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MARKETING - AN INTRODUCTION
Marketing touches every aspect of our lives,
from our birth to our death.
Our entire life, our life styles and our existence
are continuously affected by marketing.
If we examine our daily life, commencing from
getting up from bed in the morning to the time
we go to the bed in the night, we observe that
we use a number of products and services.
We get up from our bed in the morning, may be
with the help of an alarm clock. Then we brush
our teeth with a colgate tooth brush and paste.
We drink a cup of tea prepared from a well
known brand say AVT premium.
We use gas stove and many types of utensils
are used to prepare tea.
Thus our activities go on for the whole day,
using several types of goods manufactured by
different companies.
Market
Market is the root word in the term marketing.
The word ‘market’ is derived from the Latin word
‘Marcatus’.
It means merchandise, trade or a place where
business is conducted.
In ordinary language, the term market means a place
where goods are bought and sold.
It is a place where buyers and sellers gather to
exchange goods and services.
Due to the advent of internet and e-commerce
technology, it has become a virtual world and
marketing happens more in space than in a
geographical place.
New forms of intermediaries are emerging.
So now market has been defined as a set of
consumers, potential consumers, past consumers,
sellers, resellers and intermediaries who are either
involved in the process of exchange or are in the
process of getting involved in an exchange
process.
The term market can be mathematically defined as
follows:
Market = People ₓ Purchasing
Power ₓ Willingness to pay
Thus market consists of people with wants,
purchasing power and willingness to utilize the
purchasing power.
According to Pyle “Market includes both place and
region in which buyers and sellers are in free
competition with one another”.
Market may mean and includes either of the following elements:
1.A place as an open space or large building where actual
buying and selling takes place.
2.An assembly or a meeting together of people for their
purchase and sale of goods at stated time and place.
3.An area of operation or the geographical or economic
extent of the commercial demand for commodities. The
market may extend to a locality, village, town or country
according to the demand of a commodity.
4.The act of buying and selling activity represents an
economic function in the satisfaction of human wants.
Classification of Markets
Market can be classified in many ways. Generally, markets are
classified on the following basis:
On the basis of Area
Local market: when buyers and sellers carry on business in a
particular locality or village or area. It is called local market. Generally
market for perishables like fish, eggs, vegetables, milk etc. will have
local markets.
National Market: When certain goods of a country as a whole are
regarded as one market, it is called a national market. It exists for
industrial and durable goods.
World market: world or global market comes up when buyers and
sellers evolved on world level.
On the basis of Time
Very short period market: it is that type of market
in which the commodities are perishable. There is
no change in the supply of goods.
Short period market: It is that type of market in
which goods are durable and also reproduceable.
There is some change in the supply of goods.
Long period market: it deals in durable goods.
The supply gets adequate time to change in
response to change in demand
On the basis of Transaction:
Spot market: it is the market where
goods are transacted on the spot or
immediately.
Future Market: in this type of market
there is no physical delivery of goods.
Only future contracts are made.
On the basis of Regulation
Regulated market: these markets are
organized and regulated by statutory
measure. Stock exchanges are suitable
examples of regulated markets.
Unregulated markets: This is a free
market. There is no restriction or control
regarding price, quality etc.
On the basis of Volume of Business
Wholesale Market: These are the markets in
which goods are bought and sold in bulk or
large quantities. The dealers in this market are
known as wholesalers.
Retail Market: These are the markets in which
goods are bought and sold in small quantities.
This is the market for ultimate consumers.
On the basis of Goods:
Commodity Market: it is a market in which different
kinds of commodities are bought and sold. It is further
divided into three types
Produce Exchange: In such market only certain
commodities are bought and sold.
Manufactured Goods Market: In this market
manufactured goods are bought and sold, e.g. cloth,
leather goods etc.
Bullion Market: This deals in gold, silver etc.
Capital Market: Business concerns needs finance. This
financial needs of business concerns are met by capital
markets. This market is further divided in to three types:
Money market: This is the market in which money is lent and
borrowed.
Foreign Exchange Market: In this markets currencies of
different countries are bought and sold. It arranges foreign
currency for importers to enable them to buy and for exporters
in converting foreign currency into national currency.
Stock Market or Stock Exchange: It is a market where
shares, debentures, bonds etc. of companies are bought and
sold. It is also known as security market.
On the basis of demand and supply
conditions
Seller’s Market: It is a market where
demand for goods is greater than the
supply.
Buyer’s Market: It is a market in which
supply is greater than the demand.
Evolution of Marketing
Marketing is indeed an ancient art; it has been
practiced in one form or the other since days of Adam
and Eve.
Its emergence as a management discipline, however,
is of relatively recent origin.
And within this relatively short period, it has gained a
great deal of importance.
In fact, today most management thinkers and
practitioners the world over, regard marketing as the
most important of all management functions in any
business.
The first stage of Barter: the pre-industrial revolution
world characterized by an agricultural-cum-handicraft
economy. The agriculturist, whether he produced corn or
cotton, meat or butter, disposed of the surplus in immediate
neighbourhood.
The stage of Money Economy: The next stage in the
evolution of marketing was that of money. No fundamental
or far-reaching change took place in this stage in the
production and distribution of goods. Pricing becoming the
mechanism of the exchange process.
The stage of Industrial Revolution: The industrial
revolution was the next stage and far-reaching changes
took place in this stage. It introduced new products, new
systems of manufacture, new modes of transportation and
methods of communication etc.
The stage of competition: The mass production and
mass distribution brought by industrial revolution soon led
to the stage of competition. Now, facing competition
became the main issue. The situation demanded a
conscious effort on the part of the firms to ensure that their
products were preferred to those of their competitors.
MARKETING
Marketing is a comprehensive term.
It comprises of all activities performed by firms
to direct and facilitate flow of goods and
services from producers to buyers.
It is two-way exchange process in which
needs and wants of both buyers and sellers
are satisfied.
It is the exchange of value between buyer and
seller.
According to Philip Kotler “marketing is the
human activity directed at satisfying needs
and wants through an exchange process”.
According to the British Chartered Institute
of Marketing “Marketing is the
management process responsible for
identifying, anticipating and satisfying
consumer’s requirements profitably”.
According to American Marketing
Association “Marketing is the process
of planning and executing the
conception, pricing, promotion and
distribution of ideas, goods and
services to create exchanges that
satisfy individual and organizational
goals”.
Marketing management activities
includes
Product decisions
Pricing decisions
Distribution decisions
Communication decisions
Service and
Research
Nature or features of Marketing
Marketing is a goal oriented process
Marketing deals with products, distribution, promotion,
pricing etc.
Marketing is the creation of utilities.
Marketing focuses on goods, services and ideas.
Marketing intends to satisfy and delight the customer.
Marketing focuses on delivering value to the
customers.
Marketing is surrounded by needs.
Marketing is process of exchange.
Marketing is a universal function. Business as
well as non-profit organisations.
Marketing is a societal process.
Marketing takes place in a dynamic
environment.
Objectives of Marketing
Increasing consumption: One of the goals of
marketing is to increase the consumption of goods and
services and thereby increase the wellbeing of the
consumers.
Creation of goodwill: Marketing helps a firm in
building goodwill through selling quality goods at
reasonable prices to customers.
Cost reduction: Marketing aims at reducing the cost
to give the benefit to both the parties – sellers and
buyers.
Price stability: marketing tries to stabilises the prices
of goods by moving goods to the places where prices
are high from places where the prices are low.
Profit through customer satisfaction: Modern
marketing aims at satisfying the customer needs and
wants. It recongnises the fact that profit can be earned
only through customer satisfaction.
Ensure growth: Another objective of marketing is to
ensure growth of the enterprise by projecting the
product image and company image before the public
and the consumers.
Providing wide choice of goods: marketing providing a wide
variety of products to the consumers.
Improving quality of life: Marketing aims at improving the
quality of life of the people by supplying quality goods at
reasonable prices.
Retaining customers: One of the important objective of
modern marketing is to create, maintain and strengthen
relationship with customers and thereby retaining them.
Other objectives: Other objectives include : (a) achieving a
certain market share , (b) reaching a certain level of sales, (c)
increasing sales in existing markets , (d) Market development.
DIFFERENCE BETWEEN MARKET AND MARKETING
Market is a group of potential or future customers for a
particular product. But marketing is a process by
means of which goods and services are exchanged.
Market is a narrow concept. It includes both place and
region in which buyers and sellers are in free
intercourse with one another. On the other hand,
marketing is a wider and more comprehensive term. It
includes the whole process of distribution and the
process before distribution.
Market is an arrangement which provides an opportunity
to exchange goods. But marketing is the business
process by which products are matched with the market
and through which transfer of ownership is effected.
Market is an outlet to let out the goods. It is the key to
the engine of marketing. But marketing is the gigantic
machinery to move the goods from the points of
production to the points of consumption.
Market creates organizational environment. But
marketing gives a functional philosophy of consumer
orientation.
Factors responsible for the Growth of Modern concept of
Marketing
Population growth: Increase in population has
brought not only an increase in demand for
more products and services but has also
created a variety in tastes and preferences.
Growing number of household: This has
created more demand for goods and services.
The ‘small family’ concept has thrown new
challenges before marketingmen.
Increase in disposable income: with an increase
in personal income, employment and education, the
growth in disposable income has also necessitated
the manufacture of new styles of goods and
services. People want to spent more and to
procure more comforts, more satisfaction and more
variety in consumption.
Change in attitudes towards life: Today, people
are after new styles, new fashions and newer
things. They want more and more fancy goods.
This change in attitude has widened the market and
has developed new ideas in marketing concepts.
Technological development: Technological
changes have created the demand for more
sophisticated goods and services. This
necessitated the changes in marketing
techniques.
Growth of marketing channels: In olden
days the distribution network was very
simple. But now-a-days, a wide network of
middlemen exists. This has created many
problems in the management of marketing
channels. Hence, a new philosophy of
marketing has been emerged.
Growth of mass communication media:
The continuous advertisement of goods
through electronic media makes the people
informed and creates more demand.
Besides, the growth of computer networks
has also been responsible for the adoption of
the new marketing concept.
IMPORTANCE OR ADVANTAGES OF MARKETING
Marketing is a very much part of our normal lives,
wherever we live.
It is the cause of the existence of the business
organization.
Firms cannot exist without marketing wings.
Peter Drucker said that marketing is everything.
The success of business is measured by its
achievements in marketing – profits, market share and
cash flows.
Marketing is inevitable for the company, government,
society and the economy as a whole.
The advantages of marketing to society are as
follows;
Provides employment: Marketing provides
effective and continuous employment in the
production, distribution and promotion of goods.
Raises standard of living: Marketing improves the
quality of life of the people by satisfying varied and
innumerable needs and wants of consumers.
Creates utilities: Marketing creates place, time and
possession utilities. Transport creates place utility,
storage creates time utility and exchange creates
possession utility.
Reduces costs: marketing ensures optimum production and
optimum consumption. This reduces the cost of production.
Thus the consumers get quality goods at cheaper prices.
Solves social problems: Marketing creates social
awareness among people. Different advertisements related
with family planning, ecological balance, pollution control,
consumer’s health etc. Societal marketing provides a proper
platform to these problems.
Makes life easier: Marketing meets the changing needs and
aspirations of people by providing goods of their choice at
comfortable prices and places. Marketing makes human life
easier.
Enriches society: Many firms encourages their employees
to participate in activities that benefit their communities and
invest heavily in socially responsible actions and charities.
Importance of marketing to Companies
Marketing is said to be the eyes and ears of a business
organization. Following are the advantages of
marketing to business firms;
Helps in income generation: Marketing helps in
generating revenue or income for the firm and it is the
only revenue producing activity of the firm.
Helps in planning and decision making: Marketing
planning is an integral part of overall business planning.
It helps in formulating marketing strategies and
decisions.
Helps in distribution: After producing the product, a
firm has to decide the distribution channel. Marketing
helps the firm in selecting the distribution channels that
deliver goods to the consumer conveniently at minimum
cost.
Helps in exchanging information: Marketing gives up-to
date information to the top management about nature and
character of demand. All managerial decisions are taken on
the basis of marketing information.
Helps adapt to changing environment: Marketing provides
information to management about the changes in the
environment. This helps to make new products or changes in
existing products.
Expands global presence: Expansion of the presence of the
firm globally is possible with the help of marketing of these
products in the global world.
Helps to earn goodwill: Marketing earns goodwill for the
company.
Importance of Marketing to Consumers
1. Provides quality products: Marketer
undertakes research and development activities.
This helps in improving the quality of products. In
this way consumer gets better quality products.
2. Provides variety of products: Marketing
facilitates production and distribution of a wide
variety of goods and services for use by the
consumers.
3. Improves knowledge of consumers: Marketing
provides information of various products through
various media like TV, newspapers, magazines etc.
This imporves the knowledge of consumers.
Helps in selection: Marketing provides variety of products to
the consumers.
5. Consumer satisfaction: Today the goal of marketing is
consumer satisfaction. Consumers can purchase the
products according to their needs and wants.
Importance of Marketing to Economy :
Marketing is the key ingredient in economic growth. It
stimulates research and innovation.
Saves the economy from depression: Duringdepression, the purchasing power of consumers arevery low. At that time of depression, marketingsuggests the various alternative uses of the product.Marketing develops new markets and adoptspromotional tools to save the economy fromdepression.
Increase in National Income: Marketing providesemployment opportunities. This increases theincome of the people.
Economic Growth: The economic system movesforward with the marketing activities by using scarceresources effectively to produce useful commoditiesand the meet the consumption needs of the society.The activities of production and consumption areaccelerated with the marketing activities.
Plouging back of resources : Marketing generates
resources that are ploughed back to economic system. This
promotes the growth cycle for the country. For example,
government collects taxes and duties from business
organisations and these are being utilized for the
developmental activities.
Importance of Marketing in Indian Economy
In India marketing is regarded as the creation and
delivery of standard of living to the society. This all
has resulted in many important achievements in
India. These are summarized as follows:
Increase in employment opportunities.
Balanced growth of the economy.
Increase in per capita income.
Increase in the sale of goods.
Increase in profits.
Development of the means of transport and communication.
Development in the means of warehousing.
Development of new media of advertisement and sales promotion.
Development of banking and insurance industries.
Development of packaging industries.
Development of new means of finance.
Improvement in the standard of living.
Industrial development
Maximum utilization of available resources.
Increase in exports
Increase in national income
