MARKETING MANAGEMENTWhat is Market?Thewordmarketisderivedfromthe LatinwordMarcatuswhichmeans merchandise,tradeorplaceof business. In common man words, the term market means a location wherebuyers and sellers of goods assemble to facilitate echange. Who isa Consumer??Who is marketer or seller?Marketero!erscomfort, convenience,styleandfashionby whichmoreandmoreneedsare developedintothemindsofthe consumers.M"#$%TI&'Marketingistheperformanceof businessactivitiesthatdirectthe (owofthegoodsandservices throughproducerstoconsumersor usersConcept of Marketing Theprimaryobjectiveof marketingistoenhancesales through consumer satisfaction. Thetraditionalconceptfocused oncheapproductsbeingmade availablewidely.Thiswaspossible through low cost of production and theconceptwascalled productionorientation concept. )uality alone ensured sales. Thisconcept was called the product oriented concept.*ulk production and competition, furthercreatedashiftinfocus tosalesvolume.Thisisthe sales oriented concept. Theneedsatisfyingcapacityof theproduct.Thismakesthe consumerorientedconcept popular.+marketing concept,MarketingmanagementMarketing management is the processplanning,organi-ing, directingandcontrollingthe activitiesrelatedtothe marketingofgoodsand servicestosatisfythe customers. needs.Objectives of marketing managementTocreatenecustomersforthe business!Themarketingmanagermust attractcustomerstobuythe/rm.s productsandservices.Thiswillfacilitate increasedsales.Tosatisfytheneedsofthe customers! The marketing manager must studythedemandsofcustomersbefore o!ering them any goods or services.Toearngoodillforthebusiness0 Marketingbasicallyattemptstoprovide 1ualityproductstocustomersat reasonablepricesandthus,buildsup good image for the business.To raise the standard of living of the people!Marketingfacilitatesproduction anddistributionofawidevarietyof goodsandservicesfortheuseof consumers.Todevelopthetypeofproducts thatillsatisfytheneedsofthe customers0Marketingaimsat developing a product or service that will satisfy consumer needs, determining an appropriate pricing strategy.Togenerateade"uatepro#tsfor thegrothofthebusiness! Marketingdepartmentistheonly department,whichgeneratesrevenue for the business.Creation of demand$ational development% economic growth and employment.&i'erence beteen marketing and sellingMarketingSelling 1. Want satisfying goods Converting his goods into cash2. Marketing begins before actual production take place.Selling takes place after the production3.Emphasisisgivenonproductplanning anddevelopmenttomatchproductsith market.Emphasisisplacedonsalesofgoods already produced.!.Customeroriented"Customeristreated as a king. #e is given supreme importance$roductoriented"producten%oys supreme importance &.Marketingaimsatprofitsthrough consumer satisfaction.Sellingaimsatprofitsthroughsales volume.'.(heprincipleofcaveatvendor)letthe seller beare* is folloed(heprincipleofcaveatemptor)letthe buyer beare* is folloed.+.,ntegratedapproachtomarketingis folloed.Marketingincludesmarketing research- product planning- advertising etc.+..ragmentedapproachtosellingis folloed./ttemptismadetosell hatever is produced.0.Marketing has a long1 term perspective as itlaysemphasisongrothandstabilityof business0.Sellinghasashorttermperspective as it emphasis profit ma2imi3ation.()$CT*O$+ O( M,-./T*$0*asic 2unctions12Marketing -esearchMarketingresearchisasystematic collectionofdatarelatingtoa marketingproblem,itsanalysisand meaningfulinterpretationsothatit facilitates decision 3 making.324roduct planning and &evelopment4roductplanninganddevelopmentbeginswith identi/cationofconsumerneeds.*asedonthe identi/edneeds,theproductsaredesignedand developed so as to suit the re1uirements of users.4roduct planning and development /nds answer to a number of 1uestions like05hat to manufacture or buy67ow to / the price67ow to promote sales67ow to maintain 1uality standards65hat should be the colour, si-e and other features62acilitating 2unctions526uying and ,ssembling*uyinginvolvesthedeterminationof re1uirements,/ndingthesourceofsupply, placing order and receiving goods. "ssembling meanscollectionofgoodsalreadypurchased fromdi!erentsourcesandbringingthem together to a common point.72+elling Thisisanimportantaspectofmarketing under which ownership of goods is transferred fromthesellertothebuyer.Itisatthispoint that marketing action takes place. 82+tandardi9ation Thesettingupofstandardsofspeci/cationsofaproduct andmaintainingthesestandardsareknownas standardi-ation.8tandardi-ationisthebasisofgrading about the 1uality of the goods. :24ackaging 4ackagingistraditionallydonetoprotectthegoodsfrom damage in transitand to facilitate easy transfer of goods tocustomers.Labelingmeansputtingidenti/cationmarks onthepackage.Itcontainsinformationbouttheproducer andtheproduct.Thelabelisusedtocommunicatebrand, grade and other information about the product. ;2 +torage 'oodsaregenerallyproducedinanticipationofdemand theyhavetobestoredproperlyinwarehousetoprotect themfromanydamagewhichmaybecausedbyants, rats, moisture, sun, theft etc. till they are sold out.2 ,dvertising"dvertisinghasbecomeanimportantfunctionof marketinginthecompetitiveworld.Ithelpsto spreadthemessageabouttheproductandthus promote its sale.112 4ricing 0 4rice is the echange value of a product. 4riceofaproductisin(uencedbythecostof production and services o!ered, pro/t margin desired, prices /ed by rival /rms and 'overnment. 4olicy.132 *nsuranceLoss or damage to goods or property may arise due to /re, theft, naturalcalamities like (oodor earth1uake and so on. Insurance provides protection against these risks on payment of a nominal premium152 0rading 'radingmeansdivisionofproductintodi!erent groupsorclassesmadeupofunitspossessingsimilar features as regards si-e, weight and 1uality. 'rading is doneinaccordancewiththespeci/cationssetupby the standards. 172 Trade Mark TradeMarkisalegalterm.Itreferstobrand,whichis registeredwiththegovernmentundertheTradeand Merchandise Marks "ct, 9:;igarettes 8pecial names such as crtem 2ans &ames of the product and the manufacture.Marketing Mi?Theelements of product@ price@ promotion and place are referred to as marketing mi."ccordingto 5illiam ? 8tanton, Marketing mi is the term used to describe the combination of thefourinputswhichconstitutesthecoreofa company.smarketingsystem,theproductthe pricestructure,thepromotionalactivitiesand the distribution system. Theseelementsareinterrelatedbecause decisionsinoneareausuallya!ectactionsin the others.+igni#cance ofMarketing Mi?@eterminationofmarketingmiisanimportant decision,whichthemarketingmanagerhasto take.Ifpropermarketingmiislaiddown,the following bene/ts will accrue to the organi-ation.Marketingmiservesasthelinkbetweenthe business /rm and its customers. It helps in increasing the sales and earning higherpro/ts. Marketingmigivesdueconsiderationtothe variouselements of the marketing system, there is a balanced relation between these elements.Marketingmisigni/cancethatits fourelementsarecloselyinter related.@ecisionsorchangesinone elementusuallya!ectdecisionsor changes in the other.Marketing mi facilitates meeting the re1uirementsofdi!erenttypesof customersthroughproductdesign, pricing, promotional and distribution.Components of Marketing Mi?% ? Mc >arthy has called these four marketing decision variables as the four 4.s of the marketing mi. %very /rm has to determine its optimum marketing mi so that it can reali-e its goals such as return on investment, sales volume market share etc. The four components of marketing mia2 4roduct Mi?The di!erent types of products a /rm manufactures and markets is called a product mi. The product mi consists of the product line, the depth of the mi, the length of the mi and the width of the mi in addition to its consistency.12 4roduct lineIt refers to a group of similar products, which fall within a product mi. 2or %g. 7industan Lever Ltd. Markets soaps like pears, lifebuoy and lu.32 The depth of the mi?This refers to the variation in the product line for a product. Lusoap is available in di!erent colours and with varying features. This indicates the depth of the mi.52 The length of the mi? 0 This implies the number of items that are included in a product line. The dairy product line of $erala milk Marketing 2ederation consist of milk, butter milk, curd, ghee, butter etc. indicates the length of its mi72 The idth of the mi?! It indicates the number of product lines, the /rm markets. 7industan Levers Ltd has a width mi ranging from soaps, detergents, 8kin care products, tooth paste82 Consistency! >onsistency refers to the close association betweenproducts in a mi.b2 4rice! The term Aprice. means echange value of goods or services in terms of money. The decisions relating to pricing of a product or service are called Aprice mi.. 4rice /ation is primarily based on four conditions such as04ricingto attain organi-ational obBectivespricing to cover the cost of theproduct4ricing to meet competition in the marketpricing in order to capture customer demand(actorsin pricing! 2actors have to beconsidered before /ing the price of a product. Types of customers0 The target customers must be able to a!ord the price. Cost of production and distribution! 8uch costs must be suCcientlycovered by the sale price to avoid losses. 4ro#t margin! The sale price is also in(uenced by the pro/t margin desired by the /rm. Competition! If there is a keen competition in the market, the price /ed will be lower to stay in the market. 5hen a /rm does not face competition, it cancharge higher price from the customers. &emand for the product! If demand of a product is increasing, the /rm can increase its price. *ut if demand is falling, the sale prices have to be reduced. 0overnment regulation! The maimum saleD price of some products are /ed by the government. "/rm can.t charge beyond this price.4ricing+trategy of a ne product!In pricing a new product, generally two types of strategies are suggested 3 8kimming price policy and 4enetration price policy+kimming price 4olicy! " product is priced at a very high level due to incurringlarge promotional epenses in early stages, 8kimming price refers to/ing a high price when a new product is introduced in the market. 7igh priceand it will be reduced later step by step. 4enetration price policy! This is the 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.c2 4lace!% This refers to marketing e!orts undertaken to make the product available at the right time in the right place. In order to ensure availability of products at the right place, two factors re1uire consideration.12Channels of distribution324hysical distribution12Channels of distribution The path taken by goods in their movement from the producer to the consumer is referred to as the channel of distribution. 4roducers are located at distant places and they sell their products locally through middlemen. 8uch middlemen may play the roles of wholesalers, retailers and agents.Channel AevelsThe number of intermediaries in the channel determines the channel length. =arious channel levels are0a2 Bero level channelThis is a case when no intermediaries are involved in the channel i.ethe producer sells goods directly to the consumers.b2One level channel7ere one intermediary is involved between the producer and the consumers.c2 To level channelThis is the most commonly used channel of distribution. There are two intermediaries involved in the distribution process. i.e the wholesaler and the retailerd2 Threelevel channelIn a three level channel, there are three intermediaries vi- agents, wholesalers and retailers. This channel is followed where the market is widely spread in its geographical dimensions.32 4hysical distribution 4hysicaldistribution is basically concerned with handling and movement of goods from the place of production to the place of distributionso as to create time and place utility. The maBor activities involved in physical distribution basically constitute four decision areas.Transportation+tock or inventory0 7ere stock refers to the holding of /nished goods in anticipation of demand. 8uch stock is also referred to as inventory. 7olding of stock is essential to meet unforeseen demand.Warehousing0 %very /rm needs to store its /nished goods until they are sold. The /rm can have its own warehouses or hire.Order 4rocessing0 It is the manner in which customers. ordersare purchased or processed.d2 4romotion4romotion deals with informing and persuading the customers about the/rm.s product. 4romotion mi involves decisions about advertising, personal selling and other sales promotion techni1ues.The elements of promotional mi? are described as under012 ,dvertising! It involves dissemination of information about a product or a service to target customers through newspapers, maga-ines, radio, T = out door displays etc.32 4ersonal selling! It implies a faceDtoDface contact between a seller and a buyer.52 +ales 4romotion! "ctivities other than mentioned above to promote a product are known as sales promotion activities. These include samples, coupons, contest, priceDo! o!ers etc.724ublicity0 It involves non paid form of non personal communication