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What is the market?


Any structure which may be a place or may not be can be defined as the market that allows buyers
and sellers to exchange any type of goods, services and information. It can also be called as an
arrangement constructed by buyers and sellers. It facilitates trade and enables the distribution of
resources in a society.
Thus a market:
1. It establishes the prices of goods and services.
2. It consists of systems, institutions, procedures, social relations and infrastructure.
3. It brings a sense of competition.
4. It works on a basic force of demand and supply.
Types of market:
On the basis of place
1. Local market
2. National market
3. International market
On the basis of time
1. Very short period market
2. Short period market
3. Long period market
4. Very long period market
On the basis of competition
1. Perfectly competitive It consists many sellers. E.g. Mobile market, internet providers etc.
2. Imperfectly competitive
(a) Monopoly one seller. E.g. Indian Railway
(b) Duopoly two sellers.
(c) Oligopoly few sellers. E.g. petroleum product market
(d) Monopolistic many sellers
On the basis of product
1. Consumer market - These are the markets where products and services bought by consumers for
their own and family use.
Types:
(a) Fast moving consumers goods (FMCG)
High volume
Low unit cost
Fast and frequent purchase
E.g. Biscuits, soaps, detergents, newspapers etc.
(b) Consumer durables
Low volume
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High unit cost


E.g. Freeze, TV, computers, motorbikes, laptops etc.
(c) Soft goods - It is like consumer durable.
Low/high volume
High/low unit cost
Frequently purchased
E.g. Clothes, shoes, specs etc.
(d) Services
Targeted consumers
Brand name more important
Intangible
E.g. Health insurance, beauty parlours, insurance etc.
2. Industrial market- These markets are not intended directly to consumers but among businessmen.
Finished goods market
Raw material market
Services
E.g. Accountancy, legal advice, security services, waste disposal services etc.
What is a market economy?
It is an economy system in which economic decisions regarding monetary control, products and their
production and methods and control over distribution are based on supply and demand. These are
decided solely by the aggregate interaction of a countrys citizens as consumers and businesses and
there is very little government intervention or central planning.
Since in market economy, markets are governed by the law of supply and demand, the market itself
will determine the price if goods and services.
Businesses can decide which goods to produce and in what quantity and consumers can decide what
they want to purchase and at what price. The prices of goods and services are determined in a free
price system. In such economy, the government allows and protects ownership of property and
exchange. Government plays an important role as the protector of property rights and individual
liberty. In theory, market economy is completely different from practical market economy. However
most developed nations today can be classified as mixed economies, they are often said as market
economies because they allow market forces to drive most of their activities, typically engaging in
government intervention only to the extent that it is needed to provide stability. It can be contrasted
with planned economy or centrally planned economy, in which government decisions drive most
aspects of a country's economic activity.
What do you understand by Market Penetration?
Market Penetration is basically a strategy to increase the base or market share of the existing
product. It is one of the four growth strategies of the product market growth matrix defined by
Ansoff. It occurs when a company penetrates a market in which current or similar products already
exist.
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Market Penetration can be done by the following means:


(a) Attracting nonusers of the product
(b) Encouraging existing users to use more quantity of products.
(c) Advertisement
(d) Mega sales
(e) Lowering prices
(f) Bundling
Market Penetration can also be mathematically calculated using following formula
Market Penetration = (sales volume of the product 100) total sales volume of all competing
products.
What is a product?
A product can be defined as anything which can be offered to a market to satisfy a need or want.
Here want or need can be different from different angles. For example if a product biscuit is sold in
a market, it is satisfying the need of stomach of a person and same time maximizing profit of the
company selling the biscuit. In retail product are called as merchandise.
Product can be classified as:
1. Tangible Vehicle, cloth, gadget etc.
2. Intangible Cannot be perceived by touch. E.g. sad songs, action movies etc.
3. Branded It carries a brand name.
4. Unbranded It does not carry any brand name.
Note Goods, idea, method, information, object or service that is the end result of a process and
serves as a need or want satisfier. It is a bundle of tangible and intangible attributes like benefits,
features, functions, uses etc.that a seller offers to buyers for purchase.
What is a goods?
It can be defined as something that is intended to satisfy some wants or needs of a customer with
some economic utility.
Types:
On the basis of tangibility
(a) Tangible goods However in economics, all goods are considered tangible but in reality certain
classes are not tangible like information. All tangible goods occupy physical space.
(b) Intangible goods - Cannot be perceived by touch. E.g. information (it is different from services
because final in goods can be transferrable and traded but not services)
On the basis of relative elasticity
(a) Elastic goods It is one for which there is a relatively large change in quantity due to a relatively
small change in the price.
(b) Inelastic goods It is one for which there is very little change in quantity due to relative change in
the price.
Note
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1. Normal goods Elasticity is greater than zero.


2. Inferior goods Elasticity is smaller than zero.
3. Luxury goods Elasticity is greater than one.
4. Necessary goods Elasticity is less than one.
Other types:
(a) Convenience goods These are easily available to consumers without any extra efforts. It mostly
comprises non-durable goods. E.g. fast foods, sweets, cigarettes, etc.
(b) Staple convenience goods This type comprises basic demands like breed, sugar, milk etc.
(c) Impulse convenience goods These are goods which are bought without any prior planning with
impulse.
E.g. Candies, chocolates, wafers.
(d) Consumer goods These are final goods that are brought from retail stores to meet the needs
and wants.
(e) Emergency goods These are goods that are bought quickly when they are urgently needed in
the time of the crisis. These are typically distributed at the stores.
E.g. Tents, flashlights, lighters, shovels, umbrellas etc.
(f) Specialty goods These goods are unique or special enough to persuade the consumer to exert
unusual effort to obtain them. It means that they are bought after extensive research. E.g.
Designer clothes, painting, perfumes, limited edition cars, stunning design, typically expensive,
antiques, diamonds, wedding gowns etc.
What is a customer?
Customer can be defined as the recipient of a good, service, product or idea obtained from a seller,
vendor or supplier for a monetary or their valuable consideration.
Types:
(a) Intermediate customer These are who purchases goods for resale.
(b)Ultimate customer These are consumers.
What is a Captive Market?
Captive markets are markets where the potential consumers face a severely limited amount of
competitive suppliers; Their only choices are to purchase what is available or to make no purchase at
all. Captive markets result in higher prices and less diversity for consumers. The term therefore
applies to any market where there is a monopoly or oligopoly.
Examples of captive market environments include the food markets in cinemas, airports, and
sports arenas and food in jails prisons.
What is Marketing?
Marketing is the activity, set of institutions and process for creating, communicating, delivering and
exchanging offerings that have value for customers, clients, partners and society at large. It is a
function that links consumers, public to the marketer of a product through information. Here the
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information addresses the issues regarding all aspects of the products. Products can be tangible or
intangible. It differs from selling because in selling, the main motive remains the maximization of
profit by way of selling a product but with absence of value but in marketing
value is also considered at the par with profit. So marketing is a integrated effort to discover, create,
raise and satisfy customer needs with values. It is one of the competing concepts which can be
looked as an organizational umbrella function to benefit the organization with superior customer
value.
What is niche marketing?
Niche marketing is a type of marketing in which a narrowly defined customer group is targeted. It
focuses on small segment of consumers who have unique and similar needs.
The market in which this marketing technique is applied is called niche market. E.g. Blackberry
application or Android application, sports car, luxury cars, internet based marketing etc.
This technique of marketing can be contrasted with mass marketing.
What is Relationship Marketing?
Relationship Marketing is a technique of marketing which involves creating and maintaining strong
ties with customers and other parties like dealers, suppliers, contractors, shareholders, stakeholders,
employees etc.
This technique revolves around a concentric chain of long term relationship. It also includes Partner
Relationship Management (PRM) apart from Customer Relationship Management (CRM). Its main
objective is to find, maintain and enhance the customer base and mutually long term satisfying
relationship.In Relationship Management buyer and seller continuously improves their
understanding and thus they build up more loyalty towards each other. Thefinal product of this
system is a unique asset that is marketing network.
This marketing technique includes following steps:
Creating a customer database
Identifying key customers
Creating details
Getting closer through different channels
Maintaining relationship
Advantages of Relationship Management
Consistency of business within the marketing network
Long term brand recognition
Easy redressal of customer grievances

What is marketing process?


This is the process, which is performed by marketing managers using all marketing mixes as and
when required.
The marketing process involves the following variables:
(a) The product itself
(b) Place for selling
(c) Marketing channel
(d) Price

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These variables combine in a market offering which the consumers may decide to buy if it provides
satisfaction asper their needs. The marketing process seems to be very easy in theory; However it is
very complex one to perform. If any small change occurs in the marketing environment, the whole
concept of marketing offering and strategy changes drastically.
What is cross selling?
Cross selling is the practice of selling an additional product or service to an existing customer. The
objectives of cross selling can be either to increase the income derived from the client or clients or
to protect the relationship with the client or clients. The approach to the process of cross selling can
be varied. Unlike the acquiring of new business, cross selling involves an element of risk that existing
relationships with the client could be disrupted. For that reason, it is important to ensure that the
additional product or service being sold to the client or clients
enhances the value the client or clients get from the organization. In practice, large businesses
usually combine cross selling and upselling techniques to enhance the value that the client or clients
gets from the organization (and vice versa).
For the cross selling there can be substantial barriers.
Let us see some of them:
1. Presence of multiple vendors.
2. Different purchasing points within an account, which reduce the ability to treat the customer like
a single account.
3. The fear of the incumbent business unit that its colleagues would spoil their work at the client,
resulting with the loss of the account for all units of the firm.
Let us see some forms of cross selling:
Selling addon services--- is another form of cross selling. That happens when a supplier shows a
customer that it can enhance the value of its service by buying another from a different part of the
supplier's company. When one buys an appliance, the salesperson will offer to sell insurance beyond
the terms of the warranty. Though common, that kind of cross selling can leave a customer feeling
poorly used. The customer might ask the appliance salesperson why he needs insurance on a brand
new refrigerator, "Is it really likely to break in just nine months?"
The kind of cross selling can be called selling a solution. In this case, the customer purchasing a TV is
provided with Direct to home inbuilt set top box. In this case customer can be relived from
purchasing a set top box to watch different channels.
Examples of cross selling
1. A CDMA mobile
2. A Life Insurance company suggesting its customer sign up for car or health insurance.
3. A television brand suggesting its customers go for a set top box of its or another's brand.
4. A laptop seller offering a customer a mouse, pen drive, and or accessories.
5. A shampoo seller suggesting conditioner of its own company for better result.
What is SWOT analysis?
It is a structured planning method proposed by Albert Humphrey. It is used to analyse the following
factors of an organization:

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(a) Strengths It includes all the characteristics of a company which is not with other companies. It
needs to be exploited.
(b) Weakness It gives a inside look of the areas where there is scope for improvement
(c) Opportunities It includes external chances that can be used to improve performance of the
company.
(d) Threats It includes external as well as internal elements that could cause trouble for a project. It
can be looming or sleeping.
What is USP in marketing?
USP stands for Unique Selling Proposition. The unique selling proposition (USP) is a marketing
concept that was first proposed as a theory to understand a pattern among successful advertising
campaigns of the early 1940s. It states that such campaigns made unique propositions to the
customer and that this convinced them to switch brands.
The term was invented by Rosser Reeves of Ted Bates & Company. Today the term is used in other
fields or just casually to refer to any aspect of an object that differentiates it from similar objects. So,
USP basically provides uniqueness to a particular product. It impresses a viewer/audience so much
that the voice or view of the Ads buzzes into their ears. For example for this site that you are using
now, I can propose USP tuition till your service.
So, through USP, a seller tries to present his product as a unique one and better than all other
competitive products. It provides an instant theme for the buyer to purchase the product.
What is Upselling?
Upselling is a sales technique whereby a seller induces the customer to purchase more expensive
items, upgrades, or other add-ons in an attempt to make a more profitable sale.
Upselling usually involves marketing more profitable services or products but can also be simply
exposing the customer to other options that were perhaps not considered previously.
Upselling implies selling something that is more profitable or otherwise preferable for the seller
instead of, or in addition to, the original sale. In a restaurant and other similar settings, upselling is
commonplace and an accepted form of business. In other businesses, such as car sales, the
customers perception of the attempted upsell can be viewed negatively and thereby affect the
desired result.
Some examples of upsales include:
(a) Suggesting a premium brand of alcohol when a brand is not specified by a customer
(b) Selling an extended service contract for an appliance
(c) Suggesting a customer purchase more RAM or a larger hard drive when servicing his or her
computer
(d) Selling luxury finishing on a vehicle
(e) Suggesting a brand of watch that the customer hasn't previously heard of as an alternative to the
one being considered.
(f) Suggesting a customer purchase a more extensive car wash package.
(g) Asking the customer to super-size a meal or add cheese at a fast food restaurant.
Techniques

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A common technique for successful upsellers is becoming aware of a customer's background and
budget, allowing the upsellers to understand better what that particular purchaser might
need.Another way of upselling is creating fear over the durability of the purchase, particularly
effective on expensive items such as electronics, where an extended warranty can offer peace of
mind. The vendor can tell that you are only investing not so much money so, this particular thing
cannot be so durable. Upselling also works with items like cars, where the seller suggests doing
rubber paint inside the chassis to make the car more durable.
What is product life cycle management?
This management is a process of managing a product throughout its lifecycle. It starts from its
introduction, growth, maturity and disposal. This management integrates people, data, processes
and business systems. It works in the following areas:
(a) Product system engineering
(b) Product and portfolio management
(c) Product design
(d) Manufacturing process management
(e) Product data management
This management process basically involves:
(a) Conceive Imagine, specify, plan, innovate
(b) Design Describe, define, develop, test, validate
(c) Realize Make, procure, produce, deliver, launch
(d) Service Maintain, support, sustain
(e) Dispose Recycle, disposal, retire
What is product life cycle?
In the same fashion of our life cycle i.e. birth, growth, maturity and finally death, a product also goes
through a life cycle which consists of following stages:
(a) Product introduction/market development this is the stage when a new product is first brought
to market. It can be on the basis of demand or innovation of a company. In this stage sales are low
and slow. However, thanks to our communication channels and modern management techniques
that at this stage also sales goes up.
(b) Market growth at this stage the demand begins to accelerate and it takes off.
(c) Maturity
(d) Disposal
What is marketing management?
It is a business discipline which applies different type of marketing techniques, resources, and
trends. The application of this discipline can vary significantly based on businesss size, culture and
environment. Marketing management employs various tools like SWOT analysis, product
positioning, product differentiation, value chain analysis, strategic group analysis, statistical surveys,
ethnographic observations, competitive intelligence, environment scanning etc.

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So, this discipline is very broad one and to create an effective marketing management, it is very
necessary for a company to have its elaborated and objective understanding of its own business
model and markets.
What is marketing environment?
It is an umbrella term used for forces and variables inside as well outside themorganization which
influence the decision of marketing managers. Marketing environment comprises trends that appear
and disappear anddetermine the success of the organization marketing efforts. For better
marketing and formulation of a marketing strategy, it is necessary to scan internal and external
marketing environment variables.
Marketing environment can be classified into three groups:
(a) Micro (internal) Objective of the company Finance Resources like man power, raw material,
capital etc.
(b)Macro (external) Technology Economic Social Physical National/international
(c) Market (just outside) Competitors Intermediaries Suppliers Threats Opportunities
What is marketing mix?
Marketing mix is a tool in the hand of marketer, which is a mixture of several ideas and plans, to
promote a particular product. Different models of marketing mix:
Four P model
This is also known as producer oriented model. It was proposed by EJ McCarthy in 1960.
Elements:
(a) Product The thing which is offered
(b) Price High/low, stable/fluctuating
(c) Promotion Brand recognition and positioning
(d) Place Convenient for consumers
Seven P model
It was proposed by Booms and Bitner in 1981.
Elements:
(a) Physical evidence Interior
(b) People Human resources
(c) Process Quality
Four C model
It is a consumer oriented model. It was proposed by Lauterborn in 1993.
Elements:
(a) Product Consumer
(b) Price Cost
(c) Promotion Communication
(d) Place Convenience/channel for consumers
Seven C model Elements:
(a) Consumers
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(b) Cost
(c) Communication
(d) Convenience/channel
(e) Corporation
(f) Commodity
(g) Circumstances
Compass model Elements:
(a) N National and international
(b) W Weather
(c) S Social
(d) E Economic
What is Demarketing?
Demarketing is a type of marketing which discourages certain customers on a temporary or a
permanent basis. This marketing is mainly applied on such products which are either harmful or very
rare. Example: Tobacco, petroleum products, water, electricity etc.
This marketing process is generally supported by government or international organization with a
sole aim of humankind welfare. It is also done for the sake of conservation of resources, controlling
inflation, eliminating the factor of over competition and over demand.
This technique is applied by following methods:
Bringing substitute
Suppress demand
Increase the cost of the product itself manifold
Through government legislation
What is Remarketing?
Remarketing is a marketing process by which the demand of such product is renewed which has
witnessed declining trend of demand. It is done by spreading awareness in general, introducing new
and interesting use of the existing product, resale of second hand well fabricated products.
This concept of marketing is opposite to the Demarketing concept.
What is Synchro Marketing?
Synchro Marketing is marketing process which solves the problem of irregular demand pattern of a
product. For example a Beach side hotel is overcrowded during evening time, whereas it is almost
like desert during morning hours. A cotton shop is crowded during summer season whereas during
winter it is not.So, Synchro Marketing finds a way to solve the problem of inconsistent demand
pattern by the following methods:
(a) Keeping high price during season
(b) Offers lucrative options during offseason
(c) Using the stores with many varieties of item
(d) Promotion and incentives
What is differentiated marketing?
This is a type of marketing in which customers are divided into groups on the basis of some common
characteristics like religion, income, age, sex, caste, education etc. Thus the customer base is

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segmented. This is why this marketing is also known as market segmentation. This technique is
customer oriented with higher customer satisfaction and profits.
It has following advantages:
(a) Increased sales and profits
(b) Large number of customers from all segments
(c) Quality products manufacturing can be accurate
(d) Customer oriented
It has following disadvantages:
(a) Chances of cost rise due to small quantity manufacturing. So, it is opposite to mass marketing.
(b) Huge amount of work for R & D for customer segmentation.
(c) Wastage of money for separate advertisements for different segments
What is market segmentation?
It is a marketing strategy which involves the following criteria:
(a) Divides the target consumer/market as per their common want/need/relevant goods.
(b) It is internally homogenous and externally heterogeneous.
(c) Cost effective
(d) Profit maximization
(e) Responsiveness
(f) Sustainable
(g) Measurable
(h) Needs can be satisfied by particular product category
So, through this strategy, within a market, a market segment is created which is a subgroup of
people or organization. Sharing one or more characteristics that cause them to have similar needs.
So, this strategy is a process of enabling the marketer to tailor marketing mixes to meet the need of
one or more specific segments.
It has following advantages:
(a) It helps decision makers to more accurately define marketing objectives and better allotment of
resources.
(b) Performance evaluation is also more precise.
(c) Better marketing results.
What is undifferentiated marketing?
It is just opposite to differentiated marketing and similar to mass marketing. Under this technique
company identifies the entire consumers as one with common head. This strategy does not consider
segmented demand pattern. It involves same product, same brand, same price, same marketing
program, same advertising media with mass production and distribution.
It has following advantages:
(a) Large scale production is possible.
(b) Cheap products
(c) One type of advertisement, so, less expense
(d) One marketing mix
(e) Single brand name
It has following disadvantages:
(a) It is product oriented rather than consumer oriented.
(b) Reduces profits due to product competition.

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