CONCEPT OF MARKET UNIT 5

LEARNING OBJECTIVES :
Understand the concept of market and its evolution over the time.

Understand the meaning and concept E-Business and E-Commerce. Its role in the modern day business community.

Analyze the Market Environment at Micro and Macro Level.

Explain the techniques of Market Research and the instruments used in the same.

Appreciate the role of Market Survey as a source of collecting market information.

Understand the strategy of market expansion and development.

Understand the elements of trade and commerce

Explain the concept of marketing mix and the four P ̳s of marketing.

A market involves

1. Buying and selling of the products or commodities or services

2. The buyers and sellers meet either in person or through any other means of
communication like email, fax or phone etc.
3. The buyers and sellers may be involved during the transaction. However in case of
e-commerce the buyer and seller need not be involved.
4. The demand and supply reach an equilibrium state and the prices are competitive

The concept of market is very solid and dynamic and has gone through a lot of change
from the olden days to till date. They have a very strong influence on the economy.
Markets can make the economy very powerful and protect it from fluctuations.
In the olden days, traditional markets were in place. They existed when the economy
was driven completely by farming and handicrafts. Due to lack of sophisticated
distribution channels, the market was confined only to the surrounding areas.

The traditional market was defined as “The place where a particular commodity is
concentrated for sale”

As per this definition, a market comprises of Place: The commodities are

accumulated at a specific place. The buyers and sellers gather at this place to
conduct the transactions.

Different markets for different commodities: A particular place was used for buying
or selling a commodity and a different place was used for a different commodity.
Thus livestock had a marketplace, clothes were available in a different marketplace
and handicrafts were sold in a different marketplace.
As the industries started to grow up with time, they started to focus on
improving various activities in terms of

1. Study of consumer awareness

2. Study of competitors
3. Quantity of products through mass production
4. Quality of products or services
5. Range of products offered to meet the demand
6. Understand the emerging new legal policies, introduced to protect the
consumer rights, and act accordingly.
Marketing Environment: Macro and Micro Marketing
Environment
The marketing environment of a company is composed of the individuals, institutions, and
forces outside marketing that influence marketing management’s ability to develop and
maintain a successful relationship with its target customers.

Constantly watching and adapting to the changing marketing environment is important

because the marketing environment offers both opportunities and threats.

By conducting a regular and systematic environmental analysis, the company can revise
and adapt marketing strategies to cope with the new challenges and opportunities in the
marketplace.
Macro Environment of Marketing
Demographic Environment

Demography is the study of human population in terms of size, destiny, location, age, gender, race, occupation, and
other statistics.

This is the very important factors that help the marketer to divide the population into different market segments and
target markets.

Demographic data also helps in preparing geographical marketing plans, age, and gender-wise plans.

Economic Environment

Economic Environment is those macro factors that affect consumer buying power and spending patterns.

It includes the level of income, policies, and nature of an economy, economic resources, trade cycles, distribution of
income and wealth.

When the income of a family or country changes it also changes the buying behavior and spending pattern of the
family or country.
Natural Environment

Natural environment involves the natural resources that are needed as inputs by marketers or they are affected by
marketing activities.

So marketers should be aware of several trends in the natural environment.

Technological Environment

Technological forces are perhaps the most dramatic forces which are changing rapidly. These macro-environmental
forces create a new product, new markets and marketing opportunities for marketers.

Political Environment

It includes government actions, government legislation, public policies, and acts which affect the operations of a
company or business.

These forces may affect an organization on a local, regional, national or international level.

So marketers and business management pay close attention to the political forces to judge how government actions
which will affect their company.
Cultural Environment

Cultural factors in heritage, living styles, religion, etc. also affect a company’s marketing
strategy. Social responsibility also becomes part of marketing and slowly emerged in
marketing literature.

Socially responsible marketing is that business firms should take the lead in eliminating
socially harmful products.
Micro Marketing environment
The micro-environment refers to the forces that are close to the company and affect its ability to serve
its customers. It influences the organization directly.

It includes the company itself, its suppliers, marketing intermediaries, customer markets, competitors,
and the public.

Internal Organizational Environment

The first is the organization’s internal environment—its several departments and management levels as
it affects marketing management’s decision making.

Marketing Channel

The second component includes the marketing channel firms that cooperate to create value: the
suppliers and marketing intermediaries (middlemen, physical distribution firms, marketing-service
agencies, financial intermediaries).
 Market Research
It is a term that is used to refer to a process
of gathering or collecting information about
target audience or target market.

The main role of the concept of market

research is to provide a company or a
business organization with an in-depth view
of the customers or consumers in order to be
able to satisfy their needs better.

The process of market research is integral to

be able to compete with other players in the
same industry and helps to analyze things
like market size, competition and market
needs.
Types of Market

The third component consists of the types of markets in which the organization can
sell: the consumer, reseller, government, and international markets.

Competition

The fourth component consists of the competitors facing the organization.

Organizational Objectives

The fifth component consists of all the stakeholders that have an actual or potential
interest in or impact on the organization’s ability to achieve its objectives: financial,
media, government, citizen action, and local, general, and internal publics.
Micro environment
https://youtu.be/4YAEniStvls
https://youtu.be/d1QUX2AFjz0
Factors to be investigated through market research
Market research can be considered as a method of getting an idea of the needs of the customers,
and some of the factors that can be investigated through this process are given as follows:

1. Trends in the market – Market trends or trends in the market are the movements of a market
in a given period of time.
2. Segmentation of the market – This is the division of a market into subgroups with similar
features. This is needed to create a distinction between demographics, choices, genders, and
personalities, etc.
3. Information available – Market information is the information about prices of different
products available in the market.
4. SWOT analysis – This analysis is an analysis of the Strengths, weaknesses, opportunities
and threats to a business or company.
5. Effectiveness of marketing – Marketing effectiveness takes into account risk analysis,
product research, customer analysis, and competitor analysis, etc.
Benefits of market research

● Tapping opportunities – One of the biggest benefits of conducting market research is that it
enables you to find out the various market opportunities and makes it possible to tap into
them effectively. For example, it may help you to find whether your product is suitable for the
audience you have targeted or not, and if it isn’t, then market research helps to identify the
suitable audience.
● Encouraging communication – Market research helps you to find out the best way to
communicate with your customers. After obtaining research results, one tends to know the
audience nature, personalities, likes, dislikes, etc. and this makes it easier to connect with
them and reach out to them.
● Minimization of the risks – Another major benefit of market research is that it helps
businesses minimize risks by taking actions on certain subjects. For example, it may help to
add certain qualities to products that may reach out to number of people, thus decreasing
chances of the product going not used.
● Establish trends and market standing – The market changes
continuously and constantly. In such a scenario, only thorough market
research can help to establish the ongoing trends and then formulate
plans according to the current customer needs and requirements.
● Find out possible problems – Since market research brings out the
customer reactions, choices, and preferences, a business can alter
the product while it is still in the manufacturing or designing process. It
is easier to find problems and then work on them if one has research
results in hand.
Types Of Market Research Techniques

Primary Market Research. Primary market research is a kind of market research which is done by the
business or company itself with the objective of gathering information that can be used to improve the
products, services, and functions.

Primary market research is also known as field research since it is research done from scratch, without
using any information that is already made available through other sources.

One can gather primary data or information through qualitative research methods as well as quantitative
research methods.

Primary market research is the most common type of a market research method and is also the most
valuable type.
Focus groups.

One of the main ways used to conduct primary market research is through focus groups.

This method involves getting a group of people in a room or a place and asking them insightful questions regarding the
product, its development, their preferences, and feedback, etc.

These types of focus groups can be run or conducted at any location feasible for the company or business.

These days, with advancements in technology and the internet, it is possible to conduct them virtually as well, through the
method of video conferencing.

But the main thing here is that the group of people brought together have something in common, for example, either they
should belong to the same age group, the same gender and so on. This division of the group or the selection process must
depend on the audience targeted or the product of service of the company.

Participants in such focus groups are then compensated by either free coupons, vouchers, gifts or money, etc.

Focus groups fall under the qualitative research method and help businesses know a lot about customer or market trends.
Surveys and questionnaires.

Another superb and highly effective way to conduct primary market research is through surveys and
questionnaires.

The term ‘surveys’ is a broad term that covers a lot of things such as survey questionnaires, survey forms, survey
interviews and customer satisfaction cards, etc.

One of the most common examples of this research method is the feedback form given to customers at the time of
billing at a restaurant.

It is a straightforward method of knowing whether or not the customer is satisfied with the business’s existing
services and products or what kind of changes would the consumer like to see.

Surveys are also conducted in the form of web questionnaires these days that enable businesses to collect a lot of
feedback and then analyze it for further administration.
Observation.

There are two major observation techniques or research methods used in primary market
research, and they are observation through interaction and communication with the subject
and observation through no interaction and communication with the subject.

This form of research method comes under the quantitative primary research since through
it; researchers evaluate or measure the behavior of the respondents or the users in general.

This is more of a personal approach in comparison to surveys and questionnaires, etc.

Trials and experimentation.

This method of primary research involves scientific tests where hypotheses and variables, etc. are
used.

This is a quantitative type of market research which may either be controlled out in the field or
within controlled environments.

In order to understand this form of research, here is an example that you can refer to:

A food product company created 3 different food packaging styles and then sold the
products to different consumers. After a limited period of time, it analyzed the sales and
came to a conclusion about the preferred packaging style or design.
In-depth Interviews.

One may think of an in-depth interview to be a quantitative approach to primary market research,

but this method, in fact, is a qualitative research that takes into consideration the kinds of choices and
preferences a customer base has.

Interviews, unlike focus groups, involve interaction between one moderator and one respondent and
several types of modes and methods may be used to conduct them.

Interviews may not always be restricted to a set pattern of questions but can also be in the form of a
conversation with the target customer base or audience.

This kind of a research method helps to dig further into what the customer wants, and the answers can
later be analyzed to come to a conclusion for the final product delivery.
Secondary market research.

As opposed to primary market research, secondary market research is a research technique

that does not aim to gather information from scratch but relies on already available
information from multiple sources.

This research focuses on data or information that was collected by other people and is
available for either free or paid use for others.

Secondary market research takes into account many different sources for collection of
information including government data, office data, newspapers, magazines, the internet,
etc.

One of the benefits of doing secondary market research is that it is mostly free and takes a
lot less time.
Internal sources. Internal sources are those kinds of secondary market research
sources that already exist and are collected in the business’s database or file system.
Internal sources include information that has already been collected by the company
and proves useful for future projects, etc. Examples:

● Balance sheets – Previous balance sheets of the business can be referred to in

order to find stats and figures that may prove useful for evaluation.
● Profit and loss statements – Profit and loss statements can be consulted to find
out what kinds of products and services resulted in profits previously.
● Inventory records – This is another piece of data which can be used as a source
for secondary market research and puts into focus many stats and figures.
● Sales figures – Companies store their previous sales figures so that they can be
analyzed and used for further research.
External sources. In case the internal sources don’t fetch enough or sufficient
information, external sources can be use. External sources are those sources that
present data that is collected by other businesses or people. These are collected
from outside the business’s environment and include multiple sources.Examples:

● Government sources – Several government sources can be used to collect

a lot of useful information about multiple subjects.
● Universities and colleges – Several college students and researchers
collect and file information that can be further used by businesses.
● The internet – The internet is the most used secondary market research
source but has the disadvantage of several non-credible sources with
incomplete information.
● Competitor data – Often, businesses use the information collected and filed
by other business organizations including that gathered by their competitors.
MISTAKES TO AVOID WHEN DOING MARKET
RESEARCH
Doing only secondary market research – While doing market research, one must avoid making the
mistake of doing only secondary research and neglecting primary market research. It is true that
secondary research is important and time-saving but primary research may bring about a fresh
perspective, updated and latest results and offers a better take at the market. Things like customer’s
values, psychology, attitudes, lifestyle and interests can only be known when one conducts primary
market research.

Doing only primary market research – Another common mistake that must be avoided when doing
market research is doing only primary market research. Businesses often make the mistake of spending
so much time on primary research that they forget that using secondary sources for data could also prove
useful and a lot more time-saving. Secondary research may offer some data and stats for free and may
eliminate the need to go an extra mile for the same information. Hence, all businesses must make it a
point to do a little bit of both the research works.
● Using only the web for research – It is true that the internet or the web is the greatest database for
a wide variety of information and data but just relying on it and not using any other source could
prove to be a big mistake as far as market research is concerned. One must remember that the
internet may not always offer reliable sources and complete information. And, as they say,
incomplete information is dangerous.
●
● Limited vision – It is common for people to see what they wish to see, but you just cannot afford to
have tunnel vision if you are handling and running a business. A mistake that businesses often tend
to make is to remain within a certain enclosure and not seeing what is outside it. Businesses must
extend their vision, learn more and then apply their functions to attract maximum people of different
demographics.
●
● Not being able to identify your target audience – One of the most common reasons or causes for
the failure of products, services, and business is the inability to identify the target audience. While
with some products, it is easier to tap the potential customers but with some others, finding who your
real audience is can be tough. For example – food products. But just because it is difficult doesn’t
mean it is impossible. It is highly important for all business companies to know exactly who their
target audience is and then focus their marketing and other efforts towards them in particular.
Market survey is the survey research and analysis of the market for a particular
product/service which includes the investigation into customer inclinations. A
study of various customer capabilities such as investment attributes and buying
potential.

Market surveys are tools to directly collect feedback from the target audience to
understand their characteristics, expectations, and requirements.

Market surveys collect data about a target market such as pricing trends,
customer requirements, competitor analysis, and other such details.
Purpose of Market Survey
● Gain critical customer feedback: The main purpose of the market survey is to offer marketing and business
managers a platform to obtain critical information about their consumers so that existing customers can be
retained and new ones can be got onboard.
● Understand customer inclination towards purchasing products: Details such as whether the customers
will spend a certain amount of money for their products/services, inclination levels among customers about
upcoming features or products, what are their thoughts about the competitor products etc.
● Enhance existing products and services: A market survey can also be implemented with the purpose of
improving existing products, analyze customer satisfaction levels along with getting data about their
perception of the market and build a buyer persona using information from existing clientele database.
● Make well-informed business decisions: Data gathered using market surveys is instrumental in making
major changes in the business which reduces the degree of risks involved in taking important business
decisions.
There are four types of corporate
strategies.

They are:

l Stability strategies: make no change

to the company’s current activities

l Growth strategies: expand the

company’s activities

l Retrenchment strategies: reduce the

company’s level of activities

l Combination strategies: a
combination of above strategies
Stability Strategy
GROWTH
STRATEGY
What is the
Ansoff Matrix?
ECONOMIC AND NON ECONOMIC ACTIVITIES
 Concept of Business: – Business refers to those economic activities involving the purchase production and / or sale of
goods and services with a motive of earning profit by satisfying human needs in society.

Characteristics of Business:
1. An economic activity: Business in considered as an economic activity because it is undertaken with the objective of earning
money.

2. Production or procurement of goods and services: Business includes all the activities concerned with the production or
procurement of goods & services for sales. Services include transportation, banking, Insurance etc. Goods may consist of
consumable items.

3. Sale or exchange of goods & services – There should be sale or exchange of goods and service between the seller & the
buyer.

4. Dealing in goods & services at a regular basis: There should be regularity of dealings or exchange of goods & services. One
single transaction of sale or purchase does not constitute business.

5. Profit Earning: The main purpose of business is to earn profit. A business cannot survive without making profits.

6. Uncertainty of return: Every business invests money with the objective of earning profit but the amount of profit earned may vary.
Also there is always a possibility of losses.

7. Element of risk: All business activities carry some elements of risk because future is uncertain and business has no control over
several factors like, strikes, fire, theft, and change in consumer taste etc.
Primary Industry: The primary industry includes those activities through which the natural resources are used to provide raw
material for other industries Primary industries are of two types.

Extractive Industry refers to those industries under which something is extracted out of the earth, water or air e.g., coal, iron, gas
etc. Farming, mining, lumbering, hunting & fishing come under this category of industry

Genetic Industry refers to those industries under which the breed of animals and vegetables are improved and made more useful
e.g., poultry farms, dairy farming, fish hatchery, cattle breeding etc.

Secondary Industry: Under this industry new products are manufactured by using the previously produced things e.g., producing
cotton is a primary industry and manufacturing cloth out of cotton is a secondary industry. It is of two types.

Manufacturing: These industries convert raw materials or semi-finished products into finished products e.g., paper from bamboo,
sugar from sugar cane. It is further divided into four parts.

(i) Analytic: Different things are manufactured out of one material e.g., petrol, diesel, gasoline out of crude oil.

(ii) Processing: Those industries wherein useful things are manufactured by making the raw material to pass through different
production process e.g., steel from iron ore, sugar and paper industries.

(iii) Synthetic: Many raw materials are mixed to produce more useful product e.g., paints, cosmetics, cement.

(iv) Assembling: Where in the parts manufactured by different industries are assembled to produce new and useful product e.g.,
computers, watches cars, television etc.
2.Construction industries: Industries that are involved in the construction of buildings, dams, bridges, roads as well as
tunnels and canals.

3 Tertiary or Service Industry: Includes those services which help business to move smoothly e.g. transport, bank,
Insurance, storage and Advertising.
https://youtu.be/3o0EHOktiaw
Product – Definition in Marketing

A product is what a seller has to sell and what a buyer has to buy it satisfies the needs of
customers.

Customers purchase products because they are capable of realizing some benefits to the
purchaser.

A marketer can satisfy the needs and wants of his customers by ‘offering something’ in
exchange for money. And this ‘offering’ is basically a product.

According to Philip Kotler, “A product is anything that can be offered to a market for
attention, acquisition, use or consumption that might satisfy a want or need. It includes
physical objects, services, persons, places, organization and ideas”.
Product mix

The complete range of products present within a company is known as the

product mix. In any multi brand organizations, there are numerous products
present. None of the organizations wants to take the risk of being present in the
market with a single product.

If a company has only a single product, than it is understood that the demand of
the product is very high or the company does not have the resources to expand
the number of products it has. Generally, most companies nowadays realise the
importance of product diversification.
Product Branding, Packaging and Labelling
Brands and Branding:

A brand is the identification of a product. It can be in the form of a name, symbol, or design etc.
The branding is not only done to identify the seller or producer but also to make your product
superior than competitor’s product.

Various terms related to brand are:

1. Brand:

A brand is the identification of a product it can be in the form of name, symbol or design etc. For
example, Surf, Dettol, Nike, etc. even various symbols such as etc. are also the brands.
2. Brand Name:

The part of brand which can be spoken is called brand name. In other words we can say it is the
verbal part of a brand. For example, Dettol, Surf.

3. Brand Mark:

The part of brand which cannot be spoken but can be recognized is known as brand mark. For
example, Maharaja sign of Air India, Pepsi sign of red and blue ball, Nike sign of arrow, Mercedes
sign of star, etc.

4. Trade Mark:

A part of brand which is given legal protection is called trade mark. No the firm can use the name
or sign for which a company get legal protection.
 Packaging
Packaging means the wrapping or bottling of products to make them safe
from damages during transportation and storage. It keeps a product safe
and marketable and helps in identifying, describing, and promoting
the product.

Different kinds of products need different kinds of packaging, for example,

liquid products are packed in barrels and bottles; whereas, solid products
are wrapped. The organizations use special containers for fragile products,
such as glassware.
 Labelling is a part of marketing
Labelling and enables product
identification. It is a printed
information that is bonded to
● the product for recognition
and provides detailed
information about the
product. Customers make the
decision easily at the point of
purchase seeing the labelling of
the product.
Price
Price is the value that is put to a product or service and is the
result of a complex set of calculations, research and
understanding and risk taking ability.

A pricing strategy takes into account segments, ability to pay,

market conditions, competitor actions, trade margins and input
costs, amongst others. It is targeted at the defined customers
and against competitors.
What is cost-plus pricing?

Cost-plus pricing is also known as markup pricing. It's a pricing method where a fixed percentage is added
on top of the cost to produce one unit of a product (unit cost) -- the resulting number is the selling price
of the product.

This pricing method looks solely at the unit cost and ignores the prices set by competitors. For this reason, it's
often not the best fit for many businesses because it doesn't take external factors, like competitors, into
account.

Cost-plus pricing is often used by retail companies (e.g., clothing, grocery, and department stores). In these
cases, there is variation in the items being sold, and different markup percentages can be applied to each
product.
Penetration pricing
Penetration pricing is when a product is priced lower than the competition to
drive sales during the initial release period. This is a pricing strategy often used
by brands for a product that has high competition or is a relatively new idea. The
low price helps penetrate the market by getting the attention of more consumers
than a higher price otherwise would, allowing the brand the establish a foothold
against the competition in these early stages.

Penetration pricing is when a product is priced lower than the

competition to drive sales during the initial release period.
Skimming / creaming pricing
Skimming pricing is used when a product, which is new in the market or just launched, is sold at a relatively
high price because of its uniqueness, benefits to customers or its current Wow factor. However, slowly but
surely when the product gets older in the market, then the price is dropped and the product is brought at
competitive pricing.

Skimming price is mostly used for technological products where the product demand is not consistent. The
typical product which is launched with a skimming price strategy is unique to the market, has customers who
are ready to pay a premium for the product, and is far ahead from the competition.

The strategy that Apple is using is known as the skimming pricing strategy. And Apple is only just an example
of one of the companies performing skimming price.
Variable price method
Variable Pricing can be defined as the pricing strategy to optimize Profit by offering different prices for the
same product or service vary based on point of sale, a region of sale, date of the sale, and other factors.

Variable pricing is a marketing strategy to sell products to consumers at different prices. The same good is
sold at a varying price depending on the demand of the product at a certain time or certain region. Variable
pricing technique is used by retailers quite often to generate a profit on the goods.

The price of the product is decided based on various factors such as service required to produce and maintain
the products and the demand and supply of the product. For example, the demand for Air conditioners is quite
high in summer.

As a result, an upsurge in the price of air conditioner can be observed in summers whereas same air
conditioners are sold at heavy discounts offseason.
Place mix (Physical distribution)
In the marketing mix, the process of moving products from the producer to the intended user is
called place.

This movement could be through a combination of intermediaries such as distributors, wholesalers

and retailers. In addition, a newer method is the internet which itself is a marketplace now.

What is a Distribution Channel?

A distribution channel can be defined as the activities and processes required to move a product
from the producer to the consumer. Also included in the channel are the intermediaries that are
involved in this movement in any capacity. These intermediaries are third party companies that act
as wholesalers, transporters, retailers and provide warehouse facilities.
Promotion Promotion is the part of marketing where
you advertise and market your product,
also known as a promotional strategy.
Through it, you let potential customers
know what you are selling.

An effective promotional effort contains a

clear message that is targeted to a certain
audience and is done through appropriate
channels.
SOLUTION OF BRAND PICTURE RIDDLE
Britania (tiger getting entered)
Kingfisher (left side up of tiger)
Air India (Welcoming guy)
Nirma (dancing girl in white 👗)
Amul ( do I need to write anything about this? Dhara('Jalebi' written on cake reminds that advt. where a boy left his home and returns back for
Jalebi 😅)
Vodafone (zoozoo)
Hutch ( that dog with Parle girl sitting on floor)
Parle (girl with that dog sitting on floor)
Onida (black suited man lying on sofa)
MDH Masale (old aged person framed on wall)
Woodland ( other frame beside MDH)
Asian Paints (boy painting with brush in hand)
Fevicol (those elephants in pair under coffee table)
Lijjat Papad (Rabbit on floor with Papad in hand. I thought it would be Duracell at first 😅)
Dunzo itself
Ambuja Cement (that guy chilling outside in the balcony)
Saregama Carvan (Ambuja guy holding it)
Boomer Chewing gum (Superhero poster on main wall)
Fallero (strawberry 🍓 jelly candy poster beside boomer)
Sunfeast (Sun ☀ in the sky)
TVS (Running horse keychain on the TV table)

I missed other elephant in the frame and that red face on canvas.