Marketing Management MBA 1(1)

 

The word Market is derived from the Latin word MARCATUS which means merchandise or trade or a place where business is conducted. Marketing is not only a place of exchange but an arrangement that provides an opportunity of exchanging goods and services for money.

 

Core Concept of Marketing:

According to Philip Kotler, every human being has endless needs and demands . There are many products which can satisfy human wants and demands. These wants and demands can be fulfilled by exchange of goods and services. Marketers try to increase demand by making products more attractive, affordable and easily available. Market is a place where goods and services exchanged. Marketing means all those activities that take place in relation to market. Hence, the marketing is a social process by which individual and groups obtain what they need and want through exchanging products and values with others.

 

Definition Of Marketing:

Marketing refers to performance of set of activities essential to direct, regulate and facilitate the flow of goods and services from the manufacturer to ultimate consumer in the process of distribution. These activities include market analysis, market planning, product planning, product development, pricing of product or services, physical distribution, warehousing, financing, risk bearing etc.

“Marketing is the Process of Planning and Execution the conception, pricing, promotion and distribution of ideas, goods and services to creat exchanges that satisfy individual and organizational goals”- American Marketing Association.

"Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large."

 

 

 

Marketing Management:

Marketing Management refers to the process of planning, organizing, controlling, and implementing marketing strategies, programs, and activities to satisfy customer needs and achieve an organization’s goals.

In simple terms, it’s all about:

• Understanding the market and consumer behavior
• Developing products/services that meet consumer needs
• Setting the right price
• Promoting the product effectively
• Distributing it to the right people at the right time

Market:

“A place (physical or virtual) where buyers and sellers come together to exchange goods, services, or information.”

“A market is the group of actual and potential buyers of a product or service who have the need, willingness, and ability to purchase it.”

Key Components:

• People (buyers) – individuals or organizations
• Needs/wants – they must have a demand for the product
• Ability to buy – includes financial means and access
• Willingness to buy – they must be interested in making the purchase

Types of Markets:

1. Consumer Market – individuals buying for personal use
2. Business Market – companies buying for production or resale
3. Government Market – government agencies buying goods/services
4. International Market – buyers in other countries
5. Nonprofit Market – organizations buying for social goals, not profit

 

Nature of Marketing: 

• Marketing is a process of discovering and translating consumer wants into products and services.
• Marketing is a concept and way of thinking.
• Marketing is a dynamic process.
• Marketing relates with movement of goods and services from producer to ultimate consumer.
• Marketing creates time, place and possession utilities through warehousing, transportation and selling.
• It focuses on satisfaction of customer’s wants. Customer is considered as the ‘King’ of the market. All activities of marketing begin and end with customers.
• Marketing involves various activities such as product planning and development, product pricing, promotion, physical distribution and selling.
• Marketing is wider than selling. It not only aims at physical movement of goods but also focuses on customer satisfaction.
• Marketing involves creative thinking which provides a competitive edge to the organization.
• Marketing information system as well as integrated marketing is essential to achieve marketing goals.

 

Scope of Marketing

The scope of marketing is very wide. Various functions are performed under it.

• 1)     Merchandising Functions
• 2)     Physical distribution functions
• 3)     Auxiliary Functions

1) Merchandising Functions

It means those activities which are essential to make possible the availability of goods and services to the market. Various activities that are covered under merchandising functions have been described as follows:

• a.     Product Planning and Development
• b.     Standardization and Grading
• c.      Product Pricing
• d.     Buying and Assembling
• e.     Selling

 

A.     Product Planning and Development:

Planning for product, is the first step of marketing programme in a firm. It implies all activities which are associated with the determination of line of products which a firm can offer. It involves extensive marketing research so as to provide a product or service as per customer’s needs. Product planning and development involves certain activities as described below:

(i) Creation of Idea

(ii) Screening of Idea

(iii) Assessing technical feasibility

(iv) Analyzing its business prospects

(v) Designing the product i.e. giving shape, testing, packaging and labelling etc.

(vi) Test marketing (offering product as sample or launching it in small segment of market)

(vii) Analysing the reactions of customers and modifying the product accordingly

(viii) Pricing the product

(ix) Producing the product for sale in the local, national or international market (commercialization)

B.     Standardization and Grading:

Standardisation refers to the process of setting up standards so as to ensure that goods are produced as per those standards. A standard is a constant physical feature of the product like design, shape, size and colour. Standardisation brings uniformity in quality which further helps in marketing. A buyer can buy goods only by examining the sample rather than inspecting the whole lot. This saves lot of time and botheration of buyers and sellers.

Grading means dividing the products into different classes as per their size, quality and other features. Products with similar features are placed in one grade and are distinguishable from other products. Since, all products of the manufacturer may not be of same quality, so they are divided into different groups in accordance with specifications set in standards and are given different grades. e.g. Basmati rice differs in quality, so they are classified according to quality and grades are assigned.

C.     Product Pricing:

Product pricing is vital function of marketing and involves the determination of adequate price which can achieve pricing objectives. There is a need to follow proper pricing strategies to survive in this highly competitive market. Prices should be fixed in such a manner that on one hand, customer’s preference for product is created and on the other hand, genuine profits are earned. There are various methods of pricing viz. cost- based method,

                           i.          Demand based method,

                          ii.          Competition based method,

                        iii.          Perceived utility method.

D.    Buying and Assembling:

Buying means procuring goods at right time, at right price, in right quantity and quality and from a right source. It involves transfer of ownership from seller to buyer. 

Buyers follow different buying practices while making purchases such as:

(i) Hand to mouth buying: This is also known as conservative buying. Under this system, buyers purchase goods strictly as per their requirement.

(ii) Concentrated buying: It is the practice under which buyers make purchases from few suppliers or from a single supplier. They are able to secure certain benefits from the seller being their ‘loyal buyers’.

(iii) Diversified buying: This is also called as scattered buying. This practice refers to buying from different suppliers. Buyer can get competitive price, better service and wider choice.

(iv) Reciprocal buying: This refers to buying on reciprocal basis, i.e. if you buy from me, I will buy from you. Under this, there is assured market for the buyer.

(v) Speculative buying: It is practice of making bulk purchases so as to sell them at higher price in near future.

Assembling refers to collecting goods from different production houses and bringing them to a central place for sale. Assembling facilitates in providing goods of different variety at a place and time they are demanded. 

E.     Selling: Selling implies the process of transfer of title to goods or services in exchange of money. The buyer gets the ownership of goods but may or may not hold their possession immediately. Selling is considered as the vital function of marketing. In fact, all marketing activities are directed towards effective selling. A firm can earn profit only through successfully selling i.e. disposing of goods at reasonable prices. It is through selling that goods or services reach to ultimate consumer.  

Various methods of selling such as:

(i) Sale by Description

(ii) Sale by Inspection

(iii) Sale by Sample

(iv) Sale on Approval or Return basis

(vi) Hire purchase selling.

 

Aspect	Selling	Marketing
Focus	Focuses on the product	Focuses on the customer’s needs
Approach	Inside-out – Starts with the product	Outside-in – Starts with customer needs
Goal	Maximize sales volume	Create customer satisfaction and loyalty
Strategy	Push the product onto customers	Pull customers in by offering value
Time Horizon	Short-term (immediate sale)	Long-term (relationship building)
Emphasis	Emphasizes closing the sale	Emphasizes market research, segmentation, value creation
Viewpoint	"We must sell what we make."	"We must make what the customer wants."
Techniques	Advertising, sales force, persuasion	Market research, product development, 4Ps strategy

 

2) Physical distribution functions: It involves activities which are essential to move products from the place of production to the place of consumption. Various activities carried out under physical distribution functions are as follows:

·       Warehousing: Warehousing means storing the goods from the time of their production till they are demanded and it involves certain other functions like sorting, packing in convenient lots, risk- taking etc.

·       Transportation: Consumers are usually scattered geographically. They are made available goods and services at their places through various means of transport like airways, waterways, roadways and railways. Each mode of transport has its own merits and limitations. These modes are selected by considering factors like nature of product, speed, performance, cost, and availability of mode of transport.

·       Inventory Management: Inventory management is important function of marketing. Inventory acts as a link between customer’s orders and company’s production activity.

 It aims at reconciliation of two conflicting goals of management i.e.

(i) to offer better customer service by strictly dispatching orders as per scheduled delivery dates and

(ii) to minimize capital investment and cost of handling inventory. 

3) Auxiliary Functions

These functions facilitate the process of transfer of goods from the manufacturer to the consumers and are described below:

·       Risk bearing: The process of transfer of goods from the place of production to the ultimate consumer involves many risks and loss during transportation and warehousing such as theft, damage, pilferage, obsolescence, breakage, fall in demand etc. 

·       Financing: Finance is considered as lubricant of marketing machinery. Production of goods does not mean immediate consumption too. There is time gap between the production of goods and their sale. Many financial institutions and banks provide loan facilities to meet financial requirements of firms and middlemen. Many a times, finance is raised against goods which are presented as collateral securities. Thus, banking companies and financial institutions act as facilitators in marketing of goods and services.

·       Packing and packaging: Goods may get damaged during transportation or they may be damaged in warehouses. Goods are packed in suitable containers so as to protect them from leakage, spoilage or breakage. Packing means to wrap or fill goods with the purpose of their protection and convenient handling. It will also increase their durability. Package means specially designed wrapper, container or case which is used for packing goods. 

·       Branding: Branding means giving name or symbol to a product so as to enable consumer to distinguish it from other similar products. Branding helps in popularizing the products. Mass advertising media plays an important role in creating popularity of certain products among consumers. However, to survive in market, producers should provide quality in branded goods. 

·       Advertising and Sales Promotion: These activities are necessary to create, maintain and develop demand for the product. Even best products may fail to attract customer due to lack of proper advertising and sales promotion.

·       Market analysis: Marketing involves the study of market environment which consists of political, legal, cultural, social, technical and ecological factors. These factors constitute remote environment. There is need to collect information about consumers, competitors and suppliers that constitute operating marketing environment. The analysis of market environment provides information about opportunities and threat prevailing in the external environment.

Importance of Marketing

• ·       Marketing facilitates exchange of goods
• ·       Marketing increases market base
• ·       Marketing gives boost to other activities (like banking, insurance, warehousing and transport. Advertising, sales promotion and direct marketing)
• ·       Marketing provides satisfaction of human wants
• ·       Marketing creates job opportunities
• ·       Marketing creates stable economy
• ·       Marketing helps in optimum use of resources
• ·       Marketing helps in increasing national income
• ·       Marketing serves various sections of society

 

Marketing Concepts

According to Philip Kotler in his book,” Marketing management “states that ,”Marketing concept is customer oriented backed by integrated marketing aimed at generating customer satisfaction as the key to satisfying organizational goals.”

 

The philosophies of marketing (also called marketing management orientations) are different approaches that companies use to guide their marketing strategies. There are five main philosophies:

1. Production Concept (Early 1900s)

Focus: Efficiency & affordability

• Assumes customers prefer widely available and low-cost products.
• Companies aim to produce in large volumes to keep costs down.
• Works well in developing markets or for basic commodities.

·        Example: Walmart’s focus on low prices and operational efficiency.

 

2. Product Concept (1920s–1930s)

Focus: Quality, performance & innovation

• Assumes consumers favor the best product in terms of features and quality.
• Companies heavily invest in product development and innovation.

 Risk: Can lead to marketing myopia if companies ignore customer needs.

Example: Apple, Dyson, or Tesla.

 

3. Selling Concept (1930s–1950s)

Focus: Aggressive sales & promotion

• Assumes customers won’t buy enough unless persuaded.
• Used for unsought products (e.g., insurance, donations).
• Heavy use of advertising, sales tactics, and promotions.

Risk: Focuses on short-term sales, not long-term relationships.

Example: Car dealerships or door-to-door sales.

 

4. Marketing Concept (1950s–1990s)

Focus: Customer needs & satisfaction

• "Find out what the customer wants and give it to them better than competitors."
• Emphasizes market research, targeting, and value delivery.
• Builds long-term customer relationships.

Example: Amazon’s customer-centric approach.

 

5. Societal Marketing Concept (1990s–Present)

Focus: Customer needs + society’s well-being

• Balances company profits, customer satisfaction, and social/environmental responsibility.
• Encourages ethical marketing, sustainability, and corporate responsibility.

Example: Patagonia’s environmental activism or The Body Shop, Tesla.

 

Philosophy	Focus	Assumption	Key Goal	Example
Production Concept	Efficiency & low cost	Consumers prefer affordable and available products	Mass production & distribution	Walmart, Ford (Model T era)
Product Concept	Product quality & innovation	Consumers favor the best quality, performance, and features	Continuous product improvement	Apple, Dyson, Tesla
Selling Concept	Aggressive promotion	Consumers need to be persuaded to buy through selling and advertising	Maximize sales volume	Life insurance, door-to-door sales
Marketing Concept	Customer needs & satisfaction	Success comes from understanding and satisfying target markets	Deliver customer value better than rivals	Amazon, Netflix, Starbucks
Societal Marketing Concept	Customer + society’s long-term well-being	Must balance profit, customer satisfaction, and social responsibility	Sustainable & ethical marketing	Patagonia, The Body Shop, Ben & Jerry’s

 

 

Diffrence Between Traditional and Modern Concept of Marketing

Some New Concepts of Marketing :

·       Relationship concept: Acc to Philip Kotler- “Relationship marketing is the process of building long–term, trusting, WIN-WIN relationship with customers, distributors, dealers and suppliers.

·       Mass Marketing Concept: Mass Marketing means to sell the mass-produced goods. This concept focusses on sale of mass production by using tools of mass marketing i.e. mass advertising, mass promotion, mass distribution to large group of customers.

·       Niche Marketing Concept: Niche Marketing is a concept where marketer plays a role of specialist in particular segments. For example: Quality Specialist for manage low or high quality of the products, Service Specialist for providing best services which are not provided by other firms, Product line Specialist for availing only one product line or product.

·       Strategic Marketing Concept: Strategic marketing is a decision-making process which includes the analysis of internal potential and external environments of a firm in order to efficiently use the various marketing resources to achieve organizational objectives.

·       Stimulation Marketing Concept: In this concept a proper stimulation is provided to customers for buying the product. 

·       Synchro marketing Concept: In this concept there is a state of irregular demand or we can say that demand is more than supply.

·       Demarketing Concept: Under this concept the demand for a product exceeds the supply and this is also known as overfull demand. 

·       Remarketing: Remarketing is associated with the term “faltering demand “, which is invariably for all kinds of products, services, places, organization etc. In this state, there is a decline in demand for the products is possible, if no preventive action is taken to enhance the target market.

·       Database Marketing Concept: Database Marketing is a process of collecting and using data on our customers and markets helps us to acquire a better understanding of the market so that we can utilize sales and marketing techniques in a more precise and cost-effective way.

·       Network Marketing: Network means a strong interdependence between the firms controlling different activities, i.e. firms are components of a value chain. So that is why the success of the value chain is not only dependent on its performance but is closely related to the interactions between all the firms making that chain.