MODERN MARKETING

MODULE: 01
INTRODUCTION TO MARKETING

INTRODUCTION:
Marketing occupies an important position in the organization of business unit. Marketing is
the management process responsible for identifying, anticipating and satisfying customer
requirements profitably. Marketing deals with customers creating customer value and
satisfaction are the heart of modern marketing thinking and practice. Traditional view of
the marketing asserts that the customer will accept whatever product the seller presents to
them. In this way the main concern of the producer is to produce without considering the
choice or the behavior of the customer. But this point of view of marketing has now
changed. The modern concept may be viewed from the customer's point of view.
Marketing is centered on the customer.
Producers don't produce whatever he likes but whatever consumer wants.

MEANING OF MARKET:

The first concept to be understood in marketing management is MARKET. The term market
is derived from
The Latin word „maratus „. This means merchandise, which means the place of business and
trade.

DEFINITION OF MARKET:

“A market is an aggregate demand of the potential buyer for a product /service” - Philip
Kotler

MEANING OF MARKETING:

Marketing is the process which provides the product and service information to the
customers.

DEFINATION OF MARKETING:

According to HANSEN “marketing is the process of discovering and translating consumer

needs and wants in to product and service specifications creating demand for these product
and service and then in turn expanding this demand”.

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IMPORTANCE, ADVANTAGES, NEEDS OF MARKETING:

1. It builds a reputation for the brand:

Marketing play an important role for the well-being of a firm. The importance of
marketing too much for business it builds the organizational reputation in the society.

2. Helpful in Business Planning and Decision-Making:

Marketing in helpful in the overall business planning and taking various decisions
regarding production and other activities in the business. A firm will produce what
it can sell or as much quantity as it can sell and not what and how much it can
produce. Thus, marketing decisions affect the business decisions.

3. Helpful in Increasing Profits:

Every business is carried on with the profit motive. Marketing helps in increasing
the business profits by reducing the selling cost on the one hand and by increasing
the demand of the product through advertising and sales promotion activities on the
other hand.

4. Helpful in Communication between Firm and Society:

Business collects information regarding consumers' behavior and changes
therein from time to time through marketing. Marketing also provides
information to the firm of the competitors, price policies, production policies,
advertising and sales promotion policies, and distribution policies. It helps the
firm in framing its own policies or making necessary adjustments therein
accordingly.

5. Satisfying the Needs or Wants:

Marketing identifies those needs or wants which were not satisfied and helps in
developing the product or service which can satisfy those unmet needs or wants of
the people. For example, number ofdrugs was invented to treat various physical
problems of the people. Again the low cost formulations were developed to treat
the people who are unable to afford the expensive drugs.

6. Reducing the Price of Products or Services:

Marketing helps in popularizing the product or service which attracts the
customers as well as competitors towards that product or service categories.
Due to increase in demand, the manufacturing capacity increase which
brings down per unit fixed costs of the product or service. Furthermore

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increase in competition led to decrease in the prices charged by the firm.

7. Delivery of Standard of Living to the Society:

Marketing discovers needs and wants of the society with rising aspirations and
advancement in life, produces the goods and services according to these needs,
creates demand for these goods and services, encourages customers to use them and
thus, improves the standard of living of the society.

8. Decrease in Distribution Cost:

Marketing aims at reducing the cost of distribution as far as possible so that the
commodities might be within the reach of maximum number of consumers. It
increases the level of consumption in the society. Reduction in the cost of
distribution directly reduces the price of the commodity with economies of scale.

9. Increase in Employment Opportunities:

Employment opportunities are directly affected by the development of
marketing. It is expected. That in the under-developed countries, like India, there
is great scope of increasing employment opportunities by developing marketing
activities.

10. Protection against Business Recession:

Marketing helps in protecting society against all the recurring problems.
Marketing includes the discovery of new markets for the goods, modifications
and alterations in the quality of product, and development of alternative uses of a
product. It reduces the cost of distribution and maintains the level of sales
volume.

11. Increase in National Income:

Successful operation of marketing activities creates, maintains and increases the
demand for goods and services in the society. It results in the increased level of
production and utilization of services which in turn enhance the scope of
marketing. This increase contributes to the increase in the national income, which
is beneficial to the society as a whole.

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FUNCTIONS OF MARKETING

Merchandising function Physical function Facilitation function

Financing
Buying
Transporting
Market
research
Assembling
Pricing
Storage
andWare Branding
Selling
house

Packing

1. Merchandising function

a. Buying: It is the first step in the process of marketing. A manufacturer has to buy raw
materials for production; a wholesaler has to buy goods to sell them to the retailer; a
retailer has to buy goods to be sold to the consumer. Buying involves transfer of
ownership of goods from seller to buyer.
b. Assembling: Assembling means creation and maintenance of the stock of goods,
purchased from different sources. Generally, the dealer or middleman purchases the
goods from more than one seller. In such a case, the goods have to be collected and
assembled at one place.

c. Selling: Selling and buying are complementary to each other. Marketing efforts evolve
around the buying and selling functions. In business, the selling function is very
important. The primary objective of marketing is to sell the products at a profit. By
selling, the ownership is transferred to the buyer. Sales are concerned with the
activities, which convert the desire into demand. Creation of demand, its maintenance,
expansion, etc., are the soul of sales efforts.

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2. Functions of Physical Supply: The second group of marketing process is the physical
supply. These are the functions that are related with creation of place and time utilities.
Physical transfer of goods from the manufacturer to consumer takes place by means of
the following functions:

a. Transportation: Marketing system requires an economical and

effective transportation system. A good system of transportation increases the
value of goods by the creation of place utility. The opening of new markets
has been possible by the quick development of transportation and
communication. It has resulted in the expansion of markets, regular supply at
lower price and improved services to the consumers. There are different
kinds of transports like road, rail, sea, and air transport.

b. Storage and Warehousing: When production is seasonal but

consumption is permanent or when production is continuous but consumption
is seasonal, storage becomes necessary. Storage involves holding and
preserving of goods between the time of their production and the time of their
consumption. It facilitates a steady flow of commodities in the market. There
are different kinds of warehouse like public warehouse, bonded warehouse,
Central Warehousing Corporation (CWC) and State Warehousing Corporation
(SWC).

3. Facilitating Functions: These functions make the marketing process easy and
include financing, pricing, risk-bearing, standardization and market information, etc.

a. Financing: Finance is the life-blood of any business. It is very

difficult to carry on marketing activities smoothly without the availability
of adequate and cheap finance. Commercial Banks, Cooperative Credit
Societies, and Government Agencies arrange for short term, medium term,
and long term finance to facilitate marketing. Trade credit is also one of
the important sources of finance.

b. Pricing: Pricing is also an important function which is closely related to

selling. Price policy of the concern directly affects the profit element and
therefore, its successful functioning. In determining the price policy.

c. Risk-Bearing: In marketing, there arise numerous risks - damages

to goods, physical loss, changes in economic values of goods,
mismanagement, credit losses, etc. These are more or less inherent in
the marketing process. There are losses on accounts of fire, flood,
deterioration, bad debts, etc.

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c. Standardization: Standardization is related with the division of commodities

into distinct groups. Standard is used in providing certain basic qualities to the
goods for their use. Standard is a specification. It is a 'norm', 'grade' or
'category'. Standards are fixed on physical characteristics of products. The
standardized products possess uniform characteristics. For example, shape,
weight, size, etc.

d. Packaging: Packaging plays an important role as a medium in the marketing

mix, in promotion campaigns, as a pricing criterion, in defining the character
of new products, as a setter of trends and as an instrument to create brand
identity and shelf impact in all product groups. The purpose of product
packaging is to protect the product from damage.

CONCEPTS OF MARKETING

1. Production Concept
The production concept is based on the assumption that consumers prefer inexpensive and
widely available products. This viewpoint aligns with Says Law, which suggests that "supply
creates its own demand." Companies following this concept focus on increasing production
volume to achieve economies of scale, lowering production costs, and offering affordable
products. However, this philosophy may neglect product quality and may not always align
with customer preferences.

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2. Product Concept
The product concept operates under the assumption that customers prioritize
product quality over price and availability when making purchase decisions. Companies
adhering to this concept invest significant effort in developing high-quality products, often
at a higher cost. While this approach appeals to quality-conscious consumers, it may not
address other factors influencing purchasing decisions, such as price and availability.

3. Selling Concept

The selling concept centers on making immediate sales of a product, regardless of product
quality or customer needs. The primary focus is profit generation, often without building
long-term customer relationships. Companies following this philosophy may resort to
deceptive tactics to drive sales. This short-term approach may not be sustainable and can
lead to marketing myopia.

4. Marketing Concept

The marketing concept recognizes that to thrive in the 21st century, businesses must create
products that meet customer needs. It assumes that consumers buy products that fulfill their
needs better than competitors' offerings. Companies embracing the marketing concept
conduct research to understand customer needs and develop products that outperform
competitors. Building customer relationships and generating long-term profits are key
goals. However, this concept is not one-size-fits-all and depends on market dynamics.

5. Societal Marketing Concept

Expanding on the marketing concept, the societal marketing concept emphasizes a

business's role in promoting societal well-being. It involves meeting customer needs while
considering environmental impact, conserving natural resources, and contributing to social
causes like poverty alleviation and education. Manymajor companies include corporate
social responsibility in their marketing activities as part of this concept.

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APPROACHES OF MARKETING
1. Product or Commodity Approach

This approach studies marketing on commodity basis. The marketing situation of each
product is studied with regards to its sources of supply, marketing organization and
policies, involvement of the middlemen, to the extent of the market. This approach is also
called as 'Descriptive Approach'. In this method the commodity serves as a focus, around
which other aspects of marketing are studied and its journey from the original producer
right up to the final customer. In this we can locate the center of production. People
engage in buying and selling of the product, mode of temptation and so on. Through such
an approach we can find out the difference in marketing products, services and problems.
Thus we get a clear picture of marketing of agricultural products such as cotton, wheat,
jute represents the commodity approach.

2. Institutional Approach

In this method, description and analysis of the different institutions engaged in marketing
are undertaken. Here we study not the products it‟s about the producers, wholesaler's,
agents, retailers, transporters, storing institutions etc. Different institutions serve as
separate 'cells' of the marketing body. The functions performed by each cell form part of
the whole area of marketing and our main interest centers round the marketing institution
or agencies such as wholesalers, retailers, transport undertakings, banks, insurance
companies etc. In this approach the focus is on the study of various middle men and
facilitating agencies.
The study includes their position in the distribution channels, the purpose of their
existence, the functions performed, their operating methods and service rendered by them.
In order to obtain a comprehensive view of marketing the study is related to each type of
institutes.

3. Functional Approach

This approach splits down the field of marketing into separate functions.
These specific functions are buying, selling, transportation, storage,
standardization, grading, financing, risk-taking and marketing research, etc.
We also concentrate on the specialized service or functions oractivities performed by
marketers.
In this approach, marketing is regarded as: "The business of buying and selling and
includes those business attributes involved in the flow of goods and services between
producers and in terms of nature, important operational cause and methods. This approach
is definitely a consumer." These functions are also studied in relation to commodities and
marketing institutions, improvement over the former ones but not entirely free from

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defects.

4. Management Approach/Decision Making Approach/Managerial Approach

In this approach the focus of marketing study is on the decision making process involved
in the performance of marketing functions at various levels of the firm. The study involves
discussions of important concepts like devising alternatives strategies, analyzing their
relative importance, determining the strength and weakness of the company, techniques
and methods of problem solving.

5. Legal Approach

This approach is very narrow as it concentrates only on one aspect, i.e. the effect of transfer
of the title in a legal way. In India this aspect has particular significance. There are many
enactments passed in India which regulate and control the marketing activities e.g. Sales of
Goods Act, Contract Act, Common Carriers Act etc., Bailment Act etc.

6. Societal Approach

Under societal approach to marketing, the entire marketing process is regarded not as a
means by which business meets the needs of a consumer but as a means by which society
meets its consumption needs. The focus of study is therefore the interaction between/various
environmental factors (Sociology, Cultural, Technological, Political, Legal and Natural) and
marketing decisions. The societal approach is the study of marketing is relatively recent and
was derived out of the criticisms of the marketing behavior of business dominated with
profit attainment and growth. From the practical angle both these approaches go hand in
hand.

7. Systems Approach

This approach may be said to be an advancement of management or decision making

approach. Broadly defined “As a body of independent parts (sub systems) which has a
separate identifiable areas of operators. These sub system may further be split down in to sub
part, hence may be known as sub system of the body.

8. Economic Approach

Economic approach considers market forces like demand, supply, price, etc. the market
behavior, the type of markets etc. Are considered in this approach.

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CLASSIFICATION OF MARKETS

PLACE TIME COMPETITION

Very short
Local
Perfect
Short
National
Imperfect
Long
International

Very long

A) Market According to place

1. Local Market
A local market for a product exists when buyers and sellers of commodity carry on
business in a particular locality or village or area where the demand and supply
conditions are influenced by local conditions only.
E.g. Perishable goods like milk and vegetables and bulky articles like bricks and stones.
2. National Market
When commodities are demanded and supplied throughout the country, there is national
market. E.g. wheat, rice or cotton
3. International market
When demand and supply conditions are influenced at the global level, we have
international market.
E.g. gold, silver, cell phone etc.
On the basis of demand and supply, this geographical classification is made. With
improved transport facilities and communications, even goods of local markets can become
international goods.

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B) Market according to time

Marshall classified market based on the time element. In economics 'time' does not mean
clock time. It means only the division of time based on extent of adjustability of supply of
a commodity for a given change in its demand. The major divisions are very short period,
short period and long period.
1. Very Short Period
Very short period refers to the type of competitive market in which the supply of
commodities cannot be changed at all. So in a very short period, the market supply is
perfectly inelastic. The price of the commodity depends on the demand for the product
alone. The perishable commodities like flowers are the best example.
2. Short-period
Short period refers to that period in which supply can be adjusted to a limited extent by
varying the variable factors alone. The short period supply curve is relatively elastic. The
short period price is determined by the interaction of the short-run supply and demand
curves.
3. Long Period
Long period is the time period during which the supply conditions are fully able to meet
the new demand conditions. In the long run, all (both fixed as well as variable) factors are
variable. Thus the supply curve in the long run is perfectly elastic. Therefore, it is the
demand that influences price in the long period.

C) Market according to competition

These markets are classified according to the number of sellers in the market
and the nature of the commodity. The classification of market according to
competition is as follows.

1. Perfect Competition
Perfect competition is a market situation where there is infinite number of sellers
that no one is bigenough to have any appreciable influence over market price.
2. Imperfect competition
Imperfect competition is an economic concept used to describe marketplace conditions
that render a market less than perfectly competitive, creating market inefficiencies that
result in losses of economic value. In the real world, markets are nearly always in a
condition of imperfect competition to some extent.

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SOCIETAL MARKETING CONCEPTS

There has been a further refinement in the marketing concept particularly during 1980s
and 1990s. The new concept of marketing is concerned with understanding the consumer
needs and matching the products accordingly. This philosophy cares for not only consumer
satisfaction but for consumer welfare or social welfare.
The societal marketing concept is the newest of the five marketing management
philosophies. The societal marketing concept is an enlightened marketing concept that
holds that a company should make good marketing decisions by considering consumers'
wants, the company's requirements, and society's long-term interests. It is closely linked
with the principles of corporate social responsibility and of sustainable development. The
societal marketing concept holds that the organization should determine the needs, wants,
and interests of target markets. It should then deliver superior value to customers in a way
that maintains or improves the consumer's and the society's well-being.
The social marketing has following objectives to meet:
1) To satisfy consumers' long-term needs and wants and satisfy society's long- term
interests. Consumers will prefer and favor such marketing organizations.
2) Consumers are now concerned about safety and environmental problems and marketing
companies need to understand them.
3) The marketing activity should be harmonized to offer products which will satisfy
consumers' needs and society's long-term interests.

Holistic Marketing Concept:

A New Set of Beliefs This is a new set of beliefs and practices followed by leading
business firms of 21st century. The holistic marketing concept is based on the
development, design, and implementation of marketing programmers, processes, and
activities that recognize their breadth and interdependencies,
Holistic marketing is thus an approach to marketing that attempts to recognize and
reconcile the scope and complexities of marketing activities.
1) Relationship Marketing:
Increasingly, a key goal of marketing is to develop deep, or indirectly affect the
success of the firm's marketing activities. Relationship marketing aims to build
mutually satisfying long-term relationships with key constituents in order to earn
and retain their business. The ultimate outcome of relationship marketing is a
unique company asset called a marketing network. A marketing network consists of
the company and its supporting stakeholders - customers, employees, suppliers,

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distributors, retailers, ad with which it has built mutually agencies, university

scientists, and others profitable business relationships.

2) Integrated Marketing:

The marketer's task is to devise marketing activities, and assemble fully integrated
marketing programs to create, communicate, and deliver value for consumers.
Marketing activities come in all forms. McCarthy classified these activities as
marketing-mix tools of four broad kinds, which he called the four Ps of marketing:
product, price, place, and promotion. According to this concept marketing process
must integrate and co-ordinate all these four Ps.

3) Internal Marketing:
Internal marketing comes from the basic understanding of marketing. The term
internal marketing is defined as viewing employees as internal customers, viewing
jobs as internal products that satisfy the needs and wants of these internal
customers while addressing the objectives of the firm. Internal marketing act as part
of the marketing strategy with the employee's themselves whom are termed
internal customers. Internal marketing is an ongoing process that occurs strictly
within a company or organization whereby the functional process is to align,
motivate and empower employees at all management levels to consistently deliver
a satisfying customer experience.
4) Performance Marketing:
Holistic marketing incorporates performance marketing, and understanding the
returns to the business from marketing activities and programs, as well as
addressing broader concerns and their legal, ethical, social, and environmental
effects. Top management is going beyond sales revenue to examine the marketing
scorecard, and interpret what is happening to market share, customer loss rate,
customer satisfaction, product quality, and other measures.

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