Q-1 Enumerate different types of markets.

The market is presented as a form that is for the cultural advantage of the
general public. The market structure comprises different types of markets,
and the structures are portrayed by the nature and the level of competition
that exists for the goods and services in the market. The forms of the market,
both for the products market and the factor market or the service market, is
to be decided by the idea of rivalry that is winning in a specific kind of market.
Two types of people are involved in the market known as Buyer and Seller,
these two types can be found every market.
The Market structure is an expression that is resultant for the quality or the
adequacy of the market competition that is winning in the market. There are
seven primary market structures:

1- Monopoly
2- Oligopoly
3- Perfect competition
4- Monopolistic competition
5- Monopsony
6- Oligopoly
7- Natural monopoly

Meaning of a Market:
A market can be characterised as where a couple of parties can meet, which
will expedite the trading of products and services. The parties involved in the
market activities are the sellers and the buyers. A market is an actual
structure like a retail outlet, where the dealers and purchasers can meet eye
to eye, or in a virtual structure like an internet-based market, where there is
the truancy of direct, actual contact between the purchasers and vendors.

Types of the market

1- Monopoly:
A monopolistic market is a market formation with the qualities of a pure
market. A pure monopoly can only exist when one provider gives a specific
service or a product to numerous customers. In a monopolistic market, the
imposing business organisation, or the controlling organisation, has the
overall control of the entire market, so it sets the supply and price of its goods
and services. For example, the Indian Railway, Google, Microsoft, and
Facebook.

2- Oligopoly:
An oligopoly is a market form with a few firms, none of which can hold the
others back from having a critical impact. The fixation or concentration
proportion estimates the piece of the market share of the biggest firms. For
example, commercial air travel, auto industries, cable television, etc.

3- Perfect competition:
Perfect competition is an absolute sort of market form wherein all end
consumers and producers have complete and balanced data and no
exchange costs. There is an enormous number of makers and customers
rivalling each other in this sort of environment. For example, agricultural
products like carrots, potatoes, and various grain products, the securities
market, foreign exchange markets, and even online shopping websites, etc.

4- Monopolistic competition:
Monopolistic competition portrays an industry where many firms offer their
services and products that are comparative (however somewhat flawed)
substitutes. Obstructions or barriers to exit and entry in monopolistic
competitive industries are low, and the choices made of any firm don’t
explicitly influence those of its rivals. The monopolistic competition is firmly
identified with the business technique of brand separation and differentiation.
For example, hairdressers, restaurant businesses, hotels, and pubs.

5- Monopsony:
A monopsony is a market situation wherein there is just a single purchaser,
the monopsonist. Just like a monopoly, a monopsony additionally has an
imperfect market condition. The contrast between a monopsony and a
monopoly is basically in the distinction between the controlling business
elements. A solitary purchaser overwhelms a monopsonist market while a
singular dealer controls a monopolised market. Monopsonists are normal to
regions where they supply most of the locale’s positions in the regional jobs.
For example, a company that collects the entire labour of a town. Like a
sugar factory that recruits labourers from the entire town to extract sugar
from sugarcane.
 6- Oligopsony:
An oligopsony is a business opportunity for services and products that is
influenced by a couple of huge purchasers. The centralisation of market
demand is in only a couple of parties that gives each a generous control of
its vendors and can adequately hold costs down. For example, the
supermarket industry is arising as an oligopsony with a worldwide reach.

7- Natural monopoly:
A natural monopoly is a kind of a monopoly that can exist normally because
of the great start-up costs or incredible economies of scale of directing a
business in a particular industry which can bring about huge barriers to exit
and entry for possible contenders. An organisation with a natural monopoly
may be the main supplier of a service or a product in an industry or
geographic area. Normally, natural monopolies can emerge in businesses
that require the latest technology, raw materials, or similar factors to work.
For example, the utility service industry is a natural monopoly. It consists of
supplying water, electricity, sewer services, and distribution of energy to
towns and cities across the country.
Q-1 Explain the term markets mix and explain the 4ps approaches in the market
mix.

The marketing mix and the 4Ps of marketing are great tools can help you to
avoid these kinds of mistakes. In this article and in the video, below, we'll
discover more about how you can use them to develop a successful
marketing strategy.

The 4Ps of marketing is a model for enhancing the components of your

"marketing mix" – the way in which you take a new product or service to
market. It helps you to define your marketing options in terms of price,
product, promotion, and place so that your offering meets a specific
customer need or demand.

The marketing mix and the 4Ps of marketing are often used as synonyms
for one another. In fact, they are not necessarily the same thing.

"Marketing mix" is a general phrase used to describe the different kinds of

choices organizations have to make during the process of bringing a
product or service to market. The 4Ps is one way – probably the best-
known way – of defining the marketing mix, and was first expressed in
1960 by E. J. McCarthy in his book, "Basic Marketing – A
Managerial Approach." [1]

The 4Ps are:

 Product (or Service).

 Place.
 Price.
 Promotion.
A good way to understand the 4Ps is by the questions that you need to ask
to define your marketing mix. Here are some questions that will help you
understand and define each of the four elements:

Product/Service

 What does the customer want from the product /service? What needs
does it satisfy?
 What features does it have to meet these needs? Are there any
features you've missed out? Are you including costly features that the
customer won't actually use?
 How and where will the customer use it?
 What does it look like? How will customers experience it?
 What size(s), color(s), and so on, should it be?
 What is it to be called?
 How is it branded?
 How is it different from products by your competitors?
 What is the most it can cost to provide and still be sold sufficiently
profitably? (See also Price, below.)

Place

 Where do buyers look for your product or service?

 If they look in a store, what kind? A specialist boutique or in a
supermarket, or both? Online? Or direct, via a catalog?
 How can you access the right distribution channels?
 Do you need to use a sales force? Or attend trade fairs? Or make
online submissions? Or send samples to catalog companies?
  What do your competitors do, and how can you learn from that and/or
differentiate?

Price

 What is the value of the product or service to the buyer?

 Are there established price points for products or services in this
area?
 Is the customer price sensitive? Will a small decrease in price gain
you extra market share? Or will a small increase be indiscernible, and
so gain you extra profit margin?
 What discounts should be offered to trade customers, or to other
specific segments of your market?
 How will your price compare with your competitors?

Promotion

 Where and when can you get your marketing messages across to
your target market?
 Will you reach your audience by advertising online, in the press, on
TV, on radio, or on billboards? By using direct marketing mailshots?
Through PR? On the internet?
 When is the best time to promote? Is there seasonality in the market?
Are there any wider environmental issues that suggest or dictate the
timing of your market launch or subsequent promotions?
 How do your competitors do their promotions? And how does that
influence your choice of promotional activity?

Alternative Marketing Models

The 4Ps of marketing is just one of many lists that have been developed
over the years. And, whilst the questions we have listed above are key,
they are just a subset of the detailed probing that may be required to
optimize your marketing mix.

Amongst the other models that have been developed over the years is
Boom and Bitner's 7Ps, sometimes called the extended marketing mix,
which include the first 4Ps, plus people, processes and physical layout
decisions.

Another approach is Lauterborn's 4Cs, which presents the elements of the

marketing mix from the buyer's, rather than the seller's, perspective. It is
made up of:

 Customer needs and wants (the equivalent of product).

 Cost (price).
 Convenience (place).
 Communication (promotion).

In this article, we focus on the 4Ps model as it is the most well-recognized,

and contains the core elements of a good marketing mix.

Using the 4Ps of Marketing

The model can be used to help you to decide how to take a new offer to
market. It can also be used to test your existing marketing strategy .
Whether you are considering a new or existing offer, follow the steps below
to help you to define and improve your marketing mix.

1. Start by identifying the product or service that you want to analyze.

2. Now go through and answer the 4Ps questions – as defined in detail
above.

3. Try asking "why" and "what if" questions too, to challenge your offer. For
example, ask why your target audience needs a particular feature. What if
you drop your price by 5 percent? What if you offer more colors? Why sell
through wholesalers rather than direct channels? What if you improve PR
rather than rely on online advertising?

4. Once you have a well-defined marketing mix, try "testing" the overall
offer from the customer's perspective, by asking customer focused
questions:Does it meet their needs? (Product.) Will they find it where they
shop? (Place.) Will they think that it's priced favorably? (Price.) Will the
marketing communications reach them? (Promotion.)

5. Keep on asking questions and making changes to your mix until you are
satisfied that you have optimized your marketing mix, given the information
and facts and figures you have available.

6. Review your marketing mix regularly, as some elements will need to

change as the product or service and its market grow, mature and adapt in
an ever-changing competitive environment.
Q-3 what do you mean by consumer behavior what are the
determinants of customer behavior?

Answer: Consumer behavior is influenced by many factors such as situation,

psychological, environmental and marketing factors, personal factors, family,
and culture. Businesses try to collect data so that they can make decisions
on how they can reach their target audience in the most efficient way.

The determinants of consumer behaviour can be grouped into three major

captions namely, economic, psychological and sociological. An attempt is
made to elucidate these with least complications.

I. Economic Determinants:
Economic scientists were the first among social scientists to study
consumers and their behaviour and provided the details about the solutions
to the consumer and consumption problems. Economists, as we are aware,
took man as a social and rational animal.

The basic economic determinants among others are:

1. Personal income:
One’s income is the reward for one’s economic efforts. Income means
purchasing power. When we talk of income in marketing sense, we are more
concerned with ‘disposable income’ and “discretionary income’.

‘Disposable income’ is the amount of money that a consumer has at his

disposal for spending or saving or both. In other words, of the total gross
income, whatever balance remains after meeting preemptive demands like
taxes, debt repayment and debt servicing charges and the like.

Any change in disposable income will have change in consumer buying

decisions. Decline in disposable income reduces the consumer spending;
however, when disposable income rises, consumer spending not only rises
but makes them to go in for more of luxuries.

In other words, disposable income causes change in the relative demand for
different categories of products and services. On the other hand,
‘discretionary income’ is the income which is available after meeting the
basic needs of living.

It is the residual disposable income left after meeting all the expenses
essential to provide a minimum subsistence needs to a family. Discretionary
income changes have their own implications.

A rise in discretionary income results in usually an increased spending by

consumers on those items that raise their living standards. Therefore, a
continuous rise in the discretionary income is likely to change the very life-
style of the consumers.

2. Family income:
Where a consumer is the member of a joint family, the buyer behaviour is
influenced by the family income rather than the individual income. It does not
mean that one can ignore the individual income, for family income is the
aggregate of individual income of all the members of the family.

In a joint family, it may so happen that a rise in an individual member’s

income may be neutralised by a fall in another member’s income. That is
why; it is the relationship between the family size or the requirements and
the income that finally determines the buying behaviour or the family
members.
3. Consumer income expectations:
Many a times, it is the future income expectations of the consumer that
influences such consumer behaviour. It is the optimism or the pessimism
about consumer income that determines the level of current spending.

If there are bleak prospects of future expected income, he spends less now
and saves more and vice versa. It is worth the noting here that the force and
vitality of a tendency to spend or save depends on the nature of consumer
needs.

In case of basic needs of living, such tendency will be too weak for no
consumer denies the minimum subsistence level merely because to bleak
future income expectations. However, in case of non-essential goods, such
tendency may be very strong to save than to spend if he is expecting weak
future income generation and vice versa.

4. Consumer liquid assets:

It is the consumer liquid asset position that influences the consumer
behaviour. Liquid assets of consumers are the assets held in the money or
near-money forms of investments. The best examples of this kind are hard
cash, bank balance, bank deposits, shares and bonds and saving
certificates. These assets are built up to buy some consumer durables or to
meet unexpected future needs or contingencies.

If a person has more such liquid assets, more carefree he comes in spending
the current or the regular income.
5. Consumer credit:
Availability or paucity of consumer credit has its impact on consumer buying
behaviour. Consumer credit is a facility extended by a market to postpone
the payment of products bought to some future date.

Consumer credit takes number of shapes like deferred payment, instalment

purchasing, hire-purchase arrangements and the like. Easy availability of
consumer credit makes the consumer to go in for those consumer durables
which he would have postponed otherwise. Further, it makes him to spend
more freely the current income.

6. The level of standard of living:

The consumer behaviour has the impact of the established standard of living
to which he is accustomed. Even if consumer income goes down, the
consumer spending will not come down proportionately because, it is very
difficult to come down from an established standard of living.

On the other hand, rise in income tends to improve upon the established
standard of living. In case the income falls, the short-fall is made good by
borrowings to a certain extend over a short period of time.

II. Psychological Determinants:

Psychologists have also provided certain clues as to why a consumer
behaves this way or that way. The major psychological determinants internal
to the individual are motivation perception learning, attitude and personality.

Here is an attempt to explain and to know their implications in so far as

consumer behaviour is concerned.

1. Motivation:
Motivation is the ‘why’ of behaviour. It is an intervening variable between
stimulus and response and a governing force of consumer behaviour.

“Motivation refers to the drives, urges, wishes or desires which initiate the
sequence of events known as behaviour.” as defined by Professor M.C.
Burk. Motivation is an active, strong driving force that exists to reduce a state
of tension and to protect, satisfy and enhance the individual and his self-
concept. It is one that leads the individual to act in a particular way. It is the
complex net-work of psychological and physiological mechanisms.

Therefore, motives can be conscious or unconscious, rational or emotional,

positive or negative. These motives range from a mere biological desires like
hunger and thirst to the most advanced scientific pursuits like landing on the
Moon or Mars.
Q-4 what are the factors constituting marketing environment?
There are 7 factors of constituting the marketing environment A firm has no
control over these factors. These factors constitute macro-marketing
environment. For a firm, the only option is to accept and respect these
factors, and adopt and adjust with them. Management must respond
favorably to such environment in order to exploit the emerging opportunities.
These factors include:

1. Demographic Factors:
Demographic factors are related to population. Marketer must study these
factors due to the fact that the market is made of people, and people
constitute the population. Demographic study provides customer profile that
is basic need for market segmentation as well as selecting target market.
Therefore, demographic variables have direct and notable impact on firm’s
operations. A marketer must analyze demographic factors to get idea about
number and type of people to be served as customers.
Demographic variables include:
i. Total population and population growth rate
ii. Age groups and gender distribution
iii. Geographical (area-wise) concentration of population
iv. Proportion of rural v/s urban population
v. Literacy rate and level of education
vi. Population mobility (geographical shift) or migration rate
vii. Family system and household pattern
viii. Occupation-based classification of population.
2. Ecological Factors:
These factors primarily concern with ecological (natural) environment. They
are closely related to protection of ecological environment and pollutions –
air, water, noise, and land pollutions. At present, the global-level efforts are
made to protect environment.
Such efforts can lay down certain restrictions in terms of use of natural
resources, cost of raw material, quality of products, production process and
technology, disposal of wastes, pollution control measures, and so on. These
factors affect to the several aspects of production, distribution, and disposal
of products. A firm must understand that people want better quality products
at low price, but not at a cost of quality of life.
Analysis of ecological environment involves:
i. Availability and use of natural resources
ii. Pollution and pollution control measures
iii. Contemporary legal provisions
iv. Ecological awareness and use of eco-friendly products
v. Contribution of corporate world for protection of environment
vi. Working of national and international agencies/organisations for
protection of environment
vii. World-wide efforts for protection of environment.
3. Economic Factors:
Economic environment consists of economic forces that affect company’s
costs, revenues, and profits on one hand, and customers’ purchasing powers
and willingness to spend on the other hand.
Economic forces include a large number of variables, such as:
i. Economic growth rate
ii. Interest rates
iii. Inflation rate
iv. Functioning of stock markets and commodity markets
v. Industrial and agricultural policies
vi. Fiscal and monetary policies
vii. Export-import policies
viii. Liberalization, globalization and privatization processes
ix. Government’s long-term planning and investment in infrastructural
facilities
x. Quality and availability of basic facilities/services like transportation,
banking, warehousing, insurance, communication, etc.
4. Socio-cultural Factors:
Social and cultural factors affect consumers’ tastes and preferences. People
buy or favour those products which suit or complement their social and
cultural norms, values, traditions, and habits. Knowing these factors of the
target market, a manager can effectively design product- mix and
promotional programme.
Social-cultural environment is ever-changing and requires the manager to
undergo adjustment and readjustment in his marketing mix to balance
between what consumers want and what company offers. Ignoring or
underestimating this environment can harm severely the company’s interest.
Socio-cultural variables are:
i. Cultural norms, values, beliefs, and rituals
ii. Castes, creeds, and racial aspects
iii. Social traditions, customs, habits, and superstitions
iv. Family and reference groups
v. Age and life-cycle stage
vi. Role of women
vii. Social classes
viii. Religious events and festivals.
5. Political and Legal Factors:
A firm has to operate within the present political system and legal framework.
Political factors affect economic policies. Every marketing decision is subject
to be affected by political and legal factors. Governments have formulated a
series of legislations to regulate business operations to restrict unfair trade
practices and protect consumer and social interests. These laws may create
new opportunities or challenges for businessmen. A manager must know
business philosophy and approach of the current governments, and legal
provisions that he has to observe while dealing with other parties.
Some of political and legal factors are:
i. Political philosophy
ii. Political and legal reforms
iii. Government approach to different sectors
iv. Political stability
v. Acts or legal provisions relating to business operations and recent
amendments
vi. Working of judiciary and administrative machineries.
6. International Environment:
The world had become a global village. Most countries have permitted free
trade (with little restrictions). A marketer has to deal with and satisfy
cosmopolitan customers. Liberalization, globalization, and privatization
promoted multinational companies that carry their operations in many
countries. A businessman is required to follow global business theory – act
locally, but think globally. Every firm, whether large or small, is, directly or
indirectly, influenced by international economic and political forces.
These variables include:
i. Working of international agencies and organisations (World Bank, UNO,
etc.)
ii. Functioning of MNCs – Multinational Companies
iii. Export-import policies of different nations
iv. Availability of global aids and assistance
v. Global peace v/s conflict
vi. Liberalization, privatization, and globalization pace
vii. International agreements among countries
viii. Political stability in the dominant countries
ix. International business norms and values.
7. Technological Factors:
Technological factors affect the firm’s production process, product quality,
cost effectiveness, and, hence, competitive ability. A wise manager must
know the latest technology in the relevant field. Technology has released
wonders in fields of business transactions, communication, entertainment,
medical science, agriculture, and manufacturing systems.
At the same time, it has released horrors in fields of hydrogen bombs,
horrible chemical weapons, crime styles, deterioration of ecological
environment, and so forth. Every new technology is a force for creative
destruction. New technology compels old one to exit. New technology brings
superior products having more capacity to satisfy consumer needs.
Following technological factors are important:
i. Suitability and availability of technology
ii. Pace of technological change
iii. Replacement costs
iv. Opportunities for innovation
v. Research and development (R & D) budget
vi. Government role in developing and/or importing new technology
vii. Regulations affecting technological change/reforms
viii. Technological transfer among nations.