INTRODUCTION TO MARKETING MANAGEMENT

UNIT I
Meaning of marketing Management – Functions of Marketing
Management – Difference between Marketing Management and Sales
Management
MARKET

A set up where two or more parties engage in exchange of goods, services and
information is called a market.

The term ‘market’ has traditional been used to describe a place where buyers
and sellers gather to exchange goods and services.

TYPES OF MARKETS

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Generally, the market is classified on the basis of:
A. Place,
B. Time and
C. Competition.

A. On the basis of Place, the market is classified into:

1. Local Market or Regional Market.

Local Market
When the competition between purchaser and seller is localised and
limited at a specific market then it is called Local Market. In this market
mostly perishable goods are purchased and sold.
For example:
Sale of vegetable, fish, eggs, milk etc.
Regional Market:
In this market sale and purchase of articles is localised to state only and
not outside the state.

2. National Market or Countrywide Market.

It is that market in which the demand of the goods is in the nation as a
whole where you are living.

3. International Market or Global Market.

If the competition of goods is world-wide, the market will be
International. Gold and silver are examples of commodities that possess
an international market.

B. On the basis of Time, the market is classified into:

1. Very Short Period Market.

A very short period market the supply of goods in almost stable. Because
the supply of goods is stable, therefore the price of goods is determined
according to the demand of the goods. If the demand diminishes the
price will fall and vice-versa.
Say for example the market for flowers, vegetables. Fruits etc.

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 2. Short Period Market.
Short period market is that in which slight variation can be made
regarding the demand for the goods. The demand for the goods can be
increased to some extent and if the demand diminishes, it can be
reduced.
For example: The demand of fish or milk or eggs.

3. Long Period Market.

If the period is longer, supply will be influenced by the cost of producing
additional output; and the predominant influence on value will be the
forces of supply. If the demand for goods increases, there is time to
increase the supply. Here the price is influenced more by supply of the
goods.

4. Very Long Period Market.

According to Marshall, it is a period of more than ten years in which
changes in demand fully adjust themselves to supply. Since it is not
possible to estimate the changes in demand due to changes in
techniques of production, Population, raw-materials i.e., over a very long
period therefore Marshall did not analyse pricing under the secular
period. Here the supply has upper hand in the determination of price.
For example: change in technique of production, change in population,
change in tastes, etc

C. On the basis of Competition, the market is classified into:

1. Perfectly Competitive Market Structure.

A market is said to be perfect when all the potential sellers and buyers
are promptly aware of the prices at which transactions take place and all
the offers made by other sellers and buyers and when any buyer can
purchase from any seller and conversely.

2. Imperfectly Competitive Market Structure.

1. A monopoly has only one or a single (mono) seller.
2. Duopoly has two (duo) sellers.
3. Oligopoly has little or fewer (oligopoly) number of sellers.
4. Monopolistic competition has many or several numbers of sellers.

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(1) NEED/ WANT/ DEMAND:
Need: It is state of deprivation of some basic satisfaction. eg.- food, clothing,
safety, shelter.

Want: Desire for specific satisfier of need. eg.- Indians needs food – wants
paneer tikka/ tandoori chicken. Americans needs food- wants hamburger/
French fries.

Demand: Want for a specific product backed up by ability and willingness to

buy. eg.- Need – transportation.

(2) PRODUCTS- GOODS/ SERVICES/ PLACE.

Product is anything that can satisfy need/ want.
Product component-
1. Physical Good.
2. Service.
3. Idea.
eg. Fast food- burger/ pizza.

Physical Good – material eaten.

Service – purchase of raw material/ cooking
Idea – speed of computer/ processing power.

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(3) VALUE/ COST/ SATISFACTION:
SATISFACTION – Estimated in terms of time lead & travel comfort.
VALUE– Products capacity to satisfy.
COST– Price of each products.

(4) EXCHANGE/ TRANSACTION:

EXCHANGE: – The act/ process of obtaining a desired product from someone
by offering something in return. For exchange potential to exist, the following
conditions must be fulfilled.
1. There must be at least two parties.
2. Each party has something of value for other party.
3. Each party is capable of communication & delivery
4. Each party is free to accept/ reject the exchange offer.
5. Each party believes it is appropriate to deal with the other party
.
TRANSACTION: – Event that happens at the end of an exchange. Exchange is a
process towards an agreement. When agreement is reached, we say a
transaction has taken place.
a) Barter transaction.
b) Monetary Transaction.
1.At least two things of value.
2.Condition agreed upon.
3.Time of agreement.
4.Place of agreement.
5.May have legal system for compliance.

(5) RELATIONSHIP/ NETWORKING:

RELATIONSHIP MARKETING: Relationship marketing:- It’s a pattern of
building long term satisfying relationship with customers, suppliers,
distributors in order to retain their long term performances and business.

MARKETING NETWORK: It is made up of the company and its customers,

employees, suppliers, distributors, advertisement agencies, retailers, research
& development with whom it has built mutually profitable business
relationship.
Competition is between whole network for market share and NOT between
companies alone.

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(6) MARKET:
A market consists of all potential customers sharing particular need/ want who
may be willing and able to engage in exchange to satisfy need/ want.

(7) MARKETERS/ PROSPECTS:

Working with markets to actualize potential exchanges for the purpose of
satisfying needs and wants.
One party seeks the exchange more actively, called as “ Marketer”, and the
other party is called “Prospect”.

MODERN CONCEPTS OF MARKETING

a) Production concept: – The companies which use the production concept

generally focus too narrowly on their own activities because according to this
concept the companies think that consumer will buy the product which comes
in the market.

b) Product concept: – As per this concept companies give importance to the

features or the quality of the product because in long run the product exists
only with the quality it is giving to the consumer.

c) Selling concept: – it is not sufficient for the manufacturer to made the

goods and wait for the customers. Thus, according to this concept it is very
important to inform the consumer about the product which can be done
through different ways of promotion.

d) Marketing concept: – consumer now a day is treated as “GOD”. So it is

very important for the manufacturer to produce the product which the
consumer wants, so that consumer get satisfaction and manufacturer earns
profit.

e) Consumer concept:- now not only marketing concept is sufficient rather

the companies are using consumer concept which means to give attention to
individual consumer it can be done through one to one marketing.

f) Societal marketing concept: – this concept means that company should

not only work for the consumer but also for the society. So the company should
make balance between company’s profits, consumer wants and society welfare.

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MARKETING
“Marketing is a process of discovering and translating consumer needs, wants
into products & services creating demand and expanding it.”

M.L. Hanson

“Marketing is analysis, planning, implementation and control to bring desire

exchanges with the target buyers for personal and mutual gain.”

Philip Kotler

FUNCTIONS OF MARKETING

FUNCTIONS OF EXCHANGE

1. Buying

It involves what to buy, of what quality, how much from whom, when and at
what price. People in business buy to increase sales or to decrease costs.
Purchasing agents are much influenced by quality, service and price.

The products that the retailers buy for resale are determined by the needs and
preferences of their customers. A manufacturer buys raw materials, spare
parts, machinery, equipment’s, etc. for carrying out his production process and

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other related activities. A wholesaler buys products to resell them to the
retailers.

2. Assembling

Assembling means to purchase necessary component parts and to fit them

together to make a product. ‘Assembly line’ indicates a production line made
up of purely assembly operations. The assembly operation involves the arrival
of individual component parts at the work place and issuing of these parts to
be fastened together in the form of an assembly or sub-assembly.

3. Selling

It is core of marketing. It is concerned with the prospective buyers to actually

complete the purchase of an article. It involves transfer of ownership of goods
to the buyer. Selling plays an important part in realising the ultimate aim of
earring profit. Selling is enhanced by means of personal selling, advertising,
publicity and sales promotion. Effectiveness and efficiency in selling
determines the volume of company’s profits and profitability.

FUNCTIONS OF PHYSICAL DISTRIBUTION

1. Transportation:

Transportation is the physical means by which goods are moved from the
places where they are produced to those places where they are needed for
consumption. It creates place, utility. Transportation is essential from the
procurement of raw material to the delivery of finished products to the
customer’s places. Marketing relies mainly on railroads, trucks, waterways,
pipelines and air transport.

2. Inventory

Inventory refers to all the items, goods, merchandise, and materials held by a
business for selling in the market to earn a profit. Example: If a newspaper
vendor uses a vehicle to deliver newspapers to the customers, only the
newspaper will be considered inventory.

3. Warehousing

It includes holding of products in proper, i.e., usable or saleable, condition from

the time they are produced until they are required by customers in case of

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finished products or by the production department in case of raw materials
and stores.

4. Material handling

Material handling is the movement, protection, storage and control of

materials and products throughout manufacturing, warehousing, distribution,
consumption and disposal.

FUNCTIONS OF FACILITIES

1. Financing

Financing involves the application of the capital to meet the financial

requirements of agencies dealing with various activities of marketing. The
services to ensure the credit and money needed and the costs of getting
merchandise into the hands of the final user are mostly referred to as the
finance function in marketing.
Financing is required for the working capital and fixed capital, which may be
secured from three sources — owned capital, bank loans and advance & trade
credit. In other words, different kinds of finances are short-term, medium-
term, and long-term finance.
2. Risk Taking

Risk means loss due to some unforeseen situations. Risk bearing in marketing
means the financial risk invested in the ownership of goods held for an
anticipated demand, including the possible losses because of fall in prices and
the losses from spoilage, depreciation, obsolescence, fire and floods or any
other loss that may occur with the passage of time.

They may also be due to decay, deterioration and accidents or due to

fluctuation in the prices induced by changes in supply and demand. The
different risks are usually termed as place risk, time risk, physical risk, etc.

3. After sales service

After sales service refers to all the things you do for the care and feeding of
your valued customers after they buy your product. This type of customer
aftercare is important for any business, but especially for small businesses
where every client counts.

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 DIFFERENCE BETWEEN MARKETING AND SELLING

POINT OF MARKETING SELLING

DIFFERENCE
Concept It is a strategy based on a mix of It is the strategy of satisfying
activities aimed at boosting sales. the needs in an opportunistic,
individual method driven by
human interaction.
Cost The consumers determine the Cost defines the price.
price; the price determines the
cost.
Efforts It makes an effort such that the The company makes the
consumers want to purchase the product first and then figures
products in their interest. a way to sell and make a
profit.
Orientation It involves external market It involves internal
orientation. production orientation.
Motive Customer satisfaction is the basic Sales are the main motives.
motive.
Reach It is a comprehensive, composite, It is a narrow reach related to
and worldwide scope buyer, seller, and production
Beginning It starts much before the It comes after creation and
production of goods and services. ends with delivery and
collection of payment.
Scope It has a broader connotation and It is a part of marketing.
covers many research activities.
Mindset The mindset is “Satisfy the The mindset is “Hook the
customers.” customers.”
Job The main function is to find the The main job is to discover
right products for the customers. the customers for the
products.

MARKETING MANAGEMENT

“Marketing management is ‘the art and science of choosing target markets and
getting, keeping, and growing customers through creating, delivering, and
communicating superior customer value’
- Philip Kotler and Keller
-

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Marketing management by Philip Kotler defines as “the analysis, planning,
implementation and control of programs designed to bring about desired
exchanges with target markets for the purpose of achieving organizational
objectives”.

OBJECTIVES OF MARKETING MANAGEMENT

1. Creation of Demand:
The marketing management’s first objective is to create demand through
various means. A conscious attempt is made to find out the preferences and
tastes of the consumers. Goods and services are produced to satisfy the needs
of the customers. Demand is also created by informing the customers the
utility of various goods and services.

2. Customer Satisfaction:
The marketing manager must study the demands of customers before offering
them any goods or services. Selling the goods or services is not that important
as the satisfaction of the customers’ needs. Modern marketing is customer-
oriented. It begins and ends with the customer.

3. Market Share:
Every business aims at increasing its market share, i.e., the ratio of its sales to
the total sales in the economy. For instance, both Pepsi and Coke compete with
each other to increase their market share. For this, they have adopted
innovative advertising, innovative packaging, sales promotion activities, etc.

4. Generation of Profits:
The marketing department is the only department which generates revenue
for the business. Sufficient profits must be earned as a result of sale of want-
satisfying products. If the firm is not earning profits, it will not be able to
survive in the market. Moreover, profits are also needed for the growth and
diversification of the firm.

5. Creation of Goodwill and Public Image:

To build up the public image of a firm over a period is another objective of
marketing. The marketing department provides quality products to customers
at reasonable prices and thus creates its impact on the customers.

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The marketing manager attempts to raise the goodwill of the business by
initiating image- building activities such a sales promotion, publicity and
advertisement, high quality, reasonable price, convenient distribution outlets,
etc..

IMPORTANCE OF MARKETING MANAGEMENT

1. Analysing Market Opportunities:

Marketing management collects and analyses information related to
consumer’s needs, wants and demands, competitor’s marketing strategies,
changing market trends and preferences. This helps to identify market
opportunities.

2. Determination of Target Market:

Marketing management helps to identify the target market that the
organization wishes to offer its product.

3. Planning and Decision Making:

Marketing management helps to prepare future course of action. Planning
relates to product introduction, diversification. Decision making regarding
pricing, selection of promotional mix, selection of distribution channel is taken
by the marketing management.

4. Creation of Customer:
Consumers determine the future of the market .Therefore providing the best
product to the consumer according to their preference is the important task of
marketing. Marketing management helps in creation of new customers and
retention of current customers.

5. Helps in Increasing Profit:

Marketing caters to the varied and unlimited needs of consumers. Marketing
management helps to increase profit and sales volume. This is achieved by
expansion of market and increasing customers.

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6. Improvement in Quality of Life:
Marketing management aims at providing innovative product and services to
the customers. Marketers continuously strive to incorporate new technology
and mechanism in their product to provide more satisfaction to customers
than before. This improves quality of life and makes life of consumers easier
than before.

7. Employment Opportunities:
Marketing process is a combination of different activities like research work to
assess the marketing environment, product planning and development,
promotion, distribution of product to customers and after sales service.
Marketing process requires researcher, production engineer, different
distribution intermediaries, sales personnel also creates employment
opportunities in advertisement section. Thus marketing management opened
up different employment avenues thus creating employment opportunities.

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