MEANING OF MARKET AND MARKETING

A market is one of many varieties of systems, institutions, procedures, social

relations and infrastructures whereby parties engage in exchange. While parties may exchange goods
and services by barter, most markets rely on sellers offering their goods or services (including labor)
in exchange for money from buyers. It can be said that a market is the process by which the prices of
goods and services are established.
For a market to be competitive, there must be more than a single buyer or seller. It has been
suggested that two people may trade, but it takes at least three persons to have a market, so that
[1]
there is competition in at least one of its two sides. However, competitive markets, as understood in
formal economic theory, rely on much larger numbers of both buyers and sellers. A market with single
seller and multiple buyers is a monopoly. A market with a single buyer and multiple sellers is
[citation needed]
a monopsony. These are the extremes ofimperfect competition.
Markets vary in form, scale (volume and geographic reach), location, and types of participants, as well
as the types of goods and services traded. Examples include:

Physical retail markets, such as local farmers' markets (which are usually held in town squares or
parking lots on an ongoing or occasional basis), shopping centers and shopping malls
(Non-physical) internet markets (see electronic commerce)
Ad hoc auction markets
Markets for intermediate goods used in production of other goods and services
Labor markets
International currency and commodity markets
Stock markets, for the exchange of shares in corporations
Artificial markets created by regulation to exchange rights for derivatives that have been designed
to ameliorate externalities, such as pollution permits (see carbon trading)
Illegal markets such as the market for illicit drugs, arms or pirated products

In mainstream economics, the concept of a market is any structure that allows buyers and sellers to
exchange any type of goods, services andinformation. The exchange of goods or services
[citation needed]
for money is atransaction.
Market participants consist of all the buyers and sellers of
a good who influence its price. This influence is a major study ofeconomics and has given rise to
several theories and models concerning the basic market forces of supply and demand. There are
two roles in markets, buyers and sellers. The market facilitates trade and enables the distribution
and allocation of resources in a society. Markets allow any tradable item to be evaluated and priced.
A market emerges more or lessspontaneously or may be constructed deliberately by human
interaction in order to enable the exchange of rights (cf. ownership) of services and goods

Marketing is the process of communicating the value of a product or service to customers. It is a

critical business function for attracting customers.
From a societal point of view, marketing is the link between a societys material requirements and
its economic patterns of response. Marketing satisfies these needs and wants through exchange
processes and building long term relationships. The process of communicating the value of a product
or service through positioning to customers. Marketing can be looked at as an organizational function
and a set of processes for creating, delivering and communicating value to customers, and managing
customer relationships in ways that benefit the organisation and its shareholders. Marketing is the
science of choosing target markets through market analysis and market segmentation, as well as
understanding consumer buying behavior and providing superior customer value. There are five
competing concepts under which organizations can choose to operate their business; the production
concept, the product concept, the selling concept, the marketing concept, and the holistic marketing
concept. The four components of holistic marketing are relationship marketing, internal marketing,
integrated marketing, and socially responsive marketing. The set of engagements necessary for
successful marketing management includes, capturing marketing insights, connecting with customers,
building strong brands, shaping the market offerings, delivering and communicating value, creating
long-term growth, and developing marketing strategies and plans

Basic Functions of Marketing

The marketing process performs certain activities as the goods or services move from producer to
consumer. Every firm does not perform all these activities or jobs. However, any company that wants
to operate its marketing system successfully must carry them out. The following marketing tasks have
been recognized for a long time.
1. Selling
It is core of marketing. It is concerned with the persuasion of prospective buyers to actually complete
the purchase of an article. Setting pays an important part in realizing the ultimate aim of earning profit.
Selling is enhanced by means of personal selling, advertising, publicity and sales promotion.
2. Buying
It involves what to buy, what quality, how much, from whom, when and at, what price. People in
business buy to increase sales or to decrease costs. Purchasing agents are much influenced by
quality, service and price. The products that the retailers buy for resale are determined by the need
and preferences of their customers.
3. Transportation
Transport is the physical means whereby goods are moved from the places where they are produced
to those they are needed for consumption. Transportation is essential from the procurement of raw
materials to the delivery of finished products to the customers places. Marketing relies mainly on
railroads, tracks, waterways, pipelines and air transport. The type of transportation is chosen on
several consideration such as suitability, speed and cost.
4. Storage
It involves the holding of goods in proper condition from the time they are produced until they are
needed by consumers (in case of finished products) or by the production department (in case of raw
materials and stores). Storing protects the goods from deterioration and helps in carrying over surplus
for feature consumption or use in production. Goods may be stored in various warehouses situated at
different places. Storing assumes greater importance when production is seasonal or consumption
may be seasonal. Retail firms are called stores.
5. Standardization and Grading
The other activities that facilitate marketing are standardization and grading. Standardization means
establishment of certain standards or specifications for products based on intrinsic physical qualities
of any commodity. This may involved quantity (weight or size) or it may involve quality (colour, shape,
appearance, material, taste, sweetness etc). Government may also set some standards e.g., in case
of agricultural products. A standard conveys a uniformity of the products.
Grading means classification of standardized products into certain well-defined classes or groups. It
involves the division of products into clauses made up of unit processing similar characteristics of size
and quality. Grading is very important for raw material (such as fruits and cerials), mining products
(such as coal, iron-ore and mangenese) and forest products (such as timber). Branded consumer
products may bear grade levels, A B C.
6. Financing
It involves the use of capital to meet financial requirements of the agencies dealing with various
activities of marketing. The services of providing the credit and money needed to meet the cost of
getting merchandise into the hands of the final user is commonly referred to as finance, function in
marketing. In marketing, finances are needed for working capital and fixed capital, which may be
secured from three sources onward capital, bank loans and advances, and trade credit (provided by
the manufactures to wholesaler and by the wholesaler to the retailers).
7. Risk Taking
Risk means lose due to some unforeseen circumstances in future. Risk-bearing in marketing refers to
the financial risk inherent in the ownership of goods held for an anticipated demand, including the
possible losses due to a fall in price and the losses from spoilage, depreciation, obsolescence, fire
and floods or any other loss that may occur with the passage of time. From production of goods to its
selling stage, many risks are involved due to changes in marker conditions, natural causes and
human factors. Changes in fashions or interventions also cause risks. Legislative measures of the
government may also cause risks.

8. Market Information
The only sound foundation, on which marketing decisions may be based, is correct and timely market
information. Right facts and information reduce the aforesaid risks and thereby result in cost
reduction. Business firms collect, analyze and interpret facts and information from internal sources,
such as records, sales people and findings of the market research department. They also seek facts
and information from external sources, such as business publications, government reports and
commercial research firms. Retailers need to know about sources of supply and also about customers
buying motives and buying habits. Manufacturers need to know about retailers and about advertising
media. Firms in both these groups need information about competitors activities and about their
markets. Even ultimate consumers need market information about availability of products, their quality
standards, their prices, and also about the after-sale service facility Common sources for consumers
are sales people, media advertisements, colleagues etc.
It may be noted that in addition to the mentioned jobs, the marketing manager is also involved in
product planning, pricing of products, selection of distribution channels, framing of marketing
objectives, environmental scanning, target market selection, market programming and developing
marketing strategy.
Advertising meaning and objectives
Advertising is nothing but a paid form of non-personal presentation or promotion of ideas, goods or
services by an identified sponsor with a view to disseminate information concerning an idea, product
or service. The message which is presented or disseminated is called advertisement. In the present
day marketing activities hardly is there any business in the modern world which does not advertise.
However, the form of advertisement differs from business to business.
Advertisement has been defined differently by different persons. A few definitions are being
reproduced below:
According to Wood, "Advertising is causing to know to remember, to do."
According to Wheeler, "Advertising is any form of paid non-personal presentation of ideas, goods or
services for the purpose of inducting people to buy."
According to Richard Buskirk, "Advertising is a paid form of non-personal presentation of ideas, goods
or services by an identified sponsor."
According to William J. Stanton, "Advertising consists of all the activities involves in presenting to a
group, a non-personal, oral or visual, openly sponsored message regarding disseminated through one
or more media and is paid for by an identified sponsor."
The above definitions clearly reveal the nature of advertisement. This is a powerful element of the
promotion mix. Essentially advertising means spreading of information about the characteristics of the
product to the prospective customers with a view to sell the product or increase the sale volume.

The main features of advertise are as under:

It is directed towards increasing the sales of business.

Advertising is a paid form of publicity

It is non-personal. They are directed at a mass audience and nor at the individual as is in the case of
personal selling.

Advertisement are identifiable with their sponsor of originator which is not always the case with
publicity or propaganda.
Objective / Functions of advertising
The purpose of advertising is nothing but to sell something -a product, a service or an idea. The real
objective of advertising is effective communication between producers and consumers. The following
are the main objectives of advertising:
Preparing Ground for New Product

New product needs introduction because potential customers have never used such product earlier
and the advertisement prepare a ground for that new product.
Creation of Demand
The main objective of the advertisement is to create a favorable climate for maintaining of improving
sales. Customers are to be reminded about the product and the brand. It may induce new customers
to buy the product by informing them its qualities since it is possible that some of the customers may
change their brands.
Facing the Competition
Another important objective of the advertisement is to face to competition. Under competitive
conditions, advertisement helps to build up brand image and brand loyalty and when customers have
developed brand loyalty, becomes difficult for the middlemen to change it.
Creating or Enhancing Goodwill: Large scale advertising is often undertaken with the objective of
creating or enhancing the goodwill of the advertising company. This, in turn, increases the market
receptiveness of the company's product and helps the salesmen to win customers easily.
Informing the Changes to the Customers
Whenever changes are made in the prices, channels of distribution or in the product by way of any
improvement in quality, size, weight, brand, packing, etc., they must be informed to the public by the
producer through advertisement.
Neutralizing Competitor's Advertising
Advertising is unavoidable to complete with or neutralize competitor's advertising. When competitors
are adopting intensive advertising as their promotional strategy, it is reasonable to follow similar
practices to neutralize their effects. In such cases, it is essential for the manufacturer to create a
different image of his product.
Barring New Entrants
From the advertiser's point of view, a strongly built image through long advertising helps to keep new
entrants away. The advertisement builds up a certain monopoly are for the product in which new
entrants find it difficult to enter.
In short, advertising aims at benefiting the producer, educating the consumer and supplementing the
salesmen. Above all it is a link between the producer and the consumer.
TYPES OF ADVERTISING

Classification of Advertising
1. Print Advertising - The print media has been used for advertising since long. The
newspapers and magazines are quite popular modes of advertising for different companies all
over the world. Using the print media, the companies can also promote their products through
brochures and fliers. The newspaper and magazines sell the advertising space and the cost
depends on several factors. The quantity of space, the page of the publication, and the type

2.

3.

4.

5.

of paper decide the cost of the advertisement. So an ad on the front page would be costlier
than on inside pages. Similarly an ad in the glossy supplement of the paper would be more
expensive than in a mediocre quality paper.
Broadcast Advertising - This type of advertising is very popular all around the world. It
consists of television, radio, or Internet advertising. The ads on the television have a large
audience and are very popular. The cost of the advertisement depends on the length of the
ad and the time at which the ad would be appearing. For example, the prime time ads would
be more costly than the regular ones. Radio advertising is not what it used to be after the
advent of television and Internet, but still there is specific audience for the radio ads too. The
radio jingles are quite popular in sections of society and help to sell the products.
Outdoor Advertising - Outdoor advertising makes use of different tools to gain customers
attention. The billboards, kiosks, and events and tradeshows are an effective way to convey
the message of the company. The billboards are present all around the city but the content
should be such that it attracts the attention of the customer. The kiosks are an easy outlet of
the products and serve as information outlets for the people too. Organizing events such as
trade fairs and exhibitions for promotion of the product or service also in a way advertises the
product. Therefore, outdoor advertising is an effective advertising tool.
Covert Advertising - This is a unique way of advertising in which the product or the message
is subtly included in a movie or TV serial. There is no actual ad, just the mention of the
product in the movie. For example, Tom Cruise used the Nokia phone in the movie Minority
Report.
Public Service Advertising - As evident from the title itself, such advertising is for the public
causes. There are a host of important matters such as AIDS, political integrity, energy
conservation, illiteracy, poverty and so on all of which need more awareness as far as general
public is concerned. This type of advertising has gained much importance in recent times and
is an effective tool to convey the message.

The advertising objectives largely determine which of two basic types of advertising to use; product or institutional.

Institutional advertising tries to develop goodwill for a company rather than to sell a specific product. Its objective is to
improve the advertiser's image, reputation, and relations with the various groups the company deals with. This includes
only end-users and distributors, but also suppliers, shareholders, employees, and the general public. Institutional adver
focuses on the name and prestige of a company. Institutional advertising is sometimes used by large companies with s
divisions to link the divisions in customers' minds. It is also used to link a companys other products to the reputation of
market-leading product.

Product advertising tries to sell a product. It may be aimed at the end user or at potential representatives and distribu
Product advertising may be further classified as pioneering, competitive, and reminder advertising.

Pioneering advertising tries to develop primary demand, that is demand for a product category rather than a specific b
It's needed in the early stages of the adoption process to inform potential customers about a new product. The first com
to introduce a new technology to its industry doesn't have to worry about a competitive product since they alone have t
technology. They have to sell the industry on the advantages of the new technology itself. Pioneering advertising is usu
done in the early stage of the product life cycle by the company which introduces an innovation.

Competitive advertising tries to develop selective demand; demand for a specific manufacturers product rather than
product category. An innovating company is usually forced into competitive advertising as the product life cycle moves
After pioneering technology is accepted and most manufacturers are supplying competing products, the innovator is for
to sell the advantages of his specific design over that of the competition. This is usually the situation in a mature marke

Reminder advertising tries to keep the product's name before the public. It is useful when the product has achieved m
domination. Here, the advertiser may use "soft-sell" ads that just mention or show the name as a reminder. Reminder
advertising may be thought of as maintenance for a product with the leadership position in the market.

Of course none of the above classifications are exclusive. Some companies combine elements of the institutional ad wi
product advertising. The classifications are merely aids in developing the objectives which the company sets for their ad

CASE STUDY : McCain Foods

McCain Foods Ltd. is the world's largest producer of French Fries and Potato Specialities. Located in Florenceville, New Brunswick, Canada,
McCain has grown to become a global leader in the frozen food industry. From Canada, across the world to Japan, from the tip of
Argentina to suburbs in Australia, our tasty and convenient food products are served in restaurants and sold in retail stores; adding
nutrition and flavour to family meals time after time.
McCain Foods (India) is a wholly-owned subsidiary of McCain Foods Limited in Canada. Since 1998, McCain has been engaged in
agriculture R&D and in development of frozen food market in India and subcontinent countries. McCain products are used by leading fast
food chains, hotels, restaurants, catering companies and are popular for in-home consumption.
At McCain, it's our constant endeavour to create good food that is delightfully fresh. In order to maintain an impeccable standard of
quality, we strive to use the highest quality ingredients. Our products are prepared simply with wholesome ingredients made by good
people who care about delivering quality in every box, every bag and every bite.
McCain focuses on providing great variety to customers and consumers. A delectable range of products is available, world favourites like
McCain French Fries, McCain Smiles and local delights such as McCain Aloo Tikki, Idli Sambar Combo and real cheese appetizers like
McCain Cheese & Jalapeno Nuggets and Potato Cheese Shotz.

Global sales of over $6 billion.

Products marketed in 160 countries world over.
One in every three French fries around the world is a McCain fry.
50 manufacturing facilities around the world.
World class potato processing plant in Mehsana district of Gujarat.

McCain Foods was founded in 1957 in Canada by the McCain brothers Harrison, Wallace, Robert and Andrew.
McCain Foods is now the largest chip producer in the world with a market share of almost 33% and more than
20,000 employees working in 57 locations worldwide. Since 1968 McCain GB has been operating from its UK
base in Scarborough, North Yorkshire.
McCain prides itself on the quality and convenience of its product range and for over three decades has been
making healthier versions of favourite staple foods. The McCain brothers had a simple philosophy 'Good ethics is
good business'. This lies behind the McCain brand message 'It's All Good'.
It is not just the food that is good. The philosophy also refers to the way McCain works with its suppliers and
builds its relationship with its customers. McCain believes it is important to take care of the environment, the
community and its people. It works with around 300 farmers in the UK , chosen for the quality of their potato crop.
McCain factories are located in key potato growing areas, which helps to reduce food miles.

Corporate responsibility
A further example of the way McCain is reducing its impact on the environment is the installation of three 125m
high wind turbines to generate electricity for its Whittlesey factory near Peterborough. McCain is the first major
UK food manufacturer to use alternative energy to help power a large factory.
McCain also gives back to the community by committing resources to both local and national projects. McCain
supports a wide range of local charities and good causes. Nationally, McCain has a five-year agreement with UK
Athletics to promote track and field sport in the UK.

The marketing mix

McCain strives to be a company making good, simple food in an increasingly sustainable way, while meeting
business objectives. To achieve this, the business ensures that it balances the four elements (the four Ps) of the
marketing mix.
A product or service will have its own different mix of the four Ps. The right mix will achieve marketing objectives
and result in customer satisfaction:
Product - this has to look and taste good and be made from wholesome ingredients
Price - the price has to be attractive to ensure enough sales to generate a profit
Place - the place and position of the product in the market is important to compete for market share
Promotion - this has to fit the companys objectives for the product.
This case study shows how McCain combines all four parts of the marketing mix to develop its marketing strategy

Product
McCain Foods is the world's leading manufacturer of frozen potato products. Although McCain is perhaps best
known for producing Oven Chips, its product lines are much wider. In the UK they include various other potato
products such as McCain Wedges and McCain Home Roasts, as well as McCain Sweet Potato and McCain
Micro Pizza. In other countries McCain sells a variety of foods including frozen vegetables, ready meals and
desserts.

Some products, for example, McCain Oven Chips, captured the public
imagination immediately and continue to sell well without needing to be changed. Other products change through
time or are adapted to create new variations, e.g. curly fries or thin and crispy fries.

External influences
Changes in the range are driven by a number of different factors. For example, microwaveable snacks take
account of changing lifestyles, where people are looking for food that does not take long to prepare. McCain has
also been responsive to market needs for healthier options and its products support the governments
Change4life campaign. This encourages people to 'Eat Well, Move More, Live Longer'.
The company's philosophy supports the 'calories in/calories out' principle. This states that to maintain a healthy
weight, calories consumed should not exceed calories used. This also forms part of the 'It's All Good' message not only does McCain food taste good, but it fits in with current thinking on healthy diets.
McCain now only uses sunflower oil in the preparation of its chips. It knows that customers want to eat healthily
without compromising on taste and it is careful to use wholesome ingredients in its products. Having a wide range
including healthier options, such as Oven Chips, as well as products developed for taste, e.g. Wedges, means
the company can meet different consumer needs for different meal occasions.

Managing quality

To protect quality throughout the whole supply chain, McCain

manages its own potato seed development. After specially selecting the seeds, McCain works closely with
around 300 farmers to ensure the potatoes are grown to a high standard and harvested at their peak. Only the
best potatoes are chosen to make McCain chips and potato products.
McCain Foods' product offering extends outside the home to include food service. This provides products
specially designed for use in restaurants and canteens.

Price

In pricing its products, a business must consider four things:

1. Business objectives. The business may set its pricing to achieve a number of different objectives. These may
be to:
maximise profits
achieve a target return on investment
achieve a target sales figure
achieve a target market share
match the competition.

2. Costs. In order to make a profit a business must make sure that its products are priced above their cost. The
total cost of a product includes overheads such as research and development, investment in equipment, people
and technology, as well as direct costs, such as raw materials and ingredients.
3. Competitors. If there is no competition the business can set whatever price it chooses. On the other hand, if
there is perfect competition then the business must accept the market price for its products. In most cases the
reality is somewhere in the middle.
4. Customers. The business needs to consider what its customers' expectations will be. For example, customers
may be prepared to pay more for a product that is unique or produced in an ethical and sustainable manner. This
would place it as a premium brand above its competitors.

Pricing strategies
McCain uses a range of pricing strategies associated with adding value for money. For example, 'extra-fill' packs
can give the customer up to 30% extra free. This rewards regular buyers of a particular product. McCain may
also offer its products at a special promotional price using price-marked packs to encourage people to try the
product.

Place
Place describes the channels McCain uses to position its products in the marketplace.

As a business-to-business (B2B) organisation,

McCain does not sell directly to its consumers. Instead it places its products with wholesalers and retailers, such
as major supermarket chains. McCain may then be able to influence how its products reach the consumer at the
point-of-sale. For example, it may secure key positions for its products in stores. By paying for end-of-shelf
positions for its products, customers are more likely to see and buy them.
McCain does not use its own vehicles to distribute products to its customers. Transportation is outsourced, which
means another organisation carries out the deliveries. Products are delivered directly to retailers' central depots
for onward distribution to their stores. Alternatively, they may go to wholesalers, who sell them on to other
businesses such as restaurants.
McCain takes the need for sustainability and reducing its impact on the environment into consideration in
transporting its products. For example:
Where possible local farmers are used to reduce food miles.
Double-decker trucks are used, saving in the region of 2,000 lorry journeys a year.
The lorries have built-in solar panels which helps to provide additional power, for example, to help with the
internal lifting mechanism

Promotion
A further demonstration of the 'It's All Good' ethos is McCain Foods' ethical stance on promotion. McCain makes
a commitment not to advertise to children under 12 years old.

It also ensures that the retail labeling on its products carries

clear information on levels of fat, saturated fat, salt and sugar to help shoppers choose healthier options. Its

labeling is in line with the Food Standards Agency (FSA) traffic light scheme and the food industry's Guideline
Daily Amounts (GDA).
Promotion falls into two main categories:
Above-the-line promotion
Below-the-line promotion.

Above-the-line
Above-the-line promotion is paid-for and includes traditional advertising routes such as television, radio and the
press. These are good for carrying marketing messages to a large audience. However, it is less easy to measure
the impact of these channels, for example, whether a TV advert has increased sales.
Special displays or positioning in stores or advertising on supermarket trolleys are also examples of above-theline promotional activity at McCain Foods.

Below-the-line

Below-the-line promotion can take many forms and is usually more under the control of the business. Typical
examples include events or direct mail. McCain uses a combination of below-the-line activities including:
door-to-door leaflet drops or books of vouchers which give customers discounts over a period of time. These help
to attract consumers and establish brand loyalty so the consumer buys the product again.
email newsletter for consumers. This creates a relationship with consumers, which is unusual for a B2B
organisation. It not only allows McCain to communicate directly with and listen to consumers, it also enables the
business to collect information, for example, about their lifestyles and product choices. This is used for feedback,
research and promotions.

PR and sponsorship

Public relations (PR) is a form of promotion

that is concerned with developing goodwill and understanding between organisations and the public. For
example, McCain uses its relationship with UK Athletics to deliver 'Track and Field' roadshows across the UK.
These emphasise the link between healthy food and healthy lifestyle. Again, this aligns with the 'It's All Good'
message.
McCain also takes part in different types of sponsorship, such as:
TV show Family Fortunes. This brings the McCain brand to a wide audience through a popular family
programme.
McCain Athletics Networks which encourage young people to get involved in the sport through local clubs. This
further supports the companys approach to balancing calories in with calories out.
McCain also aims to promote better understanding of where food comes from through initiatives such as The
Potato Story. This is an educational resource that helps teach children about how potatoes grow and their place
in a balanced healthy diet.

Hip Digital worked with McCain and their agency partners to design a family promotion aimed at
engaging the family in their home. The goal of the promotion was to drive sales, engage consumers
and activate brand preference. McCain Movie Night allowed consumers to receive a Bonus Digital
Movie Rental inside of select pizza packages.
Measured Results:
During the most competitive period of year (the Super Bowl) McCain invigorated the entire sales
channel with this promotion, resulting double digit lift in sales. What is more, McCain was able to
secure incremental Point-of-Sale displays, drive repeat purchase behavior and category market share
up an impressive amount. Pizza lovers and movie fans were delighted.

Brand and brand promotion

'It's All Good' is a message that is embedded in all aspects of McCain

Foods' marketing mix.
Not only are the products designed to look and taste good, they are produced from good quality crops in a way
that addresses people's concerns about issues such as health and the origins of their food. This helps to ensure
that McCain remains a trusted brand.
McCain also takes great care to minimise its impact on the environment. Its products are placed in the market in
a way that reduces both food miles and carbon emissions.
Promotion of the products focuses on the positive relationship between McCain food and a healthy diet and
reinforces the importance of food and exercise in a healthy lifestyle.

Promotion is mainly done via mainstream media e.g.: TV advertising, popular magazines.
Supermarket promotional activity e.g.: specials are organised by our sales department in
conjunction with the respective buyers in the head offices of the major retailers.