Definition of MarketingAccording to American Marketing Association, "Marketing is an organisational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organisation and its stakeholders."

Definition of ManagementAccording to Harold Koontz, "Management is the art of getting things done through and with people in formally organised groups."

Management consists of the interlocking functions of creating corporate policy and organising, planning, controlling, directing an organisation's resources in order to achieve the objectives of the policy.

Definition of Marketing ManagementAccording to Philip Kotler, "Marketing Management is the analysis, planning, implementation and control of programmes designed to bring about desired exchanges with target audiences for the purpose of personal and of mutual gain. It relies heavily on the adoption and coordination of product, price, promotion and place for achieving responses.".

Marketing management is a business process, to manage marketing activities in profit seeking and non profit organisations at different levels of management. Marketing management decisions are based on strong knowledge of marketing functions and clear understanding and application of supervisory and managerial techniques.

Definition and Meaning of MarketingAccording to American Marketing Association (1948) - "Marketing is the performance of business activities directed toward, and incident to, the flow of goods and services from producer to consumer or user."

AMA (1960) - "Marketing is the performance of business activities that direct the flow of goods and services from producer to consumer or user.

According to Kotler (2000) - "A societal 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."

Nature of Marketing

1. Marketing is an Economic FunctionMarketing embraces all the business activities involved in getting goods and services , from the hands of producers into the hands of final consumers. The business steps through which goods progress on their way to final consumers is the concern of marketing.

2. Marketing is a Legal Process by which Ownership Transfers In the process of marketing the ownership of goods transfers from seller to the purchaser or from producer to the end user.3. Marketing is a System of Interacting Business Activities Marketing is that process through which a business enterprise, institution, or organisation interacts with the customers and stakeholders with the objective to earn profit, satisfy customers, and manage relationship. It is the performance of business activities that direct the flow of goods and services from producer to consumer or user.

4. Marketing is a Managerial function According to managerial or systems approach - "Marketing is the combination of activities designed to produce profit through ascertaining, creating, stimulating, and satisfying the needs and/or wants of a selected segment of the market." 

According to this approach the emphasis is on how the individual organisation processes marketing and develops the strategic dimensions of marketing activities. 

5. Marketing is a social process Marketing is the delivery of a standard of living to society. According to Cunningham and Cunningham (1981) societal marketing performs three essential functions:-6. Marketing is a philosophy based on consumer orientation and satisfaction

7. Marketing had dual objectives - profit making and consumer satisfaction

Scope of Marketing1. Study of Consumer Wants and NeedsGoods are produced to satisfy consumer wants. Therefore study is done to identify consumer needs and wants. These needs and wants motivates consumer to purchase.

2. Study of Consumer behaviourMarketers performs study of consumer behaviour. Analysis of buyer behaviour helps marketer in market segmentation and targeting.

3. Production planning and developmentProduct planning and development starts with the generation of product idea and ends with the product development and commercialisation. Product planning includes everything from branding and packaging to product line expansion and contraction.

4. Pricing PoliciesMarketer has to determine pricing policies for their products. Pricing policies differs form product to product. It depends on the level of competition, product life cycle, marketing goals and objectives, etc.

5. DistributionStudy of distribution channel is important in marketing. For maximum sales and profit goods are required to be distributed to the maximum consumers at minimum cost.

6. PromotionPromotion includes personal selling, sales promotion, and advertising. Right promotion mix is crucial in accomplishment of marketing goals.

7. Consumer SatisfactionThe product or service offered must satisfy consumer. Consumer satisfaction is the major objective of marketing.8. Marketing ControlMarketing audit is done to control the marketing activities.Meaning of Marketing ProcessThe Marketing Process of a company typically involves identifying the viable and potential marketing opportunities in the environment, developing strategies to effective utilise the opportunities, evolving suitable marketing strategies, and supervising the implementation of these marketing efforts.

Marketing process involves ways that value can be created for the customers to satisfy their needs. Marketing process is a continual series of actions and reactions between the customers and the

organisations which are making attempt to create value for and satisfy needs of customers. In marketing process the situation is analysed to identify opportunities, the strategy is formulated for a value proposition, tactical decisions are taken, plan is implemented, and results are monitored.

Steps in Marketing ProcessFollowing are the steps involved in the Marketing Process :- Situation Analysis

Marketing Strategy

Marketing Mix Decision

Implementation and Control

1. Situation AnalysisAnalysis of situation in which the the organisation finds itself serves as the basis for identifying opportunities to satisfy unfulfilled customer needs. Situational and environmental analysis is done to identify the marketing opportunities, to understand firms own capabilities, and to understand the environment in which the firm is operating.

2. Marketing StrategyAfter identifying the marketing opportunities a strategic plan is developed to pursue the identified opportunities.

3. Marketing Mix DecisionsAt this step detailed tactical decisions are made for the controllable parameters of the marketing mix. It includes - product development decisions, product pricing decisions, product distribution decisions, and product promotional decisions.

4. Implementation and ControlFinally, the marketing plan is implemented and the results of marketing efforts are monitored to adjust the marketing mix according to the market changes.

The marketing environment is made up of:

1. Micro-environment and

2. Macro-environment.

We discuss them in detail:

1. Micro-environment:

The micro-environment of the company consists of various forces in its immediate environment that

affect its ability to operate effectively in its chosen markets.

This includes the following:

(a) The company

(b) Company’s Suppliers

(c) Marketing Intermediaries

(d) Customers

(e) Competitors

(f) Public

The Company

1. Top Management

2. Finance

3. R&D

4. Manufacturing

5. Purchasing

6. Sales Promotion

7. Advertisement etc

Macro Environment

Demographic Environment:

Demography is the study of population characteristics that are used to describe

consumers. Demographics tell marketers who are the current and potential customers,

where are they, how many are likely to buy and what the market is selling. Demography

is the study of human populations in terms of size, density, location, age, sex, race,

occupation and other statistics.

Income:

Income determines purchasing power and status. Higher the income, higher is the

purchasing power. Though education and occupation shapes one’s tastes and preferences,

income provides the means to acquire that.

Life-style:

It is the pattern of living expressed through their activities, interests and opinion. Life-

style is affected by other factors of demography as well. Life-style affects a lot on the

purchase decision and brand preferences.

Sex:

Gender has always remained a very important factor for distinction. There are many

companies which produce products and services separately for male and female.

Education:

Education implies the status. Education also determines the income and occupation. With

increase in education, the information is wider with the customers and hence their

purchase decision process is also different. So the marketers group people on the basis of

education.

Social Class:

It is defined as the hierarchical division of the society into relatively distinct and

homogeneous groups whose members have similar attitudes, values and lifestyle.

Occupation:

This is very strongly associated with income and education. The type of work one does

and the tastes of individuals influence one’s values, life-style etc. Media preferences,

hobbies and shopping patterns are also influenced by occupational class.

Age:

Demographic variables help in distinguishing buyers, that is, people having homogenous

needs according to their specific wants, preferences and usages. For instance, teenagers

usually have similar needs. Therefore, marketers develop products to target specific age

groups.

The youth are being targeted through advertisements and promotional campaigns, stores

are being designed with ‘youthful’ features, youth events are being sponsored, and even

new technology is developed with their tastes in mind.

The Political and Regulatory Environment

Federal, state, and local bodies can set rules or restrictions on the conduct of businesses. The purpose

of regulation is to protect both consumers and businesses. Businesses favor some regulations (such as

patent laws) while chafing under others (such as restrictions on advertising). The tobacco industry, for

example, has had to learn to live with a federal ban on TV and radio advertising. More recently, many

companies in the food industry have expressed unhappiness over regulations requiring the labeling of

trans-fat content.

The following laws affected business in India:

1. Indian Contract Act 1872

2. Factories Act 1948

3. Minimum Wages Act 1948

4. Essential Commodities Act 1955

5. Securities Contracts Regulation Act 1956 (SEBI Act)

6. The Companies Act 1956

7. Trade and Merchandise Act 1958

Economic Environment

Every day, marketing managers face a barrage of economic news. They must digest it, assess its

impact, and alter marketing plans accordingly. Sometimes (but not recently), the news is cause for

optimism—the economy’s improving, unemployment’s declining, consumer confidence is up. At

other times (like today), the news makes them nervous—we’re in a recession, industrial production is

down, jobless claims are rising,consumer confidence has plummeted, credit is hard to get. Naturally,

business thrives when the economy is growing, employment is full, and prices are stable. Marketing

products is easier because consumers are willing to buy. On the other hand, when the economy is

slowing (or stalled) and unemployment is rising, people have less money to spend, and the marketer’s

job is harder.

Then there’s inflation, which pushes interest rates upward. If you’re trying to sell cars, you know that

people facing higher interest rates aren’t so anxious to take out car loans. Sales will slip, and to

counteract the anticipated slowdown, you might have to add generous rebates to your promotional

plans.

The Competitive Environment

Imagine playing tennis without watching what your opponent was doing. Marketers who don’t pay

attention to their competitors are playing a losing game. In particular, they need to monitor the

activities of two groups of competitors: the makers of competing brands and the makers of substitute

products. Coke and Pepsi, for instance, are brand competitors who have engaged in the so-called “cola

wars” for decades. Each tries to capture market share by convincing people that its soft drinks are

better. Because neither wants to lose share to the other, they tend to resort to similar tactics

The Technological Environment

New technologies also transform the marketing mix in another important way: they alter the way

companies market their products. Consider the revolutionary changes brought about by the Internet,

which offers marketers a new medium for promoting and selling a vast range of goods and services.

Marketers must keep abreast of technological advances and adapt their strategies, both to take

advantage of the opportunities and to ward off threats.

The Social and Cultural Environment

Marketers also have to stay tuned to social and cultural factors that can affect sales. The values and

attitudes of American consumers are in a state of almost constant flux; what’s cool one year is out of

style the next. Think about the clothes you wore five years ago: would you wear them today? A lot of

people wouldn’t—they’re the wrong style, the wrong fit, the wrong material, the wrong color, or just

plain wrong. Now put yourself in the place of a marketer for a clothing company that targets teenagers

and young adults. You wouldn’t survive if you tried to sell the same styles every year. As we said at

the outset of this chapter, the key to successful marketing is meeting the needs of customers. This

means knowing what they want right now, not last year.