized dealers is quite convenient.
4) Promotion: Promotional activities are for encouraging retailers and dealers to keep the stock of
company’s product and also for encouraging consumers to purchase company’s products due to
various plus points. Promotion mix includes the following variables:
a) Advertising and publicity of the product,
b) Personal selling (salesmanship),
c) Sales promotion measures introduced at different levels,

d) Public relation techniques used for cordial relations with dealers and consumers,
e) Display of goods for publicity and sales promotion, and
f) Promotional offers like discount coupons, gifts, buy one, get one free etc.
Promotional activities are necessary for large-scale marketing and also for facing market competition
effectively. Such activities (advertising, public relations, salesmanship etc.) are varied in nature an are
useful for establishing good rapport with the consumers.
Q.5) Discuss the 4cs of marketing.
Ans: Marketing mix classification proposed by Robert Lauter bornfocuses on viewpoints of customers
and includes: (1) Customer Benefit (2) Customer Convenience (3) Customer Cost and (4) Customer
Communication as variables of marketing mix (4Cs of Marketing). The seller’s four Ps are to be
adjusted with the customer's four Cs. Here, product is replaced by customer, pricing by cost, place by
convenience and promotion by communication. The four Cs model is essentially consumer oriented and
fits better in the present competitive marketing.
1) Customer Benefit: customers are not interested in the products but in the benefits th they provide.
Often customers are classified as per the benefits they seek. Products remaining the same, they provide
different benefits to different groups of buyers e.g., Shampoos offer benefits like conditioning effects,
cleaning of hair, suitability to hair types and medicinal properties. Common brands sold in the market
include Sunsilk, Head & Shoulders, Pantene, Clinic and Chic which provide different benefits to
different users. when a customer buys Dettol soap he is looking for to a protection” whereas another
customer buying Cinthol is trying to fight body odour.
Certain products offer umbrella benefits to all e.g., bottled water like Bisleri, Acquafina etc. A product
offers tangible and intangible benefits e.g., when a customer buys an air-conditioner he gets the AC
which is physical benefit and the coolness that he gets is the intangible benefit. The customers do not
buy a product because of its physical appearance but because of functional, social and psychological
benefits provided by the product. In the words of I. W. Stanton A product is a complex of tangible and
intangible attributes.” A seller/marketer has to study needs and wants of consumers and produce goods
accordingly. This will make products useful to consumers
2) Customer Convenience: Customer convenience involves minimum of effort because a Customer

has knowledge of product attributes prior to shopping ,when he/she is pressed for time. Customer
convenience results when products/services are available in the vicinity and Customers do not have to
travel long distance. In order to minimize purchase time and offer customer convenience, marketers
use advertising, in-store displays, longer store hours, self-service and well-designed store layouts. In
India, home delivery is very popular among buyers and sellers also record higher sales by providing
this service. Standardised and branded goods are readily sold through home delivery service.
Where customer convenience is offered, information search is 10" and frequency of purchase is high.
Customer convenience becomes top priority where one is trying to come out of emergency e.g.,
purchase of umbrella during rainy season or Crocin to get relief from headache. High priced products
like computers, air conditioners, refrigerators and modular kitchen when available against installment
payment facilities provide customer convenience. now, pay later” also gives buying convenience to
customers.
3) Customer Cost: Cost is the basic consideration in product/service marketing. ood quality product
should be economical or low in cost. When the customer finds the cost beyond his reach, he starts
looking for Substitutes. Companies follow cost strategy when they can Produce and distribute goods
and services at the lowest possible cost Compared to competitors to win a larger market share
The challenge before the marketer is to keep the customer cost under check Customer cost (pricing
decisions) and price competition am major problems faced by the marketing people. It is a crucial
decision for any company. Customer cost is a highly risky decision area. Any mistake pricing will
adversely affect the company, its profits and future growth. Pricing decisions are integrated with the
firm’s overall marketing programme. Pricing decision is not a one-time activity. It is recurring in
nature. The decision must be reviewed when a new product is introduced, an existing product is
revised, the competitive environment changes, a competitor initiates price change, costs rise or fall,
interference from government or other events place. Hence, customer cost is dynamic and subject to
changes.
4) Customer Communication: Sales promotion through communication is a new trend in modern

marketing. Customers must be informed about new products, their price and features before they can
develop favourable attitude towards them. Where the product is known in the market, the focus is on
persuasion and converting knowledge to liking. Where the product is popular, the focus is on
reminding and reinforcing existing consumer belief. Often companies are required to identify and
appeal to opinion leaders who influence other’s decisions such 55 doctors, teachers, office-bearers and
VIPs.Promotion involves communication of information about the manufacturer and his product. This
includes product name, features, uses, benefits etc. of the product. Communication has informative
and motivational. value. It is used to create, capture and maintain demand. It tries to motivate the
prospective buyers to visit retail shops, witness demonstrations and purchase the products offered.
Cordial public relations, fast settlement of complaints and acceptance of customer's suggestions add to
the goodwill of the firm without involving extra expense. Tools of customer communication include
personal selling, advertising, publicity, sales promotion, public relations and internet, trade fairs and
exhibitions and any other form of communication between the organisation and customers.
Points Selling marketing

1) Meaning Selling directs the flow of goods and Marketing directs want satisfying
services from producer to the goods and services to present and
consumers. Here, the stress is on the potential customers through exchange
product. process. Here the emphasis is on the
wants of consumers.
2) Objective Selling concentrates on hoe to sell the Marketing concentrates on the
goods and earn from the sale satisfaction of consumers.
3) Importance Selling is production-oriented. Here, Marketing is consumer- oriented.
company first makes a product and then Here company first determine the
figures out how to sell it. consumer’s wants and then figures
out how to make and deliver a
product to satisfy wants.
4) Basis Selling is based on the need to convert Marketing is based on demand
goods into cash. forecasting, product planning &
research and development.
5) Place of Selling views consumer as the last link Marketing views the consumer as
Consumer: in the business. the purpose of the business.
6) Fixing Price: The cost of production and distribution The cost of marketing demand.,
determine the price. consumer preference and

competition determine the price.
7) Nature of Selling pre-suppose that goods can be Marketing pre-suppose that
Goods: sold easily. consumer is the king and goods
should be made as per his needs and
preference.
8) Role of profit: Selling aims at profit maximization Marketing aims at profit
through raising the volume of sales. maximization by giving service to
Therefore, profit is primary in selling. the consumers. Therefore, profit is
secondary in marketing
9) Marketing Selling gives less importance to Marketing gives more importance to
research marketing research. marketing research.
10) Stress Need of sellers are stressed. Wants to buyers/consumers are
stressed.
Q.7) Explain what do you mean by: 1) Needs, wants and demand 2) value and satisfaction.
Ans: 1) Needs: Every human has different needs. They include physical, individual and social needs.
Human needs the fundamental concept present in all marketing activities. Need arises because of
absence of a product or service wherein an individual feels deprived. Some needs determine human
survival such as food, shelter, clothing, safety and security. In addition to these, an individual has
social need of affection and belongingness opportunity for self-expression and pursuit for knowledge
are other human needs. Precise all these are human needs necessary to lead a civilized life and they are
not created by marketing personnel.
Human needs are increasing and changing as per socioeconomic factors. Our needs were limited in the
olden days but are now diversified. Man is a social animal and he has strong needs for recreation,
education and entertainment. Marketing is useful for the satisfaction of economic needs. In fact, the
basic concept underlying marketing is that of human needs. They are states of felt deprivation.
There are five types of needs:
a) Stated needs: The customer wants an exclusive brand of wrist watch.
b) Real needs: The customer wants a Wrist Watch Which an ordinary customer will find unaffordable.
c) Unstated needs: The customer expects royal treatment from the dealer.
d) Delight needs: The customer wants the dealer to include his name in VIP list. '
e) Secret needs: The customer wants others to note his exclusive possession.
2) Wants: Human wants are unlimited. The specific satisfier that an individual looks for defines the
want. Needs become want when they are directed to specific objects that might satisfy the needs e.g.,
an American wants food to satisfy his hunger and opts for hamburger, French fries and a soft drink
whereas an Indian wants rice, chapattis, curry and curd for meeting his food needs. Wants are
determined by the socio-cultural factors. Lifestyle also determines our wants e.g., a prosperous
businessman wants more than one car for himself whereas a young entrepreneur prefers two-wheeler.
Human wants are unlimited and they change from time to time. Satisfaction of one want leads to
demand for the other wants. There is priority/preference in regard to wants. Wants become demands
when backed b buying power/purchasing power
3) Demands: Demands are wants for specific products. It must be supported by ability to pay
otherwise it remains a desire e.g., a college student may want Santro car but he does not have money
to buy one, hence it will remain a desire. Possession of purchasing power must be backed by
willingness to spend that leads to converting desire into demand. Based on their needs, wants and
ability to pay, consumers demand products and services that will help to maximize their value and
satisfaction. Consumer research primarily aims at identifying and analyzing consumer needs, wants
and other related buying behaving Marketing management identifies human and social n and tries to
satisfy them by creating, communicating and delivering products and services.
4) Transactions: Transactions develop when two parties reach an agreement. Transactions consist of
exchange of value between two or more parties. Transactions result in exchange of ownership e.g., a
customer pays Rs. ten lakh to a car dealer and buys Mercedes. Likewise, a physician treats a patient
and recovers consultation fee of Rs. 500. In olden days, when barter system was prevalent,
transactions took place without the involvement of money. at present, money acts as a medium for
trade transactions.
In money transactions, money acts as a medium of exchanges’. Trade transaction is always between
two arties in which goods are exchanged for goods or for money.
5) Transfers: Transfer means to move or and over from one place or person to another. Transfer is the
physical means whereby goods are moved from the point of production to the place where they are
required for consumption. In this sense, marketing creates time, place and possession utilities.
Products manufactured from the raw materials must be rapidly a efficiently transferred to the places of
distribution.
Transport is an integral part of marketing to facilitate transfer increases the mobility of labour and
capital. Large scale production and distribution are possible mainly due to efficient and economical
transport facilities. Even infra-structure facilities promote quick, easy and economical transfers.
6) Exchanges: Exchange is the act of getting a thing or object which one ne needs from another by
offering something in return. In order to complete an exchange two or more persons are involved.
Each person must possess something that is considered valuable by the other person. Both persons
must be men of ordinary prudence who are competent to discuss the exchange process. They may
agree at once or disagree and come to agreement after sometime. Thus exchange process consists of
offering something and discussing mutually beneficial and acceptable terms.
Normally exchange process is based on monetary payments. During the days of barter system,
exchanges were based on goods for goods. When individuals agree to satisfy their needs and wants
exchanges take place Marketing is a potent force which regulates exchanges. Unless there is actual or
potential exchange, there is no marketing. Two socially acceptable approaches of acquiring things
include self-producing and exchanging
Q.8) What are the eight concepts of marketing in vogue? Explain them briefly.
Ans: According to F. E. Webster “marketing concept is a consumer-oriented market- driven, value-

based, integrated, goal- oriented philosophy for a firm, institution or person”.
The concept of marketing has evolved over a period of time. Initially, the sellers adopted the
exchange concept when goods and services were exchanged for goods or money.
Every marketing firm ha to decide the philosophy to guide its operations. This offers proper
orientation to marketing firms. There are six competing concept under which organization can choose
to conduct their business. Out of these, many are of limited use today.
The following marketing concepts developed during the course general evolution of marketing ideas:
The marketing concepts that 'are already in vogue are as noted below:
1) Exchange concept;
2) Production concept;
3) Product concept;
4) Selling concept;
5) Marketing concept;
6) Societal Marketing concept;
7) Relationship Marketing Concept
8) Holistic Marketing concept.
The details of important marketing concepts are as given below:
The Exchange Concept: exchange concept of marketing suggests that exchange of goods and services
are the essence of marketing. Exchange of goods and services between buyers and sellers against
money is certainly an important aspect of marketing. Such narrow interpretation amounts to a gross
underestimation of the concept of marketing. Marketing concept is much broader than mere exchange
of goods.
The other aspects of marketing such as consumer satisfaction, creation of utilities, etc., are not taken
into consideration in the exchange concept of marketing. Exchange concept of marketing is a
traditional one. Consumers are taken for granted in this concept as they are expected to buy whatever
is produced in order to meet their needs. However, this is an outdated concept.
2) The Production Concept: The exchange concept is the oldest marketing concept in which marketing
involves the exchange of a product between the seller and the buyer. Here, the emphasis is on profit
and not on consumer satisfaction.
The production concept of marketing gives too much importance to production of goods and services.
It treats large scale production as the base of marketing. It is assumed that customers will purchase and
support all types of products produced by manufacturers without any reservations. Here, production
orientation is given to marketing. High production efficiency, low costs and mass distribution are the
features of production concept. This orientation is applicable to developing countries. Production is
important in marketing, as without production, marketing is just not possible. However, marketing is
much wider than mere production of goods and services.
3) The Product Concept: Product concept proposes that consumers favour products offering the best
quality, performance or innovative features. In product concept of marketing, the stress is on the
product (its quality and performance). Product excellence is the supreme thing in this concept.
Companies accepting this view are obsessed with the product the quality and features of the product-
more than with the customer and his needs. This product concept is different from production concept.
This concept suggests that large-scale marketing is possible by improving the quality of the product.
The stress is on product excellence. This means to improve the quality of the product, raise its utility
and durability. Marketing shifted from low cost products to superior and high cost products rich are
more acceptable to consumers / customers.
4) The Selling Concept: selling concept holds that commas and businesses, if left a one, won't buy
enough of the organisation's. products. The selling concept believes that products will not be marketed
easily and quickly unless there is support and co-operation from consumers. The products must be
given push through sales promotion techniques which include massive advertising, personal selling,
offering discount, gifts, attractive packaging, etc. Here, sales orientation is given to marketing. This
concept emphasizes on advertising and salesmanship. ”Push the product somehow to the customer" is
the buzzword of firms accepting selling/ sales concept. However, such companies fail to enjoy the best
of customer patronage. It is practiced most aggressively with unsought goods.
Companies having excessive production capacity or facing keen market competition use sales concept
and try to promote sales through sales promotion technique The selling concept is only sales
promotion oriented.
5) The Marketing Concept: Marketing concept is to find not the right customers for your products, but
the right products for your customers. Here, the stress is on customers and their satisfaction through
supplying product as per their need and expectations This modern consumer-oriented marketing
concept came in existence in 1960s. Consumer is put at the beginning and also at the end of the whole
marketing process. This change is from profit to service and from production to consumer.
Marketing concept is based on three main beliefs:
a) All planning and operations should be customer-oriented.
b) Marketing activities like advertising, product planning and pricing should be combined under one
executive.
c) Customer-oriented marketing is essential to achieve organization’s objectives.
6) The societal Concept: after 1980s the marketing concept is being This concept supports a new
philosophy which replaces consumer orientation by social orientation to marketing. Marketing should
be linked with the society as a whole. This means the society should benefit in the form of social well
being or social welfare.
Thus marketing organizations, while framing marketing policies should give equal weight age to three
parties, viz. a) Consumers (their satisfaction), b) Company (profitability) and (c) Society (social
welfare). The essence of this Concept is ”social orientation to marketing.
7) Relationship marketing Concept: The beginning of 1990s witnessed the rise of a new concept of
marketing called relationship marketing concept. A business desires to show the customers that it has
the ability to serve the customer’s needs in a superior way in a mutually profitable relationship.
According to Peter F. Drucker the basic purpose of a business is ”to create customers and retain
them”.
Relationship marketing is the process of creating, maintaining and enhancing strong long-term trusting
relationship with customers. distributors, dealers and suppliers.
Holistic Marketing concept was introduced by Philip Kotler and is the latest addition to the existing
marketing concepts. Holistic approach is an integrated approach in which attention is given to
different element of marketing. Such approach gives competitive advantage to marketing firms.
Professional marketing organisation adopt the holistic approach for their benefit in term of excellent
performance, goodwill and cordial relations with stakeholders.
Holistic marketing concept is one which is based on the development design and
implementation of marketing programmes, processes and activities that recognise their breadth and
interdependencies. Holistic marketing acknowledges that everything matters in marketing and that a
broad integrated perspective is very often necessary holistic marketing recognizes and reconciles the
scope and complexities of different marketing activities. Holistic marketing concept refers o treating
the entire system rather than the symptom of disease. Holistic marketing concept has four main
components.
These are:
(a) relationship marketing (b) integrated marketing (c) internal marketing. (d) performance marketing.
a) Relationship Marketing: The seller continuously improves its understanding of the buyer’s needs and
the buyer becomes more loyal to the seller. Cordial relations are also develop with other stakeholders.
b) Integrated Marketing: The marketer uses various strategies which each of the promotion mix
components is carefully coordinated.
c) internal Marketing: The marketer includes selection, training and motivating employees to serve
customers better.
d) Performance Marketing: The marketer makes effort to understand financial and non-financial return
business from marketing programmes put into practice.
2. Marketing Environment, Research and Consumer

Behaviour
Q.1) What is marketing environment? Explain briefly its features.
Ans: According to Davis, Keith: Business environment is the great of all conditions, events and
influences that surround and affect it.
Features of marketing:
1) Marketing environment is the situation/surrounding within which marketing firms have to operate:
It may be favourable or unfavorable. It may create new opportunities or threats to marketing
enterprises. However, they have to accept the environment as it is and face it boldly through
appropriate marketing plans and policies.
2) Marketing firms have practically no control on the marketing environment as it is the result of
various . economic, social, political and other factors. Marketing firms have no capacity to fight with
the marketing environment, They have to study the changing marketing environment and adjust their
activities accordingly.
3) Marketing environment is the net result of various socioeconomic factors. Factors influencing
environment may be macro factors (e.g., demographic, economic, technological, political and cultural)
or micro factors (e.g., competitors, suppliers marketing intermediaries and customers of the firm).
Even internal factors such as corporate resources also determine the marketing environment for a firm.
4) Marketing environment is always flexible. It may remain , stable for a short period. Thereafter,
major or minor changes f may develop due to internal and external factors.
5) Marketing environment is external in character but has its influence on the operations and activities
of marketing/ business enterprises. They' have to study/analyze the environment (micro and macro)
and operate within its fold.
6) Marketing firms have to keep constant watch on the changing marketing environment: This is
necessary for suitable adjustments in their policies and activities as per the need of the situation.
7) Marketing firms should be ready to face all sorts of environmental changes (favourable or
unfavourable). Such readiness is the price for their survival, growth and stability in the business world.
Favourable environment creates growth opportunities for marketing firm while unfavourable
environment creates environmental threat, a challenge posed by an unfavorable trend which may lead
to lower sales or profit.
8) Marketing environment and marketing management are closely related concepts. Study of changing
environment is a must for efficient marketing management.
Q.2) What is micro environment? Explain the micro factors influencing marketing environment.
Ans: MEANING OF MICRO ENVIRONMENT:
Micro environment implies the factors which are internal to the fi . They are in the immediate
environment which affect the company’s ability to serve the chosen market. Micro factors affect the
firm and its marketing activities directly. The firm has adequate control on micro factors and it can
adjust these factors as per the need of the situation.
Here, the forces can be adjusted as per the ne of the situation. A company can be adjusted as per the
need of the situation. A company can use micro factors for its growth.
Details of Important Internal Factors influencing micro environment (Elements of Micro

Environment):
A) Management Structure: Basically, structure deals with relationships. Management structure is a

basic framework within which decisions are made for the smooth functioning of the business.
Management structure represents hierarchy of people. All executives and managers are accommodated
in a meaningful relationships who work under the guidelines and policies framed by the board of
directors.
Management structure outlines formal aspects of working by Integrating activities, delegating ,

authority and interconnecting roles and relationships whatever way management must respond to
internal environment of the business.
B) Marketing Channels: Every company has wide mm in selecting channels of distribution to market
its products and services. It is desirable to adopt channel level rather than concentrating on any one
channel. With the emergence of middle-class consumers, Indian mar has witnessed sea change.
Increasing the length of the distribution channel may distance consumers from the manufacturer. It is
desirable that a company insists on the channel members to provide information on buyers'
preferences and expectations. An important issue is regular flow of feedback that will guide the
company to score over its competitors.
C) Markets: Market in which firm operates is determined by the area covered such as local market,
regional market, national market and global market. It is also determined by nature of competition
which can be either competitive market or monopolistic market. Where the scale of business is small
companies restrict themselves to rich market or local market As the scale of operation ex ands, they
start entering into regional or national markets. Global markets are suited to only large corporations
possessing best of resources. Today’s market is represented by competitive complex. No company can
escape from competition. Therefore, companies have to gear up its internal resources to make the
business strong to survive competition
D) Competitors: the success of a business largely depends on the study of competitors regarding their
policy on product, price, promotion, distribution and advertising. When relevant information is
collected about the competitors, it helps to strengthen the business to face the competition.
Competition always forces companies to revise their product portfolios by understanding changing
needs, expectations and perceptions of different market segments. It also induces the companies to
make their product features rich and versatile. Competition is unavoidable. It is better to face it boldly.
For this, competitors have to be identified, monitored and outmaneuvered to gain and maintain
customer loyalty.
E) Stakeholders: Marketing represents a set of processes for creating, communicating and delivery
value to customers and for managing customer relationships in ways that benefit the organisation and
its stakeholders. In the current business scenario it is being realized that unless companies nurture
stakeholders like customers, employees, suppliers and distributors, they may never earn adequate
profits for the stockholders. Companies must also communicate. present and potential stakeholders.
Employees the business. They build or break a business. 1mm" environment of business is directly
influenced by employees. Marketing of goods must be consumer-oriented.
Q.3) Explain macro factors influencing marketing environment.
Ans: MEANING OF MACRO ENVIRONMENT:
Macro-environment refers to those factors that are external factors in the company’s activities. These
factors are uncontrollable which indirectly affect company’s ability to operate effectively. The
company is helpless and is incapable of exercising any control over them. Macro-environment consists
of certain specific components which have their own implications on marketing strategy of the
company.
As macro environment forces are uncontrollable and external, th are exposed to opportunities and
threats. The macro environment includes broader forces that not only affect the company but also
other factors in the macro environment. Macro environment includes demographic economic, political.
technological, cultural and natural forces.
Details of Important Factors influencing Macro Environment:
A) Political Factors: The political environment consists of factors related to the management of public
affairs and their impact on the marketing activities of an organisation. Political environment has a
close relationship with the economic system and the economic policy. Major political events like
change of party in power bring corresponding changes in the marketing environment. Marketing
managers have to study such changes and adjust their policies accordingly.
Political environment consists of laws, government agencies and pressure groups that influence
various organisations and individuals in a given society. A large number of laws have been enacted to
regulate business and marketing e.g., laws to protect consumers, to protect companies from each other,
to discourage unfair trade practices and to protect society against exploitation through profiteering.
Such laws affect business enterprises.
B) Economic Factors: Economic environment is the must significant component of overall marketing
environment. The economic policy of the government has a great impact on marketing. Marketing
activities may get encouragement due to favourable economic environment. Unfavourable economic
environment creates new problems before marketing organizations. Economic environment facilitates
the study of inflation rate, unemployment situation and so on. Economic factors like purchasing power
and willingness to spend determine marketing environment. High level of economic growth,
employment and income suggest promising marketing opportunities and favourable marketing
environment to marketing firms.
Liberal economic policies create favourable marketing environment. This creates demand for existing
and new / products. Finally, the industrial policy, EXIM policy and other economic policies of the
government create positive 0, negative effect on the marketing environment.
C) Social and Cultural Factors: Socio-cultural forces/factors refer to the attitudes, beliefs, values and
lifestyles of individuals in a society. These forces can create threats and opportunities to marketing
firms. Culture influences even aspect of marketing. In India, social environment is continuously
changing due to various forces such as entry of women in employment, marge and growing demand
for products from women customers.
Consumers may prefer certain modifications in the existing products. Social environment changes
along with changes in the lifestyles of people. Mart demand is affected due to changes in the lifestyles
of the people. Similarly, due to consumerism, consumers become alert and conscious of their rights.
They fight collectively when they are exploited through unfair trade practices. Marketers show keen
interest in anticipating cultural shifts in order to identify new marketing opportunities or threats.
D) Technological Factors: Technological environment affects marketing activities. technological

discoveries and developments create opportunities and threats in the market. Marketers should watch
new trends in technology and adjust their production and marketing activities accordingly.
Technological changes are taking place in all aspects of life. In the production field, new products are
introduced due to which the demand for old products go down (e.g. TV in place of radio).
Modifications are made in the existing products for raising their quality and utility. Consumers prefer
such products. Such factors create marketing environment and the marketing policies are required to
be adjusted accordingly.
Technological development have shortened product life cycle an consumer expectations have also
changed. Th re content to get good quality products with limited life span.
Q.4) Write a detailed note on “ PEST” analysis.
Ans: A NOTE ON PEST ANALYSIS:
The components of macro environment are four. They include‘ political, economic, social and
technological. This constitutes PEST analysis. It stands for Political Economic, Social and
Technological factors relating to a business firm. Macro environment is the outcome of these factors.
Detailed analysis of these factors is essential for understanding the nature and features of prevailing
overall macro environment. Such analysis will enable a marketing firm to know the possible
opportunities and threats in the field of marketing. Environmental analysis enables a firm to adjust its
marketing plans, policies and strategies as per the prevailing marketing environment.
It may be ,noted that micro environment and macro environment are two supplementary concepts of
marketing environment and are closely connected with marketing activities of a firm. Environment is
an inseparable part marketing activity. Successful marketing depends largely on the ability of a
company to manage its marketing programme within its prevailing environment. PEST analysis is
used for understanding the basic macro-environmental factors/forces within which a firm has to
operate. PEST analysis ascertains for the managers and the strategy builders as to where their market
currently stands and where it will lead off in the future. It helps managers to know the environmental
trends in the near future.
A marketing organisation has to use integrated approach while dealing with the overall environment. It
has to interact with all components of environment at one time. Naturally, an integrated approach
towards total marketing environment is desirable. The totality of all environmental factors need to be
given roper attention While adjusting the marketing activities of a firm.
Environmental scanning/monitoring is the process of:
(a) gathering information regarding a company’s external environment,
(b) Analysing it, and
(c) forecasting the impact of whatever trends the analysis suggests.
This ensures success and stability of a marketing organisation. In brief, PEST analysis is a critical
study of organisation political, economic, social and technological environment.
Q.5) Define marketing research and explain its features.
Ans: DEFINITION OF MARKETING RESEARCH:
The systematic gathering, recording, and analyzing of data about problems relating to the marketing of
goods and services. -American Marketing Association (AMA)
FEATURES / NATURE OF MARKETING RESEARCH:
1) Systematic and continuous process: MR is a continuous process. This is natural as new marketing
problems develop frequently in the course of marketing of goods and services, One type of research is
not adequate to resolve all marketing problems. Similarly, new research projects will have to be
undertaken to solve-current marketing problems.
2) Wide scope: MR is wide in scope as it deals with all aspects of marketing of goods and services.
Introduction of new products, identification of potential markets, selection of appropriate selling
techniques, study of market competition and consumer preferences are some areas covered by MR.
3) Emphasizes on accurate data collection and critical analysis: In MR, suitable data should be
collected objectively and accurately. The data collected must be reliable. It should be analysed in a
systematic manner. This provides comprehensive picture of the situation and possible solutions.
4) Offers benefits to the company and consumers: Marketing research is useful to the sponsoring
company. It raises the turnover and profit of the company. MR also raises the competitive capacity and
creates goodwill in the market. It enables a company to introduce consumer-oriented marketing
strategies. Consumers also get agreeable goods more satisfaction due to marketing research activities.
5) Commercial equivalent of military intelligence: MR is a type of commercial intelligence activity. It

facilitates planned activities in the field of marketing. It is similar to military intelligence where
systematic study of the situation is made before taking any military action.
6) Tool for managerial decisions: MR acts as a tool in the hands of management for identifying and
analyzing marketing problems and finding out solutions to them. MR is a very powerful tool in
enhancing the decision-making ability of the marketer in the dynamic environment of present global
era. It is an aid to marketing decision-making but never a substitute to it. It suggests possible solutions
for the consideration and selection by managers.
7) Applied type of research: MR is applied knowledge. It is also called ’decisional’ research as it

provides specific alternative solutions to deal with a specific marketing problem. It studies specific
marketing problem and suggests alternative solutions and possible outcome of each alternative. In
brief, MR is not basic/ fundamental research but applied research. Such applied research is practical,
result-oriented and useful to a marketing firm in solving its major marketing problems.
8) Reduces the gap between the producers and consumers: MR is an essential supplement of modern
competitive marketing. It is useful for understanding the needs and expectations of consumers. It
reduces the gap between producers and consumers and adjusts the marketing activities to suit the
needs of consumers. MR acts as a media to fill-up the gap between producers and consumers.
9) Dynamic nature/character: MR is dynamic in nature. Its scope is fast expanding along with new
developments in the field of production and marketing. This is natural as MR is essentially for dealing
with new problems and challenges in the field of marketing. MR has sprung from liberal roots. social
research. Its theoretical approach and methodologies have been borrowed from subjects such as
economics, statistics, computer science, sociology, psychology and cultural anthropology.
10) Growing importance: The importance of MR is fast growing in the present era of Globalization
and liberalization. This is because of participation of many countries in the global trade and the
introduction of new varieties of goods in the global markets. Survival of manufacturing companies in
global markets de end on their capacity to face global competition successfully.
Q. 6) Explain the meaning, benefits and importance of Consumer Research.
Ans: Need for Consumer Research
Consumer research is needed for achieving the following purposes:
For wide market coverage: the size of the market is now very vast with wide coverage. It is also
characterized by competitive element. Consumer research is necessary in order to manufacture and sell
goods to consumers spread in different markets. This means for wide market coverage consumer
research is necessary. It facilitates marketing activities as per the expectations of consumers.
Consumer research is needed to make marketing competitive and agreeable to consumers. It is
necessary for export promotion. Even for keeping hold on domestic markets,’ consumer research is
needed.
2) Producing goods as per consumer needs The manufacturer invests huge money and conducts large-
scale e production in the anticipation of consumer demand. In order to find out consumer needs or in
order to adjust production as per consumer needs and expectations, consumer research is necessary.
Production of consume; friendly goods is possible only through consumer research. Pro-consumer
marketing decisions are possible through consumer research.
3) For attracting more consumers: Modern marketing is highly competitive. Every manufacturer has to
attract more and more consumers, create confidence in their minds and encourage them to
purchase .his product. For this, information about the psychology of consumers is essential and for t
collection of such information consumer research is essential.
4) Securing consumer support in marketing: Consumer occupies unique position in modern marketing.
is active support and co-operation are essential for large-scale marketing. The manufacturer must
know, how to attract consumers and how to get their support. For understanding the same, consumer
research is needed.
5) For better understanding of consumers: Consumers reject certain products and give preference to
certain other products while purchasing/shopping. The manufacturer will like to know the reasons for.
the same. For this, consumer research is needed. He can adjust his production as her the needs and
requirements of consumers and also promote sales.
Benefits/Advantages of Consumer Research:
1) Consumer research provides assistance in marketing decision making relating to sales objectives,
policies, strategies, pricing, etc.
2) Facilitates correct understanding relating to needs, habits, likes and dislikes, attitudes, etc. of
consumers for suitable adjustments in the production and marketing activities of the firm.
3) Facilitates production (product line, design, modifications in products, etc.) as per the needs and
preferences of consumers. This facilitates quick sales and consumer support.
4) Facilitates appropriate marketing decisions relating to pricing, sales promotion techniques, market
segmentation, marketing mix, product positioning, etc;
5) Provides valuable information on consumer response] reaction to company's products, impact of

trademarks and brands on consumers packing requirements of consumers and so on.
Q.7) State and Explain the types of marketing research.
Ans: The above Figure suggest the scope and coverage of marketing research activity. Product
research, packaging research, brand research, distribution research, pricing research, consumer
research, sales research, promotion research, advertising research, etc. are the different types / areas of
marketing research. Every type of marketing research has its features, merits and uses. A marketing
firm can select any branch for the conduct of research project as per need. Large companies take
special interest in product research, consumer research and sales promotion research. The branches of
marketing research are supplementary and are useful for promoting sales, for giving satisfaction to
consumers and also for attracting new markets and new consumers. Small companies conduct research
activities as per their special needs.
Q.8) Explain any three of the following areas of marketing research in brief.
A) Product Research:
Ans: Meaning of Product Research (What is Product Research):
Product is the base of entire marketing process. Consumers are in crested in the products as they
provide services and satisfaction. Manufacturers bring new/novel products which are consumer
friendly. Product is the most important element in the marketing mix. Product research facilitates the
process of king products more attractive, useful and agreeable to consumers.
product is a set of tangible and intangible attributes that facilitates consumer satisfaction. A product
has its total product personality which includes physical aspects, features, uses, brand name, package
used and so on.
Features of product research:
1) Product research is a type of applied research and i9 undertaken by companies manufacturing and
marketing products particularly the consumer products.
2) Product research is a regular and continuous activity, useful for raising the popularity of company’s
product through product modification and in terms of quality, cost, package, uses, size, design, shape,
price and so on.
3) Product research is a lengthy and costly activity. For such research, primary and secondary data are
used.
4) Product research bridges the gap between the existing attributes of the product and the expectations
of consumers about the product. This facilitates suitable adjustments in the products and make them
consumer friendly.
5) Product research is useful for identifying new product opportunities which can be exploited by
starting new product development process at the organizational level.
B) Sales Research
Ans: Meaning of Sales Research:
Sales research is an important component of marketing research. Sales research involves detailed
study of sales activities of a firm in order to find out the deficiencies therein. It deals with various
aspects like volume of sales, sales potentials, sales forecasting, evaluation of sales territory, expenses
incurred on sales and so on.
Areas covered by sales research can be conveniently divided into the following three categories:
Areas of Sales Research
Market Research Sales Analysis Sales Forecasting
1) Market Research: Market research deals with What, Where, When and How much to sell in the
available market. It is a part of marketing research and deals with specific aspects such as discovery of
new markets, study of market competition, market segmentation and other features of available market
for the products of the company.
2) Sales Analysis: sales analysis is conducted by many companies on a mu mm“: basis It relates to the
study of sales performance of company important purpose is to find out the areas of strength and
weaknesses of company’s selling operations and to provide direction to the marketing manager for a
more effective allocation of company’s selling resources.
3) Sales Forecasting: Sales forecasting occupies an important position in modem consumer oriented
marketing. The basic purpose of sales forecasting is to estimate the possible market demand and to
Minsk the manufacturing and marketing activities accordingly. Sales forecast is an estimate of sales
for a specified future period under proposed marketing plan.
C) Consumer Research:
Ans: Meaning of Consumer Research:
Consumer research is one branch of total marketing research. It investigates the consumer, his attitude,
psychology and finds out all necessary details about him. This includes his needs, his consumption
habits, buying behaviour, motives and expectations, likes and dislikes. In addition, social, economic,
cultural and psychological influences affecting purchase decisions of consumers are studied in
consumer research.
Features/ nature of consumer research:
1) Consumer research is the most important area of total marketing research as consumer is the base of
all production and marketing activities. Large scale marketing is just not possible without
understanding needs, expectations, psychology, etc. of consumers.
2) Consumer research relates to consumer behaviour at the market place. This means it studies
attitudes, psychology and behaviour of consumers with necessary details. It is -for studying the
consumer behaviour in relation to his marketing activities.
3) Consumer research provides primary data about consumer needs, expectations, buying decisions
and so on. This data is useful to manufacturers to take decisions on product, price, place and
promotion. (4P’s of Marketing Mix)
4) Consumer research relates to the study of why and how of consumer behaviour in the market.
5) Consumer research facilitates fair decision-making in relation to four Ps of marketing mix.
Q.9) Explain the need and importance of product research.
Ans: NEED OF PRODUCT RESEARCH:
Product research acts ‘as an insurance against risk of obsolescence of existing products of the
company. In addition, product research is needed in order to 'develop new products
The following points suggest justify the need of product research:
1) To assist in the setting up of objectives towards which the research and development department
will have to work in order to develop and bring out a new attractive product in the market. '
2) To pinpoint the needs and wants of consumers which the proposed product is expected to satisfy.
3) To estimate the sales potential of the new product.
4) To verify the benefits of the new product to the consumers.
5) To find out the possible impact of the new competitive products on the sales potential of the
existing product of the company.
6) To test prototypes of the product.
7) To predict the possible success or failure of the product once it is introduced in the market.
8) To reduce the chances of product failure after its modification or after its entry in the new market
and also to increase the possibilities of product success.
9) To introduce products which are consumer friendly as consumers preferences are dynamic. Product
research is needed on continuous basis for adjusting company’s products as per the needs and
requirements of consumers.
Benefits and Importance of Product Research: .
Product research is important as it offers the following advantages/benefits:
1) Product research helps to explain the features of the product.
2) It helps to simplify the product line. '
3) It enables a manufacturer to develop new. products with good market demand in the existing
product line.
4) Product research brings best sales returns.
5) It widens market for the product and also creates goodwill for the product and its manufacturer.
6) It facilitates appropriate price fixation of the product.
7) Product research brings to the limelight the different uses of the product for effective publicity for
sales promotion.
8) It facilitates modification and renovation of existing products so as to make them highly

competitive and agreeable to consumers.
9) It enables a manufacturer to introduce attractive package and brand name to the product for sales
promotion.
10) Product research reduces the chances of possible product failure after its introduction and also
increases the possibilities of product success.
11) Product research is important and useful for modifications in the existing product line. It also plays
a useful role in product modifications and product innovations. A company can make its products
most modern, updated and as per the demand and expectations of consumers through systematic
product research. This suggests the importance of product research.
12) Product research makes advertising, pricing and sales promotion decisions more rational and
promising.
13) Product research enables an advertiser to explain the features of a product in a satisfactory manner.
14) Product research is a great boon to the salesmen, packaging department and advertising copy men
as it gives them accurate and authentic knowledge of the product which they handle.
Q.10) State the need for production research.
Ans: In the process of developing a new product, conducting production research is essential. It
focuses on the production of a product i.e. how it is made. When companies conduct production
research it helps them to find out about commercial viability and possibility of earning profits.
Production research is the collection and analysis of information for the content and production of a
product.
Production is the creation of goods and services. Production helps to satisfy human wants.
Production research is undertaken by manufacturing as well as service organisations such as banks and
transport companies. Production is the foundation on which every organisation is built. In the
production process, raw materials are converted into semi-finished goods and finally into finished
goods which can be used for the satisfaction of wants. In this case, there is transformation of inputs
into outputs through suitable production operations. Production research ensures that resources are put
to optimum use. Production research helps to prepare production budget and exercise inventory
control. Many companies introduce new products frequently through R & D. Production acts as a
gateway to progress and prosperity as production widens marketing
Q.11) What do you mean by Marketing information systems ( MIS)? Explain its features.
Ans: Definition: Marketing information system (MIS) is an ongoing, organized set procedures and
methods design to generate, analyze, disseminate, store, ‘and retrieve information for use in making
marketing decisions; -William Stanton
1) Continuously operated process: Information is a skilled human accomplishment. MIS is a

consciously developed technique for the flow of information to the company. Regular inflow of
information acts as a feedback in marketing planning and decision making. It is an ongoing process as
new information is added in a continuous manner and acts as decision support system (DSS).
2) Operates with speed and accuracy. Electronically operated data processing technique can be used to
collect and process new information. Computers and internet services are now used for raising the
efficiency of MIS. This brings speed and accuracy in the MIS. acts as a connecting link between
marketing environment and marketing decision-makers.
3) Needs cooperation of departments and executives: Close cooperation and understanding among
functional departments, executives and specialists (computer expert, programmer and system analyst)
are essential for purposeful collection and utilisation of the market information.
4) Facilitates prompt and correct decision-making: MIS provides updated information on various
aspects of marketing to executives. As a result, managers are aware of new marketing developments
taking place within and outside the company. They are also in a position to take prompt decisions due
to the feedback provided by MIS acts as a data bank for the benefit of marketing managers.
5) Future-oriented: MIS provides information possible future problems and their solutions through
appropriate marketing decisions. It acts as a preventive mechanism in marketing management and
offers guidance to marketing executives. MIS is future-oriented. It provides guidance for future
decisions and actions.
6) MIS provides continuous supply of information regarding marketing developments: MIS collects
and provides information on different aspects of marketing to concern executives. This information
goes to right people at the right time. As a result, decision-making process becomes reasonably
accurate and quick. Thus speedy collection and supply of information is one feature of MIS
7) MIS uses new modern technologies: Revolutionary changes are taking place in the field of
information technology. New techniques and machines are available for collection, processing and
storage of information. Information on various aspects is collected, stored and made available to
executives as per their needs. MIS is now becoming costly and also needs the services of technically
qualified staff. In brief, MIS is now based on advanced computer technology and operates in a rational
and systematic manner. it facilitates quick and correct decision-making.
8) MIS conducts different functions: MIS conducts different functions such as assembling of
information, processing and analyzing the information/data collected, storing .of information collected
and disseminating relevant information decision-making MIS also update the information collected
periodically. These functions make marketing activities efficient. This sense, MIS acts as MDSS Le.
Marketing decision support system.
Q.12) Explain the importance of MIS to marketing managers.
Ans: Well organized and well managed MIS offers the following advantages/benefits:
1) Provides updated and timely information for decision making: MIS provides information about
various aspects of so marketing. Information acts as a feedback and facilitates se correct decision-
making by marketing managers. Likely problems are solved at the initial stage through suitable
preventive measures. Thus, MIS facilitates effective decision making by marketing executives.
2) Facilitates monitoring of marketing operations: Data on different aspects of marketing can be

collected and stored through MIS facilitates easy and effective monitoring the Performance of
products markets, Sales force continuous monitoring of marketing operations is possible through MIS.
3) Raises efficiency of decision-making: MIS is beneficial as it raises the efficiency of decision

making Process in marketing because of regular supply of marketing information collated by the
information department. Marketing managers get regular feedback of information and raises the
efficiency of decision-making.
4) Facilitates Quick/ ready reference: Easy and quick reference to old Information is possible due to
MIS. Computers are now used for easy accessibility of MIS. Thus, the use of computers facilitates
easy reference to old records and this raises the utility of MIS.
5) Provides information on changing marketing environment: MIS provides regular information about
changing marketing environment much before it actually takes place. Managers can forecast the future
trends with the scrutiny of updated information. This enables managers to prepare marketing [am and
strategies for the future.
6) Promotes marketing excellence: MIS leads to marketing excellence. It is rightly said that to manage
a business well is to manage its future and to manage the future is to manage information. Marketing
decisions will be prompt and reasonably accurate when they are based on dependable information.
7) Facilitates tapping of marketing opportunities: MIS facilitates tapping of promising marketing

opportunities and effective defense against marketing problems and threats likely to develop in the
near future. Both benefits brings stability and prosperity to business.
8) provides market intelligence: MIS acts as marketing intelligence wing of a marketing firm. It
provides information about new marketing trends likely to develop in future. Such trends may be
related to price trends, consumer. expectations, ex tent of market competition, new products likely to
enter the market and so on. This information useful for long term marketing planning
Q.13) What is meant by consumer behaviour? Explain the factors affecting consumer behaviour.
Ans: DEFINITION OF CONSUMER BEHAVIOUR: According to

Walters and Paul, Consumer behaviour is the process whereby individuals decide what, when, where,
how and from whom to purchase goods and services.
According to Philip Kotler and Gary Armstrong,
Consumer buying behaviour refers to the buying behaviour of final consumers individuals and
households who buy goods and services for Personal consumption
Details of Factors Affecting / Influencing Buyer Behaviour:
1) Social Factor: Buyer behaviour is influenced considerably by social factors which include family,
social class, status symbols and so on. Practically all buyer behaviour is influenced by other people i.e.
members of the family, friends and members of the community. Social influences act in two
directions. Firstly, they provide information and Secondly, the standards of behaviour against which
alternative buying behaviors are measured. A buyer is now exposed to a veritable flood of
information. He gets information on new products, services and so on. The buyer gets information
from TV advertisements, press, radio, mobile, net etc. and also from family members, friends,
relatives, etc. The impact of such information on buyer behaviour is substantial. Even social status and
location affect the buyer behaviour considerably.
2) Economic Factors: Economic factors such a .and purchasing power affect buyer behaviour. A rich
buyer may not be very alert/sensitive about the price and may purchase a product with high price. A
person from low income group will be very sensitive/alert about the price and may not purchase the
product even with limited price rise. The middle class buyers prefer to collect information on prices
from ice and may purchase a product with high price. A person buyer behaviour is affected due to high
or low. purchasing power. The marketing manager has to adjust his marketing strategy as per the
economic variables.
3) Cultural Factors Cultural factors include values, beliefs faith and traditions accepted willingly by
buyers or specific class of buyers. Culture is the social heritage. It relates to social value attitudes
towards work, beliefs, morals, language and so on. Cultural influences act as basis for market
segmentation, product development and advertising.
Cultural factors exert deepest influence on consumer behaviour. A marketer needs to be aware of
these cultural influences on buyer behaviour. This is necessary for adjusting marketing strategy as per
the cultural variables. He has to adjust his mark ting activities as per the cultural background of his
customers. The patterns of buyer behaviour need careful consideration while marketing/promoting/
advertising different products.
4) Personal Factors: Personal factors include age, occupation, life style, social and economic status,
personal likes and dislikes, cultural and family background, beliefs and attitudes. All these factors
(individually and collectively) influence buyer behaviour. Personal like and dislikes depend on
education, economic status, cultural / familybackground and so on. People with sound economic
background prefer costly/ luxury articles as their behaviour is not price sensitive but quality sensitive.
Preference is given to decency by middle class buyers. Thus, buyer behaviour is very much influenced
by personal factors.
5) Physiological Factors: Physiological factors include sex, age and physiognomy. Here, age is one
important factor. Buyers and their behaviour are related to maturity, experience and requirements and
these aspects are related to age. Physiological variables need consideration while introducing new
products to buyers of different age groups. The strategy relating to size, colour, attractiveness, etc.
needs to be adjusted as per the physiological variables of specific age groups.
6) Psychological Factors: Psychological factors are many. They include perceptions, motivation,
attitudes and beliefs, personality, life style and learning. These factors influence buyer behaviour in
different ways. The psychological factors dominate other factors as they are closer to the mind of the
buyer. His personality, attitudes, beliefs and life style affect his behaviour relating to products,
marketing process and so on. The marketer has to adjust his marketing strategy as per the
psychological variables. Products, services, housing, etc. need to be adjusted as per the current life
style of lower/ middle and higher class people.
Q.14) Explain the meaning and importance of study of consumer behaviour.
Ans: IMPORTANCE OF CONSUMER BEHAVIOUR IN MARKETING:
1) Critical component: The consumer/buyer, the most critical component in marketing strategy of an
enterprise, needs to be studied in-depth. Consumer psychology or behaviour cannot be precisely
quantified for marketing purpose. However, It is much better to know this behaviour the extent
possible and then take decisions rather than taking marketing decisions without any study or
understand of buyers/consumers. This indicates the importance of study of buyer behaviour.
2) Recognise consumer presence: Taking consumer for granted and taking marketing decisions
without his due consideration will prove to be a dangerous policy for manufacturing organizations.
Study of consumer behaviour has special significance/importance in the present competitive marketing
system. Such study is important and essential for successful marketing at manufacturer’s level and
also at the retailer’s level.
3) Product adaptability: Marketing activities can be adjusted as per the needs and expectations of
consumers with the help of study of consumer behaviour. Consumer behaviour analysis is! useful in
estimating the potential size of a market for a product in the market segmentation, in locating preferred
trends in product development, in finding out suitable communication methods with consumers and
finally in designing the most favourable marketing mix to achieve the marketing targets/objectives. .
4) Market planning: A clear understanding of consumer behaviour is essential in marketing planning.

Such study is also useful for the introduction of appropriate marketing mix and marketing strategies.
In the final analysis, consumer behaviour study is one of the most important keys to successful
marketing. Such study will enable marketers to formulate appropriate marketing strategies and exploit
available marketing opportunities fully.
5) Complex buyer behaviour: The studies relating to buyer, his motives, hi5 buying habits, his
behaviour pattern and his decision-making process lead to one conclusion that it is not easy to solve
the puzzle of buyer behaviour. Inspire of many efforts, the marketers, researchers and behavioral
scientists have failed to understand buyer in an exact/accurate manner. Many theories and concepts
have been built about buyer behaviour. At the same time, the more we study the buyer, the more
complex he appears. It is a fact that no theory of buyer behaviour has received universal acceptance
among marketers as a complete guide to the buyer's decision-making process. The job of marketer still
remains challenging, mainly because he has to predict the unpredictable the buyer. This on clearly
indicates the importance as well as the limitations of the study of buyer behaviour. There is ample
scope for more study on buyer behaviour.
6) Supremacy of consumers: Understanding buyer/consumer behaviour is very important for

successful marketing." This he statement is TRUE and suggests the importance of precise
understanding of consumer/buyer behaviour. It is true that as consumer behaviour is unpredictable but
needs maximum of possible understanding for sales promotion. It is not fair to take consumers for
granted. It is necessary to give attention to their psychology and possible reaction to the product
brought for sale. Attention needs to be given to factors (cultural, social, economic, psychological,
etc-) which facilitate consumer decisions. 4Ps of marketing mix need to be the adjusted to consumer
behaviour.
7) Empathy: Consumer is important in the marketing process. He is like a voter in democracy. His
selection of goods iii and / or services determines the fate of products/services. As .a result, the
marketer should know the customer well in order r: to attract him more and more. Customers need to
be treated K in the way they like to be treated. Goods should be K presented to them in the way that
they will appreciate and , close a sale in such a way that consumer satisfaction is 0’ created. For
achieving such positive results study of Consumer psychology or consumer behaviour is a must. This
indicates its importance in marketing. Study of consumer behaviour is important and useful in
determining the form packaging, brand etc. of the product.
8) Global marketing: The current trend in marketing is towards globalization. This has created a
revolutionary awakening among the consumers throughout the world, particularly in emerging
markets of the world. The consumers in the emerging markets are getting exposed to new innovations
in technology. The emergence of the Internet, World Wide Web and the wide reach of
telecommunications and the electronic media has been guiding and educating the consumer to raise his
level of expectations from the marketers and their organizations. Global marketers can face new
challenges in marketing only through consumer research and detailed study of consumer behaviour.
This, once in, indicates the importance of study of consumer behaviour.
Q.15) Explain the meaning and features of consumer behaviour.
Ans: 1) Consumer behaviour is the result of interaction of consumer with the environmental forces.
The buyer behaviour is influenced by the buyer’s environment. addition, his education, experience and
information play a positive role in framing buyer’s behaviour.
2) Consumer behaviour is the net result of various external environmental factors. Such factors are
mainly Social and psychological in character.
3) Consumer behaviour includes behaviour of consumers buyers of consumer goods, consumer

durables and industrial products. Organisational buying behaviour also comes within the scope of
consumer behaviour. Thus, consumer behaviour relates to two consuming entities; the personal
consumer and organizational consumer. The study of consumer behaviour is useful to marketers to
understand and predict consumer behaviour in the market place.
4) Consumer behaviour is always uncertain as the thinking process in human mind is uncertain. There
is no certainty as regards the possible behaviour of a consumer. It is affected by various factors
collectively.
5) Consumer behaviour gives answers to various questions such as why, what and how consumers
purchase goods and services. These are the dimensions of consumer behaviour.
6) Study of consumer behaviour is a must in the case of marketing of goods and services as such study
brings success to marketing efforts.
7) Consumer buying behaviour is a challenge and an opportunity to a marketer. Large-scale marketing

is possible only when consumer behaviour is anticipated accurately.
8) Consumer buyer behaviour involves individual aspect as well as social aspect of behaviour.
9) Consumer behaviour is reflected through satisfaction or non-satisfaction on the part of consumer

after actual purchase of product. Marketers should not neglect Trends in consumer behaviour. The
study of consumer behaviour is a must for the survival, and stability and growth of business
activities.
Chp3 Marketing mix

Q.1) What is marketing mix? Explain briefly its features.
Ans: DEFINITION OF MARKETING MIX:
According to W. J. 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.
NATURE/FEATURES OF MARKETING MIX:
1) Combination of four marketing variables: Marketing mix is a combination of four basic marketing
variables namely, product, price, promotion and place.
2) Useful for achieving marketing targets: Marketing mix aims at achieving marketing targets in terms
of sales, profit and consumer satisfaction. Marketing mix is the marketing manager’s instrument for
attainment of marketing objectives.
3) Flexible and dynamic concept: Marketing mix is not a rigid combination of four variables. It is in
fact a flexible combination of variables. It is necessary to adjust the variables in the marketing mix
from time to time as per the changes in the marketing environment. These variables are controllable
variables as they emanate from within the enterprise and the marketing manager can use them freely as
per the need of the situation.
4) Periodical adjustment of variables necessary: Marketing mix variables (four Ps) are interrelated and
need suitable adjustments from time to time. Updating of marketing mix is essential for making it a
powerful tool for achieving marketing targets.
5) Marketing manager acts as mixer of ingredients: A marketing manager has to function as a mixer of
marketing ingredients and has to achieve desired results through skilful combination of four Ps. He
needs maturity, imagination and intelligence for appropriate blending of the variables from time-to-
time as per the need of the market situation.
6) Customer is the focus point: The main focus of marketing mix is the customer. His satisfaction and
support are important. Variables of marketing mix are for giving more satisfaction and pleasure to
consumers.
7) Variables are interrelated: Marketing mix variables are interrelated. Decisions in one area affect
action in the other areas. An integrated approach is needed While making changes in the marketing
mix variables.
8) Wide applicability: The concept of marketing mix is applicable to business as well as non-business
organizations such as clubs and associations.
9) Consumer-oriented activity: Marketing mix is a consumer oriented activity as its purpose is to give
satisfaction and pleasure to consumers. Here, the needs and expectations of consumers. are given
Special attention and 4 Ps of marketing mix are adjusted accordingly.
10) Core of marketing system: The elements of marketing mix constitute the core of the marketing
system of a firm. It is a profitable formula for successful marketing operations. A marketing manager
executes his marketing strategies through these elements.
11) Four P5 of sellers correspond to four Cs of customers: Four Ps in the marketing mix represent the
sellers’ view of the marketing tools available for influencing buyers. Each tool is designed to deliver a
customer benefit. The sellers’ four P s correspond to the customers’ four Cs as shown below:
Four Ps Four Cs
Product Customer Solution
Price Customer Cost
Place Customer Convenience
Promotion Customer Communication
Q.2) Explain briefly the elements of marketing mix.
Ans: MIX: ELEMENTS INGREDIENTS OF MARKETING

There are here are four basic elements (4 PS) of marketing mix. These are: (a) Product, (b) Place, (c)
Promotion, and (d) price. As a result, four components of marketing mix are called:
(1) The product mix (2) The price mix (3) The place mix, and (4) The promotion mix.
Brief Details of Marketing Mix Elements/Variables:
1) Product: Product is the basic element in marketing mix. Product must satisfy consumer needs. It
should be as per expectations of consumers. Product mix combines the physical product, product
services, product brand and package. A marketing firm may offer a single product or several products
in the form of product line. Products of right quality, size, shape, etc. are required for competitive
position in the market. The marketing authority has to take a number of decisions on product
additions, product deletions and product modifications as per marketing information available. Product
is the heart of marketing mix. It is a powerful competing instrument. Other elements of marketing mix
may not be effective, if the product to be marketed is not attractive and agreeable to consumers. For
example, low price, extensive publicity or sales promotion measures will not be useful for selling
product which is inferior in quality and not as per need and expectations of consumers.
2) Price: Price is the second marketing mix element useful for larger volume of sale. The amount
which a buyer has to pay for the product is the basic price-value on the product. Basic price alteration
may be made by the manufacturer/seller for attracting buyers. Such alteration may be in the form of
discount, allowances, etc. In addition, the terms of credit and liberal dealings will also boost sales.
Pricing has an important bearing on the competitive position of a product. Consumer support to a
product directly depends on the price fixed. Price is a tool for achieving sales target. It is useful for
capturing competitive market. Market price needs periodical review and appropriate adjustments.
Price fixed should be high enough to give good profit to the firm but low enough to motivate
consumers to purchase the product.
3) Promotion: The product may be made known the consumers through promotion techniques
advertising, public relations, publicity, personal selling, sales promotion at consumer level and so on.
Promotion is the persuasive communication about the product by the manufacturer to the public. It is
possible at retailer level even at the salesman level. Promotional activities are necessary and useful for
large sales in competitive marketing, Here, market demands is created through Personal
communication.
Place (Distribution): Physical distribution is the delivery of products at the right time and at the right
place. Distribution mix is the combination of decisions relating to marketing channels, storage facility,
inventory control, location, warehousing, transportation, etc. For large scale distribution , services of
marketing intermediaries are useful. Prompt and economical distribution is useful for large scale sales.
For making the products easily available to consumers, the services of transportation and warehousing
are useful. In place mix, efforts are required to be made to take the product to the consumers in the
target market quickly and economically. Distribution mix supports price mix as well as promotion
mix.
ADDITIONAL 3Ps OF MARKETING MIX:

5) Pace: Pace refers to the speed in marketing decisions and actions. It involves among other things the
launch of new products or brand variations at greater speed than before. Timely marketing decisions
bring lot of profits to the business. The approach should be the right product, right price, right
promotion, right time and marketed at the right place. While doing this, business comes up to the
expectations of consumers.
6) Packaging: Packaging is an integral part of effective marketing mix. Packaging deals with
designing and producing the container or wrapper for a product. It facilitates safety and easy handling
of the product. Packaging arranges goods in tins, bags, bottles, boxes, cans etc. of convenient sizes to
help dealers and buyers to handle them easily and conveniently. Importance of packaging can be
understood as:
(i) Packaging helps in preventing breakage and protection against weather conditions.
(ii) It increases shelf-life of the product.
(iii) It is eye-catching and convenient to handle.
(iv) It facilitates identification of the product.
(v) It prevents adulteration of the product.
7) Positioning: Positioning is the image that a product produces in the mind of customers in
comparison to the competitors’ products e.g., Vicks Vaporub is positioned as a rub to tackle cold and
cough. Positioning identifies target audience and highlights product attributes and benefits. When
positioning is rightly done, the marketer enjoys regular business e.g., Maruti Car is positioned as fuel
efficient and this positioning is consumer friendly. Several other techniques are available such as:
(i) Positioning by quality strategy.
(ii) Positioning by benefits strategy.
(iii) Positioning by user strategy.
(iv) Positioning by product class etc.
Q.3) What is meant by product line? Explain the methods of product line.
Ans: PRODUCT LINE: MEANING OF PRODUCT LINE:
According to Philip Katie: and Gary Armstrong product line up of products that are closely related
because they function in similar manner, are sold to the same customer groups, are marketed Waugh
the same types of outlets or fall within given price ranges
Product lines are closely related because:
a) They are used together e.g., shoe brush and shoe polish.
b) They satisfy a specific need e.g., Airtel cell phone service.
c) They are generally purchased by same customer group e.g., costly perfumes bought by rich class of
consumers.
d) The outlet used to sell the product is the same e.g., all travelling goods are sold by the same shop.
e) They fall within given price range e.g., Arrow Shirts.
1) Increasing the Line Strength/Product Line Expansion: Most companies start with Just one product
line with two or three products. In due course, they expand their business activities. As a result, new
products are added to existing product line. More product lines are also started. This leads to increase
in line length. Thus product lines tend to lengthen overtime. Such increase in the line length
(lengthening of product line) is possible through two methods: (a) Line stretching, and (b) Line filling.
a) Line Stretching (Product line expansion): Line stretching decision is taken by firms frequently in
the field of product management. The purpose is to enter a new price slot and a new market segment
which is not covered by the existing offers of the firm In developing product line strategies; marketing
f' has to take a number of tough decisions. Product line stretching occurs when a company lengthens
its product line beyond its current rang . Line stretching can take place in three ways: (i) Stretching
down, and (ii) Stretching up and, (iii) Stretching both ways.
i) Stretching down: A company which has initially taken position in the high price slot, stretches its
product line downwards by offering its products in the same line for the prices. This is regarded as
stretching downwards.
ii) Stretching up: It is opposite to stretching down. A company which was initially positioned its
products for the lower end market, decides to make higher priced offers for the top slots. This is called
stretching upwards. Sometimes, companies stretch upward in order to add prestige to their current
products. Due to upward stretching, company may achieve faster growth rate or higher margins at the
higher end.
iii) Stretching both ways: Companies in the middle range of the market may decide to stretch their
lines in both directions upward and downwards. The benefits of both will be available in terms of sales
and profits.
b) Line filling: In line filling, the firm introduces more items to its product line to plug certain gaps in
its current range of offers. The objective is to make the company as ”full line” company. The other
purpose is to avoid its customers from going to competitors for offers in particular price slots.
2) Line Pruning (Product line contraction ): Line pruning is one more decision which can be taken in
regard to product line. Line pruning is necessary .when the product lines of the company have become
unduly long and complicated. Here, unnecessary and unprofitable items will be pruned from the line in
order to make the line manageable and to increase overall profitability. Line pruning is exactly
opposite to line stretching.
Q.4) Discuss the product life cycle in detail.
Ans: PRODUCT LIFE CYCLE (PLC):
MEANING OF PRODUCT LIFE CYCLE (PLC):
product introduced in the market has to move through different stages of growth till the product goes
out of the market. These stages constitute product life cycle (PLC). This life cycle of a product starts
with the introduction of product (birth of a product) in the market and comes to an end when the
product finally goes out of the market (exist of the product). Product life cycle (PLC) indicates distinct
stages through which a product passes in its sales history since its introduction in the market. Product
life cycle theory is similar to life cycle of a human being which starts with birth and ends with the
death. The human life cycle may be of 75 to 100 years during which human moves from one stage to
the other. The same is the case with a product which may have a life cycle of 25 years or more. A
product is born, grows lustily, attains a dynamic maturity and then enters its declining years. Product
life cycle represents sales and profits of a product over a period of time. The factors responsible for the
changes in the product’s life cycle are:
(a) changing customers’ needs, and
b) Introduction of better, more efficient and user- friendly products in their market.
There are different stages in the life cycle of a product. They include introduction, growth, maturity,
decline and finally withdrawal. In short, human life cycle theory can be applied to a product.
Introduction, growth, maturity, decline and withdrawal are five stages in the product life cycle. Some
products may have life cycle of 20 to 30 years while some others may have life cycle of 80 to 100
years. This product life cycle is rejected through product’s introduction of better: more efficient and
user-friendly sales volume and sales revenue collected The product life cycle is presented as a sales
curve taken by a product.
According to Philip Kotler, the product life cycle is an attempt to recognize distinct stages in the sales
history of the product. The life cycle is a fact of existence for every product and is similar to the
human life cycle@: stages in the life cycle are uniform in the Case of all products. However, the
length of the cycle and the duration of each stage may not be the same in the case of all Products.
Growth and decay occur in the case of each product and the product finally 0 5 out of the market. This
is similar to the life of every individual.
Product life cycle is actually product market life cycle as it is b on the marketing performance of a
product. The product life cycle suggests that a product normally moves through Successive stages and
finally goes out of the market. This is a universal rule applicable to all products. However, lifecycle
for some products may be shot while it may be of longer period in case of some other products.
The PLC reflects sales and profits of a product over a period OE time and normally they follow an
established S-shaped curve. The figure given below shows typical life cycle (with stages) of a product
(i.e. consumer item):
Chp 4 Segmentation, targeting, positioning and Trends in

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Prof. Mahesh Gala’s Siddhi Classes F.Y.

BMS Principles of Marketing 1

Q.1) Define Marketing and explain its features

Features/ Nature of Marketing:

12) Miscellaneous Features of Marketing:

Q.2) What is marketing? Explain its importance.

2) Provides profit and goodwill to marketing enterprises: Marketing is important to marketing

3) Facilitates specialisation and division of labour: Marketing function, if performed successfully,

Q.3) Explain the scope of marketing.

Ans: The scope of marketing also indicates its functions.

Q.4) Explain 4ps of marketing in full.

Details of 4ps marketing:

(a) Product line and range,

(c) Packaging and labeling of a product,

(d) Branding and trade mark given to the product,

(e) Product innovation,

(f) Guarantees and Warranties of the product,

(g) Special attractive features of the product, and

(h) Product servicing.

b) Discounts and other concessions offered for capturing market,

c) Terms of credit sale,

d) Terms of delivery, and

a) Types of intermediaries available or distribution,

b) Marketing channels available for distribution, and

a) Advertising and publicity of the product,

b) Personal selling (salesmanship),

c) Sales promotion measures introduced at different levels,

e) Display of goods for publicity and sales promotion, and

Q.5) Discuss the 4cs of marketing.

2) Customer Convenience: Customer convenience involves minimum of effort because a Customer

4) Customer Communication: Sales promotion through communication is a new trend in modern

Points Selling marketing

determine the price. consumer preference and

There are five types of needs:

a) Stated needs: The customer wants an exclusive brand of wrist watch.

Ans: According to F. E. Webster “marketing concept is a consumer-oriented market- driven, value-

6) Societal Marketing concept;

7) Relationship Marketing Concept

8) Holistic Marketing concept.

The details of important marketing concepts are as given below:

Marketing concept is based on three main beliefs:

a) All planning and operations should be customer-oriented.

c) Customer-oriented marketing is essential to achieve organization’s objectives.

2. Marketing Environment, Research and Consumer

Ans: MEANING OF MICRO ENVIRONMENT:

Details of Important Internal Factors influencing micro environment (Elements of Micro

A) Management Structure: Basically, structure deals with relationships. Management structure is a

Management structure outlines formal aspects of working by Integrating activities, delegating ,

Q.3) Explain macro factors influencing marketing environment.

Ans: MEANING OF MACRO ENVIRONMENT:

Details of Important Factors influencing Macro Environment:

D) Technological Factors: Technological environment affects marketing activities. technological

Q.4) Write a detailed note on “ PEST” analysis.

Ans: A NOTE ON PEST ANALYSIS:

Environmental scanning/monitoring is the process of:

(a) gathering information regarding a company’s external environment,

(b) Analysing it, and