AN
INTRODUCTION TO MARKETING MANAGEMENT
Marketing
is one of the functional areas of the management which enables the free flow of
goods and services from the producer to ultimate consumers. Good are produced
in anticipation of demand. Producers and consumers are separated through the
limitations of location, time and knowledge .Where are these products produced?
Who are the producers? How does it reaches to the hands of consumers? Answers
to these questions would convey the significance of marketing.
What
is Market?
The term market is derived from the Latin word “Marcatus”
which means merchandise trade or place of business. In common paralance,the
term market means a location where buyers and sellers of goods assemble to
facilitate exchange.In marketing the term market has a wider meaning and varied
dimensions. It refers to the aggregate potential demand for acommodity or
service. The demand concept of market is predominant today than the place
concept as it is the aggregate demand, which is more relavent than the meeting
place for potentiai buyers and sellers.
Who
is a customer?
Consumer is the most important
part of a business. Without consumer no marketing takes place. Individuals and
organizations consume the products and services for their satisfaction.
Generally the term ‘consumers’ is used in
respect of a group of people or organization who consume a particular product
or service on the basis of their consumption habit.
Who is Marketer or seller?
Consumers
seeks satisfaction by consuming a series of products and services , whereas the
marketer or seller provides the satisfaction by offering a series of products
and services to satisfy the consumers needs.The marketer satisfies the existing
needs and desires of the customers according to their socio-economic
conditions.It is the marketer who creats new needs in to the minds of the
consumers.Needs are transformed into the form of wants and to satiafy needs and
wants, different productsand services are generated.
CONCEPT OF MARKETINGS
The concept of marketing evolved over a period of time with
its basic objective viz. enhancement of sales is remaining the same. The
primary objective of marketing is to enhance sales through consumer
satisfaction. Consumer derive satisfaction when their needs are met by a
product or service.
“ Marketing
is nothing but desining and promoting products that match consumer needs. The
extend of sales would depend on the need satisfying capacity of the product.”
MARKETING MANAGEMENT
Marketing management is
animportant functions of management.It performs all the managerial functions in
the field of marketing. It is responsible for planning, organisingf,directing
and controlling the marketing activities.
According to E.W.Cundiff and R.R.Still ” marketing management is
conserned with the purposeful activities towards the attainement of marketing goals.
The basic goals of marketing are satisfaction of the needs of the customers and
generation of the revenue for the business.”
Marketing manangement
deals with planning, organising, directing and controlling the activities
rellated with the marketing of goods and services to satisfy the customers’
needs.
Objectives of Marketing Management
A bucsiness
aims at earning reasonable profit by satisfying the needs of the customers.
Marketing management is conserned with those activities, which are necessery to
determine and satisfy the needs of the customers so as to achieve the
objectives of business.The following are the main objectives of marketing
management;
(1) To create new customers for the business: The
marketing manager must atract customers to buy the firm’s
products and services, that facilitate increased sales.The new customers may be
atracted through advertisement and salespromotion activities.
(2) To satisfy the needs of the customers : Modern
marketing begins and ends with needs of customers before offering them any
goods and services.
(3) To determine the type of products that will satisfy
the needs of the customers:
Marketing aims at
developing a product or service that will satisfy consumer’s needs, determining
an apropriate pricing strategy, promoting the product among potential users and
ensuring fair distribution.
(4) To generate adequate profits for the growth of the
business: Marketing department is the only department, which generates
revenues for the business. Profits are essential for survival and groeth of the
business.
(5) To earn goodwill for the business: Marketing
basically attempts to provide quality products to customers at reasonable price
and thus, builds up good image for the business. This goodwill is a valuable
asset for the business.
(6) To raise the standard of living of the people: Marketing
facilitates production and distribution of a wide variety of goods and services
for the use of consumers.
Difference between Marketing and Selling
The term marketing and selling are often used synonymously.
Marketing begins before production of goods and
continue even after the sale has been take place. Selling is the mere transfer
of ownership of goods from the seller to the buyer. The difference between
marketing and selling is presented in table;
|
|
Marketing
|
Selling
|
|
1
2
3
4
|
Marketing
focuses on customer’s needs of want- satisfying goods.
Marketing
begins before actual production takes place.
Emphasis
is given on product planning.
Customer
oriented – Customer is treated as a King. He is given supreme importance.
|
Selling
focuses on seller’s needs converting his goods into cash
Selling
takes place after the production.
Emphasis
is placed on sales of goods already produced.
Product oriented – Product enjoys
supreme importance.
|
|
5
6
8
|
Marketing
aims at profits through consumer satisfaction.
The
principle of caveat vendor (let the seller beware) is followed.
Integrated
approach to marketing is followed. Marketing includes marketing research,
product planning, advertisement, etc.
Marketing
has a long- term perspective.
|
Selling
aims at profits through sales volume.
The
principle of caveat emptor (let buyer beware) is followed.
Fragmented
approach to selling is followed. Attempt is made to sell whatever is
produced.
Selling
has a short-term perspective.
|
Functions
of Marketing
The functions of marketing may be
classified into two;
|
Buying and assembling
Selling
Standardization
,Grading and Branding.
Packaging,Storage,Transportation
,Salesmanship.
Advertising
Pricing,Insurance
|
Basic
functions
Facilitating functions
|
Marketing
Research
Product
planning and development
|
(1)
Marketing Research: Marketing research is a systematic collection of
data relating to a marketing problem, its analysis and meaningful
interpretation so that it facilitates decision-making. Marketing research helps
in solving problems in the discharge of marketing functions.
(2)
Product planning and development; Product planning and developments
begins with the identifications of consumer needs. Based on the identified
needs , the products are designed and developed so as to suit the requirements
of users.
(3)
Buying and Assembling: Buying
involves the determination of requirements, finding the source of supply,
placing order and receiving goods. Assembling
means collections of goods already purchased from different sources and
bringing them together to a common point.
(4)
Selling: This is an important aspect of marketing under which ownership
of goods is transferred from the seller to the buyer. It is at this point that
marketing action takes place.
(5)
Standardization: The setting up of standards or specifications of a
product and maintaining these standards are known as standardizations.
Standardization is the basis of grading. It makes the grades stable till the
standards are received. Standardization of goods helps sale of goods by
convincing the customers about quality of the goods. The customers will
purchase goods of that standard, which fulfill their requirements.
(6)
Packaging: Packaging is done to protect the goods from damage in transit and to facilitate easy transfer of
goods to customers. Labelling means putting identification marks on the
package. It is that part of a product which contains
information
about the producer and the product. Packaging has become one of the essential
services of the modern marketing.
(7)
Storage: Goods are generally produced in anticipation of demand.
They to be stored properly in warehouses
to protect them from any damage which may be caused by
ants,rats,moisture,sun,theft,etc. till they are sold out.Storage of goods in
warehouses has become an indispensible service these days.
(8) Transportation:Transportation helps in
bringing the raw meterials to the place
of production and making available the finished products at the point of
consumption. It removes the hindrance of place It is an integral part of marketing, as it helps in
making available the product at the terminal point of consumpion.
(10)
Advertising: Advertising has become an important function of marketing in
the competitive world. It helps to spread the message about the product and
thus promotes its sale. These include newspapers,magazines,radio,
television,cinemahalls,hoardings,windw display,etc.
(11)
Pricing: Price of a product is influenced by the cost of production and
services offered, profit margin desired, prices fixed by rival firms and
government policy. A sound pricing policy is an important factor for selling
the products to the customers.
(12)
Insurance: Loss or damage to goods or property may arise due to fire, theft,natural
calamities so on. People employed in business firms are also liable to the
risks of injury or of loss of life due to accidents at workplace. Insurance
provides protection against these risks.
(13)
Grading : Grading means division of product into different grades or
classes made up of units possessing similar features as regards size, weight
and quality. Grading is done in accordance with the specifications set up by
the standards.
(14)
Trademark: Trade mark is a legal term. It refers to a brand, which is
registered with the government under the Trade and Merchandise marks Act,1958.
Thus all brand names or marks cannot be termed as trademarks.
(15)
Branding: The American Marketing Association has defined a brand as “a
name,term,symbol
or a combination of them , which is intended to identify the goods of one
seller or group of sellers and to differentiate them from those of competitors”
MARKETING
MIX
According to William J.Stanton
,”Marketing mix is the term used to describe the combination of the four inputs
which constitutes the core of a company’s marketing system , the product, the
price structure,the promotional activities and the distribution system”
Marketing
mix represents a blending of decisions in four areas product,pricing,promotion,and
physical distribution. marketing mix serves as the link between the business
firm and its customeras. Since marketing mix takes care of the needs of the
customers,it helps in increasing the sales and earning higher profits.
Marketing mix gives due consideration to the various elements of the marketing
system.
Components
of Marketing mix
Marketing mix implies a firm’s total
marketing program.It requires decision making with regard to; product, place, promotion and price.
(1)
Product:
The different types of products a firm manufactures and markets is called a
product mix. The product mix consist of the product line, the depth of the mix,
the width of the mix in addition to its consistency.
*
Product line : It refers to a group of similar products, which fall with in a
product mix.
*The
depth of the mix: This refers to the variation in the product line for a
product.
*The
length of the mix: This implies the number of items that are included in a
product line.
*The
width of the mix: It indicates the number of products lines,the firm markets.
*Consistency:
Consistency refers to the close association between the products in a mix .
(2)
Price:
The term price means exchange value of
goods or services in terms of money. The decision relating to pricing of a
product or services are called ‘price mix’
Factors
in pricing
It is very difficult for the
marketing manager to fix the right price of a product that will ensure its sale. A number of factors to be considered
before fixing the price of a product. These factors are;
·
Type of customers: The
target customers must be able to afford the price.
·
Cost of production and
distribution: While fixing the price of a product the cost of production and
distribution must be considered.
·
Profit margin: The sale
price is also influenced by the profit margin decided by the firm.
·
Competition: If there
is a keen competition in the market, the price fixed will be lower to stay in
the market.
·
Demand for the product:
If demand of a product is increasing,the firm can increase its prices.
·
Government regulation:
The maximum sales price of some products are fixed by the government.
·
Miscellaneous services:
The customer has to pay higher price if he wants additional attachments.
Pricing
Strategy of a new product
In pricing a new product, generally two
types of strategies are suggested Skimming price policy and Penetration price
policy.
·
Skimming price policy: In
this a product is priced at a very high level due to incurring large promotional expenses in early stages.
Skimming price refers to fixing a high price when a new product is introduced
in the market.This price policy aims at skimming the cream of demand at the
initial stage by keeping a very high price and it will be reduced later step by
step.
·
Penetration price
policy: This is a practice of charging a low price right from the beginning to
stimulate the growth of the market and to capture a large share of it.This
policy found success in the following conditions;
*Product has high price elasticity
in the initial stage.
*The product is accepted by large
number of customers.
*Economies of large scale
production are available to a firm.
* The potential market for the product
is fairly large and has a good deal of future prospects.
(3)
Place: Place refers to
the marketing efforts undertaken to make the product available at the right
time in the right place. There are products which are manufactured at one part
of the country which is most favorably located for that purpose.In order to
ensure availability of products at the right place,two factors requires
(a)
Channels of distribution
(b) Physical distribution.
(a)Channels
of distribution: Goods are produced for ultimate consumption by the
consumers. The path taken by such goods in their movement from the producer to
the consumers refers to channels of distribution.The number of intermediaries
in the channel determines the channel length.Various channel levels are;
*Zero
level;This is a case when no intermediaries involved in the channel i.e.the
producer sells goods directly to the consumers.
*One
level channel: Here one intermediary is involved between the producer and the
consumers.
*Two
level channel: There are two intermediaries involved in the distribution
process i.e. the wholesaler and the retailer.
*Three
level channel: In a three level channel, there are three intermediaries viz
agents, wholesalers and retailers.
(b)Physical
distribution: Physical distribution is basically concerned with handling and
movement of goods from the place of production to the place of distribution.The
major activities involved in physical distribution basically constitute four decision areas.
*Transportation
:Physical distribution of goods requires a mode of transportation. Selection of
the mode would depend on the type of the product,the place where it is
demanded,the quantity in which it is demanded.
*Stock
or inventory: The level of stock ,which a firm should hold is dependent on
meeting its distribution objectives.Stock refers to the holding of finished
goods in anticipation of demand.
*Warehousing:
Every firm needs to store its finished goods until they are sold.Such storage
protect the goods from being damaged.This enables only through warehouses.
*Order
processing: The manner in which customers orders are procured or processed is a
factor which determines the extend of services available to them.
(4)
Promotion;Promotion
deals with informing and persuading the customer
about the firim’s product.Promotion mix
involves decisions about advertising,personal sellingand other sales promotion
techniques. The elements of promotional mix are described under;
*Advertising:
It involves dissemination of information about a product or a service to target
customers through newspapers,magazines,radio,T.V,, outdoor displays, etc.
*Personal
selling: It implies a face –to-face contact between a seller and a buyer.
*Sales
promotion: Activities other than mentioned above to promote a product are known
as sales promotion activities.
*Publicity:
It involves non paid form of non personal communication.
ADVERTISING
Advertising
and personal selling are the important tools of sales promotion. Advertising is
any paid form of non- personal presentation and promotion of ideas goods or
services of an identified sponsor.
Functions
of advertising
Advertising has become an
essential marketing activity in the modern era. It performs the following
functions:
·
It promotes the sale of
goods and services by informing and persuading the people to buy these
products.
·
It helps in the
introduction of a new product in the market.
·
Advertising enables
large –scale production.
·
Advertising educates
the people about new product and its uses.
Benefits
to Manufacturers and Traders
·
Advertising helps in
introducing new products.
·
It creates new taste
among the public.
·
Advertising assists to
increase the sales of existing product.
·
Advertising helps in
steady demand of the product.
·
Advertising helps in
meeting the forces of competition in the market.
·
Advertising is used for
increasing the good will of the firm.
·
Advertising increases
the morale of the employees of the firm.
Benefits
to the Customers
· Advertising
helps the customers to know about the existence of various products and their
prices.
· Advertising
is dissemination of information concerning an idea, product or services to
induce action in accordance with the intention of the advertiser.
Benefits
to the Society
Ø Advertising
provides employment to peoples engaged in writing, designing,and issuing
advertisements.
Ø Advertising
promotes the standard of the living of the people.
Ø Advertising
educates the people about the various uses of different product and this
increases their knowledge.
Ø Advertising
sustains the press and other media.
Media
of Advertisement
A manufacturer or a trader can make use
of the following media to spread his message to the people;
v Press
Advertising Media : Press advertising, i.e. advertising through news papers,
magazines, journals, etc. comes under this. Advertisement through news
papers reach almost every place and are read by all kind of people. Magazine
and periodicals are an excellent medium of advertisement when a
v Outdoor
Advertising: Outdoor advertising has gained wide popularity these days. Its
purpose is to the attention of the people at busy road and markets.It includes
poster displays, billboard displays and electric displays. Posters are
fixed on walls of building , bridges and other places. Printed or billboard
displays involves the advertisements directly involves the
advertisements directly painted on board meant for this purpose. Electrical
displays involves the use electric light or neon tubes to attract the
attention of the people. Vehicular displays has a become fashion these days to
use modes of public transport for advertising.
v Film
Advertising: Films are an important medium of advertisement. Business concerns
as usually get their short motion picture prepared and distribute it to
different cinema houses.
v Radio
Advertising: Radio advertisement is gaining greater popularity these
days.Advertisements are broadcast from the transmitting station of the
commercial services of All India Radio.
v Television
Advertising: Television is the fastest growing medium of advertisement because
of huge expansion of electronic media. It appeals through both the eye and the
ear.
v Direct
Mailing Advertising: Direct mail is probably the most selective of all
advertising media.It is used to send message directly to the customer.
v Window
display Advertising: Window display is highly effective medium of
advertisement. Goods can be displayed in artistically laid out window at the
shop front or at important centres like railway station and busstops.
v Speciality
Advertising: Many advertisement firms offer speciality articles to the present
and prospective customers. These articles may be diaries, pen, etc the name of
the advertiser is printed or inscribed on the speciality items.
Selection
of the Advertising Media
For selecting appropriate media of
advertisement the following facts should be considered.
§ Nature
of the product: Product may be classified into two broad categories ,consumer
goods and industrial goods. Consumer goods can be advertised in news papers,
magazines, radio, T.V.etc.,but industrial goods can be advertised only through
specialized trade, technical and professional journals.
§ Nature
of market : Nature and extend of market can be determined by various factors
like geographical region, size of the population and purchasing power of the
population.
§ Objectives
of advertising: The objectives of the advertising program are very important to
determine the choice of advertising media. The objectives may be introduction
of a new product,to increase demand of an existing product,etc.
§ Circulation
of Media: If the media have greater circulation, the message of the advertiser
will reach a large number of people.
§ Financial
considerations : The cost of advertising is an important consideration and it
should be considered in relation to; the amounts of fund available,the
circulation of the media.
§ Type
of audience : If the message is to be conveyed to literate or less literate
people, radio, television and cinema advertisement will serve the purpose in a
better way.
§ Media
used by competitors; The advertising media also depends upon the media used by
the competitors.
SALES
PROMOTION
It refers to short-term
activities, which are aimed at promoting sales. The peculiarity of sales
promotion is that it brings stronger and faster response from the prospective
buyers. Sales promotion activities include;
¯ Rebates
: A deduction is made on the price of the product to make it attractive to the
buyers to buy on special occasions.
¯ Discounts:
Certain percentage of price is reduced as discount from the price of the
product.
¯ Free
gifts: The consumer is given a free gift along the product.
¯ Contests:
The consumers are required to participate in some competitive event and winners
are given some awards.
¯ Refunds:
The seller offers to refund a part of price paid by the customer on production
of some proof of purchase.
¯ Packaged
Premium: Marketers pack some gifts inside the product package and this will
create motivation among the customers to buy the product.
Salesmanship
or Person selling
Salesmanship or personal selling
involves involves face to face contact between the seller and the prospective
customer with an intention of selling some products. Salesmanships the art of
presenting an offering that the prospect appreciates the need for it.
Features
of Salesmanship; The basic features of
salesmanship are the following;
F Salesmanship
involves persuasion of customers: A salesman must have the ability to convince
the people to buy his product. The customer is not to be pressurised, but
influenced favourably by the salesman.
F Salesmanship
involves winning buyer’s confidence: Modern salesmanship aims at educating the
customer and providing a solution to his problems.
F Salesmanship
involves providing information; Salesmanship is an educative process.It tells
the people the ways in which they can satisfy their needs.
F Salesmanship
aims at mutual benefits: Salesmanship is a two- way process. It results in
benefits not only to the sellers but also to the sellers but also to the
customers.
Importance
of Salesmanship.
Salesmanship consists of individual
and personal communication in contrast to the mass and impersonal communication
through advertising. Personal selling helps in sales promotion. It is very
important to the manufactures and traders because it helps them to sell their
products. It also helps them in knowing the
tastes ,habits, attitudes and reactions of the people. Personal selling
is an important method of demonstrating the product to the customers and giving
them full information about the product. It is easier to persuade a person to
buy a product through personnel explanation. A good sales person educates and
guide the customers about the features and utility of the product.Sales man can
also handle the grievances of the customers.
Qualities
of a Good Salesman
A successful salesman should possess the
following qualities;
X Good
personality.
X Cheerfulness.
X Enthusiasm.
X Initiative.
X Self
confidence.
X Good
memory.
X Courtesy.
X Shrewdness.
X Loyalty.
X Honesty.
X Foresight.
X Communicating
ability.
X Education
and Training.
X Knowledge
of the product.
PUBLIC
RELATIONS
The marketing concept focuses on customer.
Public relation means the relation of an organization with the public. It
includes all efforts by an organization which leads to a favourable openion
about the organization in the minds of the public. Co-operation of public is
essential for the smooth operation of business.
Public
relation Tools: In order to create a public image, the
public relations professionals use various methods and tools. These includes ;
News
: This is in the form of news coverage relating to corporate stories or events. Speeches:
Speeches by company executives at the various forum of shareholders, bankers,
select customer groups and employees produce company image. Events:
Organizing news conferences, multimedia presentations, press tours, star
studded programmes, etc. Written
materials: Written materials sent to relevant public group can influence their
opinion. Public
service activities:Business firms now a days associate themselves with public
service. They join hands with other voluntary organizations to undertake
welfare activities to create a favourable image.
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