Notes - Marketing Management

           

Marketing Management

 

Quick Revision

 

1. Meaning of Marketing Marketing is a social process by which individuals and groups obtain what they need and want through creating, offering and freely exchanging products and services of value with others. According to Philip Kotler, "Marketing is a social process by which individual groups obtain what they need and want through creating offerings and freely exchanging products and services of value, with others."

 

2. Features of Marketing

(i) Need and Wants The focus of marketing is on the satisfaction of the needs and wants of individuals and organisations.

(ii) Creating a Market Offering Market offering refers to a complete offer for a product or service, having certain features like size, quality, taste, etc at a certain price available at a given outlet or location.

(iii) Customer Values The job of the marketer is to add value to the product, so that the customers prefer it in relation to the competing products present in the market.

(iv) Exchange Mechanism Exchange refers to the process through which two or more parties come together to obtain the desired product or service from someone, by giving something in return.

 

3. Functions of Marketing

(i) Gathering and Analysing Market

Information In order to identify the needs and wants of customers, the marketer gathers market information. He analyses the strengths, weaknesses, opportunities and threats of the enterprise.

(ii) Marketing Planning After market research, the marketer has to develop an appropriate marketing plan to achieve the marketing objectives of the organisation.

(iii) Product Designing and Development

Product designing helps to make it attractive and improve its performance and provides competitive advantage over the other products present in the market.

(iv) Standardisation and Grading   

Standardisation ensures uniformity and consistency in output and reduces the need for inspection, testing and evaluation of the products.

Grading ensures that the goods belong to a particular quality and helps the marketers to fix prices easily.

(v) Packaging and Labelling Packaging refers to designing and developing the package for a product.

Labelling refers to designing and developing the label to be put on the package.

(vi) Branding Branding helps to differentiate the product from other products and build customer's loyalty and promote its sales.

(vii) Customer Support Services It refers to the after sales services, handling of complaints, credit services, maintenance services etc. It aims at providing maximum satisfaction to the customer.

(viii) Pricing of Product Pricing refers to the process of determining the price of product which depends on various factors such as pricing objectives, pricing strategies, demand, cost, competition etc.

(ix) Promotion Promotion refers to the process of informing the custumers about the product and then persuading them to buy it.

(x) Physical Distribution It covers all the activities required to physically move the goods from manufacturers to the customers.

(xi) Transportation It involves physical movement of goods from one place to another. Transportation helps to create 'Place-utility'.

(xii) Storage and Warehousing Storage is necessary to make arrangement of goods, in order to maintain a regular supply of goods in the market. It helps to create 'time-utility.'

 

4. Differences between Marketing and Selling  

                    

Basis	Marketing	Selling
Scope	Marketing is a wider term and includes selling also. It covers all activities concerned with identifying and satisfying the wants of the customers.	Selling is only part of marketing process. It is limited to exchange of goods or services for some consideration
Focus	It focuses on the needs of customers.	It focuses on transfer of title of goods from sellers to buyers.
Objective	It aims to earn profits through customer satisfaction	It aims to maximise profit through increase in sales volume.
Start and end	It starts much before production and continues even after sale	It starts after production and ends with the sale of product
Strategy used	It involves strategies like product promotion, pricing and distribution.	It involves efforts like promotion           and persuasion for selling the product.
Emphasis	It emphasises on development of product according to customers needs.	It emphasises on bending the customers according to the product

 

5. Meaning of Marketing Management

Marketing management means managing activities related to marketing.

According to Philip Kotler, "Marketing management is the art and science of choosing target markets and getting, keeping and growing customers through creating, delivering and communicating superior customers value of management."

 

6. Marketing Management Philosophies

Marketing management involves conscious efforts to facilitate exchange of goods and services. To be effective, a maker can get guidance from the following philosophies of marketing management

(i) Production Concept Under this concept, the focus was on improving the efficiency of production and distribution.

(ii) Product Concept Under this concept, the focus shifted from quantity of production to quality of production.

(iii) Selling Concept Under this concept, firms began to undertake aggressive selling and promotional efforts to attract and persuade customers to buy.

(iv) Marketing Concept Under this concept, customer satisfaction became the focal point of all business decisions.

(v) Societal Marketing Concept Under this concept, customer satisfaction is supplemented by social welfare.

 

7. Concept of Marketing Mix Marketing mix represents the total marketing programme of an enterprise. The basic purpose of marketing mix is to satisfy the needs and wants of customers in the most effective manner.

According to Philip Koder, "Marketing mix is the set of marketing tools that firm uses to pursue its marketing objectives in the target market."

 

8. Elements of Marketing Mix The elements of marketing mix are popularly referred to as 4ps which are product, price, place and promotion.

 

9. Product A product is any good or service that a consumer wants. It is a bundle of utilities or a cluster of tangible and intangible attributes which can be exchanged for a value.

 

10. Product Mix The product mix refers to important decisions related to the product such as quality of product, design of product, packaging, etc.

 

11. Branding Branding is the process of assigning a distinctive name or symbol to a product, by which it can be remembered. Important terms related to branding are as follows

(i) Brand A brand is the identification of a product, e.g. Nike, Reebok, LG, etc.

(ii) Brand Name The part of brand, which can be spoken is called brand name. e.g. Maggi, Lux, Ambuja Cement, etc.

(iii) Brand Mark The part of brand, which cannot be spoken, but can be recognised is known as brand mark. e.g. Red and blue ball of Pepsi.

(iv) Trade Mark A part of brand, which is given legal protection is called trade mark. No other firm can use the name or sign, for which a company gets legal protection, e.g. Maruti Suzuki sign on Maruti cars.

 

12. Labelling The term labelling means designing a label to be put on the package. A label is a small slip placed on the product to denote its nature, contents, ownership, destination, etc.

 

13. Packaging It refers to the combination of those activities, which are related with the designing and production of the containers in which the products are packed.

 

14. Levels of Packaging

(i) Primary packaging

(ii) Secondary packaging

(iii) Transportation packaging

 

15. Pricing Price may be denned as the amount of money paid by a buyer in consideration of the purchase of a product or a service.

 

16. Factors Affecting Price Determination

(i) Product cost

(ii) The utility and demand of the product

(iii) Extent of competition in the market

(iv) Government and legal regulations

(v) Pricing objectives

(vi) Marketing methods used

 

17. Place Mix It consists of all the activities involved in transferring ownership and physical possession of the product to consumers. It includes physical distribution and channels of distribution.

 

18. Physical Distribution It is concerned with making the goods and services available at the right place, so that people can purchase the same. There are two important decisions related to physical distribution. They are

(i) Channels of distribution

(ii) Physical movement of goods

 

19. Meaning of Promotion It refers to the use of communication with the twin objectives of informing potential customers about a product and persuading them to buy it

 

20. Promotion Mix and its Elements

Promotion mix consists of all the activities aimed at persuading customers to buy the products.

The various elements of promotion mix are as under

(i) Advertising       

(ii) Personal selling

(iii) Sales promotion  

(iv) Public relations.

 

21. Meaning of Advertising Advertising involves dissemination of information about a product, service or enterprise to induce people to take actions beneficial to the advertiser.

 

22. Features of Advertising

(i) Paid form

(ii) Impersonal communication

(iii) Identified sponsor

 

23. Role of Advertising

(i) Generates employment

(ii) Supports the press

(iii) Stimulates research

(iv) Improves standard of living

 

24. Objections against Advertising

(i) Economic Objections against Advertising

(a) Unproductive

(b) Creation of monopoly

(c) Increase in prices

(ii) Social Objections against Advertising

(a) Misleads consumers

(b) Creates confusion

(c) Consumption of undesirable products

 

25. Meaning of Personal Selling Personal selling or salesmanship is the process of informing, assisting and persuading people to buy a product or service through direct personal contact.

 

26. Qualities of a Good Salesman If a salesman wants to become successful, he should possess the below mentioned qualities

(i) Physical Qualities A salesman should be good looking, healthy and smart in appearance.

(ii) Psychological Qualities He should be sweet natured, possess good behaviour, should be mentally healthy and creative.

(iii) Social Qualities He should have courtesy, good manners, sociability, enthusiasm, cheerfulness, self-confidence, patience and tolerance.

 

27. Meaning of Sales Promotion Sales promotion refers to all the activities, which are undertaken for the purpose of increasing sales.

According to AHR Delers, "Sales promotion means any steps that are taken for the purpose of obtaining or increasing sales."

 

28. Sales Promotion Techniques

(i) Samples Firms distribute free samples of their products to selected consumers no. order to make the product popular.

(ii) Prize Contests Prize contests are held through radio, newspapers, and magazines or even through pamphlets distributed to dealers to increase to sale of the product.

(iii) Discount When products are offered on less price, it is known as discounted product, e.g.. A shoe company's offer of discount upto 50%.

(iv) Lucky Draw A firm on purchases of a fixed amount gives a coupon to a customer, which entitles them for a lucky draw.

(v) Quantity Gift Sellers devise special packages, which gives extra quantity of the product to the buyers at less price or no price, e.g., 'Buy two get one free'.

 

29. Meaning of Public Relations Public relations evaluate public attitudes, identify the policies and procedures of an organization with the public interest to earn public understanding and acceptance.

 

30. Role of Public Relations

(i) Building awareness and a favourable image for a company

(ii) Managing crisis that threatens company's image

(iii) It is an efficient way to reach masses